Beruflich Dokumente
Kultur Dokumente
January 3, 2014
China: Healthcare
China: Healthcare
Equity Research
January 3, 2014
China: Healthcare
Table of Contents
Hospital reform taking center stage driven by unmet demand
10
16
16
17
19
20
23
Disclosure Appendix
29
January 3, 2014
China: Healthcare
Drug price
control
Hospital
reform
Insurance
reform
2009-2012
2013-2015
2015-2020
Source: Gao Hua Securities Research, National Health and Family Planning Commission (NHFPC).
January 3, 2014
China: Healthcare
However, the growth of medical resources fell significantly short of expenditure growth.
Overall healthcare institutions grew 1.19X, of which the total number of hospitals grew
only 2.21X. The number of private healthcare institutions is on the rise while the number of
public hospitals is declining as a result of the change in ownership structure (see page 16),
in our view. The number of medical practitioners grew 1.31X (doctors: 2.00X and nurses:
4.43X), suggesting a resource shortage in healthcare institutions. Medical beds grew 2.51X,
with beds in hospitals growing 3.24X. Given the unmet demand, we see significant growth
and investment opportunities in Chinas healthcare service industry.
Exhibit 2: Healthcare spending grew 163X in the last
three decades with
(Rmb bn)
3,000
120
2,500
+122X
100
2,000
80
1,500
60
1,000
40
+73X
20
500
17.8
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Exhibit 4: Growth of total healthcare expenditure jumped 163X, while healthcare services
resources growth lagged
Total healthcare expenditure and healthcare resources (1982 vs. 2012)
+163X
2,891
950,000
2,500
900,000
2,000
850,000
1,500
500
25,000
15,000
801,869
+2.00X
0
1982
2.5
3.0
+4.43X
2.5
2.0
1.0
0.5
0.5
0.0
2.50
0.56
0.0
2012
1982
2012
1.5
1.0
1982
1982
2012
2.0
1.31
10,473
10,000
23,170
5,000
2012
+2.21X
20,000
700,000
1982
1.5
950,297
750,000
18
3.0
+1.19X
800,000
1,000
Total hospitals #
2012
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
+3.24X
4.16
1.29
1982
2012
January 3, 2014
China: Healthcare
Exhibit 5: The number of public hospitals is trending down while the number of private
hospitals is on the rise (at 45% of total hospitals by end of September 2013)
Number of public and private hospitals (2003 -9M2013)
# of public hospitals
18,000
15,727
15,726
16,000
15,483
15,141
# of private hospitals
14,900
14,309
14,051
13,850
14,000
13,539
13,427
13,427
12,000
10,000
10,795
8,000
8,440
6,000
4,000
2,000
0
2,037
2003
2,667
2004
3,220
2005
4,105
2006
4,952
5,403
2007
2008
6,240
2009
9,295
7,068
2010
2011
9M12
9M13
January 3, 2014
China: Healthcare
Exhibit 6: Comparison between a typical public vs. private hospital in terms of ownership,
payer, payment and patient structures
Public
Private
Not-for-profit
Not-for-profit
For profit
Government
Private
enterprise
Private
enterprise
National medical
insurance
National medical
insurance, commercial
insurance, out-ofpocket
Out-of-pocket,
commercial
insurance
Set by government
Items within
reimbursement list set
by government.
Others proprietary
Mostly proprietary
pricing
Mostly covered by
national medical
insurance
Both national
insurance and
commercial
insurance
Mostly self-pay
patients, and
commercial
insurance
Government
Shareholder
Market oriented
No private claim
Proprietary
None
Provision of social
welfare
Not specified
# of private hospitals
# of public hospitals
Private hospital as % of total hospitals
14,000
13,427
44.6% 50%
45%
12,000
10,795 40%
10,000
35%
8,000
30%
25%
6,000
20%
4,000
15%
10%
2,000
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
5%
0%
10.2% 12%
10%
8%
6%
4%
2%
0%
2005
2006
2007
2008
2009
2010
2011
2012
January 3, 2014
China: Healthcare
Public hospitals dominate Chinas healthcare service industry, with about 86% of total
hospital beds in operation and more than 90% of total hospital revenue in China in 2012.
