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Stock Code : 2581
(A company incorporated in the Cayman Islands with limited liability)
明基醫院集團股份有限公司
BenQ BM Holding Cayman Corp.
GLOBAL
OFFERING
Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager


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If you are in any doubt about any of the contents in this prospectus, you should obtain independent professional advice.
BenQ BM Holding Cayman Corp.
ʮ̡
(A company incorporated in the Cayman Islands with limited liability)
GLOBAL OFFERING
Number of Offer Shares under the
Global Offering
: 67,000,000 Offer Shares
Number of Hong Kong Offer Shares : 6,700,000 Offer Shares (subject to
reallocation)
Number of International Offer Shares : 60,300,000 Offer Shares (subject to
reallocation)
Maximum Offer Price : HK$11.68 per Offer Share plus
brokerage of 1%, SFC transaction levy
of 0.0027%, AFRC transaction levy of
0.00015% and Stock Exchange trading
fee of 0.00565% (payable in full on
application in Hong Kong dollars,
subject to refund)
Nominal value : US$1.00 per Share
Stock code : 2581
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any part
of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Documents Delivered to the Registrar of Companies and Available on Dis play” in Appendix VI, has been registered
by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 3 2 of the Laws of Hong Kong). The
Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or any other d ocument referred to above.
The Offer Price is expected to be fixed by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and us on or bef ore Thursday, December 18, 2025. If,
for any reason, the Offer Price is not agreed by 12:00 noon on Thursday, December 18, 2025, the Global Offering will not proceed and will lapse. The Offer Price will be no more than HK$11.68
per Offer Share and is currently expected to be no less than HK$9.34 per Offer Share unless otherwise announced.
The Overall Coordinators may, with our consent, reduce the number of Offer Shares being offered under the Global Offering and/or the indicative Offer Price range below that stated
in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. See “Structure of t he Global Offering” and “How
to apply for Hong Kong Offer Shares” for further details.
Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includin g the risk factors set out in “Risk Factors”.
Pursuant to the termination provisions contained in the Hong Kong Underwriting Agreement in respect of the Hong Kong Offer Shares, the Overall Coordi nators, on behalf of the Hong Kong
Underwriters, have the right in certain circumstances, in their absolute discretion, to terminate the obligation of the Hong Kong Underwriters purs uant to the Hong Kong Underwriting Agreement
at any time prior to 8:00 a.m. on the Listing Date. Further details of the terms of the termination provisions are set out in “Underwriting — Underwritin g Arrangements and Expenses — Hong Kong
Public Offering — Grounds for Termination” in this prospectus. It is important that you refer to that section for further details.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and may not be off ered or sold within or to the United States,
or for the account or benefit of U.S. persons (as defined in Regulation S) except in transactions exempt from, or not subject to, the registration requi rements of the U.S. Securities Act. The Offer
Shares are being offered and sold outside the United States in offshore transactions in accordance with Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to the Hong Kong Public
Offering.
This prospectus is available at the website of the Stock Exchange at www.hkexnews.hk and our website at www.benqmedicalcenter.com . If you require a printed copy of this prospectus, you
may download and print from the website addresses above.
IMPORTANT
December 12, 2025


