The Hong Kong Stock Exchange is set to welcome a new player in the medical field.
The Hong Kong Stock Exchange recently revealed that Shulan Medical, a technology-based medical unicorn that integrates healthcare services, medical research, and medical education, has submitted an IPO application. China International Capital Corporation (CICC) and CITIC Securities are the joint sponsors for this IPO.
According to available information, Shulan Medical was founded in Hangzhou in 2013 and is led by Zheng Jie, the founder of OMAHA (Open Medical and Health Alliance). After a decade of development, Shulan Medical now owns medical institutions such as Shulan (Hangzhou) Hospital, Shulan (Anji) Hospital, and Shulan (Quzhou) Hospital, and has established deep collaborative relationships with medical institutions in Fujian, Chongqing, Henan, Shandong, and other regions.
Before its IPO, Shulan Medical received significant investments from prominent venture capital and private equity firms, including Yida Capital, Qiming Venture Partners, DeTong Capital, Sequoia China, PICC Capital, China Life Equity, and Galaxy SourceLink, valuing the company at 8 billion yuan. According to a Frost & Sullivan report, based on 2022 revenue, Shulan Medical has become the largest privately operated medical institution in East China.
After a decade of preparation, Shulan Medical is now poised for the next phase.
Section One
In the domestic medical and health industry, there is no shortage of experienced players. In fact, more than 90 medical and pharmaceutical companies are queuing up for listing on the Hong Kong Stock Exchange. However, among these numerous players, very few have successfully merged “technology and healthcare,” and Shulan Medical is one such unique technology-based medical unicorn.
The birth of Shulan Medical is closely tied to the characteristics of its time. In 2013, serial entrepreneur and investor Zheng Jie recognized that, with the new healthcare reform, the country was signaling support for privately operated medical institutions at the national level. In response, he co-founded Shulan Medical. In its early days, the company adhered to a “stem cell division” development strategy, which involved first establishing a high-level Grade III Class A comprehensive privately operated hospital and then using it as a nucleus to create various specialized privately operated hospitals tailored to local characteristics.
While following the “stem cell division” strategy, Shulan Medical also emphasized the fusion of science and technology with healthcare. To achieve this, Zheng Jie established the first non-profit research organization in the field of digital healthcare in China, the Zhejiang Digital Healthcare and Health Technology Research Institute. In 2015, he initiated the OMAHA Alliance to enhance the overall efficiency of the healthcare industry through collaboration and openness.
Zheng Jie’s ideas were quite bold at the time because the healthcare industry had been relatively closed for a long time, with each organization guarding its resources. However, he envisioned “technology, collaboration, openness, and unity” instead. Perhaps it was this forward-thinking perspective that allowed Shulan Medical to stand out in the field of privately operated medical institutions shortly after its establishment, earning a solid reputation for its “Shulan Hospital.”
The reputation of “Shulan Hospital” quickly attracted the attention of capital. Shulan Medical’s first round of financing attracted numerous venture capital and private equity firms, including Yida Capital and Qiming Venture Partners. In early media reports, Liang Yingyu, Managing Partner of Qiming Venture Partners, mentioned Shulan Medical’s distinctive features, saying, “Shulan Medical introduces new technology, making it a very good concept for scientific healthcare.”
With capital injection, Shulan Medical rapidly expanded its scale. Subsequently, it attracted investment from DeTong Capital, Sequoia China, PICC Capital, China Life Equity, and Galaxy SourceLink, valuing the company at 8 billion yuan. It ascended the ranks to become a technology-based medical unicorn. Shulan Medical evolved from its initial “Shulan Hospital” to become a comprehensive privately operated healthcare group.
Section Two
Today, within “Shulan Hospital,” Shulan (Hangzhou) Hospital, Shulan (Anji) Hospital, and Shulan (Quzhou) Hospital have specialized clinical departments, including hepatobiliary pancreatic surgery, infectious diseases, nephrology, oncology, and intensive care medicine. They offer comprehensive healthcare services, including multidisciplinary diagnosis, treatment, and rehabilitation, with a total of over 4,500 beds in place or planned.
