On June 28, 2024, Beijing Tong Ren Tang Healthcare Investment Co., Ltd. (Beijing Tong Ren Tang Healthcare Investment Co., Ltd.) submitted a prospectus on the Hong Kong Stock Exchange to issue H shares for listing on the Hong Kong Main Board.

Link to Tongrentang Healthcare's prospectus:

https://www1.hkexnews.hk/app/sehk/2024/106578/documents/sehk24062800209_c.pdf

Main business

Tongrentang Medical, founded in 2015, is a leading traditional Chinese medicine medical group. It owns and manages its own medical institutions according to the three levels of chain hospitals, primary chain medical institutions, and internet hospitals. Combining “medicine” and “nursing”, we provide modern and customized traditional Chinese medicine medical services, cover the entire scenario with standardized service procedures in one stop, use superior specialties, and use a combination of traditional Chinese medicine and non-drug treatment to provide customers with the most suitable solutions.

Tongrentang Healthcare, based on the long-standing “Tong Ren Tang” brand, is the largest traditional Chinese medicine hospital group in the medical service industry of non-public traditional Chinese medicine hospitals in China, according to the 2022 total number of outpatient visits and outpatient medical service revenue of its own traditional Chinese medicine hospitals as of June 19, 2024.

As of June 19, 2024, Tong Ren Tang Healthcare has established a hierarchical diagnosis and treatment service network, including 11 offline medical institutions and 1 internet hospital, as well as 9 offline managed medical institutions.

Tong Ren Tang Healthcare's revenue mainly comes from (i) medical services; (ii) management services; and (iii) sales of health products and other products to customers.

• Medical services mainly provide comprehensive traditional Chinese medicine medical services to individual customers. As of June 19, 2024, Tong Ren Tang Healthcare has 11 offline medical institutions, including 7 hospitals, 2 outpatient departments, and 2 clinics. In addition, the company is also expanding its online medical service portfolio through the establishment of an Internet hospital, integrating resources from external medical institutions, doctors and pharmacies.

• Management services, mainly including supply chain management services. Using the company's vast medical resources and rich management experience, we provide various management services to institutional customers, including medical institutions that provide medical services, professional training, supply chain, information technology, marketing and promotion, and regulatory compliance to empower the company's management. With the support of the company's multi-functional procurement collaborative management platform, comprehensive services are provided to pharmaceutical production and/or trading enterprises, and service fees are collected. As of June 19, 2024, Tong Ren Tang Healthcare has a total of nine managed medical institutions offline, including five hospitals, an outpatient department, and three community health institutions.

• We sell health products and other products, mainly including proprietary Chinese medicines, Chinese herbal medicines, Western medicines, health foods, and nutritional products. As a supplement to the company's traditional Chinese medicine services, it sells health products and other products through its own independent store in Jinhua City, Zhejiang Province. In addition, the company has also obtained the right to exclusively sell the Angong beef yellow pill series products to retail terminals in Zhejiang Province (excluding pharmacies and medical institutions under the Tongrentang Group) granted by Tongrentang Commercial.

Shareholder structure

According to the prospectus, Tongrentang Healthcare had a shareholder structure before listing,

The final controlling shareholder, Tong Ren Tang, directly held 83.98% of the shares and exercised a total of 93.83% of voting rights through Tong Ren Tang Health Care, Tong Ren Tang Inheritance Fund management, Tong Ren Tang Medical Fund management (0.36%), Tong Ren Tang Pension Fund (4.93%), Tongkang Fund (2.36%), and Tongqing Fund (2.36%).

Mr. Zhu Zhibiao holds 2.13% of the shares;

Ms. Pan Songqin holds 1.74% of the shares;

Bozhou Yipinde (Ms. Niu Pin 99%, Mr. Niu Baie 1%), holding 1.07% of the shares;

Jining Yinling (Wen Yongming 70%, Ms. Xiao Jing 30%) holds 0.73% of the shares;

Bingrong Investment (final control by Luo Jianchao) holds 0.50% of the shares.

Management

The Board of Directors of Tong Ren Tang Healthcare consists of 8 directors, including:

• 2 Executive Directors: Mr. Rao Zuhai (Chairman, Party Secretary), Mr. Lu Yan (General Manager, Quality Manager);

• 3 non-executive directors: Mr. Zhu Feng, Mr. Sun Kai, and Ms. Xing Qian;

• Three independent non-executive directors: Mr. Yan Zhixiong, Mr. Zhang Xiang, and Mr. Gao Yanbin.

Three members of the Supervisory Board: Ms. Huang Dongmei, Mr. Ge Bing, and Ms. Zhao Lin.

In addition to the executive directors, executives include Mr. Jin Tao, Deputy Secretary of the Party Committee and Secretary of the Economic Committee; Ms. Zhang Yang, Deputy General Manager; Ms. Gui Xun, Deputy General Manager and General Counsel; Ms. Li Yan, Deputy General Manager and Chief Financial Officer; Ms. Qiao Yanan, Assistant General Manager, Secretary of the Board of Directors and Joint Company Secretary; and Ms. Zhang Hui, Assistant General Manager.

Company performance

According to the prospectus, in the past 2021, 2022 and 2023, Tongrentang Healthcare's operating income was RMB 470 million, 697 million yuan, and RMB 895 million, respectively, and the corresponding net profit was RMB -6.793 million, -146.60 million yuan, and 44.590 million yuan, respectively.

Intermediary team

Tong Ren Tang Healthcare's intermediary team for this IPO mainly includes: CICC as its sole sponsor; Ernst & Young as its auditor; Tianyuan and Tianyuan (Hong Kong) are its Chinese lawyers and Hong Kong lawyers respectively; Han Kun and Haiwen (Hong Kong) are its Chinese lawyers and Hong Kong lawyers for its brokerage firm; JLL is its property valuer; and Frost Sullivan is its industry advisor.