"Golden Eyes and Silver Teeth" Double Joy Comes to the Door!
Yesterday, Ho Ophthalmology and Arrail Group were listed on the Growth Enterprise Market of the Shenzhen Stock Exchange and the Hong Kong Stock Exchange respectively. Among them, Ho's Ophthalmology rose by 38.5% on the first day of listing, and the market value of Rare Group exceeded HK$8 billion.
As the two most market-oriented segments of medical services, the two companies of "Golden Eye and Silver Tooth" were listed on the same day in the same month of the same year, although it was accidental, but it also fully reflected the gratifying development momentum of the two major fields.
In the past two years, the ophthalmic chain has entered an intensive listing period. In 2021, Chaoju Ophthalmology was IPO on the Hong Kong Stock Exchange; in the A-share market, in addition to the successful listing of Ho Ophthalmology, Both Huaxia Ophthalmology and Puri Ophthalmology have submitted for listing on the Gem Board for registration.
In the field of stomatology, Rare Group broke the deadlock of no oral chain listing for many years after Tongce Medical, and became the first listed company of national brand chain in China's stomatological industry. In addition, Dr. Dentistry and China Dental Medical Group have also submitted listing applications.
The listing of enterprises means that they have entered a new stage of development; after listing, business expansion and business model optimization through more sufficient funds will also affect the industry pattern. Therefore, we sorted out the fundraising purposes and strategic planning for 11 listed and applied companies in the "GoldenEye silver tooth" field to observe the market changes that may be brought about by the development of enterprises.
Regional expansion accelerated
Expanding or building new stores is a necessary option for chain institutions to expand their business to achieve large-scale operation. Listing financing provides more adequate financial support for new expansion stores, and companies also need to expand to obtain better performance.
The ophthalmic chain has accelerated the pace of national expansion
In addition to the full bloom of Aier Ophthalmology in the whole country, Chaoju Ophthalmology, Ho's Ophthalmology, and Huaxia Ophthalmology and Puri Ophthalmology, which are about to be listed, have significant regional characteristics. However, cross-regional expansion and national expansion have become important targets for these companies, and they are accelerating their pace.
Several key areas of the expansion layout of the ophthalmic chain, source: company prospectus or financial report, arterial network collation and mapping
The next step of He's Ophthalmology, which was listed yesterday, will focus on the Beijing-Tianjin-Hebei region centered on Beijing, the Yangtze River Delta region centered on Shanghai, the Greater Bay Area centered on Shenzhen, and the western region centered on Chengdu and Chongqing.
According to the prospectus of He's Ophthalmology, the investment raised by the listing includes two projects outside Liaoning Province: the new Beijing He's Eye Hospital, which is an important branch of the company to build a regional chain operation in Beijing, Tianjin and Hebei, and the new Chongqing He's Eye Hospital as an important branch of the regional chain operation in the western region.
In addition, Chaoju Ophthalmology will focus on expanding in northern Zhejiang, eastern Zhejiang and northern Jiangsu. Puri Ophthalmology will further expand the domestic market and cover more central cities, and try to lay out "one city, two hospitals" and "one city and multiple hospitals" in Chengdu, Kunming, Hefei, Nanchang, Urumqi and other cities with high market influence. Aier Ophthalmology will also speed up the network layout of multiple hospitals in one city and optometry clinics or clinics in the provincial capital city.
At the same time, Sima Ophthalmology, which has expanded from Hong Kong to the Mainland, will set up or acquire eye hospitals, eye centres and clinics in key locations in east China, southwest China, central China and cities in the Guangdong-Hong Kong-Macao Greater Bay Area.
The multinational brand Deshijia will continue to implement its expansion plan to open multiple clinics in China's core metropolises and one or two clinics in second-tier cities.
While each company's regional expansion path has its own focus, there are many commonalities. However, it is not difficult to see that the Beijing-Tianjin-Hebei region, the Yangtze River Delta region, the Chengdu-Chongqing region, and the Guangdong-Hong Kong-Macao Greater Bay Area have become hot expansion areas, and the provincial capital cities are the focus of the layout.