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IMPORTANT NOTICE TO INVESTORS:
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus to the public
in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing
Information ” section, and our website at www.benqmedicalcenter.com . If you require
a printed copy of this prospectus, you may download and print from the website
addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online through the White Form eIPO service at www.eipo.com.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian who
is a HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance.
If you are an intermediary , broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses above.
Please refer to “How to Apply for Hong Kong Offer Shares” in this prospectus for
further details on the procedures through which you can apply for the Hong Kong Offer
Shares electronically.
IMPORTANT
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Y our application through the White Form eIPO service or the HKSCC EIPO
channel must be for a minimum of 500 Hong Kong Offer Shares and in one of the
numbers set out in the table below.
If you are applying through the White Form eIPO service, you may refer to the
table above for the amount payable for the number of Shares you have selected. Y ou
must pay the respective amount payable on application in full upon application for Hong
Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, your broker or custodian
may require you to pre-fund your application in such amount as determined by the broker
or custodian, based on the applicable laws and regulations in Hong Kong. Y ou are
responsible for complying with any such pre-funding requirement imposed by your
broker or custodian with respect to the Hong Kong Offer Shares you applied for.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,898.90 7,000 82,584.55 50,000 589,889.65 700,000 8,258,454.95
1,000 11,797.80 8,000 94,382.34 60,000 707,867.57 800,000 9,438,234.25
1,500 17,696.69 9,000 106,180.14 70,000 825,845.50 900,000 10,618,013.52
2,000 23,595.59 10,000 117,977.93 80,000 943,823.42 1,000,000 11,797,792.80
2,500 29,494.48 15,000 176,966.89 90,000 1,061,801.35 1,500,000 17,696,689.20
3,000 35,393.38 20,000 235,955.86 100,000 1,179,779.28 2,000,000 23,595,585.60
3,500 41,292.27 25,000 294,944.82 200,000 2,359,558.55 2,500,000 29,494,482.00
4,000 47,191.17 30,000 353,933.79 300,000 3,539,337.85 3,350,000
(1) 39,522,605.88
4,500 53,090.07 35,000 412,922.75 400,000 4,719,117.12
5,000 58,988.97 40,000 471,911.71 500,000 5,898,896.40
6,000 70,786.76 45,000 530,900.68 600,000 7,078,675.68
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading
fee and AFRC transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy,
collected by the Stock Exchange on behalf of the SFC; and in the case of the AFRC transaction levy,
collected by the Stock Exchange on behalf of the AFRC).
No application for any other number of the Hong Kong Offer Shares will be considered and any such
application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable (1) of the Hong Kong
Public Offering, we will issue an announcement in Hong Kong to be published on our
Company’ s website at www.benqmedicalcenter.com and the website of the Stock
Exchange at www.hkexnews.hk .
Hong Kong Public Offering commences .............................. .9:00 a.m. on
Friday, December 12, 2025
Latest time for completing electronic applications
under the White Form eIPO service through
the designated website at www.eipo.com.hk (2) ....................... 1 1:30 a.m. on
Wednesday, December 17, 2025
Application lists open (3) ......................................... 1 1:45 a.m. on
Wednesday, December 17, 2025
Latest time for completing payment of White
Form eIPO applications by effecting internet
banking transfer(s) or PPS payment transfer(s)
and giving electronic application instructions
to HKSCC
(4) ............................................... .12:00 noon on
Wednesday, December 17, 2025
If you are instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions via FINI in accordance with your instruction to apply for
the Hong Kong Offer Shares, you are advised to contact your broker or custodian for the latest
time for giving such instructions which may be different from the latest time as stated above.
Application lists close (3) ........................................ .12:00 noon on
Wednesday, December 17, 2025
Expected Price Determination Date (5) ............................. b y 12:00 noon on
Thursday, December 18, 2025
Announcement of the final Offer Price, the level
of indications of interest in the International
Offering, the level of applications in the Hong
Kong Public Offering and the basis of allocation
of the Hong Kong Offer Shares to be published
on the website of the Stock Exchange at
www.hkexnews.hk and on the website of
our Company at www.benqmedicalcenter.com (6)
on or before ................................................... 1 1:00 p.m.,
Friday, December 19, 2025
EXPECTED TIMETABLE
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 in the announcement to be posted on
the website of the Stock Exchange at
www.hkexnews.hk and on the website
of our Company at www.benqmedicalcenter.com (6) . . .no later than 11:00 p.m. on
Friday, December 19, 2025
 from the designated results of allocations website
at www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function from ........................ 1 1:00 p.m. on
Friday, December 19, 2025
to 12:00 midnight on
Thursday, December 25, 2025
 from the allocation results telephone enquiry
line by calling +852 2862 8555 between
9:00 a.m. and 6:00 p.m. on ................... Monday, December 22, 2025,
Tuesday, December 23, 2025,
Wednesday, December 24, 2025
and Monday, December 29, 2025
Share certificates in respect of wholly or partially
successful applications to be dispatched or
deposited into CCASS on or before
(7)(9) ................. .Friday, December 19, 2025
White Form e-Refund payment instructions/refund checks
in respect of wholly or partially successful applications
(if applicable) or unsuccessful applications to be
dispatched/collected on or before
(8)(9) ................. .Monday, December 22, 2025
Dealings in the Shares on the Stock Exchange
expected to commence at ....................................... .9:00 a.m. on
Monday, December 22, 2025
Notes:
(1) All dates and times refer to Hong Kong local dates and time, except as otherwise stated.
(2) Y ou will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment
of the application monies) until 12:00 noon on the last day for submitting applications, when the application
lists close.
(3) If there is/are a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or Extreme
Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, December
17, 2025, the application lists will not open or close on that day. For further details, please see the section
headed “How to Apply for Hong Kong Offer Shares — E. Severe Weather Arrangements” in this prospectus.
EXPECTED TIMETABLE
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(4) Applicants who apply for Hong Kong Offer Shares by instructing your broker/custodian to give electronic
application instructions on your behalf to HKSCC via HKSCC EIPO channel should refer to the section
headed “How to Apply for Hong Kong Offer Shares — A. Application for Hong Kong Offer Shares” in this
prospectus.
(5) The Price Determination Date is expected to be on or before Thursday, December 18, 2025. If, for any reason,
the Offer Price is not agreed between the Overall Coordinators (for themselves and on behalf of the
Underwriters) and us by 12:00 noon on Thursday, December 18, 2025 the Global Offering will not proceed and
will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that the
Global Offering has become unconditional and the right of termination described in the section headed
“Underwriting — Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for
termination” in this prospectus has not been exercised. Investors who trade Shares on the basis of publicly
available allocation details prior to the receipt of Share certificates or prior to the Share certificates becoming
valid evidence of title do so entirely at their own risk.
(8) White Form e-Refund payment instructions/refund checks will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and also in respect of wholly or partially
successful applications in the event that the final Offer Price is less than the price payable per Offer Share on
application. Part of the applicant’s identification document number, or, if the application is made by joint
applicants, part of the identification document number of the first-named applicant, provided by the
applicant(s) may be printed on the refund check, if any. Such data would also be transferred to a third party
for refund purposes. Banks may require verification of an applicant’s identification document number before
encashment of the refund check. Inaccurate completion of an applicant’s identification document number may
invalidate or delay encashment of the refund check.
(9) Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to
“How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of Share Certificates and Refund of
Application Monies” for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of
White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through multiple bank accounts may have refund monies (if any)
dispatched to the address as specified in their application instructions in the form of refund checks in favor
of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary post at their own
risk.
Any uncollected Share certificates and/or refund checks will be dispatched by ordinary post, at the applicants’
risk, to the addresses specified in the relevant applications.
Further information is set out in the section headed “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of Share Certificates and Refund of Application Monies” in this prospectus.
The above expected timetable is a summary only. Y ou should see the sections headed
“Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in
this prospectus for details of the structure of the Global Offering, including its conditions,
and the procedures for application for the Hong Kong Offer Shares.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such case, we will make an announcement
as soon as practicable thereafter.
EXPECTED TIMETABLE
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this prospectus pursuant to the Hong Kong Public Offering. This prospectus may not
be used for the purpose of making, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstance. No action has been taken to permit a
public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong
and no action has been taken to permit the distribution of this prospectus in any
jurisdiction other than Hong Kong. The distribution of this prospectus for purposes of a
public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representations not contained or made
in this prospectus must not be relied on by you as having been authorized by us, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, any of the Underwriters, any of our or their
respective directors, officers, employees, agents or representatives, or any other parties
involved in the Global Offering. Information contained on our website
https://www.benqmedicalcenter.com/ does not form part of this prospectus.
Page
Expected Timetable ................................................. i v
Contents ......................................................... v i i
Summary ......................................................... 1
Definitions ........................................................ 2 6
Glossary of Technical Terms ......................................... 3 7
Forward-looking Statements .......................................... 4 4
Risk Factors ...................................................... 4 6
Waivers From Strict Compliance With the Listing Rules and Exemption From
Strict Compliance With the Companies (Winding Up and Miscellaneous
Provisions) Ordinance ............................................. 1 0 0
CONTENTS
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Information about this Prospectus and the Global Offering ................ 1 0 6
Directors and Parties Involved in the Global Offering ..................... 1 1 0
Corporate Information .............................................. 1 1 7
Industry Overview ................................................. 1 1 9
History, Development and Corporate Structure .......................... 1 4 1
Business .......................................................... 1 5 6
Regulatory Overview ............................................... 2 6 5
Connected Transactions ............................................. 3 1 3
Directors and Senior Management ..................................... 3 2 3
Substantial Shareholders ............................................ 3 3 8
Share Capital ..................................................... 3 3 9
Relationship With Our Controlling Shareholders ......................... 3 4 2
Cornerstone Investors ............................................... 3 4 7
Financial Information ............................................... 3 5 3
Future Plans and Use of Proceeds ..................................... 4 2 0
Underwriting ...................................................... 4 2 6
Structure of the Global Offering ...................................... 4 3 9
How to Apply for Hong Kong Offer Shares ............................. 4 4 7
Appendix I — Accountants’ Report .............................. I - 1
Appendix II — Unaudited Pro Forma Financial Information .......... II-1
Appendix III — Property Valuation ............................... III-1
Appendix IV — Summary of the Constitution of the Company and the
Company Laws of the Cayman Islands ............. I V - 1
Appendix V — Statutory and General Information .................. V - 1
Appendix VI — Documents Delivered to the Registrar of Companies and
Available on Display ............................ VI-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As it is a summary, it does not contain all the information that may be
important to you and is qualified in its entirety by, and should be in conjunction with, the
full text of this prospectus. You should read the entire prospectus before you decide to
invest in the Offer Shares.
There are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in “Risk Factors” in this prospectus. You should
read that section carefully before you decide to invest in the Offer Shares.
OVERVIEW
We are a private for-profit general hospital group in mainland China, and have adopted
the hospital operation and management experiences from Taiwan. We currently own and
operate two private for-profit general hospitals. As measured by total revenue in 2024, we are
the largest private for-profit general hospital group in the East China region, with our market
share being 1.0% in the East China region, according to Frost & Sullivan. By the same
measure, we are the seventh largest private for-profit general hospital group nationwide, with
our market share being 0.4% in the PRC, according to the same source. As measured by
average revenue per registered bed in 2024, we rank the first among all private for-profit
general hospital groups in mainland China, according to the same source.
As of June 30, 2025, our two hospitals had a total combined GFA of approximately
400,000 sq.m. and 1,850 registered beds, as well as an experienced team featuring more than
1,000 doctors, including 35 experts from Taiwan or overseas. In 2024, we recorded over two
million outpatient visits and performed over 22,000 inpatient surgeries.
 Nanjing BenQ Hospital. Having commenced operations in 2008, Nanjing BenQ
Hospital has been rated as a Grade A Class III hospital since 2022, being the first
private hospital so rated in Nanjing, Jiangsu Province. As measured by total revenue
in 2024, Nanjing BenQ Hospital is the third largest private for-profit general
hospital in the PRC, with its market share being 0.3% in the PRC, and the largest
private for-profit general hospital in Jiangsu Province, with its market share being
2.0% in Jiangsu Province, according to Frost & Sullivan. In addition, Nanjing BenQ
Hospital was recognized as one of the first batch of National Chest Pain Center
Accreditation Units and a National Health Management Demonstration Base of the
PRC. Nanjing BenQ Hospital has established various national and provincial key
disciplines and medical specialties. As a medical university affiliated hospital that
engages in medical treatment, teaching, research, and operation, it is a large-scale
healthcare institution integrating multi-disciplinary clinical care and a platform for
medical training and research.
SUMMARY
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 Suzhou BenQ Hospital. Having commenced operations in 2013, Suzhou BenQ
Hospital is a Class III general hospital. Suzhou BenQ Hospital was accredited by the
Joint Commission International (JCI) in 2020, and was also recognized as a National
Chest Pain Center, Certified Atrial Fibrillation Center and National Stroke
Prevention and Treatment Center of the PRC. With an acute understanding of market
demands, Suzhou BenQ Hospital has pursued a differentiated development strategy
and accumulated distinctive strengths in departments such as obstetrics and
gynecology, as well as pediatrics. In 2023 and 2024, Suzhou BenQ Hospital was
recognized as an “Elderly-Friendly Medical Institution in Jiangsu Province” by
Jiangsu Commission of Health. It was also among the first batch of pilot medical
institutions in Suzhou to offer palliative care services, according to Frost &
Sullivan.
As of the Latest Practicable Date, we operate two hospitals in Jiangsu Province and as
such, our business is primarily influenced by the market dynamics and prevailing competition
in Jiangsu Province instead of the PRC as a whole. For details, see “Industry Overview — The
Healthcare Service Market in Jiangsu Province” of this prospectus.
The DRG payment system, introduced in the PRC in 2019, applies to inpatient services
and reimburses hospitals based on standardized rates for diagnosis-related groups rather than
actual treatment costs. This DRG payment system aims to reduce unnecessary costs incurred
during treatments. Implementation is encouraged but not mandatory, except for hospitals in
regions where it has been formally adopted, such as Jiangsu since 2022. If a hospital is a
Medical Insurance Designated Medical Institution and the DRG payment system has been
implemented in the region where such hospital is located, that hospital must follow the
requirements imposed by the DRG payment system. The DRG payment system has impacted
hospital revenues by limiting reimbursements to pre-set amounts, requiring hospitals
themselves to cover any excess costs. Average spending per inpatient visit has decreased since
the application of the DRG system in China, according to Frost & Sullivan. In response to the
implementation of the DRG system, some hospitals have adjusted their financial and
operational strategies and successfully adapted by enhancing their cost management. See also
“— Implementation of the DRG Payment System” of this section.
Even amidst the impact of the COVID-19, the number of patient visits at our hospitals
grew rapidly during the Track Record Period. The total inpatient visits at our two hospitals in
aggregate increased from 67.1 thousand in 2022 to 81.9 thousand in 2023, and further to 86.2
thousand in 2024. The total inpatient visits at our two hospitals remained stable at 42.4
thousand in the six months ended June 30, 2024 and 2025. The total outpatient visits at our two
hospitals in aggregate increased from 1,680.6 thousand in 2022 to 2,002.3 thousand in 2023,
and further to 2,146.5 thousand in 2024. The total outpatient visits at our two hospitals in
aggregate amounted to 1,096.3 thousand and 1,057.4 thousand in the six months ended June 30,
2024 and 2025. Our Directors believe that, during the Track Record Period and up to the Latest
Practicable Date, the COVID-19 did not have any material negative impact on our business,
financial condition and results of operation.
SUMMARY
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Our Controlling Shareholder, Qisda Corporation, which was founded in 1984 and listed
on the Taiwan Stock Exchange (stock code: 2352.TW) in 1996, is a global technology group
with businesses spanning across IT, healthcare services and products (comprising hospital
operation through the Group as well as sales of medical equipment and medical products),
smart solutions, networking, and communication. Its brand influence and advanced technology
will continue to provide us with synergetic business opportunities. As the sole undertaker and
brand of Qisda Corporation’s healthcare services business, we plan to accelerate the expansion
of our hospital network and form regional medical alliances by strengthening cooperation with
primary, secondary and community healthcare institutions, thereby continuously identifying
new growth drivers. We believe that the extensive experiences accumulated from operating two
large-size general hospitals over the years and the support from our Controlling Shareholder
will continue to support our business expansion. This will enable us to successfully integrate
newly acquired or established healthcare institutions in different regions, so as to swiftly
replicate our success and achieve sustainable growth.
IMPLEMENTATION OF THE DRG PAYMENT SYSTEM
Since 2019, the PRC government has initiated the DRG mechanism, which applies to
inpatient services only. The DRG payment system divides patients into different diagnosis-
related groups and makes medical reimbursement payments according to a standard set for each
group instead of actual expenses incurred by treating the patients. It encourages hospitals to
treat patients efficiently, thereby reducing unnecessary costs to be reimbursed by the national
medical insurance program. Currently, its adoption is not mandatory but encouraged by the
National Healthcare Security Administration for hospitals in the PRC. However, if a hospital
is a Medical Insurance Designated Medical Institution and the DRG payment system has been
implemented in the region where such hospital is located, that hospital must follow the
requirements imposed by the DRG payment system. Jiangsu Province has adopted the DRG
payment system since 2022. Accordingly, as Medical Insurance Designated Medical
Institutions, our hospitals began to adopt DRG payment system in 2022.
Before the implementation of the DRG payment system, the public medical insurance
funds would reimburse the hospitals for all expenses actually incurred in treating a patient,
subject to adjustments made by relevant local public medical insurance bureaus in the next year
taking into account the government-approved annual quota for medical fees for inpatient
healthcare services. We estimated reimbursement amounts and recorded revenue each month
based on our actual expenses and the historical reimbursement rates.
After the implementation of the DRG payment system, the public medical insurance funds
would only reimburse the hospitals the optimal amount in treating a patient belonging to a
certain disease group, as adjusted year by year, and any fees the hospital incurred above the
optimal amount in the treatment process will be borne by the hospital itself. We estimated
reimbursement amounts and recorded revenue each month based on our predictions of the DRG
groupings of the patients we treated and the relevant DRG policy. We typically receive
reimbursement of a majority of medical fees within two months. In the following year, we will
SUMMARY
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compare the actual reimbursement we received with our estimate and make subsequent
adjustments to our recognized revenue if there is any material discrepancy between the two.
During the Track Record Period, we did not make any downward adjustment to our recognized
revenue in previous year.
Under the DRG payment system, most hospitals’ profits are negatively impacted to a
certain extent due to the reduction in the total amount of health insurance payments, according
to Frost & Sullivan. We have also been affected by the DRG payment system. The average
spending per inpatient visits at both of our hospitals witnessed a decrease after their respective
implementation of the DRG payment system. However, with our precision management
system, we are able to effectively control costs and improve operational efficiency, and quickly
