In September 2021, Xiaohe Health invested in US-China Yihe for the first time, holding 17.5748% of the shares. In June this year, Xiaohe Hong Kong, a subsidiary of Xiaohe Health, increased its 41.49% stake in Meizhongyihe. After this increase in holdings, the shareholding ratios of Xiaohe Health and Xiaohe Hong Kong are 30.47% and 69.53% respectively, totaling 100%.
Relevant documents of the State Administration for Market Regulation show that the above-mentioned acquisition has been unconditionally approved after being announced. The relevant person in charge of Xiaohe Health said that the transaction has been approved by the relevant departments and will continue to explore high-quality medical and health services in the future.
According to public information, Meizhong Yihe, founded in 2006, is a high-end private medical institution, mainly for fertility needs, covering obstetrics, gynecology, pediatrics, assisted reproduction, postpartum rehabilitation, postpartum recuperation, etc. At present, Meizhong Yihe has 7 women’s and children’s hospitals, 2 comprehensive outpatient centers and 5 confinement centers, covering the three major regions of Beijing-Tianjin-Hebei, Yangtze River Delta and Pearl River Delta.
U.S.-China Yihe started out in obstetrics, but is also seeking to expand into more medical fields. Founder Hu Lan said in an interview with “Health World”, “In the future, I hope that Meizhong Yihe will create a closed loop of full-life-cycle medical services for women, children and other members of the family, from prenatal to reproductive services to aging.”
The relevant person in charge of the company once revealed to the media that Meizhong Yihe has served more than 500,000 high-end families and more than 70,000 newborns; a large part of the group’s revenue comes from obstetrics, and the unit price of obstetrics customers is about 70,000 yuan.
Compared with the regular charging standard of thousands of yuan in public hospitals, Meizhong Yihe is really not cheap. A number of respondents who have purchased the services of Meizhong Yihe told the Alphabet (ID: wujicaijing) that the service level of Meizhong Yihe is first-class, but the fees are very high.
However, with the pursuit of high-net-worth individuals in Beijing, Shanghai, Guangzhou and Shenzhen, Meizhongyihe has gradually become one of the leading companies in domestic high-end medical care, and has become a favorite in the secondary capital market.
Photo source US-China Yihe official website
According to incomplete statistics, since 2011, the United States and China Yihe has successively received institutional investment from Legend Capital, Huaxing Capital, Warburg Pincus, Hillhouse Capital, Everbright Holdings, Aerospace Industry Fund, etc., and in December 2019 received well-known drugs A strategic stake in WuXi PharmaTech.
In October 2020, US-China Yihe launched its listing and plans to land on the Growth Enterprise Market. However, in August of the following year, U.S.-China Yihe terminated the listing guidance on the grounds of market changes and its own strategic considerations, and accepted Xiaohe Health’s shareholding a month later.
Now, with the completion of the accumulation, Byte has officially become the new owner of US-China Yihe. The United States, China and Yihe have found a new backer, and investors who have been with them for a long time have finally got the opportunity to exit.
For Byte, the acquisition of U.S.-China Yihe is more like an “idle move”. The high-end obstetrics and gynecology medical services that the US-China Yihe mainly focuses on are separated from the Internet business of Bytes, and will not impact the existing business portfolio, and it is difficult to bring in large amounts of income quickly. But after winning this new business, Byte will be able to personally test and observe the operation details of medical services closely, find more channels for the realization of traffic output, and accelerate the pursuit of Ali, Tencent,JingdongWait for the first mover.
Meizhongyihe, which Byte has recently acquired, is famous for obstetrics, which coincides with Zhang Yiming’s personal interests.
Zhang Yiming has publicly expressed his interest in life science for many times, and believes that “organisms, from cells to ecology, are rich and diverse, but the laws behind them are very simple and elegant.” It is rumored that he chose to major in biology when he entered Nankai University, but only because of the adjustment did he finally read software engineering.
In addition, when Zhang Yiming stepped down as CEO in May 2021, he said in an internal letter that “the impact of virtual reality, life sciences, and scientific computing on human life has dawned, and we need to break through the inertia of business to explore.”
However, the layout of bytes in the medical field can be traced back to the “green pine nuts” in 2019. This APP hopes to build an online patient community by providing services such as medical record inquiry and online consultation. However, due to factors such as lack of content, turquoise pine cones did not stir up too many waves.
Until the end of 2020, Byte has established a large health department “Aurora”, and the external unified brand is “Xiaohe Health”, which is in charge of Wu Haifeng, the former vice president of Baidu, and reports directly to Zhang Yiming. Byte Medical has since accelerated its development.
At the beginning of its launch, Xiaohe Health’s products mainly include Xiaohe APP for patients and Xiaohe Doctor APP for doctors. The two apps mainly focus on online diagnosis and treatment, while providing health-related information; a few months later, online drug purchase services were added.
At the same time, Byte for the first time set foot in offline medical care, launching the first “Songguo Clinic” in Zhongguancun, Beijing, with services covering gynecology, general practice, dermatology, traditional Chinese medicine, health management, etc.
Source: Tech Planet
Entering 2021, Xiaohe Health has continuously expanded its business scope by setting up branches, and has successively set foot in drug retail and wholesale, import and export, medical device sales, inspection and testing, etc., and continues to expand along the health management industry chain.
The abundant funds from Byte is an important weight for Xiaohe’s rapid expansion of health. This includes, first and foremost, investing heavily in recruiting professionals. According to a report from TouChina.com, an insider of Xiaohe Health revealed that “Xiaohe’s salary is far ahead in the industry.”
