The consolidation of the pharmaceutical market has accelerated, and another pharmaceutical company has sold off hospitals

【Pharmaceutical Network Industry Dynamics】Once, the pharmaceutical companies that "lie down to make money" have shot out to buy assets such as hospitals, but now with the normalization of collection and the promotion of policies such as medical insurance cost control, the pharmaceutical environment has undergone obvious changes, market integration has accelerated, and more and more pharmaceutical companies have gone from "soaring" to selling assets
.

Recently, Xinhua Medical announced that the company intends to transfer 12.
85% of the equity of Shanghai Chenwei Zhongde Hospital Management Co.
, Ltd.
(hereinafter referred to as "Chenwei Zhongde") jointly held by its two holding subsidiaries, Shandong Honghua and Zibo Hongxin, to Chen Wei
, a natural person.

The purpose of this hospital sale is to further optimize the asset structure and optimize the allocation
of resources.

According to the data, Xinhua Medical is a health industry group
integrating four major sectors of medical equipment, pharmaceutical equipment, medical services, and medical trade.

ChenWei Zhongde was jointly funded by Chen Wei and others in December 2015, of which Chen Wei held 95% of
the shares at that time.

According to the data, Chenwei Zhongde Holdings includes medical device companies
including Xi'an Zhongde Orthopaedic Hospital, Jinan Zhongde Orthopaedic Hospital, Changchun Zhongde Orthopaedic Hospital, Changchun Orthopaedic Hospital, Changchun Orthopaedic Hospital and many other orthopedic hospitals.

At the end of 2017, Shandong Honghua and Zibo Hongxin held a total of 12.
85% of the shares of Chenwei Zhongde through a capital increase, and now five years later, Xinhua Medical has made a decision to
withdraw from the investment.

Financial data show that in 2021, Chenwei Zhongde achieved operating income of about 706 million yuan and net profit of 16.
2219 million yuan
.

Since the beginning of this year, as of April 30, the company has achieved revenue of about 194 million yuan and a net profit loss of 50.
5766 million yuan
.

Regarding the transaction, Xinhua Medical said that after the completion of the asset transfer, the company will withdraw from the investment project
.

At the same time, the transaction does not constitute a related party transaction, and the proceeds from the sale of assets will be used for the daily operation of the
company.

It is worth mentioning that in recent years, Xinhua Medical has frequently sold assets, including many hospitals
.

For example, in June this year, Xinhua Medical announced that it intends to transfer 43.
3333% of the equity of Tangshan Hongxin Hospital Co.
, Ltd.
held by its wholly-owned subsidiary; In 2020, Xinhua Medical announced in April and December that it intends to sell its 70% and 80% equity interests
in zichuan district hospital west hospital in Zibo and 80% in nanyang orthopedic high-tech zone hospital co.
, LTD.

From the perspective of Xinhua Medical's business revenue, in 2021, Xinhua Medical's revenue contribution mainly comes from medical devices, accounting for nearly 80%, while medical services account for only 7.
76%, from the data point of view, the contribution of medical services to the company is not prominent, or the reason why the company continues to sell related assets
.

Not only Xinhua Medical, in recent years, many pharmaceutical companies are also divesting hospital business, such as Jingfeng Pharmaceutical, Zhejiang Xianju Pharmaceutical, China Resources Sanjiu, Yibai Pharmaceutical, etc.
, the hospital seems to have changed from fragrant steamed bread to hot potato, and the analysis believes that it is mainly related to
the overall environmental changes.

According to the "China Health Statistics Yearbook 2021", the loss of non-public medical and health institutions in 2020 was as high as 130.
657 billion yuan, and the loss of public medical and health institutions in the same period was 2.
207 billion yuan
.

For the sale of hospitals staged by a large number of pharmaceutical companies, some insiders said that in fact, pharmaceutical companies invest in medical services belong to out-of-circle capital, pharmaceutical companies mainly produce and provide drugs, and medical institutions provide medical services
.

In this regard, when pharmaceutical companies see that the medical service track is not very good, even if it is short-term, they may want to get rid of it earlier
.

In addition, under the comprehensive influence of factors such as collection and procurement, the main business of many pharmaceutical companies is under pressure, and it is urgent to withdraw funds or develop new products
.

Disclaimer: In no event shall the information or opinions expressed herein constitute investment advice
to any person.