On February 9, 2024, Beijing Yuanxin Technology Group Co., Ltd. (hereinafter referred to as “Yuanxin Technology”) disclosed its prospectus on the Hong Kong Stock Exchange after the hearing, or was listed in an IPO on the Hong Kong Main Board soon. It was submitted five times on October 15, 2021, April 19, 2022, October 21, 2023 May 29, and December 18, 2023.
Link to Yuanxin Technology's prospectus after the hearing:
https://www1.hkexnews.hk/app/sehk/2023/106044/documents/sehk24020900875_c.pdf
Main business
Yuanxin Technology, founded in 2015, is a leading healthcare company that provides services focused on the patient's medical service cycle. According to Frost & Sullivan, in terms of revenue in 2022, Yuanxin Technology is the largest offline online medical delivery platform focusing on prescription drugs in China. Dr. Maoshou, a comprehensive online medical service and pharmacy platform owned by the company, was one of the first Internet hospitals in China to obtain a medical practice license.
Yuanxin Technology's services include comprehensive out-of-hospital patient services, supply-side enablement services, and medical industry-side empowerment services.
Out-of-hospital comprehensive patient services
It mainly includes out-of-hospital pharmacy services, out-of-hospital medical services and pharmaceutical wholesale services. Yuanxin Technology provides personalized and caring services to patients through the nationwide offline pharmacy network Yuanxin Pharmacy and online pharmacy expert doctors. As of August 31, 2023, Yuanxin Technology has opened 322 pharmacies in 30 provinces in China. Of these, 269 are located within 1 kilometer of the hospital, while 122 pharmacies have been designated as dual-channel pharmacies for major medical insurance. The company's offline and online pharmacies provide about 61,700 varieties of products. The product portfolio covers 104 of the 125 innovative cancer treatment drugs approved by the State Drug Administration. In the first eight months of 2023, Doctor Wonderful had an average monthly user visit of about 35.7 million times. Yuanxin Technology also provides a variety of offline medical services through outpatient clinics in 14 provinces, including online consultations, infusion services, pharmacist consultation, medication management, compliance management, and consultation plans.
Supply-side enabling services
Yuanxin Technology introduced a set of standardized and modular services and solutions developed by the company to help hospitals intelligently and optimize their hospital operations, with the aim of enhancing patients' in-hospital experience and solving their unmet needs for full course of disease management. As of August 31, 2023, Yuanxin Technology has cooperated with a total of 477 hospitals, covering 26 provinces and more than 100 cities in China, including more than 180 of the top three hospitals.
Empowering services for the medical industry
Yuanxin Technology further empowers other industry participants (such as pharmaceutical companies and insurance companies) by providing targeted innovative solutions. The services mainly include disease course management and service packages provided to patients, innovative marketing services, and insurance services provided to pharmaceutical companies. The company's innovative insurance technology platform Yuanxin Insurance helps insurers provide innovative payment methods that integrate medical services and data analysis. As of August 31, 2023, Yuanxin Technology has provided services to 177 insurance companies and 8 reinsurance companies, cooperated with insurance companies to launch more than 40 new specialty insurance products, helped launch inclusive commercial health insurance in more than 120 cities, distributed a total of 55 health insurance products, and managed 59.3 million insurance policies. Yuanxin Technology also provides marketing services to pharmaceutical companies. As of August 31, 2023, it has provided marketing services to 345 pharmaceutical companies, covering 16 of the top ten pharmaceutical companies with the strongest R&D capabilities in China and the top 20 pharmaceutical companies in the world.
Shareholder structure
According to the prospectus, in Yuanxin Technology's shareholder structure before listing,
Tianjin Chuanyou Group holds 29.82% of the shares (Tianjin Chuanyou Group is controlled by He Tao and He Weizhuang respectively, 92.56% and 7.44%);
The stock reward program platform Yuanmiaoren holds 7.19% of the shares (He Tao has voting rights);
By controlling Tianjin Chuanyou Group and Yuanmiaoren, Mr. He Tao held a total of 37.01% of the shares.
Tencent, holding 19.55% of shares;
Sequoia Capital, holding 15.75% of shares;
SCHP, holding 0.47% of shares;
Qiming Venture Capital, holding 6.90% of shares;
Astral New Economy, holding 6.51% of shares;
Kunling, holding 4.54% of shares;
KL Health, holding 0.78% of the shares;
INCE Capital, holding 1.77% of shares;
CITIC holds 1.60% of the shares;
CICC holds 0.93% of shares
Aobo Capital OrbiMed holds 0.68% of the shares;
Index, holding 0.50% of shares;
Yi Fang, holding 0.31% of shares;
Others include Bank of China International, Qichuang Keyuan, ABI Asia, Guangxi New Channel, B Capital, etc., which together hold 2.70% of shares.
Directors and Executives
The board of directors of Yuanxin Technology consists of 9 directors, including 4 executive directors (Mr. He Tao, Mr. He Weizhuang, Mr. Luo Dongtao, Mr. Zhang Huanchang), 2 non-executive directors (Mr. Hao Rui, Mr. Zhou Kui), and 3 independent non-executive directors (Mr. Liao Zhongmin, Professor Wu and Ms. Zhao Xueyuan).
Three members of the Supervisory Board (Mr. He Guofeng, Mr. Kong Lingfa, and Ms. Shi Bo).
In addition to the Executive Director, senior executives include Chief Financial Officer Ms. Wen Jing.
Company performance
According to the prospectus, in the past eight months of 2020, 2021, 2022 and 2023, Yuanxin Technology's operating income was RMB 3,629 million, 5.938 billion, 7.775 billion yuan, and RMB 6.296 billion, respectively. The corresponding net losses were RMB 363 million, 757 million, 805 million and RMB 573 million, respectively. The corresponding adjusted net losses were RMB 313 million, 621 million, 696 million and 538 million yuan respectively.
Intermediary team
Yuanxin Technology's intermediary team for this IPO mainly includes Goldman Sachs and CITIC Securities as co-sponsors; Ernst & Young as its auditors; Jingtian Gongcheng and Shida are its Chinese lawyers and Hong Kong and US lawyers respectively; Tianyuan and Fuerte are its Chinese lawyers and Hong Kong and US lawyers respectively; and Frost Sullivan is its industry advisor.
