Zhuozheng Healthcare (02677) is heavily oversubscribed by over 1117 times! The rare dark horse in the health service consumption sector is about to go public.

From January 29 to February 3, Zhuo Zheng Healthcare (02677) conducted a public offering in the market. According to market reports, as of the morning of February 3, the market response was strong, and the total financing subscription amount (over-subscription) had reached 35.3 billion Hong Kong dollars, more than 1117.92 times oversubscribed. It is reported that the company plans to globally offer 4.75 million shares, with 10% offered in Hong Kong at a price ranging from 57.7 Hong Kong dollars to 66.6 Hong Kong dollars, raising up to 320 million Hong Kong dollars, with a minimum lot size of 50 shares and an entry fee of about 3364 Hong Kong dollars. Market insiders pointed out that Zhuo Zheng Healthcare is in a popular arena of health service consumption, with a strong market position, operating performance, and growth prospects. Backed by star shareholders such as Tencent, H Capital, Weixing Venture Capital, TIAN TU CAPITAL, and CICC, as well as the participation of four cornerstone investors including Guangzhou Kingmed Diagnostics Group, a leading third-party inspection company in China, and the founder of leading new energy car company Xiaopeng Motors, the market recognition is high, and there is potential for stock price growth after listing. How will the "Health Sector Costco" model reshape the industry? Since 2025, the heat of the healthcare sector in the Hong Kong stock market has remained high. Apart from "hard-tech" companies such as innovative drugs, leading players in certain sub-sectors, and companies with clear business models and profit paths continue to attract capital favor. In recent years, the company's revenue and profits have increased simultaneously, with a clear profit model. According to the prospectus, from 2022 to 2024, the company's revenue increased from 470 million yuan to 960 million yuan, with a compound annual growth rate of 42.2%; during the same period, gross profit soared from 43.98 million yuan to 230 million yuan, with a compound annual growth rate of 126.7%, indicating that the profit growth rate is significantly faster than the revenue growth rate. After returning to profitability in 2024, the company's profit indicators continued to improve, with adjusted net profit reaching 10.45 million yuan in the first eight months of 2025. Meanwhile, the company's cash flow remained healthy, with positive operating cash flow in the past three years, reaching 6.86 million yuan, 124 million yuan, and 171 million yuan respectively, indicating strong self-sustaining capabilities. Behind the excellent "report card" of financial reports, Zhuo Zheng Healthcare's unique "Health Sector Costco" business model is undoubtedly the core selling point of the company. As is well known, the most significant feature of the Costco model is its fee-based membership system, which ensures stable profit flow by charging annual membership fees. Additionally, Costco offers selected product categories to consumers, providing high-quality, cost-effective products and saving a significant amount on advertising and marketing expenses, effectively reducing operating costs. Similarly, Zhuo Zheng Healthcare has introduced a family membership plan centered around "family doctors," providing members with a one-stop, multi-specialty medical service combining offline and online communication technology. The company focuses on high-frequency and consumer-strong businesses such as disease prevention, health management, and common disease diagnosis and treatment, covering the entire process from prevention to treatment and differentiating itself from public hospitals in severe illnesses, emergencies, and rare diseases. Through continuous health management and follow-up centered around family doctors, the company has significantly increased user stickiness and loyalty. In 2024, Zhuo Zheng Healthcare's total number of patient visits reached 900,000, with an average of nearly 4 visits per customer per year, significantly higher than single-specialty medical institutions in the market. There are approximately 108,000 family members, with an average of more than 6 visits per household per year; as of August 2025, the membership renewal rate and patient return rate have reached 67% and 82.7%, with over 80% of patients choosing to purchase services again. This model directly results in very low customer acquisition costs. From 2022 to 2024, the company's marketing expenses as a percentage of revenue were only 2.7%, 1.2%, and 1.7%, significantly lower than the industry's common range of 10%-40%. Moreover, against the backdrop of increasingly stringent medical insurance cost control policies, the company's low reliance on medical insurance payments in its revenue structure provides it with strong resistance to policy fluctuations: in 2024, over 85% of the company's income comes from cash payments, about 12% from commercial insurance, and only about 1.2% from national medical insurance. Currently, the company's business network is mainly located in first-tier and super-first-tier cities with strong consumer power, operating 19 medical service institutions in cities such as Shenzhen, Beijing, Shanghai, and Chengdu, and expanding into overseas markets such as Singapore and Malaysia. Overall, Zhuo Zheng Healthcare achieved full-year profitability in 2024, and operating profits have continued to improve in the first eight months of 2025, indicating that its business model has gradually been validated. The stable cash flow from the membership system and low customer acquisition costs from word-of-mouth form the company's core moat. As the industry transitions from extensive development to high-quality growth, Zhuo Zheng Healthcare, as a leading player in the specialty with solid capabilities, prominent brand effects, and excellent operational efficiency, is expected to gain more market share. Additionally, the company's dual scarcity in the field and its business model are likely to continue to attract market attention.