Notably, Shulan Medical has established deep collaborative relationships with medical institutions in Fujian, Chongqing, Henan, Shandong, and other regions. As a provider of digital healthcare platform services, medical laboratory services, clinical trial services, and supply chain services, it is one of the few privately operated medical institutions in China that possesses these capabilities, fully realizing Zheng Jie’s innovative concept of scientific healthcare.
According to the Hong Kong Stock Exchange’s disclosure, Shulan Medical has submitted an IPO application, with CICC and CITIC Securities as the joint sponsors. If the company successfully goes public, Zheng Jie, the actual controller and chairman, holding over 28% of the shares, will become a prominent figure in the healthcare industry’s billionaire list.
The prospectus shows that Shulan Medical achieved revenues of 1.618 billion yuan, 1.548 billion yuan, and 1.778 billion yuan during the reporting periods of 2020, 2021, and 2022, respectively. While there was a slight decline in revenue in 2021, the overall trend has been stable growth. According to a Frost & Sullivan report, based on 2022 revenue, Shulan Medical has become the largest privately operated medical institution in East China.
This also implies that Shulan Medical and Zheng Jie, who have achieved fame and success, are about to reach new career heights.
While Shulan Medical is well-known, Zheng Jie’s exploration of the fusion of technology and healthcare has not changed with his status. In Zheng Jie’s eyes, healthcare development requires the integration of technology and innovation. Shulan Medical’s dream is not limited to being a medical institution but also involves developing more talent to advance the industry as a whole. In fact, as early as 2016, Zheng Jie had been considering this and used his previous investment experience to create a new vision for Shulan Medical while operating privately operated healthcare institutions, paving the way for healthcare innovation with investments.
At a time when domestic industrial capital was not prevalent, Shulan Medical established a 5 billion yuan medical industry fund with multiple organizations. The fund’s investment areas include medical technology enterprises, medical service institutions, doctor group organizations, and medical talent development.
Section Three
On the Tianyancha app, Shulan Medical is directly and indirectly involved in over 70 investments.
Years of “self-development + external investment” have laid a solid foundation for Shulan Medical to strengthen its business and empower the industry. In 2021, Zheng Jie, known for bringing surprises and innovations to the industry, launched the “SATOL Medical Innovation and Entrepreneurship Camp.”
The prerequisite for influencing any industry through investment and technology is talent development. Regarding the purpose of initiating the “SATOL Medical Innovation and Entrepreneurship Camp,” Zheng Jie expressed to the media, “The medical industry lacks complementary talent.” The “SATOL Medical Innovation and Entrepreneurship Camp” aims to supplement talent by helping students understand industry trends, integrate into the medical innovation ecosystem, enhance their understanding of medical business, and ultimately achieve significant development.
This year, ChatGPT and AI are hot topics, and the medical industry is heating up with related concepts. However, a few years ago, Zheng Jie realized that AI would have an impact on healthcare in the future. He introduced a course called “Computational Medicine” at Shulan Medical.
In addition to being a serial entrepreneur and investor, Zheng Jie is also a dual expert in medical and technology. He has participated in China’s National High-Tech Research and Development Program (863 Program), conducting research on “Digital Healthcare and Health Region Demonstration” and “Medical Information System and Information Standard Research.” In the “Computational Medicine” class, Zheng Jie proposed taking a system science and complexity science perspective to explore the long-term vision of life.
The introduction of “Computational Medicine” drew global attention. The University of California, Los Angeles renamed its existing Department of Biomathematics to the “Department of Computational Medicine.” Several universities in the United States conducted in-depth research on “Computational Medicine,” providing theoretical support for the subsequent integration of AI into healthcare. In China, Zheng Jie extended the concept of “Computational Medicine” further with his practice, focusing on “Human Body Information Modeling (BIM).”
Currently, the domestic technology industry is all about large models, with companies like Huawei, Alibaba, Tencent, Xiaomi, Lenovo, Baidu, and others participating. However, there is rarely any news of companies engaging in large models in the medical field. Will Shulan Medical be a pioneer in this regard? It remains a mystery.
But Shulan Medical is clearly taking a non-traditional path. The integration of “technology and healthcare” requires continuous practice, real-world feedback, and substantial research and financial investments. Currently, as Shulan Medical heads towards its Hong Kong IPO, it represents an opportunity.
May Zheng Jie, leading Shulan Medical, open a new chapter for the industry.