Around 73% of public hospitals are owned by the central and local governments, 25% are
owned by SOEs (state-owned enterprises), and 2% are owned by the military. Compared
with the public hospitals, the average scale of private hospitals is small and many are
specialty hospitals. The following chart sets forth a comparison of key metrics of public and
private hospitals in China in 2012.
Exhibit 9: Private hospitals are still a fraction of the overall hospital sector in terms of total beds in operation,
in/outpatient visits, and total revenue in 2012
Public vs. private hospitals in China (2009-2012 CAGR)
Public
hospital
Public
hospital
CAGR
Private
hospital
Private
hospital
CAGR
Total
Private
hospital as
% of total
2009
2012
2009-2012
2009
2012
2009-2012
2012
2012
Number of hospitals
14,051
13,384
-2%
6,240
9,786
16%
23,170
42.2%
3.01
3.58
6%
0.37
0.58
16%
4.16
14.0%
Employees (mn)
3.96
4.28
3%
0.41
0.66
17%
4.94
13.3%
Practitioners (mn)
2.89
3.56
7%
0.31
0.50
18%
4.06
12.4%
78.1
113.3
13%
6.8
14.0
27%
127
11.0%
1.77
2.29
9%
0.15
0.25
19%
2.54
9.8%
87.7%
94.3%
58.2%
63.2%
ALOS
10.7
11.4
8.7
12.0
1,391.3
102.9
1,494.2
6.9%
# of public hospitals
Private hopsital as % of total
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
# of private hospitals
38%
21%
11%
15%
25%
27%
31%
34%
17%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
# of not-for-profit hospitals
For-profit hopsitals as % of total
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
19%
11%
14%
# of for-profit hospitals
20% 20%
22%
24%
26%
16%
30%
25%
20%
15%
10%
5%
0%
January 3, 2014
China: Healthcare
Exhibit 12: Less than 10% of hospitals with more than 200 beds in operation were private
hospitals in 2011
Hospital number by number of beds in operation (2011)
Beds in public hospitals
% of beds in private hospital in total
6,000
5,485
60.2%
60%
5,000
4,000
50%
47.1%
3,624
40%
2,703
3,000
30%
2,129
1,899
2,000
21.1%
9.8%
722
1,000
1,581
171
1,100
919
6.4%
63
Beds <49
Beds 50-99
Beds 100199
Beds 200299
Beds 300399
642
3.9%
26
Beds 400499
5.0%
58
20%
841
1.9%
10%
16
0%
Source: Wind.
(Rmb bn)
160
24.7%
140
24.6%
23.4%
100
22.4%
75
42
48
0.3
0.25
0.15
60
0.1
0.05
20
0
0
2005
2006
Psychiatry
21
15%
0.2
93
15.8%
80
40
22.9%
114
120
60
139
Oncology
28
20%
2007
2008
2009
Source: Wind.
2010
2011
Ob-gyn
11
8%
Epidemic
12
9%
Paedeatric
17
12%
Source: Wind.
January 3, 2014
China: Healthcare
Exhibit 15: Oncology hospitals led specialty hospitals in terms of annual revenue in 2011
Revenue of specialty hospitals by types (2011)
Revenue (2011)
(Rmb bn)
30
28.0
25
20.8
17.2
20
15
12.0 10.7
10.4
10
6.5
6.1
5.9
5.2
4.1
3.1
3.0
1.4
1.3
1.1
0.8
0.7
0.6
0.1
Source: Wind.
Exhibit 16: Most specialty hospital revenue was maintained above 20% CAGR in 2008-11
Revenue growth of specialty hospitals by types, 2008-2011
Revenue CAGR (2008-2011)
70%
60%
50%
40%
30%
20%
10%
0%
64.5%
29.1%
14.6%
5.1%
Source: Wind.
Below are the top five private hospital groups in terms of beds in operation and number of
patient visits, respectively, in China as of December 31, 2012.
