Viewpoint
Date:2020/02/23

The sudden outbreak of COVID-19 has concerned the people, and the demands on anti-epidemic products have soared in a short time. The large demands on face masks, alcohol disinfectants, Shuanghuanglian Oral Liquid and other protective supplies, as well as nucleic acid detection kits and anti-coronavirus drugs, are all testing the R&D efficiency and production capacity in China’s healthcare sector.

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Since the launch of the Sci-Tech innovation board, many excellent domestic bio-pharmaceutical companies have successfully gone public for financing and capacity expansion and have made significant contributions to epidemic control. In 2019, amid the overall downturn in the private equity investment market, bio-pharmaceutical companies were still greatly favored by large investment institutions. According to the statistics released by ChinaVenture, in 2019, the total number of financing cases in the bio-pharmaceutical industry reached 265, ranking second only to that in the manufacturing industry.

Healthcare is Likely to See an Investment Peak

Influenced by the COVID-19, the pharmaceutical sector continues to strengthen, and the concept stocks from the industries like face masks, biological vaccines, diagnostic reagents, antiviral drugs, and pharmaceutical circulation remain hot. As the government is vigorously supporting the bio-pharmaceutical enterprises, and the Hong Kong Exchanges and the Sci-Tech innovation board have eased their listing requirements for the bio-pharmaceutical enterprises, China’s healthcare industry is likely to see a new round of investment peak in 2020.

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Statistics show that in 2018, the market scale of China’s bio-pharmaceutical industry exceeded RMB350 billion, and a total of 9 Class 1 new drugs independently developed were approved for marketing. According to statistics from the Research Report on Development Prospects and Investment in China’s Bio-Pharmaceutical Industrial Parks in 2020 released by ASKCI, the market scale of China’s bio-pharmaceutical industry will have approximated RMB400 billion by 2020.

In recent years, the governments at the state, provincial, and municipal levels have all focused on supporting the development of the bio-pharmaceutical industry. In 2018, Shandong set up a Fund of Funds with a total scale of RMB10 billion to support key projects in the healthcare industry. Fujian required that the Internet Economy Sub-Fund under the Provincial Venture Capital Guiding Fund for Emerging Industries should provide priority support for “Internet + Healthcare” projects. In January 2020, Guangzhou passed the Several Provisions of Guangzhou on Accelerating Development of Bio-Pharmaceutical Industry, providing financial support for the bio-pharmaceutical enterprises with a maximum amount of RMB150 million.

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About the development direction of the current healthcare industry, Cai Xiujun, President of Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, once said that innovation in technology, institution and talents was of great importance to the development of hospitals, enterprises and the entire industry. A nation’s healthcare industry is a comprehensive project that involves the full cooperation between the government, medical service agencies, the industry, and social capital. Currently, both the Hong Kong Exchanges and the Sci-Tech innovation board have provided great support for bio-pharmaceutical enterprises. With such support from the capital market, China’s healthcare industry is expected to enjoy greater development.

According to a Research Report from Zhongtai Securities, in the next three years, innovation in R&D and upgrading in consumption and manufacturing will become a long-term trend in the pharmaceutical industry. First, drug innovation remains a general trend with the most certainty, and R&D innovation represents the future of the pharmaceutical industry. As pharmaceutical service outsourcing is transferred to China and the domestic demand on innovation is increasing sharply, there will come a boom in China’s service outsourcing for innovative drugs. Second, in the sectors like medical services, vaccines, self-funded specialty drugs and branded traditional Chinese medicine, due to the trend of consumption upgrading, excellent leading companies are expected to maintain fast growth.

Internet Healthcare is Likely to Bring Promising Investment Opportunities

The spread of the outbreak has fueled the need for online healthcare. Many Internet healthcare service providers like Dingxiang Doctor, Chunyu Doctor, and Haodaifu Online have launched online medical consultation services to solve problems for the patients staying at home for quarantine.

