Author: Jiali Zhou, Fujuan Liu Report: Investment Community (ID: pedaily2012)
China's largest psychiatric hospital is going to go public on A-shares.
Not long ago, Corning Hospital announced that it intends to issue A shares and list them on the Growth Enterprise Market of the Shenzhen Stock Exchange. Previously, this private psychiatric hospital has successfully landed on the Hong Kong Stock Exchange and created the "first share of the mental hospital". Once successfully landed on the GEM, Corning Hospital will become the first A+H psychiatric hospital listed company.
Founded in 1997, Corning Hospital is backed by a Wenzhou couple. In 1987, Guan Weili, who had just turned 18 years old, entered wenzhou psychiatric hospital after graduating from university and met Wang Lianyue, a young nurse, his future wife. Witnessing the dilapidation of the local psychiatric hospital at that time, Guan Weili resolutely resigned in 1993 and opened a psychiatric hospital, and then Corning Hospital was officially born. For more than 20 years, Corning Hospital started from Wenzhou, and the small hospital with only 4 employees at that time has grown all the way to the largest psychiatric chain group in China today, sitting on more than 30 branches and a revenue of more than 1 billion yuan a year.
Mental health has always been an unpopular industry. Until the beginning of September this year, ByteDance led the 200 million yuan C round of financing of Good Mood Clinic, creating the largest financing in the domestic spiritual psychological Internet track. As more and more people attach importance to mental health, in order to fill the problem of insufficient resources in public hospitals, this cold track is beginning to heat up.
A Wenzhou couple opened a psychiatric hospital
It's time to ring the bell on the IPO again
To trace the history of Corning Hospital, we must start with a Wenzhou couple.
In the 1980s, Guan Weili, who majored in medical assistance, successfully graduated from Wenzhou Medical University (the predecessor of Wenzhou Health School) and was subsequently assigned to Wenzhou Psychiatric Hospital as a clinician. A year later, a young nurse named Wang Lianyue also began her medical career here. Belonging to the same department, Guan Weili and Wang Lianyue quickly fell in love, and the two entered the marriage hall after falling in love. In this way, Guan Weili and his wife worked in Wenzhou Psychiatric Hospital for more than 7 years.
At that time, China's mental illness medical resources were very limited, the industry was mixed, and there were huge misunderstandings and prejudices in society about patients with mental illness, "In the 1980s and 1990s, many psychiatric hospitals were basically in tatters. People with mental illness are discriminated against by society and do not have access to high-quality medical services", and the poor medical level and closed and simple environment make patients have no dignity to speak of. This status quo deeply stung Guan Weili, and a bold idea began to germinate.
One day in 1993, he vowed to his wife that he wanted to start a psychiatric hospital and hoped to provide dignified medical care for people with mental disorders: "If you fail, you will have a better life than others when you go to the roadside to fry dried rice noodles." ”
Wang Lianyue, who also has a medical professional background, knows that the doctor will be their only identity and life's career, she firmly stood behind her husband, and after her husband, she quit the "iron rice bowl" envied by others and officially went to the sea to start a business. "At that time, mentally ill people had to open the back door when they were hospitalized, and the market demand for this area was very large. We are all professional medical workers, and we know the current situation of this piece the most, and we are also well aware of the market gap in this piece. Wang Lianyue once said.
Stepping out of the system, Guan Weili first founded a small psychiatric clinic, and later, with the assistance of his wife, founded Kangning Hospital, the first psychiatric hospital in Wenzhou, in 1997. Such a move has caused people around to be puzzled, "When I first started a business, not only strangers, but even relatives and friends around you said why do you go to a mental hospital, others are too late to escape." The voice of prejudice led the couple to devote themselves to the cause of changing the environment for mental illness in China.
At first, Corning Hospital was very small, with only 4 employees, except for Mr. and Mrs. Guan Weili, only 1 nurse and 1 cleaner. Once established, Guan Weili put forward a concept to truly transform the past "guan" for mentally ill people into "management" and "reason". It is their goal to treat mental illness in the sun and to treat the mentally ill with dignity and kindness.
Since then, this private hospital, which started as a small clinic, started in Wenzhou and operated from 50 beds until it was recognized as a grade III B mental health specialist hospital in 2006. In 2008, the outpatient emergency workload of Corning Hospital has reached more than 80,000 person-times, an increase of more than 5 times over the early days of the hospital, and the annual total income has increased by about 30% per year.
