Meihao Healthcare Group Co., Ltd. (hereinafter referred to as 'Meihao Healthcare') was successfully listed on December 14, 2022. The company plans to issue 150 million H shares, of which 90% will be sold internationally and 10% publicly in Hong Kong. The issue price is HK$0.84 per share.
During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), facilitating communication between the issuer and the Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Exchange.
Investment highlights
The company is the largest private oral service provider in Wenzhou;
The company has a strong brand awareness and a loyal patient base;
The company has a professional and safe business operation system, as well as an experienced and high-quality oral specialty team;
The company has a management team that shares a common mission, possesses profound vision, and is highly capable of execution.
According to the Frost & Sullivan report, in terms of revenue for 2021:
Ranked first among private dental service providers in Wenzhou, China;
It is one of the leading private oral service providers in China.
Overview of the Oral Service Market in Zhejiang Province, China
Zhejiang Province's economic performance ranks among the top in the country. In terms of nominal GDP for 2021, it ranked fourth among all provinces with RMB 7.4 trillion. The oral service market in Zhejiang has shown strong growth due to higher disposable income among residents and a favorable private economy environment. The scale of the oral service market in Zhejiang Province, measured by income, increased from about RMB 8.8 billion in 2017 to RMB 13.9 billion in 2021, with a compound annual growth rate of 12.1% during this period.
Although Zhejiang Province was affected by the pandemic in 2020, after the control of the epidemic in 2021, the market as a whole showed a trend of rebound and recovery. Looking ahead, it is expected that the recurrence of the pandemic in 2022 will have a certain negative impact on the Zhejiang oral service market. However, with the normalization of the epidemic, the advancement of population aging, and the implementation of the three-child policy, these factors will continue to promote residents' demand for oral services. After 2023, there will also be a trend of rebound and recovery. By 2026, the scale of the Zhejiang oral service market is expected to further grow to about 232 billion yuan, with a compound annual growth rate of about 10.9% from 2021 to 2026. The expenditure per oral service has increased from about 303.2 yuan to about 373.2 yuan during the same period, with a compound annual growth rate of about 5.3%.
Data source: Analysis by Frost & Sullivan
According to a Frost & Sullivan report, within Zhejiang Province, from 2017 to 2021, the market scale of private dental hospitals and private dental clinics increased from approximately RMB 1.7 billion and RMB 3.4 billion to approximately RMB 34 billion and RMB 54 billion respectively, with compound annual growth rates of 18.9% and 12.2% during this period. Private dental service providers are mainly leading the growth of the oral service market in Zhejiang Province.
Data source: Analysis by Frost & Sullivan
Overview of Wenzhou Oral Service Market
As one of the more economically developed cities within Zhejiang Province, Wenzhou's urban residents have had disposable income levels higher than the average for urban residents across the province over the past five years. Therefore, Wenzhou residents are able to afford more expensive oral services when making choices. At the same time, with the increasing awareness of oral health among residents and the growth in the number of people with higher disposable income, the demand for oral services in Wenzhou will also rise accordingly. Oral service providers should gradually expand their service coverage and improve operational capabilities to create a favorable development environment for the oral service market in Wenzhou.
Due to the prosperous development of the oral service market in Wenzhou City, as well as an increase in the number of visits and average expenditure per visit among patients, the scale of the oral service market in Wenzhou City significantly grew between 2017 and 2021, increasing from approximately 5.128 billion yuan to 7.949 billion yuan, with a compound annual growth rate of 11.6%. During the same period, the expenditure per oral service also increased from 329.2 yuan to 404.6 yuan, with a compound annual growth rate of about 5.3%. Similarly, in 2020, the pandemic also had a certain negative impact on the oral service market in Wenzhou City, but in 2021, the market in Wenzhou City recovered relatively faster than the overall Zhejiang market.
According to this trend, we predict that after experiencing the pandemic in 2022 and with the continuous stable development of Wenzhou's economy, the overall scale of the oral service market in Wenzhou is expected to reach approximately RMB 13.387 billion by 2026, with a compound annual growth rate of 11.0% from 2021 to 2026.
Data source: Analysis by Frost & Sullivan
With the development of the oral service market in Wenzhou City, various types of oral services have also seen a corresponding and appreciable growth over the past five years. From 2017 to 2021, the market size of comprehensive oral treatment and other oral services increased from approximately RMB 2.292 billion to approximately RMB 3.639 billion, with a compound annual growth rate of 12.2%. In 2021, orthodontics, dental implants, oral restoration, and comprehensive oral treatment and other services accounted for 25.6%, 10.1%, 18.5%, and 45.8% of the overall Wenzhou oral service market respectively.
Data source: Analysis by Frost & Sullivan
Competition pattern in Wenzhou's oral service market
Since 2010, the private oral service market in Wenzhou has experienced significant development and has become an increasingly important part of the city's oral service market. In terms of number, the number of private oral service providers in Wenzhou increased from 342 in 2017 to 447 in 2021. The number of private dental hospital groups also increased from 12 to 15, while the number of private dental clinics rose from about 330 to 432 during the same period. Overall, private dental hospitals have more dentists, more specialized services, and larger business scales.
Many well-developed private dental service providers have accumulated loyal customer bases and established professional and good brand images, setting a high entry threshold for later market entrants. According to the revenue figures for 2021, Meihao Medical is the largest private dental service provider in Wenzhou City, accounting for 25.2% of the private dental service market and 13.2% of the overall Wenzhou oral service market.
