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真是港股圈
wrote a column · Jul 27, 2021 18:30

Rui Ci Medical (1526.HK): Undervalued high-quality medical assets in the market.

In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
Source: Futu; Rui Ci Medical stock price weekly K-line chart; As of Sunday, July 25, 2021.
In fact, Rui Ci has been striving on the right path, leveraging its experience in comprehensive hospital management, and has established the direction of medical examinations and women's and children's specialties, continuously branching out in recent years. From the company's business data, various business indicators of the enterprise continue to improve. Even after experiencing the 2020 epidemic, the company's profitability is still increasing and is expected to achieve positive income this year.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
Source of information: company annual report
1. Scarce high-quality hospital assets

Rui Ci Hospital, affiliated with Nantong University, is the first private comprehensive hospital in China.For the couple Fang Yixin with medical backgrounds, establishing a hospital was to some extent an achievement of a life goal. Therefore, over the 20 years since the establishment of Rui Ci Hospital affiliated with Nantong University, one can clearly feel the steady pace of the management, which contrasts sharply with the extensive management brought about by the capital expansion of Putian-style hospitals. 1. Strong comprehensive strength. Over the course of 20 years, Rui Ci Hospital has gradually grown from a small hospital to a comprehensive hospital, and then transformed into a comprehensive hospital with specialized characteristics. In 2020, it was affiliated with Nantong University and officially became Nantong Rui Ci Cancer Hospital in September as its second name. Rui Ci Hospital continues to develop in the direction of becoming a teaching-oriented comprehensive hospital through its affiliation with the local medical college. Furthermore, Nantong University Rui Ci Hospital has demonstrated sufficient strength in terms of its own capabilities, with steady increases in outpatient volume, inpatient admissions, and surgical procedures, as well as stable revenue growth.According to industry chain research, Rui Ci Hospital performs approximately 3,000 orthopedic surgeries, 70 pacemaker surgeries, 100 coronary artery surgeries, and 100 electrophysiological surgeries each year. The increase in the number of surgeries at Ruici Hospital is not only due to the hospital's own medical strength, but also benefits from the referral system of the medical consortium.Taking the example of 70 pacemaker surgeries per year, in fact, most of the pacemaker patients in the hospital are referred from lower-level hospitals. Ruici Hospital has a dedicated marketing department for referral work, providing a green channel for patients referred from lower-level hospitals, making this management model more efficient than public hospitals.Bingo conducted research on the Medtronic private team, confirming that the annual growth rate of Medtronic products in this hospital is around 15% - 20%, confirming that the actual number of surgeries is continuously increasing.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
Source of information: Company annual report; Data statistics from Ruici Hospital affiliated with Nantong University
2. Specialized medical services are growing rapidly Ruici HospitalOrthopedics and pediatric departments are strong departments.Based on this, a nursing home (100 beds) was established in 2017, a hemodialysis center was established in 2018, and a development zone medical consortium and stroke center were established in 2020. Bingo researched the sales representatives of Samsung Medical and Fresenius, confirming the steady increase in the usage of hemodialysis consumables in the hospital in recent years, which further proves the increasing patient volume in the corresponding specialty departments. At the same time, the nursing home established by Rui Ci Medical in 2017 also has a 100% occupancy rate (reaching 96% even during the policy period of only outpatients and no admissions during the epidemic).
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...