More importantly, through a series of equity investments, Byte has quickly formed a product service matrix in the pharmaceutical track, which complements its own Xiaohe Health.
For example, in the first half of 2020, Byte acquired a famous doctor from Baike, with a transaction amount of hundreds of millions of yuan. The latter claims to have the largest independent copyrighted medical knowledge map in China, and is the only designated website for the “National Health Commission’s Authoritative Medical Science Popularization Project”. Relying on the medical science content obtained from this acquisition, Byte subsequently made a “Xiaohe Medical Code”, which is a benchmark with Tencent Medical Code.
In 2021, with the birth of Xiao He’s health, Byte’s shots in the medical track will be more intensive.
In September of that year, Byte led the investment in the mental health medical platform “Good Mood”, which not only has an Internet diagnosis and treatment platform, but also an offline psychological clinic; The founders of each company are Hu Lan.
In frontier fields such as new drug research and development, Byte also dabbles.
In December 2020, several media reported that the R&D teams of the Byte Artificial Intelligence Laboratory in China and the United States were recruiting talents in the field of AI pharmaceuticals. In October of the following year, Byte invested in Shuimu Future, a new drug research and development platform. Public information shows that the company is mainly engaged in the acceleration of preclinical new drug research and development, and can provide comprehensive technical services such as new drug target verification, compound library screening, and lead compound discovery.
On the whole, the layout of Byte in the medical track has begun to take shape. There are both online and offline content communities and diagnosis and treatment services, as well as upstream and downstream capabilities in the industry chain such as pharmaceutical sales and new drug research and development. However, the overall scale is still lacking. Although it is small, it has all the internal organs.”
Byte acceleration layout is healthy, just in time for the bottleneck period of the main business.
In the past two years, the growth rate of bytes has been slowing down. At the end of 2021, many media quoted Byte insiders as saying that Byte’s domestic advertising revenue has stopped growing in the past six months, and Toutiao is on the verge of loss. Advertising revenue is the bulk of Byte’s revenue, and its stagnation means that the entire company is stagnant.
Bytes, on the other hand, has made a big beteducateThe sector has slumped in the policy shift, while the music, games, metaverse and other sectors have grown rapidly, but it will take time to become a new engine.
Bytes is a traffic business. In addition to having an endogenous growth traffic pool, it must also have a diversified flow of traffic to undertake realisation scenarios. Under the circumstance that the old business has encountered the ceiling and the new business is still difficult to take on the heavy responsibility, it is an option to build the medical sector that is just in demand and high frequency.
Internet medical care is a huge market with a volume of hundreds of billions. According to the “2021 China Internet Development Report”, the scale of China’s Internet medical and health market in 2020 and 2021 will be 196.1 billion yuan and 283.1 billion yuan respectively, with an annual growth rate of nearly 50%.
In addition, according to the 48th “Statistical Report on Internet Development in China”, the number of online medical users in China increased from 215 million in December 2020 to 239 million in June 2021, and the utilization rate of online medical care increased from 21.75% to 23.70% , there is still much room for improvement.
On this track, Alibaba and JD.com made their layout very early, and Alibaba Health and JD.com went public successively, with a market value of hundreds of billions of Hong Kong dollars at their peak. Tencent has also invested in many star companies such as Gengmei, WeDoctor, and New Oxygen. In contrast, Byte entered the game late, and its industry status is slightly inferior to the other three companies.
The advantage of bytes is in traffic and algorithms. At present, through the dual-pronged approach of self-operation and investment, Byte has occupied several “bridgeheads” in the track, among which there are many leaders in the subdivisions such as the United States, China and Yihe. If supplemented by the precise traffic output gameplay that Byte is good at, Byte has a great opportunity to shape the medical matrix into “Byte Health”, which is on par with Ali and JD.com.
However, as a latecomer to Internet medical care, Byte has fewer options.
It is an obvious fact that Internet companies do medical business and selling advertisements is the fastest way to make money. But after the Wei Zexi incident in 2016, this sector has not only been subject to strict supervision, but has also been cast aside by the public in the field of public opinion. Zhang Yiming himself has also stated that he “doesn’t do medical advertising”, and has generally kept this promise over the past few years.
However, with the frequent moves of bytes on the medical track, the direct line troops such as the United States, China and Yihe have begun to increase. In the face of the promotion needs of these medical companies, it is worth paying attention to whether Byte will break the promise of the year.
On the other hand, Byte Medical is also facing the dilemma of “selling medicines or not”.
A common sense in Internet medical care is that platforms must make money by selling medicines. In the last fiscal year, drug sales accounted for more than 85% of the revenue of both Ali Health and JD Health, and services such as online diagnosis and treatment accounted for a very low proportion. For bytes to make a difference, it is bound to move towards this model.
However, in the first half of this year, the “Detailed Regulations on Internet Diagnosis and Treatment Supervision (Trial)” and the “Regulations on the Implementation of the Drug Administration Law (Draft for Comments)” were successively released, and the supervision of online drug sales was significantly tightened. The single-day declines of Ali Health and JD Health exceeded 10%.
Both platforms hold offline pharmacy qualifications and belong to different company entities, so the actual impact of the above new regulations is relatively limited. For Byte, it has already joined the sales of medicines within the business scope of its subsidiaries, and if it wants to sell medicines, it has to pass the offline qualification level.
However, Byte Health is still in the early stages of development, and it is too early to say where it will go. The acquisition of Meizhong Yihe will help Byte to observe the operation status of offline medical care closely and provide a new testing ground for its traffic output. In the process, Byte will have the opportunity to deepen its understanding of medical care and find a suitable position for itself in this huge and complex track.