Oral chains solve the problem of cross-regional expansion
Compared with ophthalmology, the overall expansion rhythm of the oral chain is relatively conservative, and the strategy is to consolidate regional advantages.
Several key areas of oral chain expansion layout, source: prospectus or financial report, arterial network collation chart
Dr. Dental, who has submitted a listing application, was born and grew up in Suzhou, and the prospectus shows that Dr. Dental will further deepen and expand its layout in East China. China Stomatological Medical Group, which has submitted prospectuses to the Hong Kong Stock Exchange four times, has Wenzhou, Zhejiang As its main market.
Even Tongce Medical, which has been listed for many years and has excellent performance, is still dominated by the domestic market in Zhejiang Province. According to the 2021 semi-annual report of Tongce Medical, the income of medical services in Zhejiang Province is 1.128 billion yuan, accounting for 90.25% of the hospital's revenue; the income outside Zhejiang Province is 122 million yuan, accounting for only 9.75% of the hospital's income.
At present, Tongce Medical is promoting rapid expansion in Zhejiang Province through the "Dandelion Plan" and the construction of central hospitals. The "Dandelion Plan", that is, to increase the number of branches and expand the coverage of branches, is an important measure for the company to achieve a comprehensive layout in Zhejiang Province.
The same is heavy asset investment, long break-even cycle, oral and ophthalmology, but also facing a big mountain: that is, the difficulty of standardized operation is high, which hinders the pace of cross-regional expansion of oral chains.
However, Arrail Group, which was listed yesterday, is a special case, which has achieved a balanced layout of chain operations in multiple cities across the country.
Arrail Group differentiates its operations through two major brands, Rare Dental and Rite-Hite Dental, the former positioned in high-end oral medical services and the latter positioned in mid-end oral medical services. At present, Rare group has 7 stomatological hospitals and 104 clinics in 15 first- and second-tier cities across the country. In the next step, Arrail Group will continue to increase the penetration rate of Arrail Dental in existing first-tier cities such as Beijing, Shanghai, Shenzhen and Guangzhou, and expand its territory by opening flagship clinics in emerging first-tier cities with high potential such as Tianjin and Hangzhou; Ruitai Dental will strengthen its penetration in existing first-tier cities by opening new hospitals and clinics, and further expand to core second-tier cities.
The reason why it can better carry out national business expansion is because Rare Group has taken a series of effective measures, in addition to the dual brand differentiation positioning, it also includes the establishment of talent training and incentive system, standardized operating procedures and systems, and digital infrastructure construction to ensure the service quality and operational efficiency of Rare Group in various places.
Yesterday, Arterial Network has interpreted the business model of Rare Group in the article "The First Stock of China's High-end Dental Chain was Officially Born, Exclusive Dialogue with Zou Qifang, Founder of Rare Group". In the future, Arrail's breakthrough path and standardization experience may form a reference for the industry.
Business type optimization
In addition to the growth of the number of businesses, business expansion also includes the enrichment and optimization of business types. Whether it is ophthalmology or dental, they are looking for new growth points on the basis of the current business, or achieving stronger competitiveness through business synergy.
Ophthalmology: Broaden the base of optometry services and strengthen the spire of high-end technology
Refractive surgery, cataract surgery and optometry services support the main revenue of the ophthalmic chain. In terms of improving the business structure, the ophthalmology chain mainly follows two paths: one is to expand the optometry service network, and the other is to extend to the diagnosis and treatment projects of difficult ophthalmic diseases and high-tech levels.
Ho Ophthalmology and Huaxia Ophthalmology intend to invest in optometry services, Source: Company Prospectus, Arterial Network Collation Chart
According to the prospectus, Ho Ophthalmology and Huaxia Ophthalmology will focus on optometry services and expand the coverage area. In the hierarchical chain model of Aier Ophthalmology, optometry clinics and ai-eye e-stations based on optometry services are also important components.