adapt to changes in the DRG reform. Specifically, we installed the Firesoon system ( ˦ዓӻ୕),
a smart DRG-analysis solution, for Nanjing BenQ Hospital since July 2021 and for Suzhou
BenQ Hospital since August 2021. The Firesoon system enables automated prediction of the
diagnosis-related group that each patient should be classified into based on their symptoms,
primary diagnosis, and main treatment methods, and provides physicians with clear
reimbursement standard under the relevant group as a reference for clinical treatment. With the
Firesoon system, we are able to make cost control during the process of treating patients, and
partially alleviate the business and financial challenges brought by the implementation of the
DRG payment system. For more details, see “Business — Our Operation and Management —
Our Precision Management” and “Business — Pricing — Pricing for Healthcare Services” in
this prospectus.
OUR COMPETITIVE STRENGTHS
We believe that the following strengths have contributed to our success and differentiated
us from our competitors: (i) a private for-profit general hospital group in mainland China with
brand recognition and influence; (ii) a “medical-teaching-research-operation” integrated
private healthcare service platform emphasizing both comprehensive healthcare services and
medical specialties that keeps attracting talents and generating business synergies; (iii)
effective operational capabilities and management model that drive stable profitability; (iv) a
higher starting point backed by our Controlling Shareholder, as well as synergies with
shareholder to safeguard our long-term growth; and (v) leadership team possessing expertise
and experiences.
OUR STRATEGIES
We plan to implement the following strategies to realize our vision: (i) solidify our
advantage of “comprehensive healthcare services plus medical specialties” and enhance
medical expertise through academic research to continuously improve healthcare service
quality and patient satisfaction; (ii) further scale up operations of our existing hospitals to
expand service capabilities; (iii) form regional medical alliances that covers the full cycle of
SUMMARY
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care needs to promote resource sharing and patient referrals; (iv) extend our healthcare service
platform through acquisitions; and (v) continuously develop smart healthcare platform and
advanced diagnosis and solutions to improve operational efficiency and service
standardization.
OUR BUSINESS MODEL
We focus on providing a continuum of high-quality healthcare services to our patients
through our multi-disciplinary private for-profit general hospitals. During the Track Record
Period, we derived our revenue primarily from the provision of general healthcare services that
comprise inpatient healthcare services and outpatient healthcare services. Inpatient healthcare
services involve treating patients hospitalized overnight or for a prolonged period of time (the
duration of which depend on each patient’s health needs and recovery process), subject to the
patients’ conditions and recovery. Outpatient healthcare services refer to the treatment of
patients who are hospitalized for less than 24 hours. Within the scope of our outpatient
healthcare services, we also provide physical examination services where we will examine
signs of diseases and provide medical advices on healthcare issues.
During the Track Record Period, our revenue amounted to RMB2,336.4 million,
RMB2,687.6 million, RMB2,659.0 million, RMB1,330.1 million and RMB1,312.3 million in
2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively, among
which, revenue generated from the provision of healthcare services accounting for 98.7%,
98.9%, 98.8%, 98.8% and 99.0% of our total revenue in 2022, 2023 and 2024 and the six
months ended June 30, 2024 and 2025, respectively. Specifically, revenue generated from our
inpatient healthcare services amounted to RMB1,202 million, RMB1,396 million, RMB1,379
million, RMB685.8 million and RMB695.7 million in 2022, 2023, and 2024 and the six months
ended June 30, 2024 and 2025, respectively, representing 51.4%, 51.9%, 51.8%, 51.6% and
53.0% of our total revenue in 2022, 2023 and 2024 and the six months ended June 30, 2024
and 2025, respectively. Revenue generated from our outpatient healthcare services amounted
to RMB1,104 million, RMB1,263 million, RMB1,249 million, RMB628.1 million and
RMB603.1 million in 2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025,
respectively, representing 47.3%, 47.0%, 47.0%, 47.2% and 46.0% of our total revenue in
2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively. For more
details of our revenue, see “Financial Information — Description of Selected Components of
Consolidated Statements of Profit or Loss — Revenue” in this prospectus.
Both Nanjing BenQ Hospital and Suzhou BenQ Hospital are Medical Insurance
Designated Medical Institutions. As such, a considerable number of our patients pay for their
treatment primarily through public medical insurance programs under the PRC public social
insurance regime. In 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
our revenue derived from settlement through public medical insurance programs amounted to
RMB968.9 million, RMB1,373.6 million, RMB1,410.4 million, RMB704.8 million and
RMB700.9 million, respectively, accounting for 41.5%, 51.1%, 53.0%, 53.0% and 53.4% of
our total revenue in the corresponding year/period.
SUMMARY
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In 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, revenue
generated by our Nanjing BenQ Hospital accounted for 62.2%, 63.5%, 63.7%, 63.5% and
65.9% of our total revenue, respectively, and revenue generated by our Suzhou BenQ Hospital
accounted for 37.8%, 36.5%, 36.3%, 36.5% and 34.1% of our total revenue in 2022, 2023 and
2024 and the six months ended June 30, 2024 and 2025, respectively. The following table sets
forth a breakdown of revenue by hospital and service type, in absolute amount and as a
percentage of our total revenue, for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Nanjing BenQ Hospital
– Inpatient healthcare services /H1118/H1118/H1118742,647 31.8 909,251 33.8 902,120 33.9 447,796 33.7 471,967 36.0
– Outpatient healthcare services (1) /H1118 691,859 29.6 777,099 28.9 770,625 29.0 386,535 29.1 383,587 29.2
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,753 0.8 21,545 0.8 21,046 0.8 10,462 0.8 9,031 0.7
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,454,259 62.2 1,707,895 63.5 1,693,791 63.7 844,792 63.5 864,585 65.9
Suzhou BenQ Hospital
– Inpatient healthcare services /H1118/H1118/H1118459,031 19.6 486,468 18.1 476,926 17.9 238,046 17.9 223,686 17.1
– Outpatient healthcare services
(1) /H1118 412,048 17.6 485,806 18.1 478,379 18.0 241,587 18.2 219,547 16.7
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,097 0.5 7,444 0.3 9,877 0.4 5,706 0.4 4,498 0.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118882,176 37.8 979,718 36.5 965,182 36.3 485,339 36.5 447,731 34.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
Notes:
(1) Apart from revenue generated from our offline outpatient healthcare services, also comprise (i) revenue
generated from our provision of physical examination service, which amounted to RMB97.3 million,
RMB94.0 million, RMB84.7 million, RMB30.8 million and RMB34.8 million, accounting for 4.2%,
3.5%, 3.2%, 2.3% and 2.7%, of our total revenue in 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, respectively; and (ii) revenue generated from our provision of online consultation
services under the internet hospital business, which amounted to RMB0.4 million, RMB0.3 million,
RMB0.6 million, RMB0.2 million and RMB0.4 million, accounting for 0.02%, 0.01%, 0.02%, 0.02%
and 0.03% of our total revenue in 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively.
(2) Comprise revenue generated from our provision of leasing services and car parking services.
SUMMARY
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The table below sets forth a breakdown of our gross profit and gross profit margin by
hospital for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Nanjing BenQ Hospital /H1118/H1118217,967 15.0 301,463 17.7 296,580 17.5 158,193 18.7 141,775 16.4
Suzhou BenQ Hospital /H1118/H1118165,133 18.7 206,193 21.0 185,462 19.2 98,530 20.3 66,858 14.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,100 16.4 507,656 18.9 482,042 18.1 256,723 19.3 208,633 15.9
The following table sets forth a breakdown of certain key operating statistics of our
hospitals as of the end of or for the years/periods indicated:
As of/For the Y ear Ended
December 31,
As of/For the Six Months
Ended June 30,
2022 2023 2024 2024 2025
Nanjing BenQ Hospital
Inpatient healthcare
services
Number of registered
beds (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118900 1,050 1,050 1,050 1,050 (10)
Effective service capacity (2) /H1118328,500 383,250 384,300 191,100 190,050
Inpatient visits
(in thousand) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.1 50.6 53.3 26.0 27.2
Number of inpatient
surgeries (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,055 13,865 14,399 6,951 7,322
Average spending per
inpatient visit (RMB) (5) /H1118/H111818,520 17,969 16,925 16,236 16,424
Bed occupancy rate (%) (6) /H1118/H1118100.3 106.6 102.8 101.5 105.0
Outpatient healthcare
services
Outpatient visits
(in thousand) (7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,114.6 1,327.6 1,435.7 727.5 724.7
Average spending per
outpatient visit (RMB) (8) /H1118 573 548 508 510 504
Number of outpatient
surgeries (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980 1,871 2,298 1,199 1,100
SUMMARY
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As of/For the Y ear Ended
December 31,
As of/For the Six Months
Ended June 30,
2022 2023 2024 2024 2025
Suzhou BenQ Hospital
Inpatient healthcare
services
Number of registered
beds (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118800 800 800 800 800
Effective service capacity (2) /H1118292,000 292,000 292,800 145,600 144,800
Inpatient visits (in
thousand) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826.9 31.3 33.0 16.3 15.2
Number of inpatient
surgeries (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,396 6,646 8,375 4,157 3,625
Average spending per
inpatient visit (RMB) (5) /H1118/H111817,064 15,542 14,452 13,923 14,244
Bed occupancy rate (%) (6) /H1118/H1118 83.1 89.6 89.6 89.7 86.7
Outpatient healthcare
services
Outpatient visits (in
thousand) (7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118566.0 674.7 710.8 368.9 332.7
Average spending per
outpatient visit (RMB) (8) /H1118 650 655 613 613 611 (11)
Number of outpatient
surgeries (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,902 3,380 2,069 921 1,498
Notes:
(1) Represents the number of beds that were registered in the hospital’s practicing license as of the end of
the relevant year/period.
(2) Represents the estimated inpatient service capacity of the hospital during the given year/period,
calculated as the number of registered beds as of the end of such year/period multiplied by the number
of days in such year/period. During the Track Record Period, there were 365 days, 365 days, 366 days,
182 days and 181 days in 2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025,
respectively.
(3) Represents the total number of inpatients (with hospital stay) in the hospital during the given
year/period.
(4) Represents the total number of inpatient surgeries performed in the hospital during the given
year/period.
(5) Represents the average spending per inpatient visit calculated as the revenue from inpatient healthcare
services divided by the number of inpatient visits in the hospital during the given year/period. During
the Track Record Period, the average spending per inpatient visit experienced a general decreasing trend
as a result of the implementation of the DRG payment system and aperiodic adjustment of the DRG
reimbursement standards.
SUMMARY
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--- page 18 ---
(6) Represents the percentage of registered beds occupied by inpatients during the given year/period, as an
indicator of the utilization of registered beds, calculated as the aggregate length of stay (in terms of
days) for all inpatient visits during such year/period divided by the effective service capacity during
such year/period and multiplied by 100%. Bed occupancy rate exceeded 100% due to the addition of
temporary beds to satisfy the increasing market demand, which we believe was in line with our
hospital’s social responsibilities. Based on the Implementation Guidelines for Evaluation Standards of
Class III General Hospitals in Jiangsu Province as issued by the Health Commission of Jiangsu
Province, for a Class III hospital, the number of beds in operation as of the end of a given year can
deviate up to 15% above or below the number of registered bed as of the same date, and still be
considered compliant. As confirmed by Frost & Sullivan, in the PRC hospital industry, it is not
uncommon for hospitals to set up additional beds beyond the registered number of beds in order to
respond to temporary medical service demands.
(7) Represents the total number of outpatients (without hospital stay, and excluding the number of patients
receiving physical examination services) in the hospital during the given year/period. Except for
inpatients who are readmitted to our inpatient department and/or are transferred to our inpatient
department from another hospital, most inpatients need to check in at the outpatient counter first before
they are admitted to the inpatient department and receive relevant inpatient healthcare services. As such,
a substantial number of inpatients in each year/period comprising the Track Record Period is also
counted in the number of outpatients in the corresponding year/period. As confirmed by Frost &
Sullivan, given that hospitals commonly require patients to check in at the outpatient counter before
being admitted to inpatient care, such method of dual counting is in line with the industry norm.
(8) Represents the average spending per outpatient visit calculated as the revenue from outpatient
healthcare services (excluding the revenue from physical examination services) divided by the number
of outpatient visits of the hospital during the given year/period. During the Track record Period, our
revenue from outpatient healthcare services (excluding those from physical examination services) at
Nanjing BenQ Hospital amounted to RMB638.6 million, RMB727.3 million, RMB728.7 million,
RMB371.2 million and RMB365.0 million in 2022, 2023, and 2024 and the six months ended June 30,
2024 and 2025, respectively. Our revenue from outpatient healthcare services (excluding those from
physical examination services) at Suzhou BenQ Hospital amounted to RMB368.0 million, RMB441.6
million, RMB435.5 million, RMB226.1 million and RMB203.3 million in 2022, 2023, and 2024 and the
six months ended June 30, 2024 and 2025, respectively.
(9) Represents the total number of outpatient surgeries performed in the hospital during the given
year/period. Despite the increases in outpatient visits at Suzhou BenQ Hospital during the Track Record
Period, the number of outpatient surgeries at Suzhou BenQ Hospital decreased from 3,380 in 2023 to
2,069 in 2024, primarily due to reduced patient demand for high-end services in the Department of
Ophthalmology at Suzhou BenQ Hospital.
(10) In February 2025, we commenced the operation of Phase II of Nanjing BenQ Hospital. As the
registration of additional beds was still in progress, the number of registered beds remained unchanged
as of June 30, 2025.
(11) The average spending per outpatient visit between the six months ended June 30, 2024 and 2025
remained stable despite the increase in the number of outpatient visits, primarily due to (i) the expansion
of centralized procurement, which led to a reduction in drug prices; and (ii) the adjustment of
reimbursement standards for certain diagnostic procedures by the medical insurance bureau, led to lower
payments.
For details of our hospitals, see “Business — Our Hospitals” in this prospectus.
SUMMARY
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OUR CUSTOMERS
Our hospitals have a broad patient base, with no individual patient accounting for more
than 1.0% of our revenue in each year/period during the Track Record Period. Our five largest
customers in each year/period during the Track Record Period also included business
corporations and government administrations who purchase our physical examination services
for their employees, and lessees of our owned properties. Our five largest customers in each
year/period during the Track Record Period in aggregate contributed to less than 1.0% of our
revenue in the respective year/period. For details of our customers, see “Business — Our
Customers” in this prospectus.
OUR SUPPLIERS
Our suppliers primarily consist of local distributors of pharmaceuticals, medical
consumables and medical equipment. For some medical products, such as vaccines, we are
required to obtain supplies directly from the Chinese Center for Disease Control and
Prevention. Our suppliers also include construction companies who are engaged by us for the
construction and expansion of our hospitals, as well as collaborative healthcare service
providers who provide department consulting services to certain of our departments. Our five
largest suppliers in each year during the Track Record Period together accounted for 39.4%,
47.6%, 41.4% and 47.7% of our total purchases in 2022, 2023 and 2024 and the six months
ended June 30, 2025, respectively, and our single largest supplier in each year during the Track
Record Period accounted for 17.1%, 20.1%, 19.0% and 21.4% of our total purchases during the
same years/periods, respectively. For details of our suppliers, see “Business — Our Suppliers”
in this prospectus.
RISK FACTORS
Our business faces risks including those set out in “Risk Factors” in this prospectus. As
different investors may have different interpretations and criteria when determining the
significance of a risk, you should read the “Risk Factors” section in its entirety before you
decide to invest in our Offer Shares. Some of the major risks that we face include:
 We conduct our business in a heavily regulated industry and are subject to extensive
regulatory requirements;
 Changes in the PRC’s regulatory regime for the healthcare services industry may
have a material adverse effect on our business;
 If we become subject to additional pricing guidelines on medical services,
pharmaceuticals, medical equipment and medical consumables, our revenue may be
adversely affected;
SUMMARY
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--- page 20 ---
 We are facing challenges imposed by the implementation of the DRG payment
system. We may face challenges in controlling costs while maintaining quality care,
particularly for complex cases where standardized payment rates may not
adequately reflect higher resource utilization;
 We are exposed to inherent risks of medical disputes, including medical malpractice
claims, and legal proceedings arising from our operations;
 We derive a considerable portion of our revenue from healthcare services provided
to patients covered under public medical insurance programs, the loss of which
could materially and adversely affect our results of operations and prospects;
 We are especially sensitive to the local conditions and changes in Jiangsu Province
because our revenue has historically been significantly dependent on our operations
in Jiangsu Province; and
 Our expansion plan and business operations in mainland China may be affected as
a result of Taiwanese investors’ interests in us as they may be required to obtain
approvals from the Department of Investment Review of the Ministry of Economic
Affairs (DIR) for investments in mainland China, as well as the tensions between
two sides of the strait.
For more details, see “Risk Factors” in this prospectus.
REGULATORY REGIME OF THE HOSPITAL MARKET IN THE PRC
Classification of Hospitals
Hospitals in mainland China can be classified into public and private hospitals in terms
of ownership. Private hospitals can be further classified into for-profit and not-for-profit
hospitals based on their business objectives, service purposes and implementation of various
financial, taxation, pricing and accounting policies. During the incorporation process of a
hospital, in order to obtain approval, registration and verification from healthcare
administrative authorities, a hospital must demonstrate and specify its business nature
(“not-for-profit” or “for-profit”) on its practice registration documents. For-profit hospitals
may distribute their profit to their investors as economic returns, and have the discretion to set
the fees and prices for their medical and healthcare services based on their marketing needs.
In contrast, not-for-profit hospitals do not aim at generating profit for their own. Positive
accounting balance resulting from operation must be used for self-development. They must
also comply with the pricing guidance for medical service stipulated by governments from time
to time.
For more details, see “Regulatory Overview — Regulations On the Classification and the
Administration of Medical Institutions — Opinions on Implementing Classification
Administration of Urban Medical Institutions” in this prospectus.
SUMMARY
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Grading of Hospitals
Hospitals in mainland China are ranked by classes and grades based on the assessment of
relevant competent authorities. There are three Classes — Class I, II and III, with Class III
being the highest class, representing the highest institutional scale and medical skill. Within
each class, there are three grades, Grade A, B and C, with Grade A being the highest grade. As
such, the highest standard is Grade A Class III. The assessment of Grades itself is not a
requisite for a private for-profit hospital of any Class to carry out its business.
Moreover, a hospital established in Jiangsu province, regardless of its classes, needs to go
through a track record period as required by local competent authorities before it is eligible for
applying for a grade (i.e. Grade A, B and C). According to the Assessment Measures for
Hospitals in Jiangsu Province (), if a hospital’s class level changes,
the hospital may apply for an assessment of its grade level within that class only after three
years of operation following its last change in class. Given that Suzhou BenQ Hospital was
approved as a Class III general hospital in 2023, it will be qualified for application of
assessment of its grade level no earlier than 2026. As of the Latest Practicable Date, we
planned to proceed with obtaining Grade A Class III accreditation for Suzhou BenQ Hospital
within the next five years.
For more details, see “Regulatory Overview — Regulations On the Classification and the
Administration of Medical Institutions — The Grading of Healthcare Institutions” and
“Business — Our Strategies — Solidify Our Advantage of ‘Comprehensive Healthcare
Services Plus Medical Specialties’ and Enhance Medical Expertise through Academic Research
to Continuously Improve Healthcare Service Quality and Patient Satisfaction” in this
prospectus.
Internet Hospital Business
During the Track Record Period, we generated 0.01% to 0.03% of revenue from the
internet hospital business, which primarily included the provision of online consultation
services and was recorded under the business segment of outpatient healthcare services. Other
services under our Smart Hospital system, such as online nursing services, were not
revenue-generating but rather functions aimed to improve our operational efficiency and
enhance the quality of our healthcare services.
Pursuant to the Medical Institution Practicing Licenses of both hospitals, we are
authorized to carry on the internet hospital business, including the provision of online
consultation services, within the approved service scope. According to our PRC Legal Advisor,
as our internet hospital business is fully self-operated, and our online applications do not
involve any services provided by third parties or charge any platform information service fees
from the physicians and the patients, our internet hospital business shall be regarded as an
online extension of our offline medical service business, and we are able to conduct such
business without applying for the V alue-Added Telecommunications Services Operation
License.
SUMMARY
–1 2–


