In June this year, Gushengtang Chinese Medicine, China's largest private new Chinese medicine medical and health service platform, submitted a prospectus to the Hong Kong Stock Exchange.
Just 5 months later, Gushengtang passed the hearing of the Hong Kong Stock Exchange.
On December 10, Gushengtang successfully landed on the Hong Kong Stock Exchange.
On the day of listing, the market value of Gushengtang was finally locked in HK$6.681 billion. In the Hong Kong stock market, on the same day, it became a medical service enterprise with a market value second only to China's head oncology medical group Haigia Medical, assisted reproduction service provider Jinxin Reproduction, and Xima Ophthalmology (see below for details).
The listing of Gushengtang has also boosted the confidence of the medical industry to a certain extent, breaking the curse of the previous listing of pharmaceutical companies. Hong Kong's IPO market has been sluggish over the past few months, with many corporate IPOs opting to postpone their offerings. For example, Baixinan Biologics, which was originally scheduled to go public on November 26, issued an announcement that "in view of the current market conditions, after consulting with the exclusive global coordinator, it was decided to postpone the global offering." In the case of a relatively sluggish market, Gushengtang still completed more than 8 times the oversubscription.
Behind the listing of Gushengtang, we have once again seen the figure of Changling Capital, the capital pusher who has always been low-key. Why Changling Capital? This question is once again before everyone.
Go long, bet heavily, see highlights
For Gushengtang, an unavoidable topic figure is Jiang Xiaodong, managing partner of Changling Capital.
According to Gushengtang's prospectus, in August 2014, Jiang Xiaodong, then managing director of NEA China, invested exclusively in Gushengtang as the first institutional investor in series A.
In the following 7 years, Jiang Xiaodong represented NEA Fund and Changling Capital, which he founded at the end of 2016, and "added positions" to Gushengtang four times. Ultimately, Changling Capital and NEA held nearly 15% of the shares when Gushengtang went public, and were also the company's largest external investor shareholders.
As the sole representative of the company's early investors, after serving as a director of Gushengtang Company for 7 years, Jiang Xiaodong continued to serve as a director of Gushengtang Listed Company as a non-executive director and a member of the audit committee.
In the Gushengtang prospectus, we also found a rather intriguing point. According to the prospectus, Changling Capital is not only the first institutional investor of Gushengtang, but also the leading investor of Gushengtang's pre-IPO round of financing before listing. This phenomenon also appeared in Haigia Medical, another listed company that Changling Capital harvested a year and a half ago.
Haigia Medical, a head cancer medical group that was successfully listed at the end of June 2020, has now become the medical service enterprise with the highest value in the Hong Kong stock market. Jiang Xiaodong was not only the first investor in Hykia Medical's inception, but also the investor in the last round of Hygia Medical's listing - in 2019, its Changling Capital and WuXi AppTec invested in Hygia Medical's Pre-IPO round.
Combined with the investment in Gushengtang Traditional Chinese Medicine and Haigia Medical, we can see the "long-termism" and perseverance of Changling Capital's investment in the field of medical services. The ultimate value of this perseverance is also amazing.
According to Choice, there are currently nearly 50 "healthcare providers and services" in Hong Kong. If according to the serious nature of medical treatment, excluding enterprises in the field of oral and medical aesthetics with stronger attributes of consumer medical services (we may also need to add a point, Jiang Xiaodong once said to the outside world that medical treatment itself is serious, and consumer medical care may only be more partial to the consumerization of the scene), and then according to the offline physical hospitals to rely on the provision of services for enterprises to screen, you can roughly screen out 11 Hong Kong listed companies that focus more on the field of medical services.
Serious medical service company listed on the Hong Kong stock market, data as of December 10, 2021, data source: Tiger Brokers
As of the close of trading on December 10, the total market capitalization of the 11 listed medical service companies was HK$91.994 billion. Among them, the total market value of Haijiya Medical and Gushengtang TCM of Changling Capital is HK$42.861 billion, accounting for nearly 50% of the total market value of the above-mentioned medical service enterprises. This also shows the uniqueness of Changling Capital's vision in the field of medical services.
On the left is Tu Zhiliang, the founder of Gushengtang
On the right is Zhu Yiwen, founder of Hygia Medical
In fact, not all capital can be gained in the field of health care.
