Sanxing Medical Electric Acquired 5 Chinese Hospitals

On 28 March, Sanxing Medical Electric Co., Ltd. (601566.SH), made several announcements announcing that its subsidiary, Rehabilitation Investment, intended to acquire 100% of the equity interests in five hospitals, namely Wuhan Mingzhou Rehabilitation Hospital, Changsha Mingzhou Rehabilitation Hospital, Changzhou Mingzhou Rehabilitation Hospital, Nanjing Mingzhou Rehabilitation Hospital and Ningbo Beilun Mingzhou Rehabilitation Hospital, for a total price of CNY 844 million. The acquisition prices are CNY 180 million, CNY 160 million, CNY  182 million, CNY 210 million and CNY 112 million respectively.

In the "Supplemental Announcement" released on the same day, Sanxing Medical stated that the main purpose of the acquisition of the five hospitals was to "further enhance the operating scale and profitability of the company's medical segment" and "further strengthen the company's overall strength and competitive advantage in the rehabilitation field".

As Sanxing Medical already owns Zhejiang Mingzhou Rehabilitation Hospital, Hangzhou Mingzhou Rehabilitation Hospital and Nanchang Mingzhou Rehabilitation Hospital, all of which are specialized hospitals for critical care rehabilitation, and its subordinate general hospital Ningbo Mingzhou Hospital also carries out medical rehabilitation business. The five critical care rehabilitation hospitals joined in this acquisition are basically the same as Sanxing Medical's existing rehabilitation business and have significant synergy in department construction and operation management. Therefore, this acquisition can not only enable Sanxing Medical to replicate its rehabilitation business in other places and develop multiple points in China, but also rapidly expand the scale of Sanxing Medical 's rehabilitation business. It will also integrate the resources of the medical and nursing teams and the procurement of drugs and consumables of each party, enrich the experience of Sanxing Medical's rehabilitation hospital chain management and operation, better utilize the scale effect and form a good synergy effect.

In addition, in the "Supplementary Announcement", Sanxing Medical also made estimates and forecasts of the changes in bed capacity, operating revenue and operating profit of the five hospitals to be acquired in the next five years.