--- page 22 ---
For more details, see “Risk Factors — Risks Relating to Our Business and Industry — We
operate in a competitive industry. If we do not compete successfully against other hospitals and
healthcare providers, our profitability and market share may be affected” in this prospectus.
SUMMARY OF KEY FINANCIAL INFORMATION
The following tables summarize our consolidated financial results during the Track
Record Period and should be read in conjunction with “Financial Information” of this
prospectus and the Accountants’ Report set out in Appendix I to this prospectus, together with
the respective accompanying notes.
Summary of Consolidated Statements of Profit or Loss
The following table sets forth selected consolidated statement of profit or loss for the
years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
Cost of revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,953,335) (83.6) (2,179,957) (81.1) (2,176,931) (81.9) (1,073,408) (80.7) (1,103,683) (84.1)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,100 16.4 507,656 18.9 482,042 18.1 256,723 19.3 208,633 15.9
Other net gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,981 0.5 1,476 0.1 743 0.0 6.9 0.0 1,887 0.1
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,783) (0.3) (5,661) (0.2) (5,264) (0.2) (3,224) (0.2) (3,072) (0.2)
Administrative expenses /H1118/H1118/H1118(217,625) (9.3) (241,006) (9.0) (283,589) (10.7) (140,548) (10.6) (132,413) (10.1)
(Provision)/reversal of
impairment losses on trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,428) (0.2) (292) (0.0) 605 0.0 (1,547) (0.1) (39) 0.0
Profit from operations /H1118/H1118/H1118165,245 7.1 262,173 9.8 194,537 7.3 111,473 8.4 74,996 5.7
Net finance costs /H1118/H1118/H1118/H1118/H1118/H1118(15,491) (0.7) (4,228) (0.2) (3,089) (0.1) (1,068) (0.1) (4,259) (0.3)
Share of losses of associates /H1118 (22,143) (0.9) (23,849) (0.9) (23,414) (0.9) (13,952) (1.0) (309) 0.1
Profit before taxation /H1118/H1118/H1118/H1118127,611 5.5 234,096 8.7 168,034 6.3 96,453 7.3 70,428 5.4
Income tax expense /H1118/H1118/H1118/H1118/H1118(38,061) (1.6) (66,646) (2.5) (59,112) (2.2) (33,052) (2.5) (21,724) (1.7)
Profit for the year/period /H1118/H111889,550 3.8 167,450 6.2 108,922 4.1 63,401 4.8 48,704 3.7
Profit for the year/period
attributable to equity
shareholders of our
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,550 3.8 167,450 6.2 108,922 4.1 63,401 4.8 48,704 3.7
SUMMARY
–1 3–


--- page 23 ---
Our revenue increased from RMB2,336.4 million in 2022 to RMB2,687.6 million in 2023,
and slightly decreased to RMB2,659.0 million in 2024. For the six months ended June 30, 2024
and 2025, our revenue remained relative stable at RMB1,330.1 million and RMB1,312.3
million, respectively. Our cost of revenue increased from RMB1,953.3 million in 2022 to
RMB2,180.0 million in 2023, and decreased to RMB2,176.9 million in 2024. For the six
months ended June 30, 2024 and 2025, our cost of revenue amounted to RMB1,073.4 million
and RMB1,103.7 million, respectively. The change in cost of revenue was primarily affected
by the changes in cost of pharmaceuticals and medical consumables and employee benefit
expenses, the largest and second-largest components of our cost of revenue during the Track
Record Period.
Moreover, due to our revenue growth outpacing the increase in cost of revenue and the
greater economies of scale we enjoyed along with the increased number of patient visits, our
gross profit margin increased from 16.4% in 2022 to 18.9% in 2023. In 2024, our gross profit
margin decreased to 18.1%, primarily resulting from the increased employee benefit expenses,
as we recruited more healthcare professionals, especially chief doctors and associate chief
doctors to support the development of our hospitals. The number of chief doctors and associate
chief doctors in our Nanjing BenQ Hospital increased by 10.5% from 191 as of December 31,
2023 to 211 as of December 31, 2024, and the number of chief doctors and associate chief
doctors in our Suzhou BenQ Hospital increased by 21.5% from 107 as of December 31, 2023
to 130 as of December 31, 2024. For details, see “Business — Our Staff — Our Doctors and
Other Healthcare Professionals” in this prospectus. Our gross profit margin further decreased
from 19.3% in the six months ended June 30, 2024 to 15.9% in the corresponding period of
2025, primarily attributable to (i) the increase of RMB7.0 million in depreciation and
amortization and of RMB3.9 million in utilities, arising from the commencement of operations
of the second phase of Nanjing BenQ Hospital; and (ii) the increase of RMB30.9 million in
employee benefit expenses due to the growth in the number of doctors and other healthcare
professionals during the same period. We had 914 doctors and 1,809 other healthcare
professionals as of June 30, 2024, which increased to 1,015 doctors and 1,878 other healthcare
professionals as of June 30, 2025.
In addition, our administrative expenses increased from RMB217.6 million in 2022 to
RMB241.0 million in 2023, and further to RMB283.6 million in 2024, mainly as a result of (i)
the increase in listing expenses; (ii) the increase in employee benefit expenses associated with
the increased compensation level and the expansion of administrative team; and (iii) the
increase in depreciation and amortization in relation to the construction and expansion progress
of our hospitals during the relevant years. As a result of the foregoing, our profit for the year
increased from RMB89.6 million in 2022 to RMB167.5 million in 2023, and decreased to
RMB108.9 million in 2024. Our profit for the period decreased from RMB63.4 million in the
six months ended June 30, 2024 to RMB48.7 million in the six months ended June 30, 2025.
Our net profit margin increased from 3.8% in 2022 to 6.2% in 2023, and decreased to 4.1% in
2024. Our net profit margin decreased from 4.8% in the six months ended June 30, 2024 to
3.7% in the six months ended June 30, 2025, primarily due to a decline in gross profit margin
during the period.
SUMMARY
–1 4–


--- page 24 ---
For more details, see “Financial Information” in this prospectus.
Summary of Consolidated Statements of Financial Position
The table below sets forth selected information from our consolidated statements of
financial position as of the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Total non-current assets /H11182,143,744 2,352,231 2,596,703 2,734,292 2,737,520
Current assets
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 8––––
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,082 68,690 71,581 56,678 71,870
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292 282,897
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H111814,067 17,586 29,610 49,706 44,578
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118698 708 719 716 709
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,704 226,246 116,884 117,157 110,782
Total current assets /H1118/H1118/H1118/H1118412,053 560,154 504,606 520,549 510,836
Current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 419,992 509,199 564,331 543,737
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,216 1,36 4–––
Trade and bills payables /H1118/H1118325,796 376,865 397,151 356,115 403,433
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314,468 351,015 326,432 363,754 336,496
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886 38,995
Current taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,769 38,971 38,366 36,708 21,705
Total current liabilities /H1118/H11181,125,288 1,219,813 1,299,848 1,358,794 1,344,366
Net current liabilities /H1118/H1118/H1118(713,235) (659,659) (795,242) (838,245) (833,530)
Total non-current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101,000 190,392 185,578 230,016 204,981
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031 1,699,009
SUMMARY
–1 5–


--- page 25 ---
We had a net assets position as of December 31, 2022, 2023 and 2024 and June 30, 2025.
Our net assets increased from RMB1,329.5 million as of December 31, 2022 to RMB1,502.2
million as of December 31, 2023, and further to RMB1,615.9 million as of December 31, 2024,
primarily as our total comprehensive income for the year increased from RMB102.6 million in
2022 to RMB170.0 million in 2023, and further to RMB111.1 million in 2024. Our net assets
further increased to RMB1,666.0 million as of June 30, 2025 as we recorded a total
comprehensive income for the period of RMB49.0 million for the six months ended June 30,
2025. For further details on the equity movement of our Group, see “Consolidated Statements
of Changes in Equity” of the Accountants’ Report set out in Appendix I to this prospectus.
The fluctuations of our net current liabilities primarily reflected the changes in our cash
and cash equivalents, trade receivables, as well as bank loans that we borrowed to support our
operations and construction in progress. Our prepayments, deposits and other receivables
increased from RMB29.6 million as of December 31, 2024 to RMB49.7 million as of June 30,
2025, primarily due to the loan provided by us to Donghui Medical for its daily operational
needs. We did not experience any material change in our current liabilities during the Track
Record Period. For details of the analysis of our net current liabilities, see “Financial
Information — Cash Flows — Net Current Liabilities” in this prospectus.
Summary of Consolidated Statements of Cash Flows
The following table sets forth a summary of our cash flows information for the
years/periods indicated:
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating profit before
changes in
working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,384 419,376 365,492 198,162 168,506
Changes in working capital /H1118 38,299 (105) (43,154) 2,406 (63,711)
Cash generated from
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,683 419,271 322,338 200,568 104,795
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,503) (60,847) (63,991) (33,457) (24,666)
Net cash generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118333,180 358,424 258,347 167,111 80,129
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(255,311) (349,812) (425,155) (283,546) (184,082)
Net cash (used in)/generated
from financing activities /H1118 (32,531) 81,893 56,877 53,580 104,358
SUMMARY
–1 6–


--- page 26 ---
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net increase/(decrease) in
cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,338 90,505 (109,931) (62,855) 405
Cash and cash equivalents
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,950 135,704 226,246 226,246 116,884
Effect of foreign exchange
rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416 37 569 137 (132)
Cash and cash equivalents
at end of the year/period /H1118135,704 226,246 116,884 163,528 117,157
Working Capital Sufficiency
During the Track Record Period, we financed our operations primarily through cash
generated from our operating activities as our principal sources of funding, and our primary
uses of cash were to fund our capital expenditures and working capital. Going forward, we
believe that our liquidity requirements will be satisfied with a combination of our internal
resources, cash flows generated from our operating and financing activities and net proceeds
from the Global Offering.
Despite that we had a net current liability position as of December 31, 2022, 2023 and
2024 and June 30, 2025, taking into account the financial resources available to us, including
(i) cash inflow from operating activities, (ii) our current cash and cash equivalents of
RMB117.2 million as of June 30, 2025, (iii) the time deposit of RMB0.7 million as of June 30,
2025, (iv) the unutilized banking facilities of RMB748.7 million as of June 30, 2025, and (v)
the estimated net proceeds from the Global Offering, our Directors are of the view that we have
available sufficient working capital for our present requirements, that is for at least the next 12
months from the date of this prospectus. After making reasonable inquiries of our management
about our working capital, the Joint Sponsors concur with the Directors’ view.
SUMMARY
–1 7–


--- page 27 ---
Key Financial Ratios
The table below sets forth our key financial ratios as of the dates/for the years/periods
indicated:
As of/Y ear Ended December 31,
As of/
Six months
ended
June 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H111816.4% 18.9% 18.1% 15.9%
Net profit margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11183.8% 6.2% 4.1% 3.7%
Return on equity (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.0% 11.8% 7.0% 6.0% (7)
Return on total assets (4) /H1118/H1118/H1118/H1118/H11183.6% 6.1% 3.6% 3.0% (7)
Current ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.4 0.5 0.4 0.4
Quick ratio (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.3 0.4 0.3 0.3
Notes:
(1) Gross profit margin was calculated based on gross profit divided by revenue for the respective
year/period.
(2) Net profit margin was calculated based on net profit divided by revenue for the respective year/period.
(3) Return on equity was calculated based on net profit of the respective year/period, divided by the
arithmetic mean of the opening and closing balances of total equity and multiplied by 100%.
(4) Return on total assets was calculated based on net profit of the respective year/period, divided by the
arithmetic mean of the opening and closing balances of total assets and multiplied by 100%.
(5) Current ratio was calculated based on the total current assets divided by the total current liabilities as
of the relevant dates.
(6) Quick ratio was calculated based on the total current assets less inventories and divided by the total
current liabilities as of the relevant dates.
(7) Annualized for the six months ended June 30, 2025 by multiplying profit for the period by two.
OUR SHAREHOLDING STRUCTURE
Our Controlling Shareholders
As of the Latest Practicable Date, Qisda Corporation was interested directly and
indirectly through its wholly-owned subsidiaries (i.e., Darly2 V enture, Darly V enture, BenQ
Corp. and Darly V enture (L)) in 232,736,837 Shares, representing approximately 95.02%
equity interests in our Company. Upon completion of the Global Offering (assuming the
options granted under the Pre-IPO Share Option Plan are not exercised), Qisda Corporation
will be interested directly and indirectly in 232,736,837 Shares, representing approximately
74.61% of the equity interests in our Company.
SUMMARY
–1 8–


--- page 28 ---
Therefore, pursuant to the Listing Rules and the Guide for New Listing Applicants, Qisda
Corporation, Darly2 V enture, Darly V enture, BenQ Corp. and Darly V enture (L) will be
considered as a group of Controlling Shareholders of our Company upon Listing. For more
details, see “Relationship With Our Controlling Shareholders” in this prospectus.
As advised by the Company’s Taiwan legal advisor, with regard to the Listing and the
Global Offering, no approval from Taiwan regulatory authorities is required. However, relevant
public announcements on the Market Observation Post System on application for the Listing
and issuance of the undertakings for the Listing are required under (a) the Operating Rules of
the Taiwan Stock Exchange Corporation and (b) Taiwan Stock Exchange Corporation
Procedures for V erification and Disclosure of Material Information of Companies with Listed
Securities for Qisda Corporation. In connection with the Listing and the Global Offering,
approvals from the audit committee, the board of directors and shareholders’ meetings of Qisda
Corporation are required for our application for Listing. Furthermore, the issuance of
undertaking from the Company and the Controlling Shareholders for our application for Listing
is required to be approved by the audit committee and the board of directors of Qisda
Corporation and then reported to the shareholders’ meeting of Qisda Corporation. The
application for Listing has been approved by the audit committee, the meetings of the board
of directors and the shareholders of Qisda Corporation. The issuance of the undertaking from
the Company and the Controlling Shareholders has been approved by the audit committee and
the meeting of the board of directors of Qisda Corporation and reported to the shareholders’
meeting of Qisda Corporation.
Our Taiwanese Controlling Shareholders’ compliance with the approval of investment
regulations
Pursuant to the Mainland China Investment Approval Regulations, except for limited
exceptions, investments in mainland China made by an individual with Taiwan household
registration or a Taiwan-incorporated entity (“ Taiwanese Investor ”) are subject to the prior
approval from or post reporting to the Taiwan Department of Investment Review of the MOEA
(the “ DIR”). Our Taiwanese Investors are also restricted by the maximum aggregate
investment quota, as determined pursuant to the type of such investors, for investments in
mainland China, except for limited exceptions (e.g. Taiwanese enterprise that obtained the
operation headquarters confirmation such as Qisda Corporation and BenQ Corp.). In principle,
each of our Taiwanese Investors is subject to the following maximum aggregate investment
quota as stipulated under the Mainland China Investment Approval Regulations: (i) for
Taiwanese individual, US$5 million per year, (ii) for a small and medium-sized enterprise,
either (a) 60% of its net value or consolidated net value or (b) NT$80 million, whichever is
higher; or (c) for other enterprises, 60% of its net value or consolidated net value, whichever
is higher.
As advised by our Taiwan legal advisor, Qisda Corporation, Darly2 V enture, Inc., Darly
V enture and BenQ Corp. (each a “ Taiwanese Controlling Shareholder ”) had obtained
approvals from the DIR for their respective indirect investments in enterprises in mainland
China through investment in our Company. As advised by our Taiwan legal advisor, any equity
SUMMARY
–1 9–