According to Arterial Orange's "2020 Global Healthcare Industry Capital Report", there were 2199 financing incidents in the global medical and health industry in 2020, and the total amount of financing reached a record high of 74.9 billion US dollars (about 516.93 billion yuan).
Among them, the biomedical sector ranked first in the segment with 786 transactions and a financing transaction amount of US$36.9 billion (about 254.7 billion yuan). In the field of medical services, a total of 66 transactions have been completed, with a total of only 10 billion yuan, ranking last.
In the field of medical services, which most investors are prohibitive, why can Changling be the only A-round investor to continuously invest in half of the Hong Kong medical services? What makes them choose to bet heavily from the start-up and keep adding to it until the company grows into an industry leader?
Perhaps, we have to return to the investment logic of Long Ridge Capital.
Do the hard and right thing
Investment in medical services "sweeping monks" is a blockbuster
The special status of the director of the listed company made Jiang Xiaodong choose to refuse the interview.
However, looking at his testimonials in the circle of friends after the listing of Gushengtang, we may understand Jiang Xiaodong's determination to be all in the field of medical services.
Screenshot from the circle of friends released by Jiang Xiaodong at 4:08 p.m. on December 10
In fact, for a long time, Changling Capital has been quite low-key, even almost mysterious. Jiang Xiaodong, the founder of Changling Capital, which frequently makes a move in the field of innovative medical services and innovative medical technology, rarely appears in public to participate in public activities in the venture capital circle.
Looking at the few public speeches of the past 5 years, we may be able to gain insight into how he thinks about the healthcare industry.
He has mentioned more than once that the healthcare sector is a "fast-growing, slow industry." It's a "combination" that seems contradictory. According to Jiang Xiaodong, it is "because it is not so difficult to achieve 'GMV' growth in a period of time because of the simple enjoyment of industry dividends, but because of the complexity of these industry systems, it will be a very 'difficult' thing to truly create long-term value for customers." Simple things, many people can see the benefits with some effort, but after a certain level, it will be very difficult to improve. Difficult things, at first, it takes a lot of effort to achieve a little success, but once it gets better, it will become easier and easier. ”
Is it the secret of Jiang Xiaodong's investment in the medical service field that jiang Xiaodong seems to be turning stones into gold in the slow industry of rapid growth, doing difficult and correct things?
At the Arterial Network Future Medical 100 Conference in April this year, Jiang Xiaodong made a keynote speech on "Because I Believe, So I See: Reconstructing Future Medical Care with Innovative Services". He pointed out that Changling Capital's investment is based on a change in the aging demographic structure of China's largest gray rhinoceros in economic and social development in the next 20 years, which may lead to a doubling of health care spending.
In order to solve the problems faced by medical insurance expenditure, Changling Capital has given a third solution in addition to "open source and throttling" - to improve the input-output ratio of medical services by investing in innovative medical services and innovative technologies, and "doing the most things with the least amount of money". In his view, one of the innovation opportunities in the field of medical services is OMO, which is the integration of online and offline, which is one of the reasons why it chose to invest in Gushengtang Chinese Medicine and Hygia Medical.
The capabilities of the Long Ridge Capital Screening Program have also been validated. Changling Capital, which adheres to the ALL IN innovative medical service and innovative medical technology track, can often successfully obtain the next round of financing for enterprises invested by it. In the past 4 and a half years, it has also successfully raised 3 US dollar funds and 1 RMB fund, with a total fundraising scale of 6 billion yuan. This also somewhat shows that the outside world is optimistic about Changling Capital.
And has been keeping a low profile, the shot is Haijiya, Gushengtang and other industry leaders, Changling Capital can not help but make people have an association.
In Jin Yong's novel "Eight Parts of the Heavenly Dragon", a sweeping monk was once depicted. It looked unremarkable, and he might not even have a sense of existence, but his martial arts attainments reached the pinnacle, shocking the audience with one shot.
Jiang Xiaodong, the "sweeping monk" of China's investment in the medical service sector, will lead Changling Capital to where? Who will be the next medical service unicorn of the Changling Capital system to land on the capital market? Let's wait and see.
*Cover Source: 123rf