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Behind The Wave Of Private Ophthalmic Hospital Listing: Performance M & A Dependence Is Difficult To Solve

2021/9/21 11:01:00 59

Eye Hospital

The regeneration variables of initial application of Huaxia Ophthalmology, a company to be listed on the gem of Shenzhen Stock Exchange, is in the stage of registration.

On September 9, the China Securities Regulatory Commission (CSRC) issued a query to Huaxia Ophthalmology, asking the company to explain and clarify the business expansion and goodwill impairment, the civil and non-governmental restructuring of Xiamen ophthalmology center and the impact of the new medical reform policy.

Prior to that, the application draft of Huaxia ophthalmology had passed four rounds of inquiries on the growth enterprise market of Shenzhen Stock Exchange. It was only on June 24 this year that the application draft of Huaxia ophthalmology passed the deliberation of the Municipal Committee of Shenzhen Stock Exchange on the growth enterprise market. It is rare that the application draft of Huaxia ophthalmology was once again inquired by the CSRC after submitting the registration draft.

Whether it can successfully pass the final stage of IPO will have a significant impact on the ophthalmic medical companies queuing up for listing.

According to the statistics of 21st century economic report, in addition to Huaxia Ophthalmology, there are two ophthalmic companies in the A-share queue, namely, he's ophthalmology and pry ophthalmology. Both of them have passed the examination and approval of the gem's development and examination committee and are waiting for the CSRC to register for listing.

Some industry insiders pointed out that this time, the China Securities Regulatory Commission focused on the expansion mode of Huaxia ophthalmology business and the impact of the new medical reform policy, pointing directly to the core issues such as the common development and industry changes faced by the ophthalmic medical industry, which may have an impact on the listing process of many ophthalmic hospitals to be listed.

Ophthalmic hospitals set off a wave of listing

According to the statistics of the 21st century economic report, since this year, the number of ophthalmic hospitals listed in the market has exceeded the number of existing ophthalmic hospitals.

Looking at the A-share and Hong Kong stock markets, before 2021, there were only three ophthalmic medical listed companies in the two markets, including Aier Ophthalmology, Guangzheng ophthalmology and Xima ophthalmology. In the A-share market, only Aier ophthalmology and Guangzheng ophthalmology were listed. Aier ophthalmology was listed on the initial stock market, while Guangzheng ophthalmology was listed on the curve of asset restructuring, In the Hong Kong stock market, only one eye hospital of Xima ophthalmology has been listed in 2018.

Since the second half of 2020, ophthalmic hospitals have started to apply for listing in clusters. Huaxia Ophthalmology, PRI ophthalmology and he's ophthalmology have submitted their prospectuses to land on the A-share gem.

On June 24, 2021, the application draft of Xiamen Huaxia ophthalmology Co., Ltd. passed the Municipal Committee's deliberation on the gem of Shenzhen stock exchange through four rounds of inquiry on the gem of Shenzhen Stock Exchange, successfully passed the meeting and then submitted the registration draft.

On July 9, the 38th deliberation meeting of the GEM Listing Committee in 2021 announced that Chengdu pry ophthalmology Co., Ltd. was approved for the first time, with a plan to raise 286 million yuan; On August 19, after three rounds of inquiry, the IPO application of Liaoning Heshi ophthalmology gem met the issuance conditions, listing conditions and information disclosure requirements of the gem, and the IPO was approved. At present, the two ophthalmic hospitals have not submitted the registration draft.

In addition, Chaoju ophthalmology Co., Ltd., which passed the listing hearing of the Hong Kong Stock Exchange in July and successfully listed on the main board of the Hong Kong stock exchange, if all the above ophthalmic hospitals can be successfully issued, there will be a climax of four eye hospitals listing in 2021, and the number of newly listed ophthalmic hospitals will exceed the number of listed ophthalmic hospitals.

Why do ophthalmic medical companies choose centralized listing? Analysts from Northeast Securities told the 21st century economic report that the driving factors behind the mass listing of ophthalmic medical companies mainly come from business competition and changes in the industry environment.

According to the above analysts, Aier ophthalmology was the largest in the ophthalmic medical market before, and it was widely sought after in the capital market. At the end of 2020, its market value exceeded 300 billion yuan. Under the hot speculation of capital, eye hospitals began to capitalize one after another; Under the new policy of medical reform, the reimbursement policy of medical insurance has implemented strict supervision on the reimbursement of private institutions. The insurance related businesses of related companies are facing shrinking, and the growth of industry performance is under pressure. However, the current ophthalmic medical companies are still in the high light moment, so they can get the overvalue by listing now.

