New Stock News | Lianchi Hospital Submits Application to Hong Kong Stock Exchange for a Specialized Chinese Boutique Medical Group

On January 13th, Lianchi Hospital Group Co., Ltd. (referred to as Lianchi Hospital) submitted its application for listing on the main board of the Hong Kong Stock Exchange, with China Galaxy International as its exclusive sponsor. Company Overview According to the prospectus, Lianchi Hospital is a specialty medical group with Chinese characteristics. As of September 30, 2025, Lianchi Hospital operated 5 hospitals and a nursing home under a group management structure. The company has always upheld the core value of "patient first" and implemented a "patient-centric medical" management model, forming a well-known medical brand called "Lianchi Medical" with characteristic medical services such as painless management, Enhanced Recovery After Surgery (ERAS), integrated medical and nursing care, and unattended nursing. According to Frost & Sullivan data, Lianchi Hospital has become one of China's most influential medical groups. As of September 30, 2025, the total floor area of the company's hospitals is approximately 117,893.06 square meters, with a total of 786 registered beds and a team of 341 practicing physicians and assistant doctors. For the years 2023, 2024, and the nine months ended September 30, 2025, the company's outpatient visits were approximately 355,900, 403,200, and 321,300 respectively, and inpatient visits were 9,904, 13,282, and 11,445 respectively. During the same period, the company performed 3,655, 4,189, and 4,180 orthopedic surgeries, as well as 3,304, 5,055, and 3,758 deliveries. According to Frost & Sullivan data, based on the volume of knee surgeries in private hospitals in 2024, the company's Zibo Lianchi Orthopedic Hospital ranked first in Shandong province and third in the country. Based on the revenue in 2024, the company's Chongqing Great Wall Orthopedic Hospital ranked first among private orthopedic specialty hospitals in southwest China. Financial Data Revenue: The company recorded revenues of approximately RMB 356 million, RMB 418 million, and RMB 359 million for the years 2023, 2024, and the nine months ended September 30, 2025, respectively. Net Profit: The company recorded profits of RMB 56.732 million, RMB 67.591 million, and RMB 55.514 million for the years 2023, 2024, and the nine months ended September 30, 2025, respectively. Gross Profit and Gross Profit Margin: The company reported gross profits of approximately RMB 117 million, RMB 151 million, and RMB 128 million for the years 2023, 2024, and the nine months ended September 30, 2025, respectively. The company's gross profit margin remained relatively stable, at 35.0% for the nine months ended September 30, 2024, and 35.6% for the nine months ended September 30, 2025. Industry Overview With increasing health awareness, expanding coverage of public medical insurance, the development of commercial insurance, and the prevalence of chronic diseases, China's medical service market has been steadily improving in recent years. Medical expenditures increased from RMB 6.58 trillion in 2019 to RMB 9.76 trillion in 2024, with a compound annual growth rate of 8.2% between 2019 and 2024. It is expected that by 2030, total medical expenditures will reach RMB 14.55 trillion, with a compound annual growth rate of 6.7% between 2025 and 2030. The largest provider of medical services in China is hospitals, with approximately 38,710 hospitals in 2024. Hospitals are mainly divided into two types based on ownership: public hospitals and private hospitals. Additionally, hospitals in China are categorized into three levels (primary, secondary, and tertiary, with tertiary being the highest) and further divided into three grades (grade A, B, C, with grade A being the highest) within each level according to their size and service capabilities. Furthermore, hospitals are classified based on their specialty into general hospitals, specialty hospitals, traditional Chinese medicine hospitals, and other hospitals (such as integrated Chinese and Western medicine hospitals, ethnic minority hospitals, and nursing homes). Traditionally, public hospitals have dominated the provision of medical services in China. However, in recent years, the private hospital sector has become one of the fastest-growing components of the medical service industry. Public hospitals are usually owned, operated, and financially supported by the government or public entities, while private hospitals are owned, managed, and financially supported by private individuals, private companies, or private organizations. Private hospitals typically focus on meeting the needs of patients seeking quality medical services or those with private health insurance. In addition, private hospitals have greater flexibility in service content and pricing, focusing on providing more customized medical services. The revenue of private hospitals increased from RMB 437.9 billion in 2019 to RMB 689.2 billion in 2023, with a compound annual growth rate of 12.0% between 2019 and 2023, and is expected to reach RMB 1.88 trillion by 2030, with a compound annual growth rate of 12.2% between 2024 and 2030. During the same period, public hospitals had a compound annual growth rate of 6.7% between 2019 and 2023, and it is expected to be 8.4% between 2024 and 2030. The number of private hospitals in China increased from 22,424 in 2019 to 26,956 in 2024, with a compound annual growth rate of 3.8%, and is expected to further increase to 32,188 by 2030, with a compound annual growth rate of 2.6% between 2025 and 2030. In contrast, the number of public hospitals decreased from 11,930 in 2019 to 11,754 in 2024, and is expected to decrease further to 11,728 by 2030. The decrease in the number of public hospitals is mainly attributable to the reform of public hospitals by introducing social capital and transforming them into private entities, which aligns with the policy goal proposed in the "Notice on Further Encouraging and Guiding Social Capital to Establish Medical Institutions" to promote a more balanced distribution of medical institutions in China. Board of Directors and Executive Management The company's board of directors will consist of seven directors, including four executive directors and three independent non-executive directors. The board of directors is responsible for the management and operation of the company and has general powers. The term of office for all directors is three years and may be re-elected. Equity Structure Zhong Ya Investment owns approximately 46.86% of the company's issued share capital. Zhong Ya Investment is owned 90% by the company's chairman and executive director, Mr. Chen, and 10% by Mr. Chen Kai. Therefore, Mr. Chen, Mr. Chen Kai, and Zhong Ya Investment constitute a controlling shareholder group. Mr. Chen Kai is the son of Mr. Chen. Advisory Team Exclusive Sponsor: China Galaxy International Securities (Hong Kong) Co., Ltd. Industry Consultant: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch Company Legal Advisor: Regarding Hong Kong law: the law firm of Zhou Junxuan, in association with Tou & Co.; regarding Chinese law: Tou & Co. Reporting Accountants: KPMG CPAs