Investment in Internet healthcare emerged as early as in 2013. Statistics show that from 2013 to 2014, China witnessed 66 cases of venture capital investment in Internet healthcare and 91 active operations from investment institutions, with a disclosed financing amount of USD580 million. Among these cases, the most typical ones are the Series C financing of USD50 million for Chunyu Doctor and the Series C financing of USD70 million for DXY.

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Since 2019, investment in Internet healthcare has shown signs of recovery. Tencent, which has invested in many Internet healthcare companies like Haodaifu Online, Medlinker, DXY and WeDoctor, merged its two online medical platforms, Tencent Doctorwork and Xingren, into the “Tencent Trusted Doctors” in August 2018. In April 2019, this new platform completed a new round of financing of USD250 million, with a valuation of more than USD1 billion. In December 2019, “Yuntai Network”, an Internet medical ecological operator, also secured a Series B+ financing of RMB100 million and planned to focus on developing and upgrading Internet hospitals and other businesses, analyzing and exploring big data of healthcare, and further establishing an intensive and extensive Internet medical ecological service system.

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Premier of the State Council presided over an executive meeting of the State Council, specifying the measures to develop “Internet plus Healthcare” and confirming the role of the Internet in the healthcare sector; on August 30, 2019, the National Healthcare Security Administration officially released the Guiding Opinions on Refining Polices regarding Prices and Medical Insurance Payment for “Internet plus” Healthcare Service, formally including the Internet healthcare service items into the scope of medical insurance payment.

It is reported that Internet hospitals will become standard facilities for metropolitan hospitals. In Beijing, nearly 80% of secondary hospitals and above provide Internet-related services; in Shanghai, the information in all public medical institutions is interconnected; in Guangzhou, since 2019, it has been required that no less than 50% of grade-A tertiary hospitals should provide Internet hospital services. According to industry insiders, in the next step, the third- and fourth-tier cities will become a new battlefield for market competition in the “Internet plus” healthcare sector. With the power of “Internet plus”, excellent medical resources will be expanded to these third- and fourth-tier cities, and a balanced distribution of medical resources may be realized.

SENDKING Viewpoint

The outbreak of COVID-19 has increased the world’s awareness of the importance of health. Being an industry most closely related to the epidemic, the healthcare service sector directly bears the significant function to provide disease treatment and epidemic prevention and control for all parties. The epidemic will also have an unprecedentedly profound and extensive impact on the future development of the entire healthcare service industry. Moreover, as medical costs are constantly rising and people are having increasingly higher demands on life health, there will be newer and higher requirements from all sectors of society on the scientific and technological innovation in the healthcare industry.

Since the outbreak began, SendKing has been following the dynamics of the healthcare industry and timely integrating the relevant resources. We have fully defended the people’s health and provided substantial assistance for the society and the government to fight against the epidemic. In terms of online healthcare, we cooperated with WeDoctor, an Internet hospital, on developing an online COVID-19 consultation channel to help the general public timely get anti-epidemic information and correctly identify relevant symptoms, contributing to the national epidemic prevention and control with remote assistance. Meanwhile, relying on its own advantages, SendKing has obtained more medical supplies and resources, thus effectively supplementing the offline anti-epidemic work and actively promoting the overall epidemic prevention and control.

Furthermore, SendKing always adheres to the development thinking of strongly empowering the real economy and strives to maximally integrate industries and finance to promote the high-quality development of the social economy. Through inspecting the excellent company with potential in the healthcare sector, SendKing hopes to offer more help to the society from the perspective of industrial projects and to contribute to China’s healthcare industry with the power of finance. In the special time, we turn to focus on the healthcare industry. That is not just an inevitable choice we have made in line with the social development trend, but also a correct and effective industrial attempt.

In the future, SendKing will also continuously follow the new trends and opportunities in the healthcare industry, actively explore the industry-finance integration, and simultaneously conduct industrial layout to play the important role of finance in serving the real economy. Meanwhile, we will also strive to forestall financial risks, constantly improve our internal professional abilities, enrich financial products, and enhance our service capacities, to create new wealth for clients!

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