--- page 29 ---
capital increase by our Company into our subsidiary(ies) in mainland China will be considered
as additional investment by our Taiwanese Investors, and except for limited exceptions, each
of our Taiwanese Investors will be required to obtain prior approval from or make post
reporting to the DIR for such equity capital increase in our subsidiary(ies) in mainland China.
As advised by our Taiwan legal advisor, as Darly V enture (L) is incorporated in Malaysia,
Darly V enture (L) is not subject to the Mainland China Investment Approval Regulations.
For details, please refer to the sections headed “Risk Factors — Our expansion plan and
business operations in mainland China may be affected as a result of Taiwanese investors’
interests in us as they may be required to obtain approvals from the Department of Investment
Review of the Ministry of Economic Affairs (the “DIR”) for investments in mainland China,
as well as the tensions between two sides of the strait” and “Regulatory Overview —
Regulations in Taiwan Relating to Investment in PRC” of this prospectus.
Pre-IPO Investments
From January 2009 to May 2016, our Company introduced the Pre-IPO investors
including Mr. TSAI Chiang-Hai, Leader International Biomedicine Limited and ShareHope
Medical Co., Ltd. (ʮ̡), through subscription for issued Shares of our
Company or purchase of Shares from existing Shareholders. For more details, see “History,
Development and Corporate Structure — Pre-IPO Investments” in this prospectus.
GLOBAL OFFERING STATISTICS
Based on the
Offer Price of
HK$9.34
Based on the
Offer Price of
HK$11.68
Market capitalization of our Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$2,913.6
million
HK$3,643.5
million
Unaudited Pro forma adjusted net tangible assets
attributable to the equity shareholders of our
Company per Share as of June 30, 2025
(2)(3) /H1118/H1118/H1118
RMB7.01
(HK$7.71)
RMB7.44
(HK$8.19)
Notes:
(1) Calculation of market capitalization is based on 311,945,001 Shares expected to be in issue immediately
after completion of the Global Offering, assuming the options under the Pre-IPO Share Option Plan are
not exercised.
(2) The unaudited pro forma adjusted net tangible assets attributable to the equity shareholders of our
Company per Share have been arrived at after adjustments referred to in “Unaudited Pro Forma
Financial Information” in Appendix II to this prospectus.
(3) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to
equity shareholders of our Company to reflect our trading results or other transactions entered into
subsequent to June 30, 2025.
SUMMARY
–2 0–


--- page 30 ---
LISTING EXPENSE
Listing expenses to be borne by us are estimated to be RMB71.0 million (HK$78.1
million) (including underwriting commission), at the Offer Price of HK$10.51 per Share,
among which (i) underwriting-related expenses, including underwriting commissions are
RMB18.5 million (HK$20.4 million) and (ii) non-underwriting-related expenses are RMB52.5
million (HK$57.7 million), comprising (a) fees and expenses of legal advisors and accountants
of approximately RMB27.5 million (HK$30.3 million) and (b) other fees and expenses of
approximately RMB25.0 million (HK$27.4 million).
As of June 30, 2025, we incurred a total of RMB45.5 million (HK$50.1 million) in listing
expenses, among which RMB35.0 million (HK$38.4 million) were recognized in our statement
of profit or loss, and RMB10.5 million (HK$11.7 million) is directly attributable to the
issuance of Shares and will accordingly be deducted from equity. We estimate that additional
listing expenses of approximately RMB25.5 million (HK$28.0 million) (including
underwriting commissions of approximately RMB18.5 million (HK$20.4 million), based on
the Offer Price of HK$10.51 per Offer Share) will be incurred by our Company, RMB7.1
million (HK$7.9 million) of which is expected to be charged to our statements of profit or loss,
and approximately RMB18.4 million (HK$20.1 million) of which directly attributable to the
issue of Shares will be deducted from equity. Our listing expenses as a percentage of gross
proceeds is 11.1%, assuming an Offer Price of HK$10.51 per Share. The listing expenses above
are the latest practicable estimate for reference only, and the actual amount may differ from this
estimate.
FUTURE PLANS AND USE OF PROCEEDS
Assuming an Offer Price of HK$10.51 per Offer Share (being the mid-point of the
indicative Offer Price range), we estimate that we will receive net proceeds of approximately
HK$626.0 million from the Global Offering, after deducting underwriting commissions, fees
and estimated expenses payable by us in connection with the Global Offering. We currently
intend to use the net proceeds we expect to receive from the Global Offering for the following
purposes and in the amounts set out below:
 Approximately 74.3%, or HK$465 million, will be allocated to fund the expansion
and upgrade of our existing hospitals.
 Approximately 16.0%, or HK$100 million, will be allocated to fund potential
investment and mergers and acquisitions opportunities.
 Approximately 8.0%, or HK$50.0 million, will be allocated to fund the upgrade of
our “Smart Hospital”.
 Approximately 1.8%, or HK$11.0 million, will be used for our working capital and
general corporate purposes.
SUMMARY
–2 1–


--- page 31 ---
For details, see “Future Plans and Use of Proceeds” in this prospectus.
DIVIDEND
No dividend has been proposed, paid or declared by our Company since its incorporation,
or by any of the subsidiaries of our Group during the Track Record Period.
Our Company is a holding company incorporated in the Cayman Islands. Although
currently we do not have a formal dividend policy or a fixed dividend distribution ratio, our
Board may recommend a payment of dividend in the future after taking into account our
operations and earnings, capital requirements and surplus, general financial condition,
contractual restrictions, capital expenditure and future development requirements,
Shareholders’ interests and such other conditions and other factors which they may deem
relevant at such time. Any declaration and payment as well as the amount of the dividend shall
be proposed and approved by the Board in accordance with the Articles, the Cayman
Companies Act and any applicable laws and regulations. Any future declarations of dividend
may or may not reflect our historical declarations of dividend and will be at the absolute
discretion of our Directors. There is no assurance that dividends of any amount will be declared
or be distributed in any year.
REGULATORY REGIME FOR INVESTMENTS MADE BY TAIW ANESE INVESTORS
IN THE PRC
We are incorporated under the laws of the Cayman Islands and are ultimately controlled
by investors in Taiwan. We are subject to certain restrictions on foreign investments under
applicable PRC laws and regulations, including, among others, the Foreign Investment Law of
the PRC () (the “ Foreign Investment Law ”), unless
otherwise specified by relevant laws related to Taiwanese investors. Specifically, under the
Interim Measures for the Management of Sole Proprietorship Hospitals Established by
Taiwanese Service Providers in Mainland China (ίɽ௔ணͭዹ༟ᔼ৫၍ଣ
) (the “ Taiwanese Sole Proprietorship Hospitals Measures ”), Taiwanese service
providers may, upon the approval of the competent PRC authorities, establish wholly-owned
hospitals in the PRC. The establishment of sole proprietorship hospitals by Taiwanese service
providers in mainland China is limited to Shanghai, Jiangsu, Fujian, Guangdong, and Hainan
provinces. Taiwanese service providers can establish Taiwan funded wholly owned hospitals in
mainland China and independently choose to operate for profit or non-profit purposes. Based
on the above, notwithstanding under the Foreign Investment Law and other related rules and
regulations, the shareholding in medical institutions in the PRC by foreign investors shall not
exceed 70%, we, as a Taiwanese service provider under the Taiwanese Sole Proprietorship
Hospitals Measures, can establish wholly-owned hospitals in the PRC, provided that the
approvals from competent PRC authorities have been obtained.
Our two hospitals have obtained their respective Medical Institution Practice Licenses,
both valid until 2027 with the information of “type of ownership” registered as “others
(Taiwanese sole proprietorship)” as approved by competent health authorities. During the
SUMMARY
–2 2–


--- page 32 ---
Track Record Period and up to the Latest Practicable Date, we had never received any
additional requirements from any PRC government authorities regarding the Taiwanese sole
proprietorship status of our two hospitals. As advised by our PRC Legal Advisor, each of our
Nanjing BenQ Hospital and Suzhou BenQ Hospital had received all required approvals from
competent health and commerce authorities in accordance with the Taiwanese Sole
Proprietorship Hospitals Measures, and there are no ongoing conditions required to be fulfilled
by our hospitals to maintain their Taiwan sole proprietorship status under applicable PRC laws
and regulations.
As advised by our PRC Legal Advisor, the Taiwanese Sole Proprietorship Hospitals
Measures shall apply to our two hospitals upon and after our proposed Listing on the Stock
Exchange, given that (i) BenQ BM is ultimately owned by Qisda Corporation, a Taiwanese
investor, in accordance with the Interim Measures on Determining the Trans-investment of
Taiwanese Investors through a Third Place (),
(the “ Trans-Investment Measures ”) (ii) BenQ BM is as a deemed Taiwanese investor in
accordance with the Trans-Investment Measures, and (iii) Nanjing BenQ Hospital and Suzhou
BenQ Hospital are wholly owned by BenQ BM.
COMPLIANCE AND LEGAL PROCEEDINGS
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any non-compliance that, in the opinion of our Directors, is likely to have a material
adverse effect on our business, financial condition or results of operations. As confirmed by our
PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we
were not in violation of any applicable PRC laws and regulations that would have a material
adverse effect on our business, financial condition or result of operations.
We are subject to legal proceedings, disputes and claims that arise in the ordinary course
of business, which primarily included medical disputes brought by patients and/or their
families against our hospitals. Due to the nature of the healthcare industry and the inherent
risks in treating patients, especially patients with complex medical conditions requiring
intensive care or high-risk clinical procedures, we are exposed to risks of medical disputes
(including medical malpractice claims) that we cannot entirely eliminate. During the Track
Record Period and up to the Latest Practicable Date, we had a total of 303 medical disputes
at our hospitals that have resulted in or are likely to result in monetary compensation to our
patients and/or their families, regardless of whether such medical disputes had been resolved
or were undergoing direct negotiations or legal proceedings. Specifically,
 In terms of status, the majority of these 303 medical disputes have been fully settled
with immaterial compensation and/or waivers of treatment fees. As of the Latest
Practicable Date, 86 out of the 303 medical disputes remained unresolved and were
likely to result in monetary compensation to be paid by us.
SUMMARY
–2 3–


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 In terms of monetary amount, 31 out of the 303 medical disputes had a claimed,
court-awarded or compensated amount exceeding RMB300,000 for each dispute. As
of the Latest Practicable Date, five out of these 31 medical disputes remained
unresolved.
 In terms of patient fatality, 63 out of the 303 medical disputes involved patient
fatalities. As of the Latest Practicable Date, ten out of the 63 cases remained
unresolved, among which, two cases had a claimed amount exceeding RMB300,000.
 In terms of medical malpractice, three out of the 303 medical disputes involved
medical malpractice appraised by professional medical associations supervised by
relevant health administrative authorities. As of the Latest Practicable Date, one out
of these three cases remained unresolved.
Our Directors are of the view that none of the medical disputes that we experienced
during the Track Record Period and up to the Latest Practicable Date, individually or
collectively, had or would have any material adverse effect on our Group’s business operations,
financial conditions, and proposed Listing on the Stock Exchange. Having taken into account
the factors set out in “Business — Compliance and Legal Proceedings” and the views of the
Directors, PRC Legal Advisor and Frost & Sullivan, nothing has come to the Joint Sponsors’
attention that would reasonably cause them to cast doubt on the foregoing Directors’ views in
any material respect.
For more details, see “Business — Compliance and Legal Proceedings” in this
prospectus.
RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of
Overseas Securities Offering and Listing by Domestic Enterprises ( ྤʫΆุྤ̮೯БᗇՎ
) (the “ Trial Administrative Measures ”) and relevant supporting
guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Administrative
Measures, PRC domestic enterprises that directly or indirectly offer or list their securities in
an overseas market, which include (i) any PRC enterprise limited by shares; and (ii) any
offshore enterprise that conducts its business operations primarily in the PRC and contemplates
to offer or list its securities in an overseas market based on its onshore equities, assets or
similar interests, are required to file with the CSRC within three business days after its
application for overseas listing is submitted. We have timely filed with the CSRC, which was
officially accepted by the CSRC on April 17, 2024 and the CSRC issued the filing notice dated
January 20, 2025, confirming our completion of such filing. We are also proactively following
up on changes in laws and regulatory development and will carry out relevant work to ensure
continuous compliance with laws and regulations with the aid of external counsels, including
our PRC Legal Advisor. For details, see “Regulatory Overview — Regulations Relating to
Overseas Listings” in this prospectus.
SUMMARY
–2 4–


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In July 2025, we established two wholly-owned subsidiaries, namely Nanjing BenQ
Nursing and Suzhou BenQ Nursing, which will primarily engage in the provision of chronic
medical care and rehabilitation services. Both Nanjing BenQ Nursing and Suzhou BenQ
Nursing are expected to focus on services cater to individuals who do not meet the criteria for
inpatient hospitalization but still require ongoing rehabilitation or long-term care. By investing
in these nursing centers, we aim to address the growing demand for post-acute and long-term
care services, particularly among aging populations and patients with chronic illnesses. For
details, please refer to the section headed “History, Development and Corporate Structure —
Our Subsidiaries” in this prospectus.
For the ten months ended October 31, 2025, Nanjing BenQ Hospital recorded number of
inpatient visits of 46.3 thousand, increasing from inpatient visits of 44.0 thousand for the same
period of 2024. Nanjing BenQ Hospital also recorded number of outpatient visits of 1,216.0
thousand for the ten months ended October 31, 2025, increasing from outpatient visits of
1,191.1 thousand for the same period of 2024. Nevertheless, Suzhou BenQ Hospital recorded
number of inpatient visits of 25.7 thousand for the ten months ended October 31, 2025,
decreasing from inpatient visits of 27.3 thousand for the same period of 2024. Suzhou BenQ
Hospital also recorded number of outpatient visits of 559.1 thousand for the ten months ended
October 31, 2025, decreasing from outpatient visits of 595.0 thousand for the same period of
2024. The decreases in patient visits to our Suzhou BenQ Hospital were mainly due to the fact
that the prevalence of influenza in the beginning of 2024 was more severe as compared to that
in the same period of 2025, leading to the fluctuation in patient visits.
Notwithstanding the increase in inpatient and outpatient visits of our Nanjing BenQ
Hospital, our gross profit and gross profit margin for the ten months ended October 31, 2025
moderately decreased compared to the same period in 2024, primarily due to (i) the increased
depreciation and amortization and employee benefit expenses in relation to the ramp-up period
for the specialty disciplines building (ᅽ) at our Nanjing BenQ Hospital; and (ii) the
downward adjustment of DRG reimbursement rates of our Suzhou BenQ Hospital by Suzhou
Healthcare Security Administration, in accordance with the national healthcare insurance
policy, starting from the second half of 2024.
We expect to record a decrease in net profit for 2025 , primarily due to (i) the increasing
depreciation and amortization and employee benefit expenses in relation to the ramp-up period
for the specialty disciplines building (ᅽ) at our Nanjing BenQ Hospital, and (ii) the
downward adjustment of DRG reimbursement rates of our Suzhou BenQ Hospital by Suzhou
Healthcare Security Administration, in accordance with the national healthcare insurance
policy, starting from the second half of 2024.
Our Directors confirmed that, up to the date of this prospectus, there had been no material
adverse change in our financial, operational or trading position since June 30, 2025, being the
end of the periods reported in the Accountants’ Report in Appendix I to this prospectus.
SUMMARY
–2 5–


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In this prospectus, unless the context otherwise requires, the following terms shall
have the following meanings. Certain technical terms are explained in “Glossary of
technical terms”.
“Accountants’ Report ” the accountants report of our Company, the text of which
is set out in Appendix I to this prospectus
“affiliate(s) ” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC ” Accounting and Financial Reporting Council of Hong
Kong
“Articles ”o r“ Articles of
Association ”
the articles of association of our Company conditionally
adopted on December 3, 2025 with effect from the
Listing Date
“associate(s) ” has the meaning ascribed to it under the Listing Rules
“BenQ BM ” BenQ BM Holding Corp., a private limited company
incorporated under the laws of Malaysia on October 30,
2003 and a wholly-owned subsidiary of our Company
“BenQ Corp. ” BenQ Corp. (ʮ̡), a joint stock
company incorporated under the laws of Taiwan and will
be a Controlling Shareholder upon Listing. As of the
Latest Practicable Date, it was a wholly-owned
subsidiary of Qisda Corporation, details of which are set
out in “Substantial Shareholders” and “Relationship With
Our Controlling Shareholders” in this prospectus
“BenQ Healthcare Consulting ” BenQ Healthcare Consulting Corporation (ਿᔼਕ၍ଣ
ʮ̡), a company limited by shares
incorporated under the laws of Taiwan on February 5,
2009 and a wholly-owned subsidiary of our Company
“BenQ L ” BenQ (L) Corp. (now known as Qisda (L) Corp.), a
company incorporated under the laws of Malaysia and a
wholly-owned subsidiary of Qisda Corporation (our
Controlling Shareholder)
“Board ” the board of Directors
DEFINITIONS
–2 6–


--- page 36 ---
“business day ” any day (other than a Saturday, Sunday or public holiday
in Hong Kong) on which banks in Hong Kong are
generally open for normal banking business
“Cayman Companies Act ” the Companies Act (As Revised) of the Cayman Islands,
Cap. 22 (Law 3 of 1961), as amended or supplemented or
otherwise modified from time to time
“CCASS ” the Central Clearing and Settlement System established
and operated by HKSCC
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance ”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong)
“Companies Ordinance ” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong)
“Company ”o r“ our Company ”
or “ BBHC ”
BenQ BM Holding Cayman Corp. (΅Ϟ
ʮ̡), an exempted company incorporated in the
Cayman Islands with limited liability on January 5, 2009
“connected person(s) ” has the meaning ascribed to it under the Listing Rules
“connected transaction(s) ” has the meaning ascribed to it under the Listing Rules
“Controlling Shareholder(s) ” has the meaning ascribed to it under the Listing Rules,
and unless the context otherwise requires, collectively
refers to Qisda Corporation, Darly2 V enture, Darly
V enture, BenQ Corp. and Darly V enture (L) as detailed in
“Relationship With Our Controlling Shareholders” in this
prospectus
“CSRC ” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Darly Venture ” Darly V enture Inc. (ʮ̡), a joint stock
company with limited liability incorporated under the
laws of Taiwan and will be a Controlling Shareholder
upon Listing. As of the Latest Practicable Date, it was a
wholly-owned subsidiary of Qisda Corporation, details of
which are set out in “Substantial Shareholders” and
“Relationship With Our Controlling Shareholders” in this
prospectus
DEFINITIONS
–2 7–


--- page 37 ---
“Darly Venture (L) ” Darly V enture (L) Ltd, a limited liability company
incorporated under the laws of Malaysia and will be a
Controlling Shareholder upon Listing. As of the Latest
Practicable Date, it was a wholly-owned subsidiary of
Qisda Corporation, details of which are set out in
“Substantial Shareholders” and “Relationship With Our
Controlling Shareholders” in this prospectus
“Darly2 Venture ” Darly2 V enture, Inc. (ʮ̡), a
limited liability company incorporated under the laws of
Taiwan and will be a Controlling Shareholder upon
Listing. As of the Latest Practicable Date, it was a
wholly-owned subsidiary of BenQ Corp., details of which
are set out in “Substantial Shareholders” and
“Relationship With Our Controlling Shareholders” in this
prospectus
“Designated Bank ” HKSCC Participant’s EIPO Designated Bank
“Director(s) ” the director(s) of our Company
“Donghui Hospital ” Guigang Donghui Hospital Co., Ltd. (ฯᔼ৫Ϟ
ʮ̡), a wholly-owned subsidiary of Donghui Medical
“Donghui Medical ” Guigang Donghui Medical Investment Co., Ltd. ( ൮ಥ̹
ʮ̡), a limited liability company
incorporated in the PRC on November 30, 2017 and an
associate of the Group during the Track Record Period,
details of which are set out in “Financial Information” in
this prospectus
“Extreme Conditions ” extreme conditions caused by a super typhoon as
announced by the government of Hong Kong
“FINI ” Fast Interface for New Issuance, an online platform
operated by HKSCC that is mandatory for admission to
trading and the collection and processing of specified
information on subscription in and settlement for all new
listings in Hong Kong
“General Rules of HKSCC ” the terms and conditions regulating the use of HKSCC’s
services, as may be amended or modified from time to
time and where the context so permits, shall include the
HKSCC Operational Procedures
DEFINITIONS
–2 8–