3. Harmonious government relations This is specifically reflected in the following 3 aspects: A. Adequate medical insurance. Other local hospitals may stop surgeries at the end of the year due to lack of medical insurance funds, but Rui Ci Hospital has not experienced this. B. The range of drugs and consumables that can be reimbursed by Ruici Hospital's medical insurance is wider than that of public hospitals. C. Ruici Hospital holds major events with the participation and support of local leaders. 4. The medical team of doctors is trustworthy. Ruici Hospital has a stable medical team and a good academic atmosphere, and regularly participates in high-quality academic activities. Ruici Hospital has a long-term technical cooperation with the Medical School of Fudan University and the Medical School of Shanghai Jiao Tong University, and the high-quality medical resources in Shanghai can directly support the medical development of the group.For example, Dr. Zhao Qiang's team from the Department of Cardiothoracic Surgery and Ruijin Hospital have collaborated to perform multiple high-technical difficulty heart surgeries. 5. The comprehensive hospital is about to take off. Currently, the 1st and 2nd inpatient wards of Ruici Hospital are overcrowded, and beds are even needed in the corridors. In order to alleviate the tight situation of hospital beds, the Phase II project of the hospital is nearing completion. According to the company's annual report, as of December 31, 2020, the Rehabilitation Center (now renamed as Ruici Maternal and Child Building) has completed the main acceptance, and is expected to be put into operation in October 2021. The comprehensive ward building and the conference and activity center have completed the structural topping, and are expected to be put into operation in July 2022.By then, the hospital will increase its bed capacity from the current 500 beds to over 1,500 beds, able to serve more patients.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...

6. Internal scientific management A. Procurement:The procurement is personally handled by the group owner's wife, comparing prices from multiple sources, with lower costs compared to public hospitals.The company has a strategic cooperation with GE to purchase a series of high-end GE equipment at preferential prices. B. Scientific management assessment:The assessment of the department is centered on revenue.For example, the orthopedics department has an annual revenue target of 10 million yuan, which is used to calculate the department's incentive salary based on achievement, to promote the enthusiasm of department personnel. C. Diversified patient recruitment channels: the main aspects of this are reflected in the following: 1) Physical examination channels: recruiting patients through Nantong Ruici physical examination.The Nantong Ruici physical examination and the Ruici Hospital are connected, so if any problems are found during the Ruici physical examination, patients can directly go to Ruici Hospital for treatment, breaking the situation of Meinian OneHealth's physical examination reports not being recognized by comprehensive hospitals. 2) Recruitment through medical consortia: the marketing department regularly engages in activities with affiliated hospitals to refer patients. 3) Affiliated to the Medical School:Richcer and Nantong University Medical School cooperate to establish a comprehensive hospital integrating medical education and practice, constantly improving the brand strength of the hospital. However, Richcer Hospital is not without flaws. Looking ahead, Richcer Hospital may also face certain challenges. The centralized procurement of consumables will directly affect the hospital's revenue. Assuming that the current price of one steel plate is 8000 yuan, and the price after centralized procurement is 2000 yuan, the average customer price of the hospital's projects will be reduced by 6000 yuan, directly reflected in the hospital's revenue. Of course, the company can increase charges by adding examinations, services, special projects, etc., or use off-book consumables. Private hospitals have more flexibility in implementing centralized procurement, and can choose more expensive off-book consumables.
2. Stable growth of the medical examination business 

Leading health check-up company Meinian Onehealth Healthcare Holdings suffered from blind expansion, which resulted in the inability to keep up with medical services, and the problem of doctors operating without licenses was exposed in the early stage. In addition, Meinian only serves as a single health check-up center without medical capabilities, which leads to a lack of trust from public hospitals in Meinian Onehealth Healthcare Holdings' reports, making the health check-up industry not favored by capital. But in reality, health check-ups, as a medical service project with certain consumer attributes, is a promising industry.Compared with the embarrassment of Meinian Onehealth Healthcare Holdings being solely focused on health check-ups, Rui Ci Medical is more synergistic. On one hand, Rui Ci established clinics in health check-up centers in 2016, enabling the resolution of minor health issues in outpatient departments and the referral to higher-level medical departments for major problems, essentially providing community healthcare services. On the other hand, Rui Ci itself owns comprehensive hospitals and women's and children's hospitals in some cities, and it can refer patients to its own hospitals through health check-up institutions.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
Sources: company annual report; Rui Ci health check-up data (Xingyuanhui is a high-end health check-up center)
It can be seen that the company has a scientific development plan and is rooted in the Yangtze River Delta region, steadily implementing comprehensive medical services in each clinic. Based on this foundation, the company launched the high-end health check-up brand "Xingyuanhui" in the fourth quarter of 2019, and the second Xingyuanhui opened in 2020. From the data, even during the COVID-19 pandemic in 2020, the group's medical examination business revenue scale continued to expand. The company's fixed costs, such as depreciation and amortization, remained relatively stable, so the growth rate of costs was smaller than the growth rate of revenue.Further observation of the data will reveal that the proportion of individual customers in Rui Ci continued to increase. The company gradually moved towards B2C, so the overall gross profit of the company will improve. On July 20th, Bingo visited Hangzhou Rui Ci Medical Examination. Overall, there were a lot of people, good service attitude, fast process, and not much need to queue. For routine physical examinations and pre-employment examinations, private ones offer greater cost-effectiveness.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...

