Hillhouse Capital entered the stock market a year ago

◎ Reporter Qiu Dekun ○ Editor Qiu Jiang

Recently, Chongqing Shanwaishan Blood Purification Technology Co., Ltd. (hereinafter referred to as "Shanwaishan") applied for the IPO of the Science and Technology Innovation Board and was accepted by the Shanghai Stock Exchange. According to the prospectus (draft filing), Zhuhai Xiuheng Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Zhuhai Xiuheng"), an affiliate of Hillhouse Capital, acquired a stake in Shanwaishan in October 2020 and held 12.96% of the shares, and Chen Xinxing, executive director of its medical team, served as a director of Shanwaishan.

Hillhouse Capital takes a stake

Hillhouse Capital's stake in Shanwaishan dates back to October 16, 2020. At that time, Shanwaishan held the third extraordinary shareholders' meeting in 2020, and deliberated and agreed that Huagai Xincheng Medical and Health Investment Chengdu Partnership (Limited Partnership) (hereinafter referred to as "Huagai Xincheng") would transfer 6.734% of the shares of Shanwaishan (about 6.4839 million shares) held by Huagai Xincheng to Zhuhai Xiuheng at a price of 15.42 yuan per share. At the same time, the registered capital of Shanwaishan increased to 108.5403 million yuan, and the new registered capital of 12.2545 million yuan was subscribed by Zhuhai Xiuheng, Xiangjiang Industrial Investment, Liyuan Jianhuan and Xiong Yan at a price of 17.14 yuan per share.

So far, Zhuhai Xiuheng has obtained 12.96% of the equity of Shanwaishan, becoming the fourth largest shareholder of Shanwaishan. In addition, the above-mentioned Extraordinary General Meeting of Shareholders also deliberated and passed a proposal to nominate Chen Xinxing as a director of Shanwaishan by Zhuhai Xiuheng. According to the prospectus (draft declaration), Chen Xinxing has served as an executive director of Hillhouse Capital's medical team since July 2020 and a director of Shanwaishan since October 2020.

Xinxing Chen has some experience in the field of medical investment. According to the prospectus (draft filing), Since 2007, Chen Xinxing has successively served as a consultant of the Boston Consulting Group in China, the manager of the China Medical Group of Morgan Stanley Investment Banking, the director of the China Medical Group of AB Investment, and the executive director of the China Medical Industry Fund of China Renaissance Capital.

Currently, Chen Xinxing serves as a director of a number of medical companies invested by Hillhouse Capital. According to the prospectus (draft declaration), Chen Xinxing not only serves as a director in Shanwaishan, but also serves as a director in 12 companies including Ningbo Jianshi Technology Co., Ltd. According to Tianyan, Hillhouse Capital's affiliate, Zhuhai Yuheng Equity Investment Partnership (Limited Partnership), is a shareholder of Ningbo Jianshi Technology Co., Ltd.

In addition, behind the shareholders of Shanwaishan, there are also a number of A-share companies. Huagai Xincheng currently holds 7.19% of the shares of Shanwaishan, and the A-share companies involved in its shareholders include China Merchants Bank, Huatai Securities, Vanke A, Youngor, Huajin Capital, Sumeda, Tasly, Hongbo Shares, Aier Ophthalmology, Tigermed, Zhejiang Pharmaceutical, Bohui Innovation, Furui Shares, Asia-Pacific Pharmaceutical, Yuyue Medical, etc.

It is planned to raise 1.247 billion yuan

Founded in 2001, Shanwaishan specializes in the research and development, production and sales of blood purification equipment and consumables, and provides chain hemodialysis medical services, the main products and services include blood purification equipment, blood purification consumables and chain hemodialysis center medical services.

At present, more than 70% of the global blood purification market is mainly concentrated in the United States, Japan and Europe and other countries and regions. China's blood purification market has been driven by policies since 2014, encouraging social capital to enter the field of hemodialysis centers, and hemodialysis centers have developed to chain and collectivization.

The prospectus (draft declaration) shows that the blood purification equipment in Shanwaishan has been installed in more than 10,000 units at home and abroad, and the terminal installation capacity has been realized in more than 1,000 hospitals across the country. In August 2021, the company was certified by the China Medical Device Industry Association as "the leading domestic manufacturer of high-end blood purification equipment" and "the market share of domestic blood purification equipment ranks first".

However, the blood purification industry belongs to the technology, capital, talent-intensive industry, products from project research and development, product trial production, clinical trials, product registration, mass production to market promotion and sales, the need for a lot of continuous investment of funds. Shanwaishan said that in the face of the current situation of relatively single financing channels, the company urgently needs to develop financing channels to meet the capital needs of business development.

It can be seen from the combing that in August 2016, Shanwaishan was listed on the national small and medium-sized enterprise share transfer system for public transfer, and the listing was terminated in October 2018. The company intends to raise 1.247 billion yuan for the industrialization project of blood purification equipment and high-value consumables, the construction project of blood purification research and development center, the construction project of marketing network upgrade and remote operation and maintenance service platform, and the supplementary working capital.

When emphasizing its science and technology innovation attributes, Shanwaishan mentioned that the company's cumulative R&D investment from 2018 to 2020 was 45.0523 million yuan, the cumulative operating income was about 511 million yuan, and the cumulative R&D investment accounted for 8.82% of the cumulative operating income; in the first half of 2021, the company's R&D investment was 13.4571 million yuan, accounting for 10.19% of the current operating income; from 2018 to 2020 and the first half of 2021, The proportion of the company's R&D personnel in the total number of employees in the year exceeds 10%.

According to financial data, from 2018 to 2020 and the first half of 2021, Shanwaishan achieved operating income of 113.8484 million yuan, 142.3056 million yuan, 254.4083 million yuan and 132.0441 million yuan, and net profit was -27.5406 million yuan, -34.9333 million yuan, 18.3341 million yuan and 3.4056 million yuan, respectively.

The overall valuation of Shanwaishan after the latest capital increase is 1.86 billion yuan, and the market value is expected to exceed 1 billion yuan. Therefore, the Company chose to apply the first listing criterion of Article 2.1.2 of the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange: "The expected market value is not less than RMB1 billion, the net profit in the last two years is positive and the cumulative net profit is not less than RMB50 million, or the expected market value is not less than RMB1 billion, and the net profit in the most recent year is positive and the operating income is not less than RMB100 million." ”

【Source: Shanghai Securities News】

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