A comprehensive healthcare group leader that has set sail again

Xinmileage Health Group is an important enterprise in the healthcare field in China. It has many professional platforms and a huge medical service network with a total of about 30,000 beds. With medical services as the core, the company has built a “four in one” health industry pattern of medical treatment, rehabilitation, medicine and insurance, and insisted on promoting the construction of a multi-level medical insurance system. In 2022, Xinmileage Health Group took control of Hengkang Medical, formerly known as Gansu Unique Biopharmaceutical, through bankruptcy and restructuring, and changed its name to Xinmileage. Currently, it holds 11 hospitals and continues to advance on the path to becoming the “First Stock in Comprehensive Healthcare Group”. After the restructuring, the company's revenue gradually recovered. In 2023, the company achieved operating income of 3,590 billion yuan (+13.59%), achieved net profit to mother of 31 million yuan (-80.29%), and performance continued to recover.

Internal: The hospital's assets are of excellent quality and have a good reputation

Up to now, Xinmileage has a total of 11 hospitals, including 3 level-III hospitals and 7 level-II hospitals. Wafangdian No. 3 Hospital is an important tertiary general hospital in Northeast China. It has minimally invasive technical advantages, and specialties include orthopedic surgery, general surgery, and neurology. Xuyi County Hospital of Traditional Chinese Medicine was founded in 1986. Its major departments include obstetrics and gynecology, ophthalmology, hepatology, cardiovascular disease, and urology. Siyang Hospital was founded in 1945 and will soon be upgraded to a level-III hospital with a total of 1,600 beds. There is an East Hospital area focusing on oncology, rehabilitation, and chronic diseases, and has 800 beds. Hospitals within the company are distributed in densely populated counties and cities, and public medical resources are insufficient. As a private provider of high-quality medical services, New Mileage is highly attractive to patients.

In vitro: The hospital's asset reserves are large and of excellent quality, and the rhythm of injection into the body is controllable. Long-term development can be expected. New Mileage Health Group has established regional medical centers in Hebei, Shandong, Henan, Shanxi, Shaanxi, Sichuan and Chongqing. Among them, Yankuang Xinmileage General Hospital is a level-3 A general hospital in Zoucheng, Shandong Province; Jincheng University Hospital is a leading tertiary class A regional medical center in Shanxi, with a standardized national training base; Baotou Obstetrics and Gynecology Hospital is a third-class hospital, Baotou Obstetrics and Gynecology Hospital; Baotou Obstetrics and Gynecology Hospital It is a third-class B general hospital located in the central area of Taiyuan, Shanxi. An application is being made for an upgrade to a Class III A general hospital. Dongying Honggang Hospital is a tertiary hospital specializing in geriatrics. It is the first batch of national integrated medical care model institutions assessed by the National Health and Health Commission. Luoyang Xinmileage Hospital is a third-level geriatric medical center. It is the first national group standard drafting unit for geriatric hospitals; the group has 7 general hospitals and 1 outpatient department in Chongqing; in addition, it invests in holding more than 10 hospitals above level 2 in Hebei, Henan, Shanxi, Shaanxi, etc.

Investment advice: Give a “buy” rating

The company uses the “1+N” model to build regional medical service centers in regions with insufficient medical resources. The quality of internal assets is high, the reserves of extracorporeal assets are abundant, and the pharmaceutical industry sector is growing steadily. From 2024 to 2026, we expect to achieve operating income of 40.98/48.48/5.479 billion yuan, or +14.1%/18.3%/13.0% year over year; achieve net profit of 1.17/2.56/334 million yuan, +280.4%/118.5%/30.5% year over year; first coverage, giving a “buy” rating.

Risk warning

Risk of policy changes; increased risk by regional competition.