Exhibit 17: Phoenix Healthcare Group (PHG) is currently
the largest private hospital management group with
3,194 beds under its management
3,194
3,000
3.0
2,500
2,500
2,000
2.5
1,800
1.5
1,000
1.0
600
500
0
Dongguan
Kanghua
Dongguan
Donghua
Jinling
Pharmaceutical
2.22
2.0
1,700
1,500
PHG
3.05
Nanjing
Tongren
1.62
1.54
1.30
0.5
0.0
PHG
Dongguan
Kanghua
Jinling
Pharmaceutical
Dongguan
Donghua
Nanjing Tongren
January 3, 2014
China: Healthcare
(Rmb bn)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,647
1,373
49%
1,186
897
538
60%
1,400
50%
1,200
40%
960
30%
601
24%
16%
12%
20%20%
10%
7%
(Rmb bn)
0%
2
2011
2005 2006 2007 2008 2009 2010
Source: Wind.
24%
1,245
1,02820%
20%
1,000
25%
21%
20%
860
800
600
23%
15%
700
424
471 11%
566
10%
400
5%
200
0
0%
8 2009 2010 2011
2005 2006 2007 2008
Source: Wind.
Close to 40% of hospital revenue were from drugs, and 49% from services.
Exhibit 21: C
Subsidy acccounted for less than 10%
Hospital reve
enue breakdown (2011)
(Rmb bn))
Drug reven
nue,
472, 40%
%
Other business
revenue, 18,
2%
Fiscal subs
sidy,
101, 9%
%
Other subsidy,
6, 0%
Service
revenue, 567,
49%
Source: NHFPC
C.
10
January 3, 2014
China: Healthcare
Grade III
Grade II
Grade I
Out/inpatient
ratio
3:7 to 4:6
5:5
9:1 to 7:3
Drug revenue
as % of total
40%-50%
60%-80%
50%-60%
Public hospital
Private hospital
Drugs
35%-45%
25%-40%
Consumables
8%-15%
5%-10%
Labor
30%-45%
20%-30%
Depreciation
2%-10%
5%-15%
Financial
3%-10%
5%-10%
Management
15%-25%
10%-20%
11
January 3, 2014
China: Healthcare
Exhibit 24: Average spending per in/outpatient visit grew at low teens/single digit
Average spending per in/outpatient visit
Outpatient (avg)
(Rmb)
6,000
Inpatient (avg)
5,000
4,778
4,232
3,842
4,000
5,896
5,280
3,000
2,000
1,000
143
134
124
115
106
0
2008
2009
2010
2011
2012
Hospitals
Urban primary healthcare clinics
Rural primary healthcare clinics
Average
(Rmb)
250
200
Hospitals
Urban primary healthcare clinics
Rural primary healthcare clinics
Average
(Rmb)
8,000
7,000
6,000
150
106.1
114.7
124.1
134.0
143.1
5,000
4,000
100
3,841.5
4,231.7
4,778.4
5,279.8
5,896.4
3,000
2,000
50
1,000
0
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
12
January 3, 2014
China: Healthcare
(bn)
8
7
6
5
4.10
6%
6%
6%
4%
4%
2
1
0
(bn)
Outpatients(hospitals)
yoy%
3
3
11%
2
1.39
1.47
1.64
1.78
9%
2.26
2.04
1.92
14%
2.5412%
12%
11%
10%
8%
8%
6%
6%
6%
2%
0%
4%
2%
0%
2005 2006 2007 2008 2009 2010 2011 2012
Source: Wind.
(mn)
200
150
100
72
50
7%
8%
0
2005 2006 2007 2008 2009 2010 2011 2012
Source: Wind.
10%
(mn)
140
Inpatients(hospitals)
120
17%
100
80
60
51
56 9%
65
74
14%85
15%95
yoy%
127
108
20%
18%
15%
12%
13%
40
5%
20
0%
10%
5%
0%
13
January 3, 2014
China: Healthcare
(mn)
(mn)
11.0
250
196
200
7.0
100
5.0
3.0
1.3
1.0
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
22
9.7
9.0
150
50
Source: Wind.
