PE-backed Wenzhou Kangning Hospital files for HK IPO

The company didn't indicate how many shares would be sold in the offering or at what price in its preliminary filing.

Founded in 1996, Wenzhou Kangning mainly focuses on psychiatric medical treatment. As of the end of last year, the group ran five directly-owned hospitals and managed three psychiatric centers for other medical institutions, providing nearly 2,000 beds in total.

In 2013, the firm received RMB140.5 million ($23 million) from Guangzhou GL Capital and RMB59.5 million from CDH Investments. Three months ago, GL Capital committed a further RMB55.1 million in a new financing round, while CDH provided RMB23.3 million. GL Capital and CDH hold stakes of 29.14% and 12.35%, respectively, in the hospital group.

The company's revenue grew from RMB226.4 million in 2013 to RMB296.3 million last year, while net profit increased 40% year-on-year to RMB51.2 million in 2014.

According to consultancy Frost & Sullivan, over 180 million people in China suffer from psychiatric disorders, but much of this demand is unmet.

The total revenue of healthcare institutions in China grew from RMB1.2 trillion in 2009 to RMB2.3 trillion in 2013, and is projected to reach RMB5 trillion in 2018. Meanwhile, the private psychiatric healthcare market is expected to grow from RMB5.1 billion in 2014 to RMB6.2 billion this year.

Private equity investors see huge opportunities in China's hospital space on the back of healthcare reforms. Last year, iKang Healthcare Group, China's largest operator of medical examination and disease screening centers, raised $150 million through its US IPO. The successful public offering facilitated partial exits for NewQuest Capital Partners and GIC Private.

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• Topics
• Greater China
• Healthcare
• Exits
• China
• healthcare
• Exit
• IPO
• Hong Kong (China)
• CDH Investments Management