Quality, Affordable and Accessible

Sinophi completes US$130 million project with Huai Yin Hospital in Huai’An City, Jiangsu Province, China

December 29, 2014

Sinophi China Hospitals Holdings Limited announced today a US$130 million project with Huai Yin Hospital in Huai’An City, Jiangsu Province.  Sinophi China Hospitals Holdings Limited is a company invested by Sinophi Healthcare, Morgan Stanley Private Equity Asia (MSPEA), Sihuan Pharmaceutical (Sihuan) and Euromax.  MSPEA, Sihuan and Euromax hold their investment in Sinophi China Hospitals Holdings Limited through a joint venture, Renfang Medical Holdings Ltd.

Simon MacKinnon, Chairman of Sinophi China Hospitals Holdings Limited and Sinophi Healthcare noted “Huai Yin Hospital is the first hospital invested by Sinophi China Hospitals Holdings in mainland China. We are committed to actively participating in the Chinese Government’s reforms of the healthcare system by investing in public hospitals, building new hospitals and bringing together international healthcare resources with leading Chinese hospitals, doctors and nurses in Huai’An and other cities.  Our hospitals will support the Chinese Government’s goals of delivering more accessible, more cost-effective and better quality healthcare services to all Chinese citizens.”

NOTES:

Huai’An City

Huai’An City (population 5.5 million) is located in Jiangsu province (population 80 million, next to Shanghai) in East China.  Huai’An City is a famous cultural and trading center on the Grand Canal and is the hometown of former Chinese Premier Zhou Enlai.

Huai Yin Government and Huai Yin Hospital

Huai Yin District (population around one million) is in the center of Huai’An City.  The Huai Yin District Government administers the Huai Yin Hospital, the largest district-level hospital in Huai Yin District in Huai’An City in Jiangsu Province. It is the third largest hospital in Huai’An City in terms of bed count.

The Huai Yin Hospital has been recognised as one of the best local level II general hospitals in HuaiAn City.  It covers a total of 116,000 square meters and gross floor area of 56,000 square meters with 1,085 beds, 17 functional departments and 24 clinical medical departments.  The departments of general surgery and urinary surgery are the two municipal key clinical specialties. The hospital has achieved over a 100% bed utilization rate for the past three years with over 490,000 annual outpatient visits in 2013.

Rapid economic development has contributed to a surge in local medical demand, which underpins Huai Yin Hospital’s important market position in Huai’An City.

Sinophi Healthcare

Sinophi Healthcare is a UK company focused on investing in and managing hospitals in China. Target businesses include public and private general hospitals as well as specialty hospitals.  Sinophi’s hospitals deliver quality, value-for-money healthcare in China’s rapidly growing urban areas. Sinophi brings international hospital expertise, links with hospitals in the UK’s National Health Service system and with leading UK and international healthcare partners to its hospitals in China.

Morgan Stanley Private Equity Asia

MSPEA is one of the leading private equity investors in Asia Pacific, having invested in the region for over 20 years. MSPEA invests primarily in highly structured minority investments and control buyouts in growth-oriented companies at attractive valuations. The experienced investment team is led by senior professionals with extensive industry relationships, in-depth market knowledge and the ability to apply international investment principles within each local context. MSPEA has offices in Hong Kong, Beijing, Shanghai, Seoul, Tokyo, Mumbai and New York, and leverages the brand and unparalleled global network of Morgan Stanley to source investment intelligence and opportunities. MSPEA is part of Morgan Stanley Merchant Banking & Real Estate Investing.

Sihuan Pharmaceutical Holdings Group Limited

Sihuan Pharmaceutical is a Hong Kong listed company (stock code: 0640).  Sihuan is a leading pharmaceutical Company with the largest cardio-cerebral vascular drug franchise in China’s prescription drug market by market share. The Group has a differentiated and proven sales and marketing model, supported by an extensive nationwide distribution network covering around 10,000 hospitals through over 3,000 distributors in all 31 provinces, autonomous regions and cities throughout the PRC.

Euromax is wholly-owned by Dr. Che Fengsheng, an executive Director of Sihuan and a substantial shareholder in Sihuan. The principal activity of Euromax is investment holding.

China healthcare sector

According to McKinsey data, the Chinese healthcare sector is set to grow at over 12% per annum, with total healthcare spend to exceed US$1 trillion by 2020.

According to the Chinese Centre for Disease Control and Prevention, Beijing, the major causes of disease and death in China have shifted from predominantly infectious disease and diet-related deficiency diseases to non-communicable diseases (NCDs) including hypertension, stroke, coronary heart disease, diabetes, cancers, etc. These account for 85% of deaths today (up from 50% four decades earlier).  China’s considerable efforts in healthcare reform are addressing the increased demand on the system from NCDs. The NCD burden in China continues to grow with recent studies estimating 114 million diabetics in China with another 493 million in a pre-diabetic state.

Following the twelfth Five Year Plan and the latest waves of healthcare reform commencing in 2009, Chinese government policy is encouraging the involvement of private and foreign capital into healthcare services and is targeting 20% of inpatient visits and beds to be serviced by the private sector by 2020 from current levels of below 10%.

For further information please contact:

Simon MacKinnon                  simon.mackinnon@sinophi.com