-1.0
Source: Wind.
Special public
medical
institutions
12,083
1%
Others
2,424
0%
Hospital
23,170
3%
Others
0.04
1%
Hospital
4.16
73%
Grassroot
medical
institutions
912,620
96%
Source: NHFPC.
Source: NHFPC.
14
January 3, 2014
China: Healthcare
Other
9,018
39%
Grade III
1.47
35%
Other
0.55
13%
Grade II
6,566
28%
Grade I
0.31
8%
Grade II
1.83
44%
Grade I
5,962
26%
Source: NHFPC.
24,000
20,000
10.2% 12%
20,000
10%
16,000
12,000
8,000
15,000
8%
6%
10,000
4%
4,000
5,000
2%
0%
Source: Wind.
Source: Wind.
15
January 3, 2014
China: Healthcare
16
January 3, 2014
China: Healthcare
Public hospitals offer better patient access: It is easier to invest and gain access
to private hospitals than public hospitals. However, public hospitals offer better
access to patients and a bigger addressable market. Major tradeoffs in investing in
Chinas public hospitals are the challenges of managing employees in stateowned enterprises, and changing the corporate structure, incentive scheme and
performance measures. More importantly, the not-for-profit and social function
served by the public hospitals may also limit the return of private investment.
Tug of war between payback period and long-term returns: Building a private
hospital from scratch offer better visibility and long-term growth prospects. It may
also allow investor to enjoy asset appreciation in the long run. However, higher
cost and longer payback period due to heavy capital investment may lead to lower
return in the short to medium term.
17
January 3, 2014
China: Healthcare
Exhibit 39: Private investment in hospitals in China face trade-offs between profitability, accessibility, initial investment,
ownership strength
Four possible routes for private investment in hospitals in China
Public
Ownership
structure
reform
Investment
route
Private
InvestOperateTransfer (IOT)
Build from
scratch
All not-for-profit
Not-for-profit
encouraged. Forprofit has less
accessibility to
reimbursement fund
Not-for-profit
encouraged. Forprofit has less
accessibility to
reimbursement fund
Long approval
process and initial
construction periods
Invest in
existing hospital
Nature
All not-for-profit
Accessibility
Capex
Light
Somewhat Light
Extremely intensive
Somewhat intensive
Ownership
Equity ownership,
inherent policy risk
No ownership, only
management right
Equity ownership
Equity ownership
Payback
period
Short
Very short
Very long
Long
Risk/Return
Medium risk,
medium return
Low risk,
low return
Medium risk,
medium return
Examples
PHGs investment in
Jiangong Hospital
Chindexs United
Family Healthcare
(UFH)
Fosun Pharmas
acquisition of
Chancheng Hospital
High risk,
high return
PHGs investment in
Beijing Mentougou
Hospital
18
January 3, 2014
China: Healthcare
19
January 3, 2014
China: Healthcare
Individual
Social
Government
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
(Rmb)
400
360
350
280
300
240
250
30.4%
200
200
120
150
80
100
50
20
20
40
80
40
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015
Source: Wind, NHFPC.
