Leju Holdings Ltd Finance and Economics Deng RufeiShulan Medical Management Co., Ltd. (hereinafter referred to as "Shulan Medical") submitted to the HKEx in August, with co-sponsors China International Capital Corporation and CITIC.
Since Li Lanjuan stepped down as chairman of Shulan Medical in 2020 and was replaced by her son Zheng Jie, Shulan Medical has been on the road of continuous losses. From 2021 to the first quarter of 2023, the company has lost 225 million yuan, and the loss has been expanding.
At present, the business of Shulan Medical integrates three parts: health care service, hospital management service and platform service.
As of March 31, 2023, Shulan Medical has owned and operated three comprehensive social medical institutions, of which Shulan (Hangzhou) Hospital has opened 1000 beds, 46 clinical specialties and 13 medical technology departments. It is the only social medical institution in China that can carry out liver, kidney, heart and lung transplantation at the same time.
In terms of hospital management services, Shulan Medical provides two modes: comprehensive management services and discipline management services. As of March 31, 2023, Shulan Medical has signed hospital management service agreements with 14 hospitals, covering Fujian, Chongqing, Henan, Shandong, Guangdong, Yunnan, Anhui and other provinces and municipalities.
In addition, Shulan Medical also provides a number of platform services, including digital medical platform services, medical testing services, clinical trial services and supply chain services.
Under the multi-point layout operation mode, the total income of Shulan Medical from 2020 to 2022 and at the end of March 2023 was 1.618 billion yuan, 1.548 billion yuan, 1.778 billion yuan and 486 million yuan respectively. Among them, health and medical services contribute most of the total income, accounting for more than 70% of the total income.
Although the total revenue shows an upward trend as a whole, the company's profit has changed from profit to loss, and the amount of loss has been increasing. From 2020 to the end of March 2023, Shulan Medical's annual profits were 64.112 million yuan,-82.289 million yuan,-111 million yuan and-31.545 million yuan respectively, with a cumulative loss of 225 million yuan in two and a half years.
As for the reasons for the large losses, Shulan Medical said frankly that it was mainly due to the expansion of the hospital network to build and set up Shulan (Anji) Hospital and Shulan (Quzhou) Hospital, both of which were in the climbing period, with huge costs but limited benefits.
According to non-IFRS, Shulan Medical's adjusted net profit during the reporting period was 122 million yuan, 21.177 million yuan, 6.304 million yuan and 4.8 million yuan respectively.
It should be pointed out that since the hospital industry requires a large amount of initial investment because of its heavy asset nature, newly established hospitals need time to attract patients and generate sufficient returns to offset the costs and expenses of the initial investment. Therefore, while expanding the medical network, the gross profit level of Shulan Medical is also affected by the two new hospitals, there are certain fluctuations.