For ophthalmic chain enterprises, the addition of optometry service stores has many advantages: first, the single store investment is relatively small, the degree of service standardization is high, and the gross profit margin is also considerable; secondly, the multi-store layout can expand the scope of services, conduct a wider range of disease screening, and provide customers for ophthalmic diagnosis and treatment, refractive surgery and other projects to reduce the cost of hospital customer acquisition; at the same time, compared with ordinary optometry and optics agencies, optometry services with medical attributes have stronger competitiveness.
Taking Ho's Ophthalmology as an example, it has constructed a tertiary eye health service model: primary eye care services are positioned as prevention and rehabilitation, secondary eye care services are positioned as common eye disease diagnosis and treatment, and tertiary eye health services are positioned as regional difficult eye disease diagnosis and treatment. Two-way referral and up-down linkage are formed between institutions at all levels. Among them, primary eye care services provide the public with eye health knowledge through optometry stores, clinics, etc., and provide basic eye health services such as eye health monitoring, diagnosis and treatment of basic eye diseases, and refractive error optical correction.
It can be seen that in the service model of Ho's ophthalmology, the primary eye care business based on prevention and rehabilitation services plays a fundamental role.
Ho's Ophthalmology Tertiary Eye Health Service Model, Source: Ho Ophthalmology Prospectus
Under the good development momentum of consumer medical treatment, Ophthalmology Chain also strives to improve the level of diagnosis and treatment and extend to high-tech diagnosis and treatment projects. For example, in the process of optimizing service content and department settings, Puri Ophthalmology will focus on high-end medical optics, full femtosecond laser refractive surgery, pediatric strabismus amblyopia, nystagmus diagnosis and treatment, high-end cataract visual repair and other ophthalmic medical service projects with high medical technology level; further strengthen the diagnosis and treatment of fundus lesions and surgical services, and continue to exert efforts in difficult eye diseases.
Oral: All age groups expand and focus on family customer value
Different age groups face different oral health problems, with the public's awareness of oral health care and consumption power improved, oral chains are making up services for all ages. Specifically, in recent years, parents have paid more attention to children's oral health problems, and paid more attention to the prevention and dental care of various oral diseases earlier; the prevalence of high-sugar foods and beverages has led to an increase in the risk of oral diseases; the trend of population aging has intensified, and the demand for oral disease diagnosis and treatment, dental restoration and implantation for middle-aged and elderly people has increased. These have become the driving force for the rich service type of the oral chain.
In 2020, Tongce Medical completed the acquisition of Trifola Children's Dental Business, launched the construction of 3 secondary hospitals positioned in children's stomatology and family in 2021, and invested 8 new Triye brand clinics in Zhejiang Province and Nanjing, Wuhan, Xi'an, Chengdu and other places, with the goal of achieving Trifolass Children's Dental Business covering major cities across the country.
Dr. Dentist continues to explore expanding the scope of oral services and the coverage of all-age client groups, including orthodontics and dental disease prevention and treatment in children, correction of deformities in adolescents, correction of adult orthodontics and teeth whitening, implants for middle-aged and elderly people, and other services.
At present, the service items of each dental chain have focused on each other, and the gross profit margin and demand frequency of various types of projects are different. After the improvement of oral health services at all ages, it can better integrate and collaborate various projects, and expand customers based on family units to improve the repurchase rate. Many dental chains have launched membership services for families, or individual membership benefits can be shared by family members.
Ruitai Dental, a subsidiary of the Rare Group, focused on the core areas of easy access to customers and family homes when selecting the site. Dr. Dental uses the design of children's membership annual passes and family care packages to stimulate the customer stickiness of children and even the families behind them. Any one of the family customers who gets a great experience may drive other members to spend again.
Digital technology empowerment
Digitalization is becoming an essential capability for healthcare providers, whether it is ophthalmology or dental, many companies have revealed the planning of digital projects in their prospectuses or financial reports.
Investment in the digital project of many companies in the field of "Goldeneye and Silver Teeth", source: company prospectus, arterial network collation and mapping
Overall, these companies will invest tens of millions or even hundreds of millions of yuan in digital capacity building and optimization, and digital technology will bring them service capabilities, service efficiency, management capabilities and other aspects of improvement.
