Two years ago, only a few listed companies were engaged in the hospital business in the A-share market. Today, there are more than 20 listed companies involved in hospitals, and there are also companies that have expressed their desire to enter the field. The capital market is embracing the hospital industry with unprecedented enthusiasm.

As the state encourages social medical treatment, especially in the near future, the specific support measures such as opening up medical insurance and encouraging doctors to practice more have been launched. The market demand and policy environment have continuously warmed up the medical service investment market. Industrial capital includes medical services including private hospitals. The speed of investment has accelerated and medical services have become a new investment hot spot for A-share companies.

However, as the hospital industry as a special service industry, it has unique industry barriers and thresholds. What types of hospitals can be invested to get more returns? Which investment models are more in line with China's national conditions and thus more successful? These issues are new topics for new entrants who are chasing "hospital dreams."

The return on investment in hospitals is significant in the investment circle, and it is always a controversy that investment hospitals are not a good business. Since investing in hospitals has always been a heavy asset model with long investment cycles and low Roe, many scholars do not even recognize that hospitals exist as an industry. They believe that hospitals are non-profit organizations and not for profit. For example, the top three public hospitals are overcrowded, but lose money every year. They need government subsidies every year... How hard is the hospital to make money! However, optimists see the other side of the “coin”, such as a small district-level public hospital in Shanghai, which can achieve annual revenues of 45 million yuan and a net profit of about 10 million yuan.

Phoenix Healthcare, a Hong Kong-listed company that claims to be a “pure hospital stock”, tells its squabbled industrial capital with its solid financial report data: resource sharing, scale operation, and cost advantages. Ultimately, it can produce management benefits and operating performance. The return will also be substantial.

After hosting a number of public hospitals in the Beijing area, the company created economies of scale and achieved sharing of medical resources. As a result, the cost of procurement and other aspects of the company's hospitals rapidly declined. The fastest public hospitals entrusted with public hospitals turned losses into profits. Phoenix Medical achieved revenue of 887.4 million yuan in 2013 and its profit reached 139 million yuan. When the company went public in Hong Kong last year, the company over-subscribed by over 500 times in retail sales and over 130 times in over-subscription by institutions, creating the highest IPO ratio for IPO in Hong Kong in the past two years.

Dechuan Medical Fund Chairman Jiang Guangze reported to the reporter that if we bid farewell to the previous heavy asset investment model, we will take the light asset model, especially investment specialists (such as the "Goldeye" specialty hospital in recent years, the compound growth rate is 30 More than %)) and high-end medical services, then the earnings of listed companies are expected to advance.

The future of the hospital is actually limitless. Statistics show that the income of various types of hospitals in China has reached 1.99 trillion yuan in 2012, accounting for 69.1% of the total health expenditure and 5.56% of GDP. In the previous year, the hospital revenue accounted for 69% and 3.4% respectively. The situation is clear. In the United States, the healthcare industry has become the largest industry, accounting for 17% of GDP, and has become a key sector of the U.S. economy. Therefore, Cao Jian, a researcher at the China Economic Development Research Center of the University of International Business and Economics, told reporters that the experience of the United States has a strong reference value for China's hospital industry. In the future, Chinese hospitals will also play an increasingly important role in national economic development. .

It is worth noting that the listed company's “practice medicine” is heating up. Since 2014, many listed companies have been involved in private hospitals to open up the industry in order to create new profit points. The last one kilometre, which in turn drives sales of medicines or medical devices. At the same time, traditional pharmaceutical manufacturing companies have also responded to the needs of industrial upgrading, and have focused on the hot direction of policy guidance. “Investment hospitals” have become an important starting point for the company’s external outreach.

Take Fu Human Medicine as an example. In March of this year, the company formally opened a “hospital dream”: 20 hospitals will be deployed within the Hubei region within the next three years. Wang Xuehai, chairman of the company, revealed that he did not plan to build a new hospital but rely on the existing hospital. In addition, the reporter was also informed that Renfu Pharmaceutical's acquisition of the hospital is progressing smoothly.