(Rmb bn)
180
160
140
120
75.2% 75.7%
80.7%
86.2%
(Rmb bn)
171
96.0% 97.5%
91.5% 94.2%
119
100%
80
66
60%
2004
2005
20%
16
0%
2006
2007
2008
2009
2010
2011
694
554
600
400
35
40
UBMI payout
Payout yoy %
700
500
40%
60
800
80%
92
100
20
120%
UBMI revenue
Revenue yoy %
300
200
367
289
221
155
202
2007
2008
431
354
443
2010
2011
554
280
100
0
2009
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2012
20
January 3, 2014
China: Healthcare
2007
2008
2009
2010
2011
2012
221.4
288.6
367.2
430.9
553.9
693.9
554.3
155.2
202.0
279.7
353.9
443.1
223.1
318.2
401.5
432.6
473.4
536.4
61.9%
42.6%
26.2%
7.8%
9.4%
13.3%
180.2
200.0
219.4
237.3
252.3
264.9
42.9
118.3
182.1
195.3
220.7
271.6
288.2
331.3
401.5
494.7
22.1
30.6
49.7
76.0
139.4
173.4
216.5
269.7
427.6
474.1
568.3
688.4
427.6
504.7
17.9%
618.0
20.5%
764.4
21.1%
yoy (%)
UBMI balance
- Balance of public part
URBMI balance at year-end (Rmb bn)
- Balance of individual part
UEBMI balance at year-end (Rmb bn)
244.1
343.2
Unlike the Urban Employee Basic Medical Insurance Program (UEBMI), for which urban
workers and their employers are required to make contributions, the Urban Resident Basic
Medical Insurance Program (URBMI), and New Rural Cooperative Medical Scheme
(NRCMS) rely on government subsidies and personal contributions. The following table
sets forth certain information regarding each insurance program. We expect rising
government subsidies will add to higher balances for the three funds for the next few years.
Exhibit 45: Rising government subsidies to add to higher fund balances
Comparison between UEBMI, URBMI and NRCMS and their funding sources
Program
Funding source
UEBMI
Employers and
employees
2,619
URBMI
Urban residents
and governments
320
NRCMS
308
Funding
An employee and his or her employer shall pay 2% and 6%,
respectively, of such employees monthly salary into the
insurance fund every month.
Varies among cities; the urban resident pays approximately
20% to 40% of the funding while the government pays the
balance.
Varies among rural areas; the rural resident often pays
approximately 20% to 40% of the funding while the government
pays the balance.
Chinese government has been striving to establish a universal medical insurance system
since 2009. In China, government insurance programs mainly consist of the UEBMI, URBMI,
and NRCMS. By the end of 2012, 99% of the total registered population in China were
covered by one of three governmental insurance programs, compared to 85.3% at the end
of 2008 (Exhibit 46).
Total funding of three medical insurance programs (UEBMI, URBMI, NRCMS) reached
Rmb795.2 bn in 2012, and Frost & Sullivan expects it to reach Rmb2,692 bn in 2017 (Exhibit
48).
21
January 3, 2014
China: Healthcare
(bn)
1.40
1.35
1.30
1.25
1.20
1.15
1.10
1.05
1.00
96.8%
100%
94.6%
95%
92.5%
90%
85.3%
85%
80%
75%
2008
2009
2010
2011
NRCMSP
(Rmb bn)
900
800
700
600
500
400
300
200
100
0
2012
URBMIP
UEBMIP
240.8
171.0
92.3
16.7
66.2
0.0
118.8
26.7
202.0
263.0
327.2
2008
2009
2010
63.8
41.3
490.6
401.8
2011
2012
Exhibit 48: Total funding of three medical insurance programs (UEBMI, URBMI, NRCMS) is
expected to reach Rmb2,692 bn in 2017
Total funding of three medical insurance programs (UEBMI, URBMI, NRCMS) (2008-2012)
Total funding
(Rmb bn)
3,000
2008-2012 CAGR=26.6%
2012-2017 CAGR=23.4%
2,500
2,000
1,500
2,691.6
1,000
367.0
461.6
561.8
758.8
942.3 1,128.8
2008
2009
2010
2011
2012
500
0
2013
1,445.1
2014
1,796.9
2015
2,182.3
2016
2017
22
January 3, 2014
China: Healthcare
Hospital
group
Jian Gong
# of beds in
# of
# of patient
operation as
community
visits ('000)
of June 30,
clinics
2012
2013
JCI
accredited
hospital?