--- page 38 ---
“Global Offering ” the Hong Kong Public Offering and the International
Offering
“Group ”, “ our Group ”, “ we”,
“us”, or “ our”
the Company and its subsidiaries from time to time, and
where the context requires, in respect of the period prior
to our Company becoming the holding company of its
present subsidiaries, such subsidiaries as if they were
subsidiaries of our Company at the relevant time
“Guangxi ” Guangxi Zhuang Autonomous Region, the People’s
Republic of China
“Guide for New Listing
Applicants ”
the Guide for New Listing Applicants published by the
Stock Exchange effective on January 1, 2024, as amended
from time to time
“HK”o r“ Hong Kong ” the Hong Kong Special Administrative Region of the
People’s Republic of China
“HK$”, “ HK dollars ”o r“ Hong
Kong dollars ”
Hong Kong dollars, the lawful currency of Hong Kong
“HKFRS ” Hong Kong Financial Reporting Standard
“HKSCC ” Hong Kong Securities Clearing Company Limited
“HKSCC EIPO ” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your designated
HKSCC Participant’s stock account through causing
HKSCC Nominees to apply on your behalf, including by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions
via HKSCC’s FINI system to apply for the Hong Kong
Offer Shares on your behalf
“HKSCC Nominees ” HKSCC Nominees Limited, a wholly owned subsidiary
of the HKSCC
DEFINITIONS
–2 9–


--- page 39 ---
“HKSCC Operational
Procedures ”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operation and functions of the CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant ” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong Offer Shares ” the 6,700,000 Shares being initially offered for
subscription in the Hong Kong Public Offering (subject
to reallocation as described in “Structure of the Global
Offering”)
“Hong Kong Public Offering ” the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong at the Offer Price (plus
brokerage of 1%, SFC transaction levy of 0.0027%,
AFRC transaction levy of 0.00015% and Stock Exchange
trading fee of 0.00565%) on the terms and subject to the
conditions described in this prospectus, as further
described in “Structure of the Global Offering — The
Hong Kong Public Offering”
“Hong Kong Share Registrar ” Computershare Hong Kong Investor Services Limited
“Hong Kong Takeovers Code ”
or “ Takeovers Code ”
Codes on Takeovers and Mergers and Share Buy-backs
issued by the SFC
“Hong Kong Underwriters ” The underwriters of the Hong Kong Public Offering as
listed in “Underwriting — Hong Kong Underwriters”
“Hong Kong Underwriting
Agreement ”
the underwriting agreement dated December 10, 2025
relating to the Hong Kong Public Offering, entered into
by, among others, our Company, the Joint Sponsors, the
Overall Coordinators and the Hong Kong Underwriters,
as further described in “Underwriting — Underwriting
Arrangements and Expenses — Hong Kong Public
Offering — Hong Kong Underwriting Agreement”
DEFINITIONS
–3 0–


--- page 40 ---
“IFRS ” International Financial Reporting Standards, as issued by
the International Accounting Standards Board
“Independent Third Party(ies) ” any entity or person who is not a connected person of our
Company within the meaning ascribed to it under the
Listing Rules to the knowledge of our Directors after all
reasonable enquiries
“International Offer Shares ” the 60,300,000 Shares being initially offered for
subscription under the International Offering (subject to
reallocation as described in “Structure of the Global
Offering”)
“International Offering ” the conditional placing of the International Offer Shares
at the Offer Price outside the United States in offshore
transactions in accordance with Regulation S or any other
available exemption from the registration requirements
under the U.S. Securities Act, as further described in
“Structure of the Global Offering”
“International Underwriters” the underwriters of the International Offering
“International Underwriting
Agreement ”
the international underwriting agreement, expected to be
entered into on or about December 18, 2025, relating to
the International Offering, by, among others, our
Company, the Overall Coordinators and the International
Underwriters, as further described in “Structure of the
Global Offering — The International Offering”
“Joint Bookrunners ”,
“Joint Global Coordinators ”,
“Joint Lead Managers ” and
“Overall Coordinators ”
the joint bookrunners, the joint global coordinators, the
joint lead managers and the overall coordinators as
named in “Directors and Parties Involved in the Global
Offering”, respectively
“Joint Sponsors ” the joint sponsors of the Listing as named in “Directors
and Parties Involved in the Global Offering”
“Latest Practicable Date ” December 3, 2025, being the latest practicable date for
ascertaining certain information in this prospectus before
its publication
“Listing ” the listing of the Shares on the Main Board
DEFINITIONS
–3 1–


--- page 41 ---
“Listing Committee ” the Listing Committee of the Stock Exchange
“Listing Date ” the date, expected to be on or about Monday, December
22, 2025, on which the Shares are to be listed and on
which dealings in the Shares are to be first permitted to
take place on the Stock Exchange
“Listing Rules ” the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited
“Macau ” the Macau Special Administrative Region of the People’s
Republic of China
“Main Board ” the stock exchange (excluding the option market)
operated by the Stock Exchange which is independent
from and operates in parallel with the Growth Enterprise
Market of the Stock Exchange
“mainland China ”o r“ PRC” the People’s Republic of China which, for the purposes of
this prospectus and for geographical reference only,
except where the context requires otherwise, exclude
Hong Kong, Macau and Taiwan
“Memorandum ”o r
“Memorandum of
Association ”
the memorandum of association of our Company
conditionally adopted on December 3, 2025, with effect
from the Listing Date
“Nanjing BenQ Hospital ” Nanjing BenQ Medical Center Co., Ltd. (ਿᔼ৫
ʮ̡), a limited liability company incorporated in
the PRC on November 11, 2003 and a wholly-owned
subsidiary of our Company
“Nanjing BenQ Hospital
Management ”
BenQ (Nanjing) Hospital Management Consulting
Co., Ltd. (ਿ(ԯ)ʮ̡), a limited
liability company incorporated in the PRC on November
14, 2005 and a wholly-owned subsidiary of our Company
“Nanjing BenQ Nursing ” Nanjing BenQ Nursing Center Co., Ltd. (ਿᚐଣ৫
ʮ̡), a limited liability company incorporated in
the PRC on July 9, 2025 and a wholly-owned subsidiary
of Nanjing BenQ Hospital
DEFINITIONS
–3 2–


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“Nanjing Yinxia Healthcare ” Nanjing Yinxia Healthcare Industry Development
Co., Ltd. (ʮ̡), a limited
liability company incorporated in the PRC on March 6,
2018 and an associate of the Group during the Track
Record Period, details of which are set out in “Financial
Information” in this prospectus
“NHC” the National Health Commission of the PRC ( ʕശɛ͏΍
ึ)
“NTD”o r“ NT$” New Taiwan dollar(s), the lawful currency of Taiwan
“Offer Price ” the final offer price per Offer Share (exclusive of
brokerage, SFC transaction levy, AFRC transaction levy
and Stock Exchange trading fee), expressed in Hong
Kong dollars, at which Hong Kong Offer Shares are to be
subscribed for pursuant to the Hong Kong Public
Offering and International Offer Shares are to be offered
pursuant to the International Offering, to be determined
as described in “Structure of the Global Offering —
Pricing and Allocation”
“Offer Share(s) ” the Hong Kong Offer Shares and the International Offer
Shares
“PRC Legal Advisor ” Commerce & Finance Law Offices, our legal advisor as
to PRC laws
“Pre-IPO Investment(s) ” the investment(s) in our Company undertaken by the
Pre-IPO Investors prior to the Global Offering, the details
of which are set out in “History, Development and
Corporate Structure — Pre-IPO Investments”
“Pre-IPO Investor(s)” the investors in our Company prior to the Global Offering
as named in “History, Development and Corporate
Structure — Pre-IPO Investments — Information about
our Pre-IPO Investors”
“Pre-IPO Share Option Plan ” the share option plan which first became effective in
November 2018, as amended and adopted by our
Company on March 22, 2024, as amended from time to
time, the principal terms of which are set out in
“Statutory and General Information — D. Pre-IPO Share
Option Plan” in Appendix V to this document
DEFINITIONS
–3 3–


--- page 43 ---
“Price Determination Date ” the date, expected to be on or before Thursday, December
18, 2025 and in any event no later than 12:00 noon on
Thursday, December 18, 2025, on which the Offer Price
is to be fixed for the purposes of the Global Offering
“Qisda Corporation ” Qisda Corporation (ʮ̡), a joint
stock limited company incorporated under the laws of
Taiwan and is listed on the Taiwan Stock Exchange (stock
code: 2352.TW). Qisda Corporation will be a Controlling
Shareholder upon Listing, details of which are set out in
“Substantial Shareholders” and “Relationship With Our
Controlling Shareholders” in this prospectus
“Qisda Entities ” Qisda Corporation and its subsidiaries, who are the
Shareholders of the Company as of the Latest Practicable
Date
“Qisda Group ” Qisda Corporation and, except where the context
otherwise requires, all of its subsidiaries and their
respective branches and business and, for the purpose of
this prospectus, excluding our Group
“Regulation S ” Regulation S under the U.S. Securities Act
“RMB”o r“ Renminbi ” Renminbi, the lawful currency of the PRC
“SAFE ” the State Administration of Foreign Exchange of the PRC
(̮ි၍ଣ҅)
“SAMR ” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SASAC ” the State-owned Assets Supervision and Administration
Commission of the State Council of the PRC ( ʕശɛ͏΍
ึ)
“SAT” the State Taxation Administration of the PRC ( ʕശɛ͏
೼ਕᐼ҅)
“SFC” Securities and Futures Commission of Hong Kong
“SFO”o r“ Securities and
Futures Ordinance ”
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
DEFINITIONS
–3 4–


--- page 44 ---
“Share(s) ”o r“ Ordinary
Share(s) ”
ordinary share(s) in the capital of our Company with a
nominal value of US$1.00 each
“Shareholder(s) ” holder(s) of our Share(s)
“Stock Exchange ” The Stock Exchange of Hong Kong Limited
“subsidiary ”o r“ subsidiaries ” has the meaning ascribed to it in section 15 of the
Companies Ordinance
“substantial shareholder(s) ” has the meaning ascribed to it in the Listing Rules
“Suzhou BenQ Hospital ” Suzhou BenQ Medical Center Co., Ltd. (ਿᔼ৫Ϟ
ʮ̡), a limited liability company incorporated in the
PRC on July 7, 2004 and a wholly-owned subsidiary of
our Company
“Suzhou BenQ Investment ” Suzhou BenQ Investment Co., Ltd. (ʮ
̡), a limited liability company incorporated in the PRC
on September 16, 2015 and a wholly-owned subsidiary of
our Company
“Suzhou BenQ Nursing ” Suzhou BenQ Nursing Center Co., Ltd. (ਿᚐଣ৫
ʮ̡), a limited liability company incorporated in
the PRC on July 24, 2025 and a wholly-owned subsidiary
of Suzhou BenQ Hospital
“Taiwan” Taiwan, province of the People’s Republic of China
“Track Record Period ” the three financial years ended December 31, 2022, 2023
and 2024, and the six months ended June 30, 2025
“U.S. ”, “ US”o r“ United States ” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“U.S. dollars ”, “ US dollars ”o r
“US$”
United States dollars, the lawful currency of the United
States
“U.S. SEC ” the Securities and Exchange Commission of the United
States
“U.S. Securities Act ” United States Securities Act of 1933 and the rules and
regulations promulgated thereunder
DEFINITIONS
–3 5–


--- page 45 ---
“Underwriters ” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements ” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“VAT” value-added tax
‘‘White Form eIPO ’’ the application for Hong Kong Offer Shares to be issued
in the applicant’s own name by submitting applications
online through the designated website of White Form
eIPO Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider ”
Computershare Hong Kong Investor Services Limited
“%” per cent
DEFINITIONS
–3 6–


--- page 46 ---
“AI” Artificial Intelligence
“angiography” visualization of blood vessels by means of injecting
radiographic substance into the blood stream
“associate chief doctor” a doctor obtaining associate professional title will be
recognized as an associate chief doctor, which is the
second professional rank for doctors in the PRC after
chief doctor. An associate chief doctor may supervise
attending and resident doctors, direct research work of a
specific field, and typically handle complex medial cases
“attending doctor” an attending doctor may supervise resident doctors and
typically undertake medical treatment, teaching, research
and disease prevention work
“CAGR” compound annual growth rate, a financial metric used to
measure the annualized growth rate of an investment or
business over a specified period of time
“cardiovascular” relating to or affecting heart and blood vessels
“chief doctor” a doctor granted the senior professional title will be
recognized as a chief doctor, which is the highest
professional rank for doctors in the PRC. A chief doctor
is generally in charge of a specific clinical department
“COVID-19” Novel Coronavirus (COVID-19) or Novel Coronavirus
Pneumonia, a respiratory illness caused by a new strain
of coronavirus and characterized especially by fever,
cough, and shortness of breath and may progress to
pneumonia and respiratory failure
“critical care” healthcare services provided to seriously or critically ill
patients who are at risk of, or are recovering from
conditions that may be life-threatening
“CT” computed tomography, a medical imaging technique that
uses X-rays and computer processing to create detailed
cross-sectional images of the body
“dialysis” the clinical purification of blood by dialysis, as a
substitute for the normal function of the kidney
GLOSSARY OF TECHNICAL TERMS
–3 7–


--- page 47 ---
“DRG” diagnosis-related group, a system commonly used in the
healthcare industry to classify and categorize hospital
inpatient stays into groups based on similar clinical
conditions and resource requirements, primarily for
reimbursement purposes by government insurance payer
“DSA” digital subtraction angiography, a medical imaging
technique which combines angiography and digital image
processing to provide clear images of blood vessels to
assist in the detection, diagnosis, and treatment of
vascular diseases, used to observe and evaluate the
condition of the vascular system
“endoscopy” the examination and/or treatment of the interior of body
organs, joints or cavities using miniaturized camera
systems inserted into the body through openings or small
incisions
“gastroenterology” the branch of medicine which deals with the diagnosis
and treatment of diseases and disorders of the digestive
system
“general hospital” a hospital that provides multi-disciplinary healthcare
services including outpatient, inpatient and diagnosis
“geriatrics” the branch of medicine that deals with problems and
diseases of old age and aging people
“GFA” gross floor area
“gynecology” the branch of medicine that deals with health care for
women, in particular the diagnosis and treatment of
disorders affecting the female reproductive system
“healthcare services” include (i) medical services, which are services dedicated
to the prevention, diagnosis, and treatment of diseases,
illnesses, injuries or dysfunctions; and (ii) other
healthcare services, which are services dedicated to acute
care, rehabilitation, home care and similar healthcare
services, as well as healthcare education and infectious
disease prevention and control
GLOSSARY OF TECHNICAL TERMS
–3 8–


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“hemodialysis” a treatment method for individuals with end-stage kidney
disease or acute kidney injury, where an artificial kidney
machine is used to remove waste products and excess
fluids from the blood
“ICU” intensive care unit, a specially equipped unit that
provides intensive care to patients who suffer from
serious injuries or illnesses generally through a multi-
disciplinary team of healthcare professional
“immunotherapy” a type of treatment that fights disease by activating
enhancing, or regulating the function of a patient’s own
immune system
“infectious disease” a specialty of medicine that focuses on the prevention,
diagnosis and treatment of infectious diseases
“internal medicine” the branch of medicine dealing with the diagnosis and
non-surgical treatment of diseases, especially of internal
organ systems
“internet hospitals” a new type of medical institutions approved by the
provincial health commission or municipal health
commission primarily consists of offshoots of offline
medical institutions and online medical platforms. After
completing filing on relevant regulatory platforms and
registration with the internet hospitals, doctors usually
could provide online consultation and diagnosis,
follow-up consultation for some common diseases and
chronic diseases, as well as family doctor health
management services
“inflammatory bowel disease” disorders involving long-standing inflammation of
tissues in digestive tract
“ISO” International Organization for Standardization, a non-
governmental organization that develops and publishes
international standards
“JCI” the Joint Commission International, an international arm
of The Joint Commission. The Joint Commission is an
independent, not-for-profit organization which accredits
and certifies healthcare organizations and programs
GLOSSARY OF TECHNICAL TERMS
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“Jiangsu Provincial Key Clinical
Discipline”
a designation awarded by the Jiangsu Provincial Health
Commission to recognize clinical departments that
demonstrate excellence in medical care, teaching, and
research, and grant them priority access to provincial
resources, funding, and policy support
“Jiangsu Provincial Key Clinical
Discipline Construction Unit”
a clinical department selected by the Jiangsu Provincial
Health Commission to undergo focused development
through targeted investment and support, with the goal of
eventually achieving full Provincial Key Clinical
Discipline status upon meeting established standards
“kWh” kilowatt hour, a unit of energy
“medical examination” a process by which a medical professional investigates
the body of a patient for symptoms of disease, which aids
in determining the correct diagnosis and devising the
treatment plan
“Medical Insurance Designated
Medical Institutions”
medical institutions designated by the relevant local
medical insurance authority as ones that are permitted to
treat patients covered by public medical insurance
programs
“minimally invasive” an advanced surgical technique that results in less
injuries to the body than with open surgeries. Such
techniques minimize recovery time, blood loss,
postsurgical complications, surgical traumas and
infection risks and result in more aesthetically pleasing
surgical wounds than conventional open surgeries for the
same condition
“MRI” magnetic resonance imaging, a type of medical imaging
technique to visualize detailed internal structure by
making use of the property of nuclear magnetic resonance
to image the nuclei of atoms inside the body
“multi-disciplinary team” a healthcare team involving healthcare professionals
from a range of disciplines collaborating with each other
for the purpose of providing comprehensive healthcare
services to address as many of the patient’s needs as
possible, including planning and implementing treatment
programs for complex medical conditions
GLOSSARY OF TECHNICAL TERMS
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“multi-site doctors” licensed doctors who are qualified and permitted to
practice at multiple sites in the PRC
“multi-site practice” a doctor providing medical services in two or more
medical institutions in the PRC within his or her
practicing period
“Nanjing Municipal Key Medical
Disciplines”
a designation awarded by the Nanjing Municipal Health
Commission to recognize clinical departments that
demonstrate excellence in medical care, teaching, and
research, and grant them priority access to municipal
resources, funding, and policy support
“National Key Clinical
Discipline”
a designation awarded by the NHC through the National
Key Clinical Specialties Construction Project, a major
healthcare initiative launched by the NHC in 2009. It
recognizes clinical departments that demonstrate
excellence in medical care, teaching, and research, and
grants them priority access to resources, funding, and
policy support
“near-miss situation” a situation that could have had an adverse patient
consequence but was avoided
“nephrology” a medical specialty that focuses on the diagnosis,
treatment, and management of kidney-related diseases
and disorders
“neurosurgery” surgery performed on the nervous system, especially the
brain and spinal cord
“NHFPC” the National Health and Family Planning Commission of
the PRC (ึ),
which was reformed from the former Ministry of Health
and the National Population and Family Planning
Commission in March 2013, and its predecessors for the
purposes of this prospectus
“nosocomial infection” an infection that is contracted from the environment or
staff of a healthcare facility
“nuclear medicine” the branch of medical specialty that applies radioactive
substances in the research, diagnosis, and treatment of
diseases
GLOSSARY OF TECHNICAL TERMS
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“obstetrics” the branch of medicine that deals with the care of women
during pregnancy, childbirth, and the recuperative period
following delivery
“oncology” a branch of medicine that focuses on the prevention,
diagnosis, treatment, and research of cancer
“orthopedics” medical specialty that focuses on injuries and diseases of
the musculoskeletal system, which includes bones, joints,
ligaments, tendons, muscles and nerves
“pathology” a branch of medical science relating to the examination of
organs, tissues and bodily fluids in order to make a
diagnostic decision
“pediatrics” the branch of medicine that deals with diagnosis and
treatment of diseases of the infants, children and
adolescents
“PET” positron emission tomography, a functional imaging
technique
“PET-CT” positron emission tomography-computed tomography, a
nuclear medical technology which combines, in a single
gantry, a positron emission tomography scanner and an
X-ray computed tomography scanner, to acquire
sequential images from both devices in the same session
and combine such images into a single superposed
(co-registered) image, enabling the more precise
alignment or correlation between the functional imaging
obtained by positron emission tomography scanning and
the anatomic imaging obtained by computed tomography
scanning
“radiodiagnosis” diagnosis by means of radiography or radioscopy
“radiology” a medical specialty that uses imaging technologies to
diagnose and treatment of diseases
“radiotherapy” a treatment that uses high energy to kill malignant cancer
cells or other benign tumor cells
“registered bed” bed that is registered in a medical institution’s practicing
license
GLOSSARY OF TECHNICAL TERMS
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“resident doctor” the entry professional rank for physicians in the PRC. A
resident physician must have a medical degree, and may
undertake basic tasks such as patient’s medical record
preparation and practice medicine under the supervision
of attending physicians or other superiors
“SCI” Science Citation Index
“sq.m.” square meter(s)
“thoracic surgery” surgery performed on the heart, lungs, esophagus, and
other organs in the chest
“traumatology” the branch of medicine that deals with serious wounds
and injuries and the associated surgical and
reconstruction procedures
“urology” a specialty field of medicine that focuses on the
diagnosis, treatment, and management of diseases of the
urinary system, including the kidneys, bladder, urethra,
and prostate
“X-ray” a type of radiation that can pass through most solid
materials, with wavelength ranging from 0.01 to ten nm,
which is commonly used for medical imaging
examination
GLOSSARY OF TECHNICAL TERMS
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Certain statements in this prospectus are forward-looking statements that are, by their
nature, subject to significant risks and uncertainties. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions, future events, or
performance (often, but not always, through the use of words or phrases such as ‘will’,
‘expect’, ‘anticipate’, ‘estimate’, ‘believe’, ‘going forward’, ‘ought to’, ‘may’, ‘seek’,
‘should’, ‘intend’, ‘plan’, ‘projection’, ‘could’, ‘vision’, ‘goals’, ‘aim’, ‘aspire’, ‘objective’,
‘target’, ‘schedules’, and ‘outlook’) are not historical facts, are forward-looking and may
involve estimates and assumptions and are subject to risks (including but not limited to the risk
factors detailed in this prospectus), uncertainties and other factors some of which are beyond
our Company’s control and which are difficult to predict. Accordingly, these factors could
cause actual results or outcomes to differ materially from those expressed in the forward-
looking statements.
Our forward-looking statements have been based on assumptions and factors concerning
future events that may prove to be inaccurate. Those assumptions and factors are based on
information currently available to us about the businesses that we operate. The risks,
uncertainties and other factors, many of which are beyond our control, that could influence
actual results include, but are not limited to:
 our operations and business prospects;
 our business and operating strategies and our ability to implement such strategies;
 our ability to develop and manage our operations and business;
 our ability to complete the development and obtain the relevant requisite regulatory
approvals of our product candidates;
 our ability to commercialize our approved products in a timely manner;
 our expectations with respect to our ability to acquire and maintain regulatory
licenses or permits;
 our ability to control costs and expenses;
 our ability to identify and satisfy user demands and preferences;
 our ability to maintain good relationships with business partners;
 the actions and developments of our competitors;
 changes to regulatory and operating conditions in the industry and geographical
markets in which we operate;
FORW ARD-LOOKING STATEMENTS
–4 4–


