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Wanda Group to Invest $2.3 Billion To Build Hospitals in China

Discussion in 'China & Far East' started by cirr, Jan 9, 2016.

  1. cirr

    cirr ELITE MEMBER

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    Wanda Group to Invest $2.3 Billion To Build Hospitals in China

    Natasha Khan

    January 5, 2016 — 9:45 PM EST
    Wanda Group, the closely-held conglomerate controlled by Asia’s richest man, Wang Jianlin, is investing 15 billion yuan ($2.3 billion) to build three hospitals in China, seeking to tap rising demand for high-end health-care services in the country.

    The company, one of China’s biggest property developers, will partner with U.K.-based International Hospitals Group to begin construction of the facilities, it said in an e-mailed statement. The plans include 1,000-bed IHG Wanda International Hospital in Shanghai, while the others will be located in the cities of Chengdu and Qingdao.

    Many developers have tapped health care as a lucrative alternative as growth in the world’s second-largest economy has slowed. Chinese patients often face long lines at public hospitals, and many are willing to pay up for better care. The health industry has also been buoyed by government incentives to boost private investment in the sector.

    The projects announced today help meet "the growing health-care needs of the country’s affluent population," Wang said in the statement, adding that the hospitals will “serve as role models for the development of premium health care in China.”

    Wang, who according to the the Bloomberg Billionaires Index is worth $33.3 billion, is Asia’s richest man. His companies have invested in everything from the organizer of the Ironman triathlons to an 89-floor skyscraper in downtown Chicago. Dalian Wanda Group is close to a deal to buy a majority stake in California-based movie producer Legendary Entertainment, Bloomberg News reported.

    China’s government last year issued policies to cut red tape and boost financing for private hospital investment. International Hospitals Group provides services ranging from hospital design to recruitment, according to its website. It has completed over 450 health-care projects for clients ranging from the United Nations to the World Bank, the statement said.

    Wanda Group to Invest $2.3 Billion To Build Hospitals in China - Bloomberg Business
     
  2. Aepsilons

    Aepsilons ELITE MEMBER

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    As China’s overall GDP growth rate slows as a result of the country’s transition from an investment-driven growth model, the health care sector remains a bright spot. The sector’s growth potential is obvious from looking at China’s per capita health care expenditures, which is one-third of the global average and massively lower than that of developed countries.

    Per capita health care expenditures (USD):
    [​IMG]
    Source: The World Bank

    The sector’s potential is being unleashed by multiple factors, including demographic change, rising incomes and improving insurance coverage. The government is playing a key role, having now extended basic medical insurance coverage to 99% of the population. That said, there is still immense potential for investors as government health care spending remains well below the global average, and 80% of the insured population receives an annual government subsidy of only $50.

    As the government attempts to move to a more consumption-driven economy, strengthening the social safety net and reducing out-of-pocket health care expenditures will remain a key focus. Overall, China health care spending is expected to grow at a mid-teens annual rate over the coming years. We anticipate the exchange-listed health care companies will grow even faster, aided by consolidation of an extremely fragmented industry. (For example, the top 10 Chinese drug manufacturers hold a combined 15% market share compared to over 40% cumulative market share for the top 10 global drug producers.)

    Total health care expenditures in China (RMB bn):
    [​IMG]
    Source: National Healthcare and Family Planning Committee, UBS estimates



    In other words, bro, potential is high in this sector. This is an area investors should tap into NOW .... ;)