The equipment is also made by GE, which is sufficient for routine corporate physical examinations and pre-employment examinations. During the ultrasound examination, it was discovered that the ultrasound screen can be seen while lying on the bed. When the doctor takes the probe to take pictures, they can see the images themselves, and the details are handled well.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
3. Obstetrics and Gynecology Hospital: Integration of Obstetrics, Gynecology, Maternity, and Pediatrics
In Bingo's opinion, if a comprehensive hospital can be well managed, the operation of a specialized hospital becomes easier.Rui Ci Medical, like Samsung Medical, is also transforming from operating well in public comprehensive hospitals to specialized hospitals. Unlike Samsung Medical's advantageous disciplines in rehabilitation, Rui Ci Medical's advantageous discipline is in the field of obstetrics and pediatrics, so the group began exploring obstetrics and gynecology specialized hospitals in 2018.As of now, Rich Baby has established 3 specialized maternity and pediatric hospitals in shanghai, Changzhou, and Wuxi.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...


Currently, the hospitals in Changzhou and Wuxi have been included in the medical insurance.Rich Baby Hospital has reached a technical cooperation agreement with Fudan University and Shanghai Jiao Tong University School of Medicine to create specialty departments such as gynecology, obstetrics, pediatrics, and medical-grade maternity centers.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...

At the same time, the performance of this business segment will gradually be released.The establishment and initial operation of the group's maternity and pediatric hospitals in 2018 and 2019 brought significant cost expenses. Therefore, the early stage development of the maternity and pediatric hospitals in 2018 and 2019 led to an unattractive profit for the Rich Baby group.However, this phenomenon was greatly relieved in 2020. Despite the impact of the epidemic in 2020, the number of deliveries in the maternity and pediatric hospitals still increased by 54.5%, and the revenue increased by 72%, while the sales cost only increased by 10%. This indicates,The group's maternal and child hospital is gradually maturing, and revenue continues to increase, but costs are relatively fixed. Achieving positive profitability is only a matter of time.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
Data source: company annual report; Rui Ci Medical specialized hospital operating data
The most important thing is that Rui Ci Medical's maternal and child hospital business has formed an ecological closed loop. With the opening of the Shanghai Narcissus special outpatient department for adults and children in the second half of 2020, and the establishment of the second phase medical-grade confinement center, the service projects of the group's specialized maternal and child medical care have formed an ecological closed loop.Compared to the maternity services provided by Aidigong, Rui Ci's services are more comprehensive. In Rui Ci's maternal and child hospital, the chain of maternal and child services from "obstetric examination, outpatient-pregnancy-medical-grade confinement center-pediatric outpatient" all provide professional medical services. For Rui Ci, hospitals with integrated outpatient departments, obstetric centers, and confinement centers have more loyal and sticky customers, as well as lower flow costs. Looking at each hospital, Even though the pediatric ward of Changzhou Rui Ci Maternity and Child Hospital, which started operation in January 2018, could not be opened in 2020 due to the epidemic, the hospital still maintained overall high-speed growth.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
(Changzhou Ruici Maternity and Child Hospital)