Since 2010, Corning Hospital has begun to expand rapidly, and in 2015, it officially landed on the Hong Kong Stock Exchange for IPO bell ringing, is the first listed psychiatric hospital listed in China, with a total market value of nearly HK$2.5 billion so far. It is worth mentioning that along the way, Corning Hospital has emerged behind the figure of institutions including Defu Capital, CDH Investment, Jinshi Investment, Zhengxin Valley Capital and so on.
Six years after landing on the Hong Kong Stock Exchange, Corning Hospital launched an attack on the A-share market. On September 17, Corning Hospital announced that it intends to issue A shares and list on the Growth Enterprise Market of the Shenzhen Stock Exchange, and if all goes well, China's first A+H-share psychiatric hospital listed company is expected to be born.
How to prop up an IPO
China's largest psychiatric hospital, with a year of 1 billion yuan
In fact, Corning Hospital's desire to register A shares has a long history.
As early as the second year after landing on the Hong Kong Stock Exchange in 2015, Corning Hospital applied for A-share listing, but in March and July 2017, it was suspended by the CSRC twice due to the replacement of legal counsel and the resignation of the signing lawyer. In December of the same year, Corning Hospital launched another A-share IPO.
In January 2018, the 17th NDRC failed to approve Corning Hospital's first application, and Corning Hospital failed to break through again. Judging from the inquiries of the NDRC, there are doubts about Corning Hospital's competition in the same industry, whether it complies with the provisions of accounting standards, related parties and related party transactions, the conversion of industrial properties to medical purposes, and real estate investment.
At the end of September 2020, the official website of the Zhejiang Securities Regulatory Bureau disclosed the counseling filing documents of Corning Hospital. On June 24 this year, Corning Hospital issued an inside information announcement that the company had hired a sponsor for counseling and made business adjustments based on the sponsor's recommendations. In August, Corning Hospital announced that it intends to apply for an A-share offering and list on the Growth Enterprise Market of the Shenzhen Stock Exchange, and issued another announcement on the matter in mid-September.
Why are you so obsessed with A shares? The solid climb in performance may also be one of the important reasons why Corning Hospital is determined to return to A. So, what does a psychiatric hospital rely on to make money? According to past prospectuses, the operating income of Corning Hospital's own hospitals accounts for the majority, and it is more dependent on medical insurance. According to the financial report, in the first half of 2021, Corning Hospital's own hospital operations achieved revenue of 576 million yuan, accounting for 92.55% of revenue, that is, treatment, general medical services and drug sales.
Financial data show that since the Hong Kong stock IPO, Corning Hospital's revenue has achieved five consecutive years of increases, of which in 2018 and 2020 revenue was 746 million yuan, 860 million yuan and 1.03 billion yuan, respectively; profit was slightly volatile, 81 million yuan, 57 million yuan and 70 million yuan, respectively.
By the end of 2020, there are more than 30 branches of Corning Hospital Group, including 24 self-owned hospitals, including 1 independent Internet hospital (Yining Psychological Internet Hospital). With 7,483 inpatient beds and 277,200 outpatient visits, it is the largest psychiatric hospital in China.
Guan Weili once told the truth that Corning Hospital strives to return to A shares: one is to break the prejudice against the stigmatization of mental illness; the other is to attract high-level talents; and the third is to win more support from the capital market for the long-term development of the hospital. "Corning wanted to list on the A-share market in order to restore the dignity of the mentally ill and remove the stigma of madness for the mentally ill."
Mental health, the tide of financing is coming
Zhang Yiming just cast a good mood clinic
Corning Hospital's second IPO was not sudden. You may not know that the mental psychological track that has always been on the edge of the cold is starting to heat up.
At the beginning of September, a rare financing surfaced focusing on the good mood of the CNS (central nervous system) and internet medical platforms in the field of mental health, and officially announced the completion of a 200 million yuan C round of financing. Surprisingly, this round of financing was led by ByteDance, followed by well-known institutions such as Fosun Health, Decheng Capital, and Xingfu Capital, and oversubscribed by old shareholders Tonghe Yucheng and KIP China. It should be pointed out that this is the largest financing of the current domestic spiritual psychological Internet track.
Founded in 2015, the parent company of Good Mood is Jiangsu Haoxinqing Mobile Medical Technology Co., Ltd., which is an Internet medical platform focusing on mental health services in the field of CNS (central nervous system), providing digital diagnosis and treatment services for patients with mental illness, and has now developed into the largest central nervous system and mental psychological Internet medical service platform in China.
