HONG KONG — China Resources Phoenix Healthcare Holdings Company Limited (the “Company”, together with its subsidiaries the “Group”) is pleased to announce that on September 25, 2017, the Company (through its wholly-owned subsidiary) and the People’s Government of Laibin City (the “Laibin Government”) entered into a strategic cooperation framework agreement (the “Framework Agreement”), pursuant to which the parties agreed to set up an joint venture company (the “JV Company”) as the investment platform to invest in the healthcare industry in Laibin City.
The capital of the JV Company will be contributed by the Company in cash and by Laibin Government in cash or other legitimate forms, the amounts of which will be further agreed. The Company will own the majority shareholding in the JV Company. The JV Company will utilize the recourses of the parties to invest in and/or cooperate with the public hospitals in Laibin City with the aim to improve services, management and operation efficiency of the local hospitals and build up the healthcare industry cluster in Laibin City. The JV Company will provide capital investment for the hospitals and in return be granted the right to operate and manage the hospitals and charge management fees. It is currently contemplated that the JV Company will start its investment in cooperation with People’s Hospital of Laibin City, Bayi Hospital of Xingbin District and Central Healthcare Center of Qianjiang Town.
INFORMATION ABOUT LAIBIN CITY, GUANGXI ZHUANG AUTONOMOUS REGION AND THE HOSPITALS TO BE UNDER COOPERATION
Guangxi Zhuang Autonomous Region, with a resident population about 4,796 million, is located at east of Guangdong Province and south of the Beibu Gulf, facing Hainan province across the sea. Guangxi’s aggregate economic volume reached RMB 1,824.5 billion in 2016, which is an important component of the Pan-Pearl River Delta. It is also one of the most dynamic and potential developing areas of China’s economy. Laibin City is located in the middle of Guangxi Zhuang Autonomous Region and has a population of approximately two million, which is a city of the Pearl River Xijiang economic belt and an essential part of southwest passage to the sea. Laibin City has abundant medical resources, and the hospitals which would be in the first round of investment cooperation including,
1. People’s Hospital of Laibin City, a Grade III general hospital, teaching hospital of Guangxi Medical University, cooperative hospital of The First Affiliated Hospital of Guangxi Medical University, has 1,095 beds in operation.
2. Bayi Hospital of Xingbin District, a Grade II general hospital, has 165 beds in operation.
3. Central Healthcare Center of Qianjiang Town, a Grade I Class A hospital, has 98 beds in operation.
Based on this cooperation, the Company would further expand the cooperation with Laibin City into other cities in Guangxi.
The Framework Agreement is a further attempt to strengthen the reform of the medical institutions in Guangxi, on the basis of a comprehensive enhancement of the reform of the healthcare services system in the PRC. The Group’s professional medical service management capabilities and flexible social capital can be leveraged to introduce market mechanism and modern management model to the medical system of Laibin City, reform the current medical system and establish a new multi-level social healthcare system.
It is expected that through the cooperation with Laibin Government to establish a new multi-level social healthcare system, the Group’s medical industry management scale and medical service capabilities can be further enhanced. It can also benefit the Group by creating synergies with the Group’s current hospital network to promote resources sharing and cooperation among the member agencies, and thus optimising the Group’s medical service business structure, enhancing the quality of the Group’s medical service as well as operation and management capabilities.
The Framework Agreement is not only focusing on the operation and management in individual hospitals, but also strengthen the integration and development of regional services system, which will bring significant strategic value to the Group in expanding its business network and all-round participation in the public hospital reform.