At the same time, from the perspective of industry environment, the market competition of ophthalmic medical market is serious homogenization, the marketing mode is similar, the development of enterprises depends on merger and acquisition to drive the industry development trend, and rapid capitalization will occupy the market initiative; Under the stimulation of the rapid development of Ophthalmology market, many disadvantages embedded in the industry competition have begun to be exposed, and the market operation environment is facing changes, or will usher in strict supervision of the industry.

Huaxia Ophthalmology, which took the lead in China Securities Regulatory Commission, has been faced with problems such as the business expansion mode and the impact of medical reform policy, which has attracted the attention of the regulatory authorities. Whether the relevant ophthalmic companies are successfully listed or facing changes.

"Light R & D" and other issues are highlighted

In fact, the market and investors have been questioning the development of the ophthalmic hospital since it submitted the listing application.

The 21st century economic report's reporter consulted the Prospectuses of several ophthalmic hospitals and found that all of their projects were used for the construction of new ophthalmic hospitals, the reconstruction of existing ophthalmic hospitals and the replenishment of working capital. The ophthalmic medical market companies attached importance to marketing, ignored research and development, and relied on merger and acquisition to realize large-scale expansion, Related companies to be listed are generally faced with market competition, national health insurance policy changes, industry regulatory policy changes, business expansion and other risks.

During the reporting period from 2018 to 2020, the revenue of he's ophthalmology was 613 million yuan, 756 million yuan and 838 million yuan respectively, while the R & D investment was only 2.16 million yuan, 1.6104 million yuan and 1.636 million yuan, accounting for less than 0.4% of long-term R & D expenses; From 2017 to the first three quarters of 2020, the proportion of R & D investment in revenue of Huaxia ophthalmology was only 0.69%, 0.66%, 0.78% and 0.71% respectively; In the report period, the R & D investment of PR ophthalmology was zero all year round.

From 2018 to 2020, the average rates of advertising and promotion expenses of each company reached 4.50%, 5.09% and 4.07% respectively, and the advertising and promotion expenses rate of pry ophthalmology even exceeded 10% all the year round, which means that the operating performance of ophthalmic medicine mainly depends on the realization of publicity and marketing.

On the other hand, the expansion of ophthalmic medical market without R & D investment can only be realized by opening new hospitals or merging more hospitals, which has made it difficult for relevant companies to bear the burden.

According to the investigation of 21st century economic report, only 11 of the 35 subsidiaries owned by he's ophthalmology as of the end of 2020 were profitable, while the remaining 24 were in deficit; Among the 67 holding subsidiaries of Huaxia ophthalmology that have disclosed financial information in 2019, 42 are in loss and 25 are in profit; By the end of 2020, among the 33 first-class subsidiaries of pry Ophthalmology, 8 of the 18 hospitals that have been opened have lost money, and 9 hospitals that have not opened their business are also in the state of loss.

Throughout the explanations given by various companies, the hospital construction is still in the early stage, has not yet obtained market recognition, and the income scale is small. At the same time, there are necessary fixed costs in the operation of the hospital, resulting in the loss of new hospitals for a period of time. And the cost pressure brought by the large-scale expansion is becoming the performance resistance that every company is hard to bypass.

At the same time, ophthalmic medical institutions have to face another layer of fierce competition.

According to the "white paper on eye health in China" issued by the National Health Commission, China is generally facing a shortage of ophthalmologists. By the end of 2019, the number of ophthalmologists in China is less than 50000. At present, ophthalmic medical hospitals do not have the ability to train medical practitioners themselves. Most of the practitioners in the industry companies are recruited from ophthalmic institutions of public hospitals.

The reporter of 21st century economic report consulted ophthalmologists from a number of top three hospitals in Beijing. These doctors said that although the state has a policy to promote and standardize doctors' multi-point practice, in recent two years, due to the impact of the medical industry rectification, the relevant policies have been tightened, and public ophthalmologists must reduce the time of going out for practice. This means that the rapid expansion of private ophthalmic medicine does not have enough professional practitioners to support, and the related companies generally have a shortage of doctors. In this case, the expansion can only be in the state of continuous loss.

In addition, the most critical impact of ophthalmic medical market is the new medical insurance policy.

The reporter of 21st century economic report noted that the business of the three ophthalmic medical companies to be listed is basically homogeneous, and their main businesses are to provide ophthalmic specialist diagnosis and treatment services and optometry services to patients with eye diseases, among which cataract and glaucoma diagnosis and treatment services are the core business of revenue.