However, Good Mood is not only an Internet diagnosis and treatment platform, but also opened an offline physical psychological clinic in October last year, the first psychological counseling center landed in Beijing, and in 2021 to the whole country to open up the layout of clinics.
Good mood financing is just a microcosm, and more and more people are paying attention to the unpopular track of mental health. According to public data, the overall incidence of various types of mental illness in China is 17.5%, the number of people with mental illness and the demand for medical services has reached 250 million, while there are only about 45,000 practicing physicians in the department of clinical psychiatry. The average number of psychiatrists per 100,000 people is less than 1/4 of the international standard, and resources are severely short.
According to the analysis of the National Mental Health Work Plan (2015-2020), China's psychiatric medical resources are mainly distributed in provincial and prefecture-level cities. The supply of mental health is inadequate and uneven. Common mental illnesses include depression, anxiety disorders, obsessive-compulsive disorders, of which depression and anxiety disorders have the highest incidence, with an incidence rate of more than 7%, which is the largest proportion of diseases in psychiatric clinics; in recent years, the incidence of mental and psychological diseases has been rising.
It is urgent to attach importance to mental health. Not long ago, the National Health Conference put forward the policy of "increasing the basic research on mental health problems, doing a good job in mental health knowledge and psychological disease science popularization, and standardizing the development of mental health services such as psychological therapy and psychological counseling".
Eight national ministries and commissions, including the Health Commission, also jointly issued the "Notice on Printing and Distributing the Key Tasks of the Pilot Construction of the National Psychosocial Service System in 2021", requiring 100% of the psychiatric specialized hospitals in the jurisdiction to set up psychological clinics, and 40% of the general hospitals above the second level to open psychiatric (psychological) outpatient clinics to improve the mental health service capabilities of medical institutions.
At the same time, private spiritual and psychological hospitals began to rise, filling the problem of insufficient resources in public hospitals. According to incomplete statistics, since 2020, there have been nearly 60 financing incidents in the field of mental health, with a cumulative financing of more than $1 billion. Only since 2021, including Flow meditation, one point spirit, small understanding of health, hope..... Financing has been completed successively, and there are many investors behind VC/PE institutions such as Matrix Partners China, Fosun Health, Tak Shing Capital, Tonghe Yucheng, KIP China, and Lotus Venture Capital.
In August, Flow Meditation completed a multi-million dollar angel round of funding, led by Evolve Venture and Lightspeed China. Launched in 2021, Flow Meditation mainly offers introductory and advanced meditation courses, sleep music, and online audio and video content for different topics and different scenarios such as mood management, anxiety relief, improved sleep, sound healing, yoga extension, etc. According to the Epidemiological Survey Report on Mental Disorders in China, the prevalence of anxiety disorders in adults in China is the highest, and more and more young people are plagued by anxiety and depression.
At the end of April, the digital psychological service platform Yidian Ling announced the completion of tens of millions of B round financing from the 58 Industry Fund. The founder, Xu Yingqi, is also a serial entrepreneur who has successfully founded 5173 online game service network, 818 pharmaceutical network and 658 financial network. In 2007, due to the huge psychological pressure, looking for a small psychologist to adjust, due to long-term exposure to the Internet, Xu Yingqi, who has a keen sense of business, decided to create an online consultation platform, and Yidian Ling was born.
"We have a long-standing focus on unmet clinical needs in the field of psychiatry." Dr. Cui Xiangmin, founding and managing partner of Tak Shing Capital, who participated in good mood financing, said frankly. This hidden track has attracted many funds with medical backgrounds to enter the field for research.
As Dr. Chen Lianyong, managing partner and CEO of Tonghe Yucheng, lamented, there is a huge unmet demand in the field of central nervous system and psychiatry in China, but there are few qualified hospitals and it is difficult for patients to seek medical treatment. Internet medicine provides unprecedented access to patients.
Of course, because the domestic mental health track is still in the early stage of development, it is still full of all kinds of chaos. At present, most of the psychological counseling prices on the market are based on the qualifications of psychological counselors and other conditions, ranging from hundreds to thousands of yuan per hour. But also because of this charging model, there is a problem that psychological counselors deliberately delay the length of time and peddle training courses to induce consumption.
Pain points mean opportunities. I just don't know what kind of new medical species will be born in this industry that has always been mysterious.
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