Data source: Analysis by Frost & Sullivan
Key market drivers of the Chinese oral service market
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Oral services are in short supply
According to the results of the fourth national oral health epidemiological survey released by the National Health and Family Planning Commission, there is a significant difference between the prevalence rate of oral diseases in China and the corresponding treatment rates. Compared with previous survey results, the incidence of dental caries has also shown an upward trend. The State Council has also proposed initiatives for healthy oral lifestyles in the 'Healthy China 2030' Plan Outline. In addition to policy support, with the increasing attention of Chinese parents to children's health issues, the demand for oral services among the public is gradually increasing, and the Chinese oral service market is also expected to grow further.
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Consumption upgrade and heightened awareness of oral health care
With the continuous and stable increase in disposable income in recent years, China's middle class has been expanding. China has entered a stage of consumption upgrading, and Chinese residents can generally afford higher oral expenditures. In this regard, Chinese residents have a higher acceptance of relatively more expensive oral projects, which has further promoted the development of China's oral service market.
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Favorable policies promote more diversified oral services
Since the 21st century, the 'Healthy Oral Health Action Plan (2019-2025)' has been dedicated to improving the overall level of oral care services, reducing oral morbidity rates, and enhancing residents' awareness of oral health. These efforts are conducive to the continuous deepening and development of standardized and diversified oral care services.
Frost & Sullivan, integrating 61 years of global consulting experience, has dedicated 24 years to serving the booming Chinese market. With a global perspective, we help clients accelerate their business growth, achieving benchmark positions in industry growth, innovation, and leadership. The healthcare industry is one of Frost & Sullivan's core areas of focus. Over the past 20-plus years, the Frost & Sullivan team has provided financing and financial advisory services, IPO industry advice, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceutical, medical device, healthcare services, and internet healthcare companies. Successful listings include: GAVI Medical (2407.HK), LepuXintai (2291.HK), JianShi Technology (9877.HK), Health Yuan (JCARE.SW), Lepu Medical (LEPU.SW), DingDang Health (9886.HK), BaiAosuitu (2315.HK), Zhiyun Health (9955.HK), MeinGene (6667.HK), Prenetics (PRE.NASDAQ), YunKang Group (2325.HK), RuiKe Biotech (2179.HK), Lepu Biotech (2157.HK), Clear Medical (1406.HK), BaiXinAn (2185.HK), Yonghe Medical (2279.HK), KailaiYing (6821.HK), Beihai Kangcheng (1228.HK), Gusheng Tang (2273.HK), YingPeng Technology (2251.HK), Clover Biotech (2197.HK), Minimally Invasive Robotics (2252.HK), Harmony Cayman (2256.HK), KunBo Medical (2216.HK), XianRuida (6669.HK), KangSheng Global (9960.HK), Yimai Tong (2192.HK), TengSheng Bo Yao (2137.HK), CanSino (2162.HK), Chaoyu Eye Hospital (2219.HK), Guichuang Tongqiao (2190.HK), Huihuang Medicine (0013.HK), Koi Pharmaceutical (2171.HK), ZhaoKe Eye Hospital (6622.HK), Nature Medicine (UPC.NASDAQ), Sainfo Pharmaceutical (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), Tianyan Medicine (ADAG.NASDAQ), Beikang Medical (2170.HK), JianBimiaoMiao (2161.HK), Minimally Invasive Heart Center (2160.HK), RuiLi Medical Beauty (2135.HK), Jiake Pharmaceutical (1167.HK), HepBiotec (2142.HK), JD Health (6618.HK), Deqi Medicine (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), XianSheng Pharmaceutical (2096.HK), Yunding New Energy (1952.HK), Jiahe Biotech (6998.HK), ZaiDing Biotech (9688.HK), Oucang Vision (1477.HK), Yongtai Biotech (6978.HK), Haipu Pharmaceutical (9989.HK), Kechuang Pharmaceutical (9939.HK), Peijia Medical (9996.HK), Kangfang Biotech (9926.HK), NuoCheng Jianhua (9969.HK), Tianjing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dongyao Pharmaceutical (1875.HK), Yasheng Medicine (6855.HK), Fuhong Hanlin (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabotech (2181.HK), Fangda Holdings (1521.HK), ViaBio (1873.HK), CStone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hualing Medicine (2552.HK), BeiGene (6160.HK), Gilead Sciences (1672.HK), WuXi Biologics (2269.HK), China Resources Medicine (3320.HK), Yacogen Scientific Research Pharmaceutical (2633.HK), Huihuang China Medicine (HCM.NASDAQ), (1548.HK), BBI Life Sciences (1035.HK), etc. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, consistently ranking first in market share from 2018 to 2021.
Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board listed companies in the industry. These include: Kangwei Century (688426.SH), Jinqian Protein (688137.SH), Nuo Cheng Jianhua (688428.SH), Aopu Mai Biotech (688293.SH), MicroPort Electrophysiology (688351.SH), Mengke Pharmaceutical (688373.SH), Yifang Biotech (688382.SH), Jicui Yaokang (688046.SH), Haichuang Pharmaceutical (688302.SH), Rongchang Biotech (688331.SH), Rendu Biotech (688193.SH), Shouyao Holdings (688197.SH), Heyuan Biotech (688238.SH), Yaxin Security (688225.SH), Xidi Micro (688173.SH), Mawei Biotech (688062.SH), Yahong Medicine (688176.SH), BeiGene (688235.SH), Jiahe Meikang (688246.SH), Dizhe Medicine (688192.SH), Novogene (688105.SH), Chengda Biotech (688739.SH), Geke Micro (688728.SH), Huaxi Biotech (688363.SH), Junshi Biotech (688180.SH), Zhejiang Oncology (688266.SH), BeiGene (688177.SH), Shenzhou Cells (688520.SH), and others. They are considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's healthcare industry, and build a healthy future.
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