At present, Ho Ophthalmology has built a smart cloud medical platform to promote the sinking of high-quality medical care through smart eye disease diagnosis software and telemedicine systems, making large-scale, low-cost eye health monitoring possible. Shenyang He's Ophthalmology department has also launched an Internet hospital to open up pre-diagnosis, diagnosis and post-diagnosis services, establish a closed loop of data management, and realize functions such as health management, telemedicine, mobile payment, interactive marketing, and intelligent analysis. In this listing financing, He's Ophthalmology plans to invest another 41.06 million yuan in the construction and improvement of user digital projects.
For Aier Ophthalmology, which has accumulated a large amount of diagnosis and treatment data, the value that digital technology can play is particularly significant. According to the latest annual report of Aier Ophthalmology, the company will strengthen the construction of ophthalmic big data centers; make full use of big data resources, tap the value of data, improve the level of ophthalmic scientific research, explore artificial intelligence-assisted diagnosis, and provide accurate diagnosis and treatment for patients.
Tongce Medical has built a "future hospital" in Hangzhou. The front end of the "Future Hospital" will build an intelligent diagnosis and treatment space, and all aspects of customer appointments, follow-up visits, and medical routes will be digitally informatized. On the back end, the hospital builds a digital oral collaboration platform and establishes a digital hospital command center, and each medical path will form a workflow in the form of digitalization. "Future Hospital" also plans to build a big data platform and an artificial intelligence platform to sort out and analyze the operation of the hospital and the health information of customers, and output high-quality diagnosis and treatment and operation management analysis results through intelligent analysis.
It is worth mentioning that digitalization can also form an important support for the standardized operation of chain institutions. In Rare's digital project, a SaaS platform system for operations and healthcare quality management has been built to support business operations, customer relationship management, BI data analysis of different brands, regions, organizational structures and service products, and to ensure compatibility with data exchange with other healthcare IT systems to improve the ability to quickly open and expand new clinics and hospitals, as well as to seamlessly integrate acquired clinics under the centralized management of Rare group to ensure a consistent experience for customers everywhere.
After the listing, Rare Group will also improve and upgrade these systems by raising funds, and expand the DSO business model by using a standardized system enabled by digital technology.
All in all, while public hospitals are vigorously building smart hospitals, private medical institutions have also fully realized the importance and necessity of digital technology and made key investments.
What kind of changes will the "golden eye and silver teeth" usher in?
Ophthalmic chains are intensively listed, and the dental department ushers in the first listed company of the national brand chain. In the future, the "golden eye and silver tooth" market may follow a series of changes.
After the listing of each company, the funds are more abundant, the business expansion ability is stronger, and more large and medium-sized institutions will emerge. Correspondingly, since acquisitions are one of the main ways for listed companies to expand their business scale, the situation of small and scattered markets may improve after more independent or small chain institutions are included in large institutions.
In the process, changes brought about by the external environment will also be overlaid.
First of all, the changes in the upstream pharmaceutical and device market pattern will be transmitted to the downstream. In the field of ophthalmology, the development of domestic orthokeratology mirrors has accelerated; in the field of stomatology, the participation of domestic invisible orthodontic appliances has increased. These are closely related to downstream consumption projects, which not only makes there more supplier choices in the service field, but also enables the domestic price advantage to expand the coverage of consumer groups on the service side and further enhance market penetration.
Second, new technologies and new models bring new imagination space. At present, the digital therapy in full swing also covers ophthalmology, a variety of ophthalmic digital therapy products have landed, eye hospitals and optometry centers are the main landing scenarios of these products, which can form incremental services. In terms of dental, the coverage and influence of the DSO model in China have expanded, helping the industry to achieve digital transformation and standardized operation.
In short, driven by the dual internal and external factors of the market, the "golden eye and silver tooth" hundreds of billions of markets will be more optimistic.
*Cover image source: 123rf