St Guoyi, whose two hospitals are still in the period of closure for rectification, plans to sell its holding Shangluo hospital.
On the evening of March 8, St Guoyi disclosed that the company had signed a framework agreement on equity transfer with Shangluo transportation investment and Construction Co., Ltd. (hereinafter referred to as “Shangluo Jiaotou”) and planned to transfer 99% of the equity of Shangluo Xi’An International Medical Investment Company Limited(000516) Central Hospital Co., Ltd. (hereinafter referred to as “Shangluo hospital”) at a price, and Shangluo Jiaotou planned to transfer it with monetary funds.
Source: St national medical bulletin
started treatment only one year and planned to “sell”
Shangluo hospital is one of the three comprehensive medical service hospital areas of St national medicine (Note: Xi’an high tech hospital, Xi’an Xi’An International Medical Investment Company Limited(000516) Central Hospital and Shangluo hospital). It was officially opened on March 28, 2021, with a total construction area of 220000 square meters. It is a comprehensive hospital integrating medical treatment, teaching, scientific research, prevention and health care and rehabilitation built in accordance with JCI and class III a standards.
Photo source: St national medical 2021 semi annual report
Shangluo hospital has not yet achieved profitability. According to the unaudited data announced by St Guoyi, in 2021, Shangluo hospital achieved a revenue of 126 million yuan, a total profit loss of 129 million yuan and a net profit loss of 124 million yuan by the end of 2021, Shangluo hospital had total assets of 1.835 billion yuan and total liabilities of 1.519 billion yuan, with an asset liability ratio of 82.77% .
Source: St national medical bulletin
The proposed Shangluo trading and investment is state-owned assets, and the SASAC of Shangluo Municipal People’s government is the actual controller, with a shareholding ratio of 59.42%; CDB development fund Co., Ltd., a subsidiary of China Development Bank, holds 33.33% of the shares. Its main business scope includes transportation infrastructure investment and construction, urban and rural infrastructure construction, real estate development, etc.
Source: tianyancha
According to the framework agreement, the subject equity to be transferred this time is 99% equity of Shangluo hospital held by St Guoyi and enjoys 96.5% of shareholders’ after tax profit distribution right .
Based on the principle of market-oriented transaction, Shangluo trading and investment needs to pay a transaction deposit of 20 million yuan within 10 working days from the date of entry into force of the agreement. At the same time, within 30 working days from the effective date of the formal equity transfer contract, Shangluo trading investment needs to pay the remaining amount; And by providing loans or other forms to Shangluo hospital, assist it to repay in full the shareholder loans formed by the company as the controlling shareholder to support its hospital construction and operation.
Source: St national medical bulletin
“resource integration” or “survival with broken arms”
Why rush to “sell” after only one year of operation?
St Guoyi said that in recent years, the company has continuously integrated high-quality resources, improved business layout and optimized asset structure. At present, the company is steadily promoting the development of the main business of medical services. The business scale of Xi’an high tech hospital and Xi’an Xi’An International Medical Investment Company Limited(000516) central hospital has achieved rapid growth, and the core advantages of medical and health services built by the company centered on Xi’an have been continuously strengthened.
In terms of the actual situation, St national medicine’s “selling son” this time is quite “broken arm for survival”.
In January 2022, a maternal abortion occurred in Xi’an high tech hospital, a subsidiary of St Guoyi; On January 5, Shaanxi Province and Xi’an Municipal Health Commission organized an expert investigation and identified it as a liability accident; On January 13, Xi’an Municipal Health Commission gave the handling opinions of “rectifying immediately for three months and reopening after the rectification is qualified” to Xi’an high tech hospital and Xi’an Xi’An International Medical Investment Company Limited(000516) central hospital.
Source: Official Website of Xi’an Health Commission
This also means that the profitability of other two hospitals except Shangluo hospital in the three comprehensive medical service hospital areas of St national medicine may be sharply reduced . In the first half of the year, Xi’an high tech hospital achieved a net profit of 400000 yuan, while Xi’an high tech hospital achieved a net profit of 400000 yuan in the previous half of the year.
According to the 2021 performance forecast previously disclosed by St Guoyi, the company’s performance is under obvious pressure. In 2021, St Guoyi expects a revenue of 2.88 billion yuan to 2.92 billion yuan, a net profit loss of 735 million yuan to 825 million yuan, and a non net profit loss of 650 million yuan to 750 million yuan.
Source: St national medical bulletin
Statistics show that st Guoyi was formerly Shaanxi liberation hospital, which operated department store retail business. At the end of 2011, the company wholly acquired Xi’an high tech hospital Co., Ltd. with 297 million yuan to implement the dual main business of “department store + hospital”. In 2018, the company stripped off department store assets and began to focus on medical business.
In terms of the performance after the transformation, among the three major comprehensive medical service hospital areas that st national medicine is operating, only Xi’an high tech hospital is profitable. From 2018 to 2020, the net profit deducted by the company was in a loss state.