--- page 54 ---
 relevant government policies, legislations and regulations relating to our business
and industry, as well as interpretation and positions adopted by, and actions taken
by, the relevant regulatory agencies; and
 all other risks and uncertainties described in “Risk Factors”.
Since actual results or outcomes could differ materially from those expressed in any
forward-looking statements, we strongly caution investors against placing undue reliance on
any such forward-looking statements. Any forward-looking statement speaks only as of the
date on which such statement is made, and, except as required by the Listing Rules, we
undertake no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made or to reflect the occurrence of
unanticipated events. Statements of, or references to, our intentions or those of any of our
Directors are made as of the date of this prospectus. Any such intentions may change in light
of future developments.
All forward-looking statements in this prospectus are expressly qualified by reference to
this cautionary statement.
FORW ARD-LOOKING STATEMENTS
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An investment in our Shares involves significant risks. You should carefully consider
all of the information in this prospectus, including the risks and uncertainties described
below, before making an investment in our Shares. The following is a description of what
we consider to be our material risks. Any of the following risks could have a material and
adverse effect on our business, financial condition and results of operations. In any such
case, the market price of our Shares could decline, and you may lose all or part of your
investment. These factors are contingencies that may or may not occur , and we are not
in a position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in the section
titled “Forward-Looking Statements” of this prospectus.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categorized these risks and uncertainties into: (i) key
risks relating to our business, industry, regulatory compliance, general operations and financial
prospects; (ii) risks relating to our business and industry; (iii) risks relating to regulatory
compliance; (iv) risks relating to our financial position and need for additional capital; (v) risks
relating to our general operations; and (vi) risks relating to the Global Offering. Y ou should
consider our business and prospects in light of the challenges we face, including those
discussed in this section.
KEY RISKS RELATING TO OUR BUSINESS, INDUSTRY, REGULATORY
COMPLIANCE, GENERAL OPERATIONS AND FINANCIAL PROSPECTS
We conduct our business in a heavily regulated industry and are subject to extensive
regulatory requirements.
We are subject to laws and regulations at the national, regional and local levels as a
private hospital in the PRC. Such laws and regulations are mainly relating to (i) the quality and
use of medical facilities, equipment, supplies and services; (ii) procurement, usage and storage
of pharmaceuticals, medical equipment and medical consumables; (iii) the licensing and
number of healthcare facilities, hospital beds and medical professionals; (iv) the discharge and
disposal of pollutants and medical waste; (v) anti-corruption and anti-bribery; (vi) the
confidentiality and safekeeping of patient’s medical records; and (vii) data privacy and
protection. The above list of certain regulated areas is not exhaustive. For details, see
“Regulatory Overview” in this prospectus. Due to the complexity of the regulatory
environment, we cannot assure you that subsequent laws and regulations would not render our
operations non-compliant or that we would always be in full compliance with applicable laws
and regulations. Besides, there can be no assurance that there will not be additional laws or
regulations on healthcare services. We cannot assure you that we will always be able to meet
any additional requirements imposed in the future on hospitals. In the event that we must
remedy any violations, we may be required to modify our business models in a manner that
undermines our attractiveness to our customers. In each case, our business, financial condition
and results of operations may be materially and adversely affected.
RISK FACTORS
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Announced and unannounced inspections by regulators may be carried out periodically at
our hospitals depending on the applicable regulatory requirements. Any failure to comply with
laws or regulations, the receipt of an unsatisfactory rating in an inspection, a determination of
regulatory non-compliance, a material administrative penalty or any failure to rectify any
material deficiencies cited in an inspection report could, depending on the nature and severity,
result in reputational damage, financial losses, judicial and administrative penalties, conditions
being placed on our licenses, revocation or suspension of our licenses or downsizing or
cessation of the existing services provided by us. For instance, any irregularities with our fee
charging practices, payment system, or prescribing activities of our doctors, especially those
deemed by the competent authorities upon their inspections to have resulted in payments in
excess of the reimbursable insurance scope subjecting to evolving implementation polices and
interpretations, could lead to administrative penalties such as confiscation of payments
collected and/or fines. Any of these consequences could have a material adverse effect on our
business, results of operations and prospects.
Changes in the PRC’s regulatory regime for the healthcare services industry, particularly
changes in healthcare reform policies, may have a material adverse effect on our business.
In 2009, the PRC government unveiled its healthcare reform plan, which aims to ensure
that every citizen has access to affordable basic healthcare. Since then, the PRC government
has issued new policies addressing the affordability, accessibility and quality of healthcare
services, public medical insurance coverage, as well as the reform of public hospitals, and has
called for additional government spending on healthcare.
Our business and operations benefited directly from such policies and we expect our
future growth will largely be driven by these policies. For example, the Several Opinions of the
State Council on Promoting the Development of Healthcare Service Industry (ڮ׵
ʍจԈ), which was promulgated by the State Council on September
28, 2013, encourages the private sector to invest in the healthcare service industry by various
means, and proposes to take measures to further relax the limitations for establishing hospitals
based on Sino-foreign joint venture and cooperation, and gradually expand the pilot project for
qualified foreign capital to set up wholly foreign-owned medical institutions. However, these
policies may change significantly in the future or become unfavorable to our business and
operations. Future legislative changes may, among other things, limit private or foreign
investment in healthcare services, change reimbursement rates for healthcare services provided
to publicly insured patients, regulate the treatment fees permitted to be charged. Any such
adverse change in the PRC’s regulatory regime for the healthcare services industry could have
a material and adverse effect on our business.
Moreover, the PRC government has issued multiple regulations promoting the reform of
the “separation of prescribing and dispensing” (࢕in public hospitals by implementing
pharmaceutical zero-markup policy (ഄ) and restricting in-hospital earnings from
pharmaceutical selling activities. For details, see “Regulatory Overview — Regulations on the
Reform of Medical Institution — Regulations on Separation of Prescribing and Dispensing” in
this prospectus. Our hospitals are private for-profit general hospitals and are not subject to the
RISK FACTORS
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separation of prescribing and dispensing policy. However, as Medical Insurance Designated
Medical Institutions, our hospitals voluntarily follow the pharmaceutical zero-markup policy,
pricing pharmaceuticals at a tariff similar to public hospitals in the same region. Having said
that, changes in related policy will still pose challenges for us, as we may be required to
continuously adjust our operations to comply with new regulations. Stricter scrutiny on
pharmaceutical sales may also result in increased compliance cost and thereby impact our
financial performance. Furthermore, as the separation of prescribing and dispensing policy has
effectively increased the transparency of pharmaceutical sales and prescription practices in
public hospitals, competition between public and private hospitals may intensify, thereby
affecting our market share.
If we become subject to additional pricing guidelines on medical services,
pharmaceuticals, medical equipment and medical consumables, our revenue may be
adversely affected.
We are affected by pricing guidelines on healthcare services and pharmaceutical products.
The Notice on the Implementation of Market Adjusted Prices in Healthcare Services by
Non-Public Medical Institutions (ٙ
), which was promulgated by the National Development and Reform Commission of the
PRC (the “ NDRC ”), the NHC and the Ministry of Human Resources and Social Security of the
PRC (the “ MOHRSS ”) on March 25, 2014, requires the price of healthcare services provided
by non-public medical institutions to be subject to market conditions. Non-public medical
institutions, which are for-profit in nature, may set the price of services provided by their
medical institutions at their own discretion, but the price must be determined reasonably
according to the principles of fairness, legality, honesty and credibility, and the price must be
relatively stable for a certain period of time.
The Circular on Issuing the Opinions on Promoting the Drug Pricing Reform (Ι
), which was promulgated on May 4, 2015, sets forth that
from June 1, 2015, except for narcotic drugs and Class I psychotropic drugs, the restrictions
on the prices of the drugs that were subject to government pricing will be canceled.
Specifically, the prices of narcotic drugs and Class I psychotropic drugs are still subject to
maximum factory prices and maximum retail prices set by the NDRC for the time being. The
public medical insurance regulatory authority shall, along with other competent departments,
draw up provisions in relation to the standards, procedures, basis and methods of the payment
of drugs paid by public medical insurance funds. With regard to patented drugs and exclusively
produced drugs, the prices are set through transparent and public negotiation among multiple
parties. The prices for blood products not listed in the Medical Insurance Drugs List, immunity
and prevention drugs that are purchased by the PRC government in a centralized manner, and
AIDS antiviral drugs and contraceptives provided by the PRC government for free, shall be set
through tendering purchase or negotiation. Except as otherwise mentioned above, the prices for
other drugs may be determined by the manufacturers and the operators on their own on the
basis of production or operation costs and market supply and demand.
RISK FACTORS
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Our profitability is susceptible to fluctuations in the costs of pharmaceuticals, medical
equipment and medical consumables, which are subject to factors beyond our control. Any
change in the pricing regime that applies to hospitals, such as reductions in the price ceilings
on pharmaceutical products and medical services provided by our hospitals, may have a
material adverse effect on our results of operations, cash flows, financial condition and
prospects. Furthermore, we may not be able to anticipate and timely react to changes in medical
supply costs by changing service offerings or adjusting service fees in the future, or we may
be unable to pass these cost increases onto our customers, which could materially and
adversely affect our margins and results of operations.
We are facing challenges imposed by the implementation of the DRG payment system,
which may adversely affect our business operations, financial performance and prospects.
We may face challenges in controlling costs while maintaining quality care, particularly
for complex cases where standardized payment rates may not adequately reflect higher
resource utilization.
As Medical Insurance Designated Medical Institutions in Jiangsu Province, our hospitals
are required to follow the DRG payment system, under which the public medical insurance
funds reimburse only the predetermined optimal amount for treating patients in certain disease
groups rather than all expenses actually incurred. This has resulted in decreased average
spending per inpatient visit at both of our hospitals. We may face challenges in controlling
costs while maintaining quality care, particularly for complex cases where standardized
payment rates may not adequately reflect higher resource utilization.
Moreover, we face additional risks related to the evolving nature of the DRG system. The
relevant authorities may adjust DRG reimbursement standards and grouping methodologies
from time to time, potentially reducing reimbursement rates for certain procedures or
reclassifying them into lower-reimbursement groups, which may, in turn, have potential
negative effect on our revenue and gross profit margin. For example, Suzhou Healthcare
Security Administration reduced the DRG reimbursement rates of our Suzhou BenQ Hospital
starting from the second half of 2024 in accordance with the national healthcare insurance
policy. The average spending per inpatient visit at both of our hospitals may continue to
decrease if the relevant authorities lower the reimbursement standards or reclassify certain
procedures into lower-reimbursement groups. We estimate reimbursement amounts based on
predicted DRG groupings. Any inaccuracies in our predictions may necessitate material
adjustments to our financial statements. Furthermore, ongoing compliance with the DRG
system requires substantial investments in management systems and staff training, and any
future expansion or modification of the system by the PRC government could increase
operational complexity and compliance costs, thereby affecting our profitability and growth
prospects.
RISK FACTORS
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We are exposed to inherent risks of medical disputes, including medical malpractice
claims, and legal proceedings arising from our operations, and resolving such disputes
and proceedings could result in further costs and harm to our reputation, and materially
and adversely affect our results of operations and prospects.
We rely on doctors and other healthcare professionals of our hospitals to make proper
clinical decisions regarding diagnosis and treatment of our patients. However, it is impossible
for us to have direct control or oversight over all the clinical activities of our hospitals or the
decisions and actions taken by doctors and other healthcare professionals, as their diagnoses
and treatments of patients are subject to their professional judgment, and in many cases, must
be performed swiftly on a real time basis. Any lapse of judgment on the part of our doctors and
other healthcare professionals, or any failure by our hospitals to properly manage their clinical
activities may result in unsatisfactory treatment outcomes, patient injury or possible patient
death. We are especially exposed to these risks from the treatment of complex medical
conditions at our hospitals that do not have guaranteed positive outcomes. As a result, we may
be held liable in medical disputes and medical malpractice claims with our patients and/or their
families that arise out of the personal judgment of our doctors and other healthcare
professionals. In addition, there are inherent risks associated with our clinical activities which
may result in unfavorable medical outcomes not caused by clinical decisions. We are
susceptible to complaints from patients or their relatives associated with our services from time
to time. They may use violence during the course of the disputes, which may result in damage
to our equipment and facilities or cause harm to our doctors, other medical staff, patients or
visitors. They may also generate negative publicity using the media. For details of our on-going
medical disputes and medical malpractice we were involved, see “Business — Compliance and
Legal Proceedings — Medical Disputes and Legal Proceedings” in this prospectus.
In the future, serious incidents of patient death or injury may occur at our hospitals.
Through providing healthcare to patients with various medical conditions, we are exposed to
inherent risks in our operations, even in areas for which we have adopted the highest clinical
standards. Such risks cannot be entirely eliminated. Any medical dispute occurring at our
hospitals may result in a medical malpractice claim or other legal proceeding against us, which,
regardless of merit or settlement status, could adversely affect our industry reputation, divert
management resources and cause us to incur further costs, such as legal fees. If any medical
dispute is determined to constitute medical malpractice, we may be subject to material
penalties imposed by the relevant regulatory authorities, which, in turn, could not only harm
our reputation but also have a material adverse effect on our business, financial condition,
results of operations and prospects. Further, we may not be adequately insured against losses
and liabilities arising from such medical malpractice claims or proceedings. A settlement or
successful claim against us can result in further costs, damages, compensation and adversely
affect our reputation, business, results of operations and prospects.
RISK FACTORS
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We derive a considerable portion of our revenue from healthcare services provided to
patients covered under public medical insurance programs, and the loss of any such
revenue, especially that caused by our failure to remain eligible for public medical
insurance coverage, could have a material adverse effect on our business, results of
operations and prospects.
We receive a considerable portion of payments for our medical bills from the PRC
government, principally through public medical insurance programs under the PRC public
social insurance regime. The medical fee of patients for healthcare services and products
covered under such programs is generally paid by the PRC government to our hospitals. In
2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025, our revenue derived
from settlement through public medical insurance programs was RMB968.9 million,
RMB1,373.6 million, RMB1,410.4 million, RMB704.8 million and RMB700.9 million,
respectively, accounted for 41.5%, 51.1%, 53.0%, 53.0% and 53.4% of our total revenue in the
respective years. For more details, see “Business — Our Customers” in this prospectus. We
expect to continue to receive a considerable portion of our total medical bill payments under
public medical insurance programs. The PRC government also only reimburses medical
expenses for certain approved services and pharmaceuticals, and the reimbursement
percentages and limits for covered medical expenses may vary widely depending on the region,
hospital rating, type of disease and the treatment and pharmaceuticals provided. Our
participation in medical insurance programs is dependent on our hospitals’ maintaining the
relevant “designated” status, which is subject to stringent regulatory scrutiny of, among other
things, our medical facilities, staff, quality of healthcare services, procedures, internal controls,
clinical governance and risk management. Specifically, according to the rules and regulations
issued by relevant provincial and municipal health insurance authorities supervising our
hospitals, medical institutions applying for designation status shall meet certain standards,
including, among others, (i) having commenced official operation for more than three months,
(ii) having employed required medical practitioners and medical insurance personnel, (iii)
having adopted internal management system related to medical insurance policies, and (iv)
having implemented adequate information technology system for medical insurance settlement.
Our hospitals have entered into medical insurance designated institution service agreements
with relevant medical insurance management agencies, and, subject to status review, these
agreements are renewable annually or biannually according to their respective terms. Also, if
a medical institution is to be found no longer meet the standards for the designation status,
management agencies shall promptly terminate such service agreements according to relevant
rules and regulations. As of the Latest Practicable Date, we have not found any impediment for
our hospitals to maintain their status as a “designated” hospital. However, we cannot assure
you that our hospitals will always be able to maintain their status as a “designated” hospital
under any of the public medical insurance programs in which we currently participate. The loss
of the “designated” status of our hospitals will not only harm our reputation but may also result
in a reduced volume of patients visiting our hospitals for healthcare services covered by the
relevant public medical insurance programs. Further, the PRC government may develop its
reimbursement policies in coverage plans in the future such that: (i) certain healthcare services
and products provided by us will no longer be covered; or (ii) more stringent thresholds on
existing coverage may be imposed, such as reducing the admissions and length of stays for
RISK FACTORS
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inpatients, for whom treatment is generally more costly than outpatients. Any reduction in the
rates paid or the scope of services covered may reduce patient accessibility to our hospitals and
may lead to reduced patient flow and fees. Both the loss of our “designated” status and any
development in the PRC government’s reimbursement policies in public medical insurance
programs could lead to a decrease in our revenue generation and profitability which could have
a material adverse effect on our business, results of operations and prospects.
Our revenue has historically been significantly dependent on our operations in Jiangsu
Province. As such, we are especially sensitive to the local conditions and changes in
Jiangsu Province, such as with respect to its economy, laws and regulations, and any force
majeure events, natural disasters or other outbreaks in this region.
During the Track Record Period, we derived our revenue from our operations in Jiangsu
Province. Going forward, we expect that a large part of our revenue will remain dependent on
our operations in Jiangsu Province. We are therefore highly sensitive to the regulatory,
economic, environmental and competitive conditions, as well as the public health landscape,
in this region. Furthermore, significant changes in the laws and regulations governing the
healthcare industry in Jiangsu Province may have a material effect on our business operations.
In addition, any pandemic outbreaks in Jiangsu Province may disrupt our operations. For
example, the volume of patients that would seek non-urgent medical care at our hospitals may
decrease if such patients avoid visiting hospitals during such outbreaks. The service capability
of our hospitals will also be disrupted as a result of the need to implement heightened
sanitation and quarantine procedures. Furthermore, natural disasters or other catastrophic
events that may occur in Jiangsu Province, such as earthquakes, fires, droughts, typhoons,
floods, outages of critical utilities, disruptions to transportation systems, including as a result
of terrorist attacks, may damage or limit our ability to operate our hospitals. Any such
unpredictable development in Jiangsu Province could have a material adverse effect on our
business, results of operations and prospects.
We derive our revenue from operating Nanjing BenQ Hospital and Suzhou BenQ Hospital
during the Track Record Period. Our revenue and profitability could be materially and
adversely affected if we fail to successfully operate these two hospitals.
Nanjing BenQ Hospital and Suzhou BenQ Hospital contributed all of our revenue during
the Track Record Period. Any disruption to the operations of Nanjing BenQ Hospital and
Suzhou BenQ Hospital, including as a result of natural disasters, negative publicity, regulatory
action or otherwise, could have an adverse effect on our business, results of operations and
prospects.
Our future growth and financial performance will depend on our ability to develop
Nanjing BenQ Hospital and Suzhou BenQ Hospital by enhancing their clinical quality and
expanding their service offerings. Therefore, if we fail to consistently maintain the standard of
Nanjing BenQ Hospital and Suzhou BenQ Hospital or develop Nanjing BenQ Hospital and
Suzhou BenQ Hospital to compete effectively with other hospitals, our ability to grow may be
adversely affected.
RISK FACTORS
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The development and ramp-up of new healthcare facilities could contribute to
fluctuations in our financial results, and they may not achieve profitability as anticipated
in a timely manner, or at all.
New healthcare facilities typically require a substantial amount of commitment, capital
expenditure (such as capital contribution), as well as investments, for the construction,
decoration and/or renovation of the property, recruitment of suitable staff, and acquisition of
requisite medical and other equipment. As a result, relevant costs and expenses, such as
amortization, depreciation of property, plant and equipment, staff expenses and rental
expenses, begin to accrue in this initial operation phase. As such, the development and ramp-up
of new healthcare facilities could affect our results of operations and may lead to
period-to-period fluctuations in the future.
Ramp-up schedules may also be affected for regulatory reasons as we are generally
required to undergo certain regulatory reviews and approval processes from various authorities,
including relevant health authorities, in the PRC. We cannot assure you that we will be able to
obtain all the required approvals, permits or licenses for establishing and operating healthcare
facilities in a timely manner, or at all, particularly in areas outside of Nanjing or Suzhou where
we have limited experience. Furthermore, we may not be able to fully ramp-up new healthcare
facilities in line with our anticipated timetables due to, among other reasons: (i) any failure or
material delay in obtaining the required approvals, permits or licenses; (ii) any substantial
increase in costs to ramp-up operations and utilization; (iii) achieving weaker market reception
than expected; and (iv) difficulty in recruiting sufficient doctors and other medical staff to
work at such facilities. Should any of these circumstances occur, we may be unable to put our
new healthcare facilities into operation as planned.
We cannot assure you that we will be able to successfully commence, ramp-up our new
healthcare facilities in a timely and cost-efficient manner, or at all, and put them into operation
as planned, and if we fail to do so, our overall business growth strategy and prospects could
be materially and adversely affected. The operating results generated at our new hospitals, or
our expanded operations at our existing hospitals may not be comparable to the historical
operating results generated at any of our existing hospitals, and may even operate at a loss. If
so, our gross profit margin and net margin may be impaired. We cannot assure you that our
future hospitals will achieve the level of profitability of our existing hospitals, if at all. Any
of the above conditions could materially and adversely affect the operation of our new
hospitals or our expanded operations at our existing hospitals, our reputation and our ability to
compete effectively, which would in turn have a material adverse effect on our business, results
of operations and prospects.
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The Grade A Class III rating of our Nanjing BenQ Hospital and Class III rating of our
Suzhou BenQ Hospital carry significant competitive advantages. If we are unable to
maintain such ratings in the future, our reputation and our ability to compete successfully
could be adversely affected.
The Grade A Class III rating of our Nanjing BenQ Hospital represents the highest rating
attainable by hospitals in the PRC under the NHC hospital classification system. The Grade A
Class III rating and Class III rating that have been attained by our Nanjing BenQ Hospital and
Suzhou BenQ Hospital carry significant competitive advantages, but require substantial
ongoing efforts to maintain. We cannot assure you that our Nanjing BenQ Hospital and Suzhou
BenQ Hospital will always be able to meet all of the enhanced requirements of a Grade A Class
III hospital and a Class III hospital, or that these two hospitals will be able to maintain the
rating in the future, which is subject to assessment once every four years. If we are unable to
maintain the Grade A Class III rating and Class III rating for our Nanjing BenQ Hospital and
Suzhou BenQ Hospital, our reputation and ability to compete with other hospitals, particularly
those possessing the Grade A Class III rating, could be compromised, and our business, results
of operations and prospects would be adversely affected.
Our success is linked to our ability to recruit and retain high quality doctors, hospital
administrators and other healthcare professionals, such as nurses and technicians.
Our operations depend on the number, efforts, ability and experience of our doctors and
other healthcare professionals at our hospitals. We compete with other healthcare providers to
recruit and retain qualified doctors and other healthcare professionals. The reputation,
expertise and demeanor of the doctors and other healthcare professionals who provide medical
services at our hospitals are instrumental to our ability to attract patients. The success of our
hospitals is, therefore, linked to the number and the quality of the doctors and other healthcare
professionals at our hospitals, their admitting practices and our relationships with them. The
factors that doctors consider important in deciding where they will work include their
compensation package, reputation of the hospital, the quality of equipment and facilities,
research capability, platform for career advancement, the quality and number of supporting
staff, and market leadership of the hospital. We may not be able to compete with other
healthcare providers, whether public or otherwise, on all of these factors.
Without a team of quality doctors and other healthcare professionals, our hospitals would
not be able to attract patients or offer high quality services to the general public. The loss of
a significant number of our doctors and other healthcare professionals, or the inability to attract
or retain sufficient numbers of qualified doctors and other healthcare professionals, could have
a material adverse effect on our business, results of operations and prospects.
The implementation of the DRG payment system, which requires hospitals to control
costs by limiting reimbursement to a standardized amount for treating patients within specific
diagnosis-related groups, has added additional pressure to our cost management efforts. While
controlling costs is necessary to operate within the DRG reimbursement framework, we remain
committed to offering competitive compensation packages to our doctors and other healthcare
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professionals to ensure that we attract and retain qualified talents. However, the DRG payment
system may limit our ability to significantly increase compensation in the future, as doing so
could impact our overall cost structure and profitability. Given the ongoing shortage of doctors
in the PRC and the intense competition among healthcare providers for recruitment, we face
challenges in balancing cost control measures mandated by the DRG payment system with the
need to provide attractive compensation and benefits. If the DRG payment system creates
additional constraints on our ability to offer competitive compensation, we may face
difficulties in retaining our existing doctors or attracting new talents. Without quality doctors
and other healthcare professionals, our hospitals would not be able to attract patients or offer
high-quality services to the general public. The loss of a significant number of our doctors and
other healthcare professionals, or the inability to attract or retain sufficient numbers of
qualified doctors and other healthcare professionals, could have a material adverse effect on
our business, results of operations and prospects.
Quality deficiencies could adversely impact our brand, reputation and ability to market
our services effectively.
Our success depends on our ability to continuously and consistently deliver high-quality
healthcare services to our patients, to which end, we have established strict code of conduct for
our healthcare professionals and internal control systems, and have arranged regular training
sessions to provide added assurance of the quality of our healthcare services and avoid
defective service delivery. We cannot assure you that we may not face risks of quality
deficiencies, due to the nature of the healthcare industry and the inherent risks in treating
patients, especially patients with complex medical conditions requiring intensive care or
high-risk clinical interventions. In addition, any problems contained in our supply chain,
inventory management, or the provision of services by our healthcare professionals, could lead
to quality deficiencies that negatively affect our business operations.
We depend on the strength of our brand and reputation, in particular the Grade A Class
III hospital rating attained by our Nanjing BenQ Hospital and Class III rating attained by our
Suzhou BenQ Hospital. Factors such as poor clinical outcomes, health and safety incidents,
problems with our medical equipment, negative press or patient dissatisfaction, could lead to
a deterioration in our hospitals’ rating or the public perception of the quality of our services,
which could result in a reduction in the number of our patients. In addition, quality deficiencies
could lead to regulatory action by PRC regulatory authorities, which could also result in a
reduction of patient numbers or in us ceasing to provide a service or closing down part of our
service offerings because of the negative publicity such regulatory action may generate.
Many of our patients have complex medical conditions, are considered vulnerable and
often require a substantial level of intensive care and supervision. There is a risk that one or
more of such patients could be harmed by our employees, either intentionally, negligently or
accidentally. A serious incident involving harm to one or more of our patients could result in
negative publicity. Furthermore, the damage to our reputation or to the reputation of our
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hospitals could be exacerbated by any failure on our part to respond effectively. We cannot
assure you that our internal control and other governance procedures will enable us to prevent
an event giving rise to significant negative publicity.
Any quality deficiency in our healthcare services could lead to deterioration of our
hospitals’ rating, loss of goodwill or damage to our reputation or the value of our brand, which
could have a material adverse effect on our ability to attract new and returning patients and,
as a result, adversely affect our business, results of operations and prospects.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We may not be able to properly identify or effectively execute expansion opportunities
and plans, and any business we acquire in relation to our expansion may have unknown
or contingent liabilities, which may materially and adversely affect our business, results
of operations and prospects.
Our growth strategy depends, to an extent, on our ability to acquire and manage additional
healthcare institutions and businesses. We may from time to time identify suitable acquisition
targets, and pursue strategic acquisitions of and/or equity investments in businesses that we
believe are complementary to our growth strategies. However, we might not be able to achieve
the anticipated benefits or synergies from our acquired businesses due to a number of factors.
We may in the future continue to evaluate and consider a wide array of acquisitions and
investments that we believe are complementary to our growth strategies, particularly those that
can help us expand our geographical presence. We may not be able to identify suitable business
targets to expand our business operations, or be able to negotiate commercially acceptable
terms for such expansion. We also compete with other companies on seeking suitable business
targets. Even if we are able to identify suitable business targets, such expansion can be
difficult, time consuming and costly and we may not be able to secure the necessary financing
at commercially acceptable terms for such expansion. In addition, new facilities may require
a significant number of additional staff, and we may have difficulty in hiring enough properly
qualified personnel or in obtaining licenses for such personnel to practice in the relevant
