As China Ages: Investment Ecosystem of the Private Healthcare Services

This report provides an in-depth overview of how the “myriad of opportunities” in China's healthcare services scene came into being and analyzes to what extends the industry presents an opening for VC/PE investors.

By Yusuf I. Tuna Sep 9, 2019 11:53 am

Image: Credit to Hanny Naibaho on Unsplash

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Since the healthcare companies Ping An Good Doctor (1833: HK) and So-Young Int. (SY: NASDAQ) went public, private equity (PE) investors’ attention has been drawn to China’s lively healthcare services industry.

The analysis presented in this report provides an in-depth overview of how the “myriad of opportunities” in the scene came into being and analyzes to what extends the industry presents an opening for VC/PE investors. This report shows that China has some unique structural advantages for the development of the healthcare services industry, while also examining the risks associated with related fields.

Healthcare services in contemporary China are characterized by three emerging attributes: A growing unmet need for healthcare services, a massive medical data pool and the rise of information technology as a support for healthcare services. On top of these, lax regulations in medical data collection and utilization are creating a unique operational atmosphere for the emerging tech-driven healthcare services.

The report ultimately demonstrates the investment risks and opportunities affecting China’s Online Healthcare, Medical AI and supportive IT services in healthcare. Whilst this study does not confirm an ideal investment opportunity for VC/PE investors, it does partially substantiate a feasible investment environment, mainly due to macro-economic fundamentals. While doing so, the report points out specific case studies, providing sample business models and regulatory risks associated with these fields in China.

Based on widely practised investment decision-making criteria among healthcare private equity venture capital investors, the report aims at drawing attention to the companies that are presumably able to provide growth prospects for the periods of 2-7 years.