The diagnosis and treatment service of bihaoshi ophthalmology department accounts for 70% of the main business income of each period, the ophthalmic medical business income of Huaxia ophthalmology department accounts for 90% of the revenue of each period, and the proportion of revenue of ophthalmic diagnosis and treatment business of PRI ophthalmology in each period is about 85%.

In the ophthalmic medical services of private ophthalmic medical institutions, only the basic costs of cataract surgery (excluding high-end lens, etc.) and partial comprehensive eye disease surgery are included in the scope of medical insurance payment, while refractive and optometry business is generally not included in the scope of medical insurance payment.

In recent years, the national medical insurance fund is faced with the situation that the expenditure increases too fast, unreasonable drug use, excessive increase of diagnosis and treatment items and drug abuse lead to the waste of medical insurance expenses, and even many medical institutions, especially private institutions, appear the phenomenon of insurance fraud. In order to reduce the unreasonable expenditure of medical insurance fund and improve the utilization rate of medical insurance fund, the state has implemented a wide range of medical insurance cost control policies.

Affected by this, each company said that if the company continues to increase its dependence on medical insurance income or fails to expand other non-medical insurance project income smoothly, the stability of the company's future income and the sustainability of its growth are expected to be adversely affected.

On August 31, the state health insurance bureau, the National Health Commission and other eight ministries and commissions jointly issued a notice on printing and distributing the pilot program of deepening the reform of medical service prices. It is planned to explore and form replicable and popularized experience of medical service price reform through three to five years of pilot projects. By 2025, the pilot experience of deepening the reform of medical service prices will be extended to the whole country. The medical service price mechanism with classified management, hospital participation, scientific determination and dynamic adjustment will be mature and finalized, and the function of price leverage will be brought into full play. According to the pilot program, medical consumables will be gradually separated from the price items, play the role of market mechanism, and implement centralized procurement and "zero margin" sales.

The chaos began to show

In addition, as many private ophthalmic medical companies rushed to the market, the ophthalmic medical market led by Aier ophthalmology continued to suffer from medical malpractice, false publicity and over diagnosis and treatment.

Since the end of 2020, Aier Eye Hospital has been in the whirlpool of public opinion due to the medical disputes between Wuhan Aier ophthalmic hospital and patients, well-known anti epidemic doctors, and director of emergency department of Wuhan Central Hospital.

Aifen questioned Aier ophthalmology through social platform, saying that her retina fell off and her right eye was almost blind after being treated by Aier ophthalmology. On July 21 and 22 this year, Aifen released a video again to expose the medical accident problems of Aier ophthalmology with the other three patients. Undoubtedly, the reputation of Aier ophthalmology was hit and the company's share price was severely damaged, Within half a year, the stock price dropped nearly 100 billion yuan.

In fact, in recent years, private ophthalmic medical institutions have become a high incidence area of medical disputes, and it is in urgent need of the regulatory authorities to crack down on it.

According to statistics, there were more than 50 medical disputes and many cataract surgery disputes in the short three-year reporting period. In each period of the report period, there were 8, 23, 20 and 4 medical disputes involving 55 patients.

From 2017 to the end of 2020, the reporter of the 21st century economic report noted that from 2017 to the end of 2020, there were also 49 cases of violation of laws and regulations involved in the operation of pry Ophthalmology, including 27 cases of practice norms, 14 cases of medical announcement, 3 cases of fire fighting, 3 cases of Taxation and 2 cases of environmental protection, "unlicensed practice" and "exaggerated publicity" The company has always been difficult to get rid of.

The 21st century economic report reporter noted that all of the above-mentioned ophthalmic medical companies proposed to be listed put medical disputes or accidents in the same position as the industry regulatory policy changes, national medical insurance policy changes, market competition and other risk items, indicating that as ophthalmic medical institutions, they are facing certain risks of medical disputes or accidents, Medical disputes and accidents may cause the company to face complaints, legal proceedings or economic compensation, which may have adverse effects on the company's reputation and brand.

According to a study, in 2019, the number of emergency ophthalmic patients in China will be 128 million, of which 26.2% are in private ophthalmic hospitals and 74.6% are in general hospitals. With the expansion of private ophthalmic medicine and fierce competition in the market, potential problems in the industry may continue to be exposed, It will bring challenges to the prospects of private ophthalmic medical institutions which rely on advertising to survive.

 

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