Topchoice Medical Co.Inc(600763) , whose main business is oral medical services, is known as “Yamao” in the capital market. Since its listing in 2007, Topchoice Medical Co.Inc(600763) has been relying on endogenous forces to maintain the steady growth of scale and profit, with few big moves of M & A. However, on May 16, 2022, the company announced its intention to acquire Heren Health Co.Ltd(300550) controlling stake in cash, which once again stood in the spotlight of the capital market. A few days ago, a reporter from Securities Daily walked into Topchoice Medical Co.Inc(600763) Hangzhou headquarters and interviewed LV Jianming, chairman of the company.
on M & A:
complementary advantages in common values
The cooperation between the two sides had sparked many years ago.
LV Jianming mentioned that in 2019, he and Yang Yibing, the actual controller of Heren Health Co.Ltd(300550) company, got acquainted with each other through business exchanges. “We visited the information system of mayoclinic together and found that they had very same ideas on medical informatization and digital construction. It can be said that our business ideas and values are consistent.”
” Heren Health Co.Ltd(300550) is a ‘healthy’ company with sufficient cash on account, mature business and high asset quality. Topchoice Medical Co.Inc(600763) is able to help him activate some potential businesses, which means that Heren Health Co.Ltd(300550) will have the possibility of doubling in the future under the coordination of Topchoice Medical Co.Inc(600763) in the future.” Referring to the acquisition, LV Jianming said, “the price of Heren Health Co.Ltd(300550) in the secondary market is undervalued. It took us only about a week to reach this agreement.”
Topchoice Medical Co.Inc(600763) , which is committed to building a first-class large-scale public medical group, is naturally inseparable from the layout of medical informatization in order to develop to the field of medical service specialty. In the future, the overall digital solution created by Heren Health Co.Ltd(300550) will also be implemented in Topchoice Medical Co.Inc(600763) Zijingang hospital and Binjiang “future hospital”.
In LV Jianming’s view, the cooperation between the two sides is not only an act of capital acquisition, but also a cooperation with complementary advantages on the basis of common values. The benchmarking Mayo Clinic spent US $1.5 billion to build its own unified electronic pathology system. After the integration of Topchoice Medical Co.Inc(600763) and Heren Health Co.Ltd(300550) can also greatly improve the company’s professional ability and create higher value for customers and enterprises.
talk about planning:
build a multi specialty medical platform
As soon as the acquisition plan came out, many investors of the company wondered whether Topchoice Medical Co.Inc(600763) ‘s oral business had shaken?
“After the completion of the acquisition, we will consider gradually stripping other specialties except stomatology to Heren Health Co.Ltd(300550) to build Heren Health Co.Ltd(300550) into a multi specialty medical group,” said LV Jianming. ” Topchoice Medical Co.Inc(600763) will be more pure, continue to focus on the field of Stomatology, comply with the development trend, and still rely on its own endogenous strength and follow its own pace.”
In the plan of Topchoice Medical Co.Inc(600763) in the future, Heren Health Co.Ltd(300550) will enter the double main business operation mode of the science and technology sector of “integrated solution for digital hospital construction” and the hospital sector of “eye, ear, nose and throat and other specialized medical services”.
In fact, it makes sense to divest businesses other than oral cavity to Heren Health Co.Ltd(300550) . At the end of the first quarter of 2022, 30055 monetary capital was 285 million yuan and trading financial assets (wealth management) was 261 million yuan. It is undoubtedly a good platform for healthy cash flow.
LV Jianming is proud of his focus on stomatology for more than ten years. Topchoice Medical Co.Inc(600763) has been stable at the return on net assets of 20% – 30%, which continues to create value for the company’s shareholders, and the larger potential market is also open to the company. “We are now the strongest in Zhejiang, but we still need to further expand the market share. To form a scale of 10000 dental chairs in Zhejiang, an average of 6000 people have one dental chair.”
Topchoice Medical Co.Inc(600763) left the image of the capital market in a regular way. In the past 15 years since its listing, it has not raised funds through the capital market platform, but its cash flow has been abundant.
“The oral cavity market is still a blue ocean. In theory, we should tolerate high expansion under a certain low profit situation and win the incremental market as soon as possible. But now Topchoice Medical Co.Inc(600763) has become the focus of the capital market. Once the company has capital action, it is like ‘elephant dancing’,” Lv Jianming said bluntly. The aura of star enterprises restricts the company’s every move, “Use the resource allocation function of the capital market with the second platform, forge ahead and innovate, help Topchoice Medical Co.Inc(600763) expand the medical service industry, and allow the company to avoid certain risks.”
talking about the future:
climbing to the peak of Medicine
Today, Topchoice Medical Co.Inc(600763) , at the helm of LV Jianming, is not only China’s first listed company on the main board with medical services as its main business, but also one of China’s largest dental medical institutions, with a total of 60 operating dental medical institutions under his command.
Deeply rooted in the base camp of Zhejiang, the company is trying to build Hangzhou into a Topchoice Medical Co.Inc(600763) oral base integrating medicine, teaching and research. At present, Topchoice Medical Co.Inc(600763) Zijingang hospital in Hangzhou is in full swing. The company has focused on the layout of the head and face medical center, which is also the first hospital in China to propose the integration of head and face disciplines.
“In China’s public medical system, disciplines such as otolaryngology and stomatology are subdivided, and maxillofacial surgery and head and neck surgery are added to the stomatology department without the support of comprehensive medical platform. The separation of departments leads to the fragmentation of medical resources and the risk of high misdiagnosis rate.” LV Jianming talked about his thinking that integrated medical treatment must be a trend, and what Topchoice Medical Co.Inc(600763) needs to do is to form the parts above the head and neck into a large department and hospital to focus on solving the problems of head and face.
LV Jianming revealed that in the 1980s, Heidelberg University had begun to integrate head and face disciplines. The construction structure of the head and face medical center of Zijingang hospital will refer to Heidelberg University, take the Department of anesthesiology as the center to manage the ward, put the safety of customers first, at the same time, introduce China’s top doctors, and one third of the medical staff will come from excellent international teams.
Topchoice Medical Co.Inc(600763) he is full of confidence in the integration of clinical, teaching and scientific research. In LV Jianming’s Thoughts on the development trend of the hospital, digital medical reform and the advanced mode of hospital management from time to time, he shows his expectation for the enterprise – a sense of mission and the perfect combination of medical spirit and scientific spirit. Perhaps in the future, Topchoice Medical Co.Inc(600763) wants to make profound changes to the structure of the medical industry.
“Today’s medical services are becoming more and more high-tech and complex. How can the medical spirit remain unchanged forever? We need to mobilize all resources and use all technical, social and financial means to realize the ideal of solving patients’ real problems. Topchoice Medical Co.Inc(600763) today, with Heren Health Co.Ltd(300550) , there may be more extended platforms, but one day, we will meet at the peak of medicine.” Lu Jianming said.