Type of
hospital
Initial date
609.3
Yes
General
2007
324.8
554
791.6
Yes
General
2008/02
72/150 **
7/17/2055
421
490.9
General
2010/07
75
12/31/2030
1 Grade III
7 Grade I
11
1,738
807.6
General
2011/05
150
12/31/2030
IOT
1 Grade II
100
350.2
Specialty
2012/06
25
12/31/2030
12
28
3,213
3,049.7
Model
# of
hospitals
80% equity
*
1 Grade II
400
Yan Hua
IOT
1 Grade III
17
Mentougou
IOT
1 Grade II
Jing Mei
IOT
Mentougou
TCM
Total
Investment Agreement
(Rmb mn) expiry date
733.8
Notes: *PHG and Beijing Construction Engineering Group holds 80%/20% equity interests in Jian Gong Hospital. **PHG has made an initial investment of
Rmb72mn in Yan Hua and committed to make a further investment of Rmb150mn of which PHG has paid Rmb87mn by July 2013. JCI stands for
accreditation from Joint Commission on Accreditation of Healthcare Organizations (JCAHO).
Source: Company data.
23
January 3, 2014
600196.SS/2196.HK
United Family Healthcare (UFH)
3
Chindex
1
2
3
4
5
G3
G2
G1
Hunan
Anhui
Jiangsu
Guangdong
Guangdong
Province
Jiangsu
Yunnan
Hubei
Guangdong
Guangdong
Guangdong
Y
G3
Y
G1
-
Y
Y
Y
Y
A
Y
Y
Y
Y
Y
Y
B
-
Y
Y
Y
Y
G2
Y
Y
Y
-
300015.SZ
40+ ophthalmology hospitals
600763.SS
13 dental hospitals/clinics
CQ Bo'En Reproduction Hosp.
Province
Hunan (HQ)
Province
Chongqing
G3
G3
-
G2
G2
-
G1
G1
-
Province
G3
G2
Xi'an
Guangzhou
Province
7
8
Qingdao UFH
Guangzhou UFH
Start time
Comments
11.8%
2010/06
55%
70%
55%
50%
60%
Equity
100%
66%
51%
49%
-
2H2011
2011/05
2012/12
9/3/2013
2013/10
Start time
2011/07
2012/04
2013/02
2013/09
-
A
A
-
B
B
-
NIC
NIC
-
Consideration
Equity
Equity
51%
Start time
2009/10
Start time
2006
6/17/2013
Comments
21 provinces
Comments
G1
NIC
Consideration
Equity
Start time
Comments
US$39.4 mn
52%
2011
Province
Beijing
Shanghai
Beijing
Tianjin
Beijing
G3
-
G2
-
G1
-
A
-
B
-
Equity
NIC
-
Consideration
Y
Y
Y
Y
Y
Gen. Spe. SOE
Y
Y
Y
Y
Y
Y
Y
Beijing
NIC
c.Rmb693 mn
Consideration
Consideration
70%
NIC
-
Consideration
500 beds
700+500 beds
500 beds
900 beds
1,900 beds
Failed
Beijing
2013/06
Shandong
Guangdong
2014
1H2015
Note: NIC = National Insurance Covered, SOE = State-owned enterprise, A/B stands for Class A/B, Gen = General. Spe = Specialty; G1-3 = Grade 1-3
24
China: Healthcare
Pharmaceutical companies
Jinling Pharma 000919.SZ
Province
G3
G2
G1
NIC
Consideration
Equity
Jiangsu
Jiangsu
Rmb132 mn
68.33%
2012/07
002219.SZ
Province
G3
G2
G1
NIC
Consideration
Equity
Start time
Sichuan
Rmb120 mn
85%
2013/01
Sichuan
Rmb15 mn
100%
2013/06
Sichuan
Rmb25 mn
100%
2013/06
Sichuan
Rmb80 mn
100%
2013/06
5
Kangmei
Sichuan
Province
G3
G2
G1
Y
B Gen. Spe. SOE
NIC
Consideration
100%
Equity
10/28/2013
Start time
Guangdong
Rmb300 mn
100%
2007
Jilin
11/5/2013
Jilin
11/5/2013
Jilin
11/5/2013
>Rmb500 mn
investment
>Rmb500 mn
investment
>Rmb500 mn
investment
2003/07
Comments
SPH booked earnings of Rmb76.57 mn in
2011.
