It was said that one in every 8 people in China had a neurosis, and Corning Hospital broke into an A-share IPO

Wen | Wang Xin

Although it bears the title of "the first share of psychiatric hospitals", it is obviously not so easy for Corning Hospital to successfully list in the A-shares.

Photo: Corning Hospital's official website

As the largest private psychiatric hospital in China, Corning Hospital can be described as a popular hospital.

As early as 2015, after shouting out the signal that "more than 180 million people in China currently have mental illness", it went public in Hong Kong and became the "first stock of psychiatric hospitals", and the stock price rose by 24.29% on the first day of listing.

Corning Hospital, which seems to have unlimited scenery, recently issued an announcement that after the failure of the last sprint A-share, it has started A-share listing again.

Corning Hospital said that the total amount of funds to be raised is 302 million yuan, which will be used for the construction project of Wenzhou Corning Taizhou Central Hospital, the Wenzhou Lening Elderly Care Center Project, and the research and development project of the social psychological service desk system construction of Zhejiang Yining Health Technology Co., Ltd.

However, some media said that Corning Hospital's return to A listing this time is due to its no longer being sought after by capital in Hong Kong, and its return to the A-share market is to find a higher valuation premium.

In addition, Corning Hospital is overly dependent on medical insurance in terms of income, and there are already hidden dangers in its performance, and there are still many medical malpractice risks in its operation and management.

The resumption of A-share listing has been questioned

In fact, Corning Hospital has more than once shown its ambition to sprint the A-share market.

As early as July 2016, Corning Hospital had already begun to attack the A-share capital market, and CITIC Construction Investment was its counseling agency, but due to the replacement of legal counsel and the departure of the signing lawyer, it suspended the audit twice in March and July of the following year, and then launched the A-share listing again in December of the same year.

In 2018, due to doubts in the same industry, whether it complied with the provisions of accounting standards, related parties and related party transactions, industrial properties were changed to medical purposes, real estate investment, etc., Corning Hospital's IPO application was finally rejected by the Issuance Review Committee, marking corning hospital's first sprint to the A-share market.

However, this did not discourage Corning Hospital's determination to attack the A-share market. After more than a year of adjustment, in September 2020, with the official website of the Zhejiang Securities Regulatory Bureau disclosing to the outside world a document on the counseling and filing of Corning Hospital, it indicates that Corning Hospital has once again embarked on a journey to impact the A-share market. This year, Corning Hospital also issued another announcement confirming that it intends to apply for another A-share listing.

It is reported that Corning Hospital has been successfully listed on the Hong Kong stock market, but why is it eager to list on the A-share market. In this regard, Corning Hospital said that it should seize the opportunity to continuously enhance the company's core competitiveness and influence to better provide high-quality medical services for the general public.

However, some media do not seem to think so and report that Corning Hospital's rush to return may be because the company's market value in the Hong Kong stock market has been undervalued for a long time, and investors cannot get better investment returns, return to the A-share market or seek a higher market value premium.

At the same time, the situation in the secondary market seems to hint at this. In 2015, Corning Hospital's issue price on the first day of landing on the Hong Kong stock market was HK$38.7 per share, and after its share price hit a record of HK$51.60 per share on the second trading day of listing, Corning Hospital's stock price was difficult to be optimistic, and as of the opening of the market on October 25 this year, its stock price was HK$31.15 per share, a high point decline of 39.63%.

There are hidden dangers in performance

Although the A-share listing was not smooth, Corning Hospital's total revenue was considerable.

According to the financial report, corning hospital's total revenue rose from 415 million yuan in 2016 to 1.031 billion yuan, with a compound annual growth rate of 25.50%. By 2021, Corning Hospital still maintained a rapid growth in revenue, and the data showed that in the first half of 2021, it achieved revenue of 623 million yuan, an increase of 33.89% year-on-year.

From a business perspective, Corning Hospital's own hospital operation revenue accounts for a relatively high proportion of operating income. According to the financial report, in the first half of 2021, the business achieved revenue of 576 million yuan, accounting for 92.55% of the revenue.

If you only look at the total revenue of this financial data, Corning Hospital's achievements are indeed gratifying, but the excessive revenue has not brought it a matching profit. According to the financial report, from 2016 to 2020, the net profit of Corning Hospital was 68.832 million yuan and 4907 respectively. 080,000 yuan, 80.5957 million yuan, 57.2894 million yuan and 70.0001 million yuan, the overall fluctuation is larger.

The reason is that because of the attributes of designated hospitals, Corning Hospital has over-reliance on medical insurance in terms of income. Of course, excessive medicare payments will lead to a reduction in their average daily income per bed, hindering the growth of their profits. According to the financial report, from 2018 to 2020, the settlement amount of public medical insurance of Corning Hospital accounted for 56.6%, 58.2% and 61.4% of the cash received from the sale of goods and services in the same period, showing a trend of increasing year by year.

Ping An Securities also said in the research report that the intensification of China's aging has brought about a significant increase in medical insurance expenditure, and cost control is still the main theme of pharmaceutical policy. It can be seen that Corning Hospital will have some pressure to make a large profit in the future.

In addition, there is still some pressure on the profitability of Corning Hospital's continued to rise debt is also worthy of attention. According to the financial report, Corning Hospital's total liabilities have increased from 562 million yuan in 2015 to 935 million yuan in 2020, and by the first half of 2021, Corning Hospital's total liabilities have exceeded 1 billion yuan to 1.039 billion yuan.

Medical malpractice is frequent

For hospitals, medical malpractice is obviously a "high-voltage line" that cannot be touched. However, in contrast, Corning Hospital, this "high-voltage line" seems to have been hanging high on the head, and in recent years, Corning Hospital has been frequently exposed to medical malpractice and violations.

Enterprise investigations show that in recent years, the punishment of Corning Hospital for violations does not seem to be interrupted. In May 2018, Corning Hospital was administratively punished by the Municipal Development and Reform Commission for improper pricing behavior. In December 2019, Kangning Hospital was issued an administrative fine by the Wenzhou Municipal Health Commission because the medical waste storage facilities did not meet the sanitary requirements. According to AI Finance and Economics, in June 2021, Corning Hospital received another fine from the Wenzhou Municipal Health Commissioner.

In addition, as early as 2017, the CSRC questioned the professionalism of medical staff at Corning Hospital, but from the current point of view, this doubt has not been broken.

In 2018, China.com reported that there were situations such as schizophrenic patients fighting each other, jumping off buildings and committing suicide in Corning Hospital, and there were also misdiagnoses, resulting in loss of consciousness, cardiac arrest, and brain dysfunction during treatment.

In March 2021, according to a fine issued by the Pingyang County Health Bureau, Corning Hospital was fined 3,800 by the Pingyang County Health Bureau for using five non-health technicians to engage in health technology work.

Obviously, at present, there are still urgent problems to be solved in the financial and operational management of Corning Hospital, and Hydrogen Finance will continue to pay attention to whether Corning Hospital can get the entrance ticket of A shares.