Shanghai Shuixian Maternity and Child Hospital, which started operating in June 2018, has also gained a certain level of popularity in Shanghai.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
(Shanghai Ruici Maternity and Child Hospital)

Wuxi Ruici Maternity and Child Hospital, which opened in June 2019, is in a period of booming profitability.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...
(Wuxi Ruici Maternity and Child Hospital)

On July 20, 2021, the government announced a policy to support having a third child, which includes specific guidance on improving public reproductive services, strengthening prenatal screening and diagnosis, promoting integrated management services for pregnancy and postpartum, and multidisciplinary collaboration.
In 2019, Rui Ci Medical Chairman Fang Yixin said at an investor communication meeting. When Rui Ci went public, it only had one comprehensive hospital and some medical examination institutions. At that time, the company's market cap was 4 billion. As a result, the company worked hard, continuously expanded and explored, and made certain breakthroughs in its business model over a period of 2 years. However, the market cap fell by 20 billion, simply because the company did not make a profit from a financial statement perspective. Source: Futu; K-line chart of Rudig Medical stock price; Data as of Sunday, July 25, 2021. In fact, Rudig Medical has been working hard on the right path, with experience in managing general hospitals, and has determined the direction of medical examinations and specialized services for women and children. Over the past few years, the company has been continuously branching out. From the company's business data, all of its business indicators have been consistently improving, even after being affected by the 2020 pandemic, the company's profitability is still increasing and is expected to achieve positive returns this year. Source: Company Annual Report. 1. Scarce High-Quality Hospital Assets Rudig Hospital, affiliated with Nantong University, is China's first private comprehensive hospital. For Fang Yixin and his wife, who have a background in medicine, opening a hospital is to some extent the realization of a life goal. Therefore, observing the establishment of Rudig Hospital in the past 20 years, you can clearly feel the steady pace of the management, which is in stark contrast to the extensive management brought about by the capital expansion of Putian hospitals. 1. Strong comprehensive strength: Rudig Hospital has gradually grown from a small hospital to a comprehensive hospital over the past 20 years, undergoing a transformation...

Undoubtedly, the government's policy to encourage childbirth will likely provide more policy support to private maternity and child institutions, especially in terms of license review, medical insurance coverage, technical support, and allowing doctors to practice at multiple locations.As Ruici Medical has already established a closed-loop ecosystem for maternity and child hospitals, it will likely thrive under this wave of policies. 
Four, valuation thinking. 
Finally, investments always need to be implemented in terms of valuations. 
As for the recent primary market hospital acquisitions, at least a 2x price-to-sales ratio should be used as the basis for acquisition.For example, Su Ning Global plans to acquire 100% equity of 3 medical aesthetic hospitals held by affiliated medical aesthetic industry investment funds and global equity investments with 337 million yuan in cash, the 3 hospitals had a total revenue of 130 million yuan in 2020, which is a 2.6x price-to-sales ratio. 
Even the frequently defaulted meinian onehealth healthcare holdings currently has a 4x PS in the capital market.Not to mention the enterprises favored by the capital market such as international medicine and haige. 
And the irony is,The current valuation of Rici Medical corresponds to only 1x PS for the 2020 fiscal year, which is a typical abnormal valuation in the Hong Kong stock market. In simple terms, The current 1x PS of Rici, combined with the high probability of profit guidance in 2021, makes the current market cap of over 2 billion Hong Kong dollars very undervalued. On the risk side, centralized procurement reduces the prices of medical consumables, which will negatively impact hospital revenue. The specific expansion plans for the company's specialized hospitals and medical examination institutions also need to be observed. Management and the capital market have very limited communication, and the current market cap liquidity is poor. However, when these uncertain factors experience positive marginal changes, will Richy still be valued the same?
 $RICI HEALTH (01526.HK)$  $HYGEIA HEALTH (06078.HK)$  $C-MER MEDICAL (03309.HK)$  $JXR (01951.HK)$ 
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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