Changed to for-profit status in 2003, paying
income tax since 2010/07
410 beds (520 beds with new building in use),
2011 NPAT: Rmb11.1 mn
2012/06/12 turned to for-profit hospital
Comments
350 beds
Oncology hospital
Gansu Duyiwei
Start time
January 3, 2014
Note: NIC = National Insurance Covered, SOE = State-owned enterprise, A/B stands for Class A/B, Gen = General. Spe = Specialty; G1-3 = Grade 1-3
Source: Company data.
China: Healthcare
25
Pharmaceutical companies
Guizhou Bailing 002424.SZ
1
Mayinglong
Tasly
1
Shuanglu
Province
G3
G2
G1
Guizhou
600993.SS
Province
G3
G2
G1
Hubei (HQ)
Province
Yunnan
Province
G3
Y
G3
G2
G2
G1
G1
A
Y
A
B
B
Henan
Jointown
1
2
Furui Medical
600998.SS
Wuhan Jointown Hospital
Beijing Renhe Hospital
300049.SZ
Province
Hubei
Beijing
Province
G3
G3
G2
G2
G1
G1
A
A
B
B
Inner Mongolia
Province
G3
G2
G1
Hubei
Province
G3
G2
G1
Jiangsu
Wuhan Jianmin
1
Guizhou Yibai
1
Harbin Sanjing
1
2
600976.SS
Wuhan Jianmin Disgestive
Disease Hospital
600594.SS
Guannan County People's
Hosptial
600829.SS
Harbin Sanjing Women's
Specialty Hospital
Harbin Sanjing Renal Disease
Specialty Hospital
NIC
Consideration
Equity
Start time
Rmb1.48
100%
10/16/2013
NIC
Consideration
Equity
Start time
Comments
Another Rmb25 mn for further investment
2012 NPAT: (Rmb1.50 mn)
Specifically for diabetes treatment
Comments
2008
NIC
NIC
Consideration
Consideration
Equity
Equity
Start time
2011/07
Start time
Comments
200 beds (to be expanded to 500 beds)
Comments
Rmb160 mn
80%
2011/06
NIC
Y
NIC
Consideration
Consideration
Equity
Equity
Start time
2011
Start time
Rmb300 mn
2010/10
NIC
Consideration
Equity
Start time
Comments
Comments
Non-for-profit
At construction phase
Comments
Rmb130 mn
65%
2012/10
NIC
Consideration
Equity
Start time
Comments
90%
2005
500 beds
Comments
First women's specialty hospital in Helongjiang
Province
Province
G3
G2
G1
NIC
Consideration
Equity
Start time
Heilongjiang
Rmb30 mn
100%
2005/10
Heilongjiang
2008/08
150 beds
Province
G3
G2
G1
NIC
Consideration
Equity
Start time
Comments
Guizhou
Rmb60 mn
2010/09
January 3, 2014
Note: NIC = National Insurance Covered, SOE = State-owned enterprise, A/B stands for Class A/B, Gen = General. Spe = Specialty; G1-3 = Grade 1-3
Source: Company data.