According to brokerage industry analysts, in the layout of private hospitals, Renfu medicine can not only directly occupy a larger market for anesthetic drugs, but also create the advantages of regional hospital group operation, reduce hospital procurement costs, improve management efficiency, successful transformation The probability is greater.

As Fudan University’s listed company platform, Fudan Fuhua is expected to participate in the trusteeship business of the Fudan hospital system in the future. Among Shanghai's top-three hospitals, the best hospitals such as Huashan Hospital, Zhongshan Hospital, and East China Hospital are all affiliated with Fudan University. The listed company platform will accelerate the process of integrating Fudan University's resources and participating in hospital management.

Jinling Pharmaceuticals is highly experienced in hospital operations. The company now controls two general hospitals, among which Suqian Hospital is a Class III B hospital and Yizheng Hospital is a Class A hospital. Last year, the two hospitals maintained a good momentum of development and achieved business revenue of 682 million yuan and 210 million yuan respectively. In the first quarter of this year, the company's performance continued to maintain a high growth momentum, attracting many funds to enter. The Shanghai Daily correspondent was informed that it does not rule out the possibility of further capital operation in the medical service sector this year.

"Branding, first-mover advantage, and policy barriers are very obvious. Missed, it is difficult to enter after 10 years." A brokerage researcher in Shanghai told reporters in this way that, in her view, "the current total value of A shares of the pharmaceutical sector is 17,400. 100 million yuan, of which the total market value of medical service companies is nearly 100 billion yuan. Even if only 30% of hospitals are securitized in the future, the market value of 500 billion yuan in hospitals can be expected."

Support policy to make the "cake" bigger

The successful experience of Phoenix Medical made related listed companies and investment institutions further aware that participating in the reform of public hospitals is a “money scene”. More investment institutions frankly stated that the reform of public ownership mixed ownership and promotion and promotion of public hospitals will be the “big cake” in the future.

In the trillion-dollar blueprint for medical services, tertiary hospitals are the best assets, but due to their limited resources, they are also the focus of competition. In 2012, the tertiary hospitals accounted for 10.16% of the total number of hospitals, and had 56.89% of the total income of public hospitals in the country, which was higher than the 54.54% of the total income in 2010. The proportion of tertiary hospitals' revenue continued to expand.

After observing several tertiary hospitals, the partner of an investment institution told reporters: “As China enters an ageing society and the accumulation of social wealth, people’s attention to health is increasing. You see, many people are even young. For a small cold, we must go to the top three hospitals to find authoritative doctors to see. Special hospitals in public hospitals are also booming.

On the other hand, public hospitals are the deepwater areas of China's medical service reform, involving multiple interests, and their reform process does not happen overnight. Some senior investors believe that although some listed companies have already entered the reform work of public hospitals, the government’s control over public hospitals will not change. The later reform process depends on the determination and courage of the local government.

At present, the pilot reform of public hospitals in Beijing and Guangdong is progressing in an orderly manner. On May 9th this year, the Health and Planning Commission once again announced a list of pilot cities for reform of public hospitals, including cities such as Tianjin and Shaoxing in Zhejiang Province, Tangshan in Hebei Province, and Taiyuan in Shanxi Province.

"In order to encourage public hospital reforms and the development of private hospitals, we will continue to introduce new policies or fall into place in the past." Cao Jian, a researcher at the China Economic Development Research Center of the University of International Business and Economics, believes that the support policy will become the hospital this year. The main catalyst for investment.

At the 2014 National Economic System Reform Conference held from May 16 to May 17, the National Development and Reform Commission proposed to complete the medical reform and other tasks within the year. By allowing more capital to enter, it will increase the supply of medical resources and bring in more sun-growth management. It really solves the problems of difficult medical treatment and expensive medical treatment. This is the expectation of all sectors of society and is also the dream of hospital investors and related listed companies.