China: Healthcare
26
General groups
Founder
Technology
600601.SS
Province
G3
G2
G1
NIC
Consideration Equity
Start time
Comments
Beijing
2013/03
Focus on urology, in
association with PKU
Healthcare Industry
Group
Hunan
2013/09
Beijing
Rmb1 bn
70%
2014/04
Province
G3
G2
G1
Start time
Comments
Hunan
2002
Zhejiang
100%
6/6/2005
Guangdong
2012/04
Guangdong
2012/10
Beijing
2012/08
In cooperation with
Yuquan Hospital
Province
G3
G2
G1
Start time
Comments
Liaoning
60%
2005/09
Beijing
2001
1,015 beds
Backed by Tsinghua
Univeristy
Beijing
2013/09
600500.SS
Province
G3
G2
G1
4
5
NIC
NIC
NIC
Consideration Equity
Consideration Equity
Consideration Equity
January 3, 2014
In cooperation with
Zhongnan University
Including CITIC
Hangzhou Hand
Surgery Hospital,
divested in 2012
500 beds (with
designed capacity of
2,000 beds)
Start time
Comments
Shanghai
2012
In cooperation with
Taiwan Zhanghua
Christianity Hospital
Shanghai
2013
Note: NIC = National Insurance Covered, SOE = State-owned enterprise, A/B stands for Class A/B, Gen = General. Spe = Specialty; G1-3 = Grade 1-3
27
China: Healthcare
Insurance company
China Ping An
601318.SS
Shenzhen Longgang TCM
1
Hospital
Province
G3
G2
G1
Guangdong
Province
G3
G2
G1
Zhejiang
NIC
Consideration
Equity
Start time
2011/04
Comments
Exit in 2012/12, local government insists on
"not-for-profit" status
January 3, 2014
Province
G3
G2
G1
Shandong
000516.SZ
Province
G3
G2
G1
NIC
Consideration
Equity
Start time
Comments
NIC
Consideration
Equity
Start time
Comments
Focus on oncology
NIC
Consideration
Equity
Start time
Others
Xi'an Kaiyuan
Comments
- First private Grade IIIA hospital on August
17, 2009
- 760 beds
- Switched to for-profit status in July 2011
- Located in Xi'an Hi-tech Industries
Development Zone
- 1H13 healthcare service revenue: Rmb207
mn, NPAT: Rmb27 mn
- Founded by Mr. Liu Jianshen in 2000
Shaanxi
Rmb297 mn (for
100% equity share
on Nov 12, 2011)
Shaanxi
Rmb330 mn (build
from scratch)
Province
Hainan
G3
-
G2
-
G1
-
A
-
B
-
NIC
-
Consideration
-
Equity
-
Start time
2012-2013
Comments
-
Province
G3
G2
G1
NIC
Consideration
Equity
Start time
Comments
Hainan Airline
600221.SS
1
Haikou Guoxingcheng Hospital
Changchun High &
000661.SZ
New Tech
Changsha Nuobei'er Children's
1
Hospital
Jiangsu Etern
600105.SS
1
Suzhou Etern Hospital
Hunan
Province
Jiangsu
G3
-
G2
-
G1
-
A
-
B
-
2011/11
Rmb5.4 mn
NIC
-
Consideration
Rmb300 mn
Equity
88%
Start time
-
Comments
-
Note: NIC = National Insurance Covered, SOE = State-owned enterprise, A/B stands for Class A/B, Gen = General. Spe = Specialty; G1-3 = Grade 1-3
Source: Company data
China: Healthcare
28
January 3, 2014
China: Healthcare
Disclosure Appendix
Reg AC
We, Wei Du, Ph.D and Li Yu, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject
company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to
the specific recommendations or views expressed in this report.
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The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and
market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites
of several methodologies to determine the stocks percentile ranking within the region's coverage universe.
The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:
Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate
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Disclosures
Coverage group(s) of stocks by primary analyst(s)
Wei Du, Ph.D: China Healthcare. Li Yu: China Healthcare.
China Healthcare: Baiyunshan (H), Biosensors International Group, CSPC Pharmaceutical Group, China Medical System Holdings, China Shineway
Pharmaceutical Group, Jiangsu NHWA Pharmaceutical Co., Jiangsu Yuyue Medical Equipment & Supply, Mindray Medical International, Phoenix
Healthcare Group Co Ltd., Shandong Weigao Group, Shanghai Fosun Pharmaceutical (Group) Co Ltd, Shanghai Pharmaceuticals Holding (H), Sihuan
Pharmaceutical Holdings Group, Sino Biopharmaceutical, Sinopharm Group Co., The United Laboratories International Holdings, Tianjin Tasly
Pharmaceutical Co., WuXi PharmaTech Cayman, Wuhan Humanwell Healthcare (Group) Co., Zhejiang Huahai Pharmaceutical Co..
Buy
Hold
Sell
Buy
Hold
Sell
Global
31%
54%
15%
50%
42%
37%
As of October 1, 2013, Goldman Sachs Global Investment Research had investment ratings on 3,570 equity securities. Goldman Sachs assigns stocks
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January 3, 2014
China: Healthcare
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30
January 3, 2014
China: Healthcare
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31