location. Furthermore, as we may not achieve the operating levels that we expect from future
projects, including acquired healthcare institutions, we may not be able to achieve our target
return on investment on, or intended benefits or operating synergies from, these projects. If we
cannot identify suitable expansion opportunities, secure suitable financing or achieve our target
return on investment, our business, results of operations and prospects could be materially and
adversely affected.
With respect to the execution of our expansion strategy, we may encounter unknown or
contingent liabilities, including those incurred for non-compliance with relevant laws, rules
and regulations, such as failure to obtain requisite licenses, permits and title certificates to land
or failure to register leases, which may result in financial penalties, reputation damage as well
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as being required to relocate our facilities. If we suffer reputational damage or financial loss
caused by unknown or contingent liabilities of the business targets that we expand to, our
business, results of operations and prospects could be materially and adversely affected.
We may not be able to execute our growth strategy or manage our growth in a timely and
cost-efficient manner.
As part of our growth strategy, we are exploring opportunities to among other things, (i)
expand the operating scale of our existing hospitals, namely, Nanjing BenQ Hospital and
Suzhou BenQ Hospital, via multiple-phase expansion plans or other business upgrade schemes;
and (ii) acquire existing healthcare institutions through selective mergers and acquisitions. See
“Business — Our Strategies” in this prospectus. To grow our business effectively and expand
our geographic foot print, we are seeking expansion opportunities in, and have expanded into,
areas outside of Jiangsu Province, with which we have limited experience. In particular, we
have jointly invested in Donghui Hospital in Guigang, Guangxi in a collaborative manner with
several business partners. Since our experience in operating hospitals was historically limited
to Nanjing and Suzhou, we may not be successful in adapting our business model outside such
markets. We may not be able to overcome the technological, regulatory, commercial and
operational challenges relevant to a new market in a timely and cost-efficient manner. As a
result, it may be challenging for us to develop, operate and integrate our hospitals in new
markets outside of Nanjing or Suzhou or capitalize on our brand recognition in the new areas.
Additionally, our experience in mergers and acquisitions is limited and we may not be able to
identify and execute on suitable acquisition targets as we carry out our expansion plans. We
may also not be able to successfully integrate newly acquired healthcare institutions or achieve
expected profitability.
Furthermore, our future expansion and subsequent ramping up and integration efforts may
require significant time commitments from our management, as well as substantial operational,
financial and other resources, and could result in a diversion of resources from our existing
hospitals, which in turn could have an adverse effect on our business operations.
Generally, we are subject to the following risks associated with our growth strategy:
 significant demands on our management’s time and attention and diversion of
resources from our existing operations;
 difficulties in identifying suitable business targets to expand our business operations
to and negotiating commercially acceptable terms for such expansion;
 difficulties in expanding into other sectors within the healthcare value chain, such
as elder care, including the increased operational cost associated therewith and
uncertainties in achieving the desired outcomes;
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 uncertainties in our multi-phase expansion plans for Nanjing BenQ Hospital and
Suzhou BenQ Hospital, including successfully completing such plans on time within
designed budget and yield the desired benefits therefrom;
 expansion may be costly and time-consuming and may require us to obtain third
party financing, which may not be available on commercially acceptable terms;
 hiring properly qualified staff and obtaining the requisite licenses for staff to
practice locally;
 uncertainties associated with the local rules and regulations which we may not be
familiar with;
 failure to achieve the expected operating levels, target return on investment or
intended benefits or operating synergies from new business opportunities;
 difficulties in capitalizing on our brand recognition with respect to hospitals outside
of markets familiar to us;
 difficulties in adapting our hospital operation model outside of markets where we
operate in;
 local market competition dynamics may not be conducive to our hospital operations;
 local demographics may not be receptive to the types of healthcare services we
offer;
 our due diligence may not uncover all material unknown or contingent liabilities or
other negative developments with respect to acquired business targets, including
those incurred for non-compliance with relevant laws, rules and regulations;
 integrating acquired business targets into our management structure and operations,
including with respect to implementation of clinical governance procedures; and
 providing consistent, high-quality services throughout all of our hospitals to uphold
our reputation and brand.
In addition, we may not be able to obtain all necessary approvals, permits or licenses for
the expansion and upgrade of Nanjing BenQ Hospital and Suzhou BenQ Hospital. For example,
prior to the commencement of our planned construction, we shall obtain the Permit for Planned
Construction Project, Permit for Commencement of Construction with the competent urban-
rural planning and development authorities, and shall complete the approval/filing procedures
of Enterprise Investment Project for the proposed construction with the competent
development and reform authorities, and before putting the constructed buildings into
operation, we are required to complete the fire prevention acceptance, environmental
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protection acceptance and construction completion acceptance procedures in accordance with
relevant PRC laws and regulations. For certain large-scale medical equipment or radioactive
ray devices that we plan to procure and deploy for the upgrade of our hospitals, we may be
required to obtain deployment licenses, complete relevant assessment procedures on
occupational disease hazard and protection against radiation, relevant environmental protection
procedures and/or other relevant registrational procedures. There is no assurance that obtaining
relevant approvals, permits, licenses or certificates will not be delayed due to reasons out of
our control. In the event there is a material delay in obtaining the required approvals, permits,
licenses or certificates, or we fail to obtain them at all, our expansion plans would be delayed,
which may materially and adversely affect our business, financial condition and results of
operations.
We cannot assure you that our growth strategy will be successful or implemented
successfully. Any failure to manage our growth strategy effectively may materially and
adversely affect our ability to capitalize on new business opportunities, place us at a
competitive disadvantage and limit our growth, which may in turn have a material adverse
effect on our business, results of operations and prospects.
The shortage of healthcare professionals, together with the costs associated with the
increased wages and benefits to attract such professionals, may have an adverse effect on
our profitability.
The competition for medical talents is intense in the industry where we operate. We have
experienced and expect to continue to experience pressure to offer significant and increasing
wages and benefits to doctors and other medical personnel due to the current shortage of
healthcare professionals. Such competition is particularly intense in certain disciplines
involving high clinical complexity and threshold for medical practitioners’ experience. Also,
there can be no assurance that we will not experience competition for recruiting doctors in
some less complex disciplines that can be readily offered by outpatient clinics, which are
generally able to offer a competitive salary package to doctors and a more flexible and less
demanding working environment compared to hospitals.
The implementation of the DRG payment system, which requires cost control by limiting
reimbursement for inpatient services to a standardized amount based on diagnosis-related
groups, has further constrained our ability to increase overall compensation packages to our
doctors. While we remain committed to providing competitive compensation to attract and
retain talent, the additional cost pressures imposed by the DRG payment system may limit our
flexibility to offer significantly higher wages or benefits in the future. This could affect our
ability to compete effectively for doctors, particularly in high-complexity disciplines or in
regions where competition for medical talent is particularly intense.
We expect this shortage to continue, and we expect to continue to enhance wages,
performance bonuses and benefits to recruit and retain our healthcare professionals. It has
become increasingly costly to recruit and retain healthcare professionals in recent years. We do
not know when and if the number of professional personnel will increase so that there would
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no longer be a shortage of such doctors and healthcare professionals. The continuation of the
shortage of doctors in certain disciplines and medical personnel and the costs associated with
the increased wages and benefits to attract such doctors and other healthcare professionals
could have an adverse effect on our business and reduce our profitability in the long term.
Furthermore, although multi-site practice is generally considered to be beneficial to the
development of private hospitals by facilitating their access to high quality and experienced
doctors particularly from public hospitals, our own doctors may also opt to engage in multi-site
practice with other healthcare facilities, which may result in a shortage of doctors from time
to time. The relevant rules of multi-site practice stipulate that doctors in the PRC may only use
their free time for multi-site practice without interfering with their responsibilities with the
primary healthcare institution they practice in. Doctors constantly work under pressure and
those who use their free time to engage in multi-site practice without taking adequate rest may
be more prone to clinical mistakes and job burnout. If our own doctors who participate in
multi-site practice with other hospitals fail to manage their time and responsibilities
effectively, their performance at our hospitals, and in turn our clinical quality, may be
adversely affected. These doctors may also request to reduce their practice hours with us,
which may strain our clinical resources, in particular disciplines that are under heavy workload
and generally experience a shortage of doctors. These doctors may also be more susceptible to
attrition if their other multi-site practice healthcare facilities, having established rapport, seek
to recruit them. If a significant number of our own doctors begin to engage in multi-site
practice with other healthcare facilities in the future, we may experience a shortage of doctors.
We may not be able to replenish the shortage of doctors on reasonable terms without paying
substantially higher wages and benefits, if at all. As a result, our business, results of operations
and prospects may be adversely affected.
We may be adversely affected by unfavorable market perceptions of, or negative
developments and news regarding, the private healthcare industry as a whole.
Recognition of the importance and value of healthcare has grown significantly in the PRC
in recent years. However, many prospective patients and their families are prone to have more
trust in public hospitals and may carry misconceptions and skepticism about the merits of the
private hospital industry, and may be particularly susceptible to, among other things, media
influences, social stigma, peer perceptions and reports alleging potential adverse health effects
of certain healthcare procedures involved in our industry, any of which may have adverse
consequences for the market perception of healthcare services provided in private for-profit
hospitals and in turn, lead to less demand for services such as ours. In addition, if any news
report or allegation surfaces in the traditional media, social media or other sources of any
accident, ineffectiveness of treatment, poor service standards or mishandling of sensitive
personal information by any operator of healthcare services provided by private for-profit
hospitals, the private for-profit hospitals healthcare industry as a whole may suffer reputational
harm. Any of the above developments may have a material adverse effect on our business,
financial condition and results of operations.
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Our business depends significantly on the strength of our reputation, which may be
negatively impacted by various circumstances and events. Failure to develop, maintain
and enhance our reputation, or any negative publicity about us or our hospitals could
harm our brand recognition of, and trust in, our services.
We operate in an industry in which maintaining a reputation for high quality and reliable
healthcare services overseen by a professional, high caliber and stable management team is of
paramount importance to our success. We cannot assure you that we will be able to maintain
or further enhance this reputation.
Many of the circumstances may negatively impact our reputation, and we may have
limited or no control over the occurrence of many events we are unwilling to encounter. For
example, there may be poor clinical outcomes with some of our patients and our employees
may engage in conduct that is contrary to laws or regulations. There may also be anonymous
negative reviews about us online from time to time, but the lack of detailed information makes
it difficult for us to verify and address them. Despite having official channels for patient to
lodge complaints and established dispute resolution mechanisms, we cannot control others’
decision to post negative reviews online instead of resolving disputes through the complaint
channels we provide. Excessive negative publicity, even if groundless, can influence our
reputation. Furthermore, negative publicity surrounding our Shareholders, Directors,
management and their associates may also impact our reputation, whether or not directly
related to us or our operations, and any negative publicity relating to our Shareholders,
Directors, management and their associates, whether or not accurate or justified, may in turn
have a material adverse impact on the reputation of our Company, our hospitals and operations.
Any deterioration of our reputation or the value of our brand caused by any of these
events could have a material adverse effect on our ability to hire quality healthcare
professionals and attract new and returning patients and, as a result, adversely affect our
business, results of operations and prospects.
Our prospects for growth and reputation will be affected if we do not continuously
enhance our facilities with the most recent technological advances in diagnostic and
treatment equipment.
We utilize various types of medical equipment to carry out our operations. The healthcare
industry is characterized by frequent product improvements and evolving technology. As
technological advances in the healthcare industry continue to evolve rapidly, in order to
compete with other hospitals and healthcare providers for doctors and patients, we must
continuously assess our equipment at our hospitals and upgrade or acquire new equipment as
a result of technological improvements. Such equipment upgrades and acquisitions represent
significant expenditure and may be subject to licensing or other regulatory requirements. If we
are unable to upgrade our existing medical equipment or satisfy relevant regulatory
requirements for any newly acquired equipment in a timely manner, such that medical
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practitioners are unable to provide required services and either do not provide the relevant
treatment or elect to leave our hospitals, then it could have a material adverse effect on our
business, results of operations and prospects.
Rapid technological advances in the healthcare industry and in other hospitals could also,
at times, lead to earlier-than-planned obsolescence or redundancy of equipment and result in
asset impairment charges, which may materially adversely affect our results of operations. We
may from time to time incur impairment charges, which may materially adversely affect our
business, results of operations and prospects.
Moreover, using equipment with advanced technologies also requires us to timely and
properly provide training for our healthcare professionals. Without adequate training, our
medical professionals may struggle to effectively utilize the upgraded technology, leading to
waste in medical resources and inefficiencies in workflow. This may result in unnecessary
expenditures, such as prolonged procedural times, increased equipment downtime, and
maintenance costs that could otherwise avoid. In addition, inadequate training may result in an
increased risk of medical errors or malpractice. Without a thorough understanding of the
upgraded technology and its proper usage, healthcare professionals may make errors in
diagnosis, treatment, or patient management. These errors can have serious consequences,
including patient harm, legal implications, damage to our hospitals’ reputation, and potential
litigation costs. Any of such consequences may materially and adversely affect our business
operation and growth.
Although we do not compete directly with virtual hospitals and clinics, there may be
potential risks associated with increasing competition from these emerging healthcare
models in the hospital industry in China.
Given that we are a private for-profit hospital group primarily providing general hospital
services, with only 0.01% to 0.03% of revenue generated from the provision of online
consultation services, we did not directly compete with virtual hospitals and clinics in the past,
and do not see ourselves compete in this way in the near future. However, there may be
potential risks associated with increasing competition from these emerging healthcare models
in the hospital industry in China. First, virtual hospitals and clinics have gained popularity in
recent years due to their convenience, accessibility, and potentially lower costs. As more
consumers become accustomed to seeking healthcare services online, there is a risk that our
general hospital services may become less appealing, leading to a decline in patient volumes
and revenue. Second, virtual hospitals and clinics often leverage advanced technologies, such
as telemedicine platforms, remote monitoring devices, and artificial intelligence-driven
algorithms, to provide efficient and personalized healthcare services. If we do not keep pace
with these technological advancements, we may struggle to compete effectively, potentially
losing market share to virtual healthcare providers. Third, regulatory landscape surrounding
virtual hospitals and clinics is still evolving in many jurisdictions. Changes in regulations or
the introduction of new policies may either facilitate or hinder the growth of virtual healthcare
models. Compliance with evolving regulations can pose challenges for us, potentially affecting
our ability to adapt and compete in this changing environment. Moreover, virtual hospitals and
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clinics have the potential to disrupt traditional healthcare models by offering alternative
channels for diagnosis, treatment, and patient care. This disruption may lead to a significant
shift in patient behavior, with individuals opting for virtual healthcare services instead of
traditional hospital visits. We may need to monitor these changing dynamics and adapt our
business model accordingly to mitigate any adverse impact. Any of the above risks may
materially and adversely hinder our competitiveness in the hospital industry in China.
Our failure to maintain relationships with public or commercial insurance providers on
terms similar to those currently in place could have a material adverse effect on our
business, results of operations and prospects.
Our relationship with public and commercial insurance providers is important to our
success. For details of risks related to uncertainty with our continuous eligibility for public
medical insurance coverage, see “— Key Risks Relating to Our Business, Industry, Regulatory
Compliance, General Operations and Financial Prospects — We derive a considerable portion
of our revenue from healthcare services provided to patients covered under public medical
insurance programs, and the loss of any such revenue, especially that caused by our failure to
remain eligible for public medical insurance coverage, could have a material adverse effect on
our business, results of operations and prospects” in this section. Public and commercial
insurance providers usually maintain a list of appropriate providers of certain medical services,
which is made available to the patients who are funded by such insurance providers. Patients
will not be reimbursed for treatments from hospitals that are not included in that list.
Accordingly, our ability to attract patients who are funded by public or commercial
insurance providers could be adversely affected if one or more commercial insurance providers
for any reason were to: (i) remove our hospitals from its approved list of hospitals; (ii)
eliminate coverage of treatment options that we provide; (iii) impose more onerous
reimbursement policies; (iv) revoke any applicable direct settlement protocols; (v) change its
policies in a manner which makes access to our services more difficult or costly to patients;
or (vi) otherwise withdraw recognition status of our hospitals. Any of these situations could
have a material adverse effect on patients’ affordable accessibility to medical services
delivered by our hospitals, which could have a corresponding material adverse effect on our
business, results of operations and prospects.
Our relationship with commercial insurance providers is important to our success. We
have agreements in place with a number of commercial insurance providers setting out, among
other things, the prices payable or reimbursable by commercial insurance providers for the
services we provide. We may not be able to renew our existing agreements with commercial
insurance providers on terms comparable to what we have achieved in the past. Any reduction
in the rates paid or the scope of services covered by commercial insurance providers may
reduce patients’ accessibility to our hospitals, and may, in turn, lead to reduced patient flow or
require us to lower the prices we charge, either of which could have a material adverse effect
on our business, results of operations and prospects. In addition, should any of our agreements
with commercial insurance providers be terminated, commercial insurance providers may
withdraw recognition of our hospitals from their approved lists of hospitals, resulting in a
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reduced number of privately insured patients seeking our hospital services. Should some or all
of our arrangements with commercial insurance providers (including but not limited to
arrangements on pricing) fail to be renewed or extended, or are renewed on terms less
favorable than in the past, or are otherwise adversely modified without alternative
arrangements being made on comparable terms, our business, results of operations and
prospects could be materially and adversely affected.
We operate in a competitive industry. If we do not compete successfully against other
hospitals and healthcare providers, our profitability and market share may be affected.
The healthcare industry in the PRC is competitive. We compete with other public and
private general hospitals and, to some extent, specialty hospitals, in particular those located in
Jiangsu Province. In 2024, there were 216 Class III hospitals and 31 Class III private hospitals
in Jiangsu Province, respectively. Specifically, in 2024, there were 24 Grade A Class III
hospitals in Nanjing that are in proximity to our Nanjing BenQ Hospital, and 28 Class III
hospitals in Suzhou that are in proximity to our Suzhou BenQ Hospital.
Public hospitals have traditionally held a prominent position in delivering healthcare
services in the PRC, and patients are prone to have more trust in public hospitals, which make
it challenging for private hospitals to establish their market position and grasp patient
resources. We will also compete with future market entrants as the growth of the healthcare
market in the PRC may attract new entrants, both domestic and international. International
market players may have substantially greater financial, marketing or other resources than we
do, and the international profile of these operators and their ability to draw resources may
constitute attractive features for many patients, thus increasing their competitive advantage.
Furthermore, specialty hospitals that focus on one or a few clinical disciplines continue
to grow. These hospitals generally have a lower barrier to entry than general hospitals. Any
increase in such hospital could divert patients who might otherwise go to our hospitals for the
same services, intensifying competition for our business, which could, in turn, have a negative
effect on our patient volume and overall market share.
In addition, Internet hospital services are becoming increasingly prevalent in the PRC
healthcare market, with many healthcare providers expanding their digital healthcare offerings
to meet growing patient demand for convenient and accessible healthcare services. During the
Track Record Period, our internet hospital business, primarily comprising online consultation
services, accounted for only 0.01% to 0.03% of our total revenue. While we have obtained the
requisite Medical Institution Practicing Licenses for operating our internet hospital business
and are currently exempt from obtaining V alue-Added Telecommunications Services Operation
Licenses as our services are fully self-operated, we may face increasing competitive
pressure from other healthcare institutions with more established internet hospital platforms or
from specialized internet healthcare companies. If we are unable to effectively expand our
internet hospital business or enhance our digital healthcare capabilities, including the
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revenue-generating components of our Smart Hospital system, in response to evolving market
trends and consumer preferences, we may lose market share to competitors with more robust
digital offerings. This could adversely affect our business, results of operations, financial
performance and prospects.
Hospitals compete on factors such as reputation, clinical excellence and patient
satisfaction. We cannot assure you that we will be able to successfully compete against new or
existing competitors, and changes in the competitive landscape may result in price reduction,
reduced profitability or loss of market share, any of which could have a material adverse effect
on our business, results of operations and prospects.
Regulatory uncertainties and future changes in laws and regulations governing internet
hospitals in the PRC could adversely affect our business operations, industry
competitiveness, and prospects.
The regulatory framework governing internet hospital businesses in the PRC is evolving
rapidly and subject to ongoing changes. The National Health Commission and other relevant
PRC regulatory authorities have been actively developing and refining regulations for internet
hospitals and telemedicine services. Although we currently operate our internet hospital
business without a V alue-Added Telecommunications Services Operation License based on our
fully self-operated model, future regulatory changes may impose additional licensing
requirements, operational restrictions, data security protocols, or patient privacy protections.
Such regulatory changes could significantly affect our business and operations in various ways,
including increasing our compliance costs and administrative burden, limiting the scope of
services we can offer through our internet hospital platform, requiring us to restructure our
internet hospital business model, imposing stricter qualification requirements on healthcare
professionals providing online services, and implementing more stringent standards for data
security and patient privacy protection. We may be required to make significant investments to
comply with new regulations, modify our existing online platforms, implement additional data
security measures, or restructure certain aspects of our internet hospital business. Furthermore,
if our current exemption from obtaining a V alue-Added Telecommunications Services
Operation License is challenged or revoked by regulatory authorities, we may face temporary
suspension of our internet hospital services, or be required to alter our internet hospital
business, any of which could adversely affect our reputation, business operations, and financial
performance.
We depend on the continual service of our key personnel, and loss of the services of one
or more of our key executives or a significant portion of our management personnel could
weaken our management team and materially adversely affect our business, results of
operations and prospects.
Our success depends on the skills, experience and efforts of our senior management. For
details, see “Directors and Senior Management” in this prospectus. Our senior management has
extensive experience in the healthcare industry and have skills that are important to the
operation of our business. The pool of individuals with industry-specific experience is limited,
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and the market for such individuals is competitive. Should we incur loss of one or more of our
key personnel, we may not be able to attract, recruit and retain qualified personnel with
comparable expertise to replace or succeed members of our senior management or other key
employees. We do not maintain any key man life insurance policies. The loss of services of one
or more members of our senior management or of a significant portion of any of our
management staff could weaken our management expertise and our ability to deliver healthcare
services efficiently, which could in turn have a material adverse effect on our business, results
of operations and prospects.
Our ability to provide our services may be harmed if we fail to secure adequate supplies
at reasonable costs or experience any supply interruptions.
We depend on third parties for different aspects of our business, such as supplying
pharmaceuticals, medical equipment, medical consumables, and other supplies. During the
Track Record Period, we also engage third-party suppliers and service providers for the
construction projects for our hospital network expansion.
The availability and prices of the pharmaceuticals, medical consumables and other
supplies used in our business may fluctuate from time to time and are subject to factors beyond
our control, including supply, demand, general economic conditions and governmental
regulations, each of which may affect our procurement costs or cause a disruption in our
supply. Should price fluctuations relating to our aforementioned supplies occur that are
unfavorable to us, we cannot assure you that we will be able to anticipate and react to changes
in such supply costs by finding alternative suppliers with more favorable terms or adjusting our
service fees in the future, or that we will be able to pass these cost increases onto our
customers. Any interruptions or changes in our supplies, or our inability to obtain substitute
suppliers and service providers meeting our quality standards at acceptable prices in a timely
manner may impair our ability to meet the demands of our patients. Any of these factors may
have a material adverse effect on our business, results of operations and prospects. Moreover,
we expect our demand for such supplies to increase as we continuously expand our business
scale. We cannot guarantee that our current suppliers and service providers have the capacity
to meet our increasing demand going forward. Any such negative development in association
with our supplies may negatively affect our business operations and prospects.
We have limited control over the quality of the pharmaceuticals, medical equipment,
medical consumables and other supplies we use in our operations, which are provided by
third-party suppliers.
The provision of general hospital healthcare services involves the frequent use of a
variety of pharmaceuticals, medical equipment, medical consumables and other supplies,
procurements of which were from suppliers we do not have control over. We cannot assure you
that all supplies are authentic, free of defects and meet the relevant quality standards. If these
products are subsequently found to have been defective at the time of the supply, even though
we did not know or could not have known about such defects, we may be subject to liability
claims, negative publicity, reputational damage or administrative sanction, any of which may
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adversely affect our results of operations and reputation. We cannot assure you that significant
claims of such nature will not be asserted against us in the future, and that adverse verdicts will
not be reached or that we will be able to recover losses from our suppliers. In addition, we
cannot assure you that we will be able to find suitable replacement suppliers, failure of which
may adversely affect our profitability, our business, results of operations and prospects.
Our relationships with certain academic institutions and clinical experts may affect our
business prospects.
Medical research and education is an integral part of our institutional practice. We
emphasize research, education and innovation, which help us attract, nurture and retain
healthcare professionals who have a keen interest in the latest medical developments. To this
end, we have been dedicating to establishing friendly and cooperative relationships with a wide
range of industry-renowned academic institutions and engaging clinical experts in our
multi-disciplinary professional team. From time to time, we also invite visiting specialist
doctors to consult on difficult, highly unusual or complicated conditions on an ad-hoc or
regular basis. For details, see “Business — Our Other Activities and Functions” and “Business
— Our Staff — Our Doctors and Other Healthcare Professionals” in this prospectus. We
believe such cooperation is critical to our ability to stay at the forefront of medical service
capabilities as well as our position as a hospital for medical treatment, teaching, research, and
operation.
However, we cannot assure you that we will be able to maintain or strengthen our
collaborations and relationships with such academic institutions and clinical experts, or that
our efforts to maintain or strengthen such relationships will yield the successful outcomes, such
as helping us iterate our medical service capabilities or expand our base of high-caliber medical
professionals. Competition for cooperation with such institutions or personnel is intensive,
thereby, they may choose to establish relationships with other hospitals within the industry,
also, these clinical experts may leave their roles, or change their business or practice focus
which render their continuous cooperation with us infeasible. If we are unable to maintain or
strengthen our collaborations and relationships with such academic institutions and clinical
experts, or generate returns from such relationships as anticipated, or at all, our business,
financial condition and results of operations may be materially and adversely affected.
We and our hospitals may not be adequately insured against professional and other
liabilities which may arise in our business.
We are exposed to potential liabilities that are inherent to the provision of healthcare
services. As of the Latest Practicable Date, Nanjing BenQ Hospital and Suzhou BenQ Hospital
were insured with property insurance, employee fidelity insurance, cash insurance, medical
facility liability insurance, physician’s practice insurance and group comprehensive accident
insurance. However, we do not maintain business interruption insurance for our operations or
key employee insurance for our management. We may face claims in excess of our insurance
coverage or claims which are not covered by our insurance due to other policy limitations or
exclusions or where we have failed to comply with the terms of the policy. In addition, there
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is only a limited number of medical liability insurance providers in the market and we may
experience gaps in coverage when seeking to renew our insurance policies or seeking to change
insurance providers. Moreover, we cannot assure you that we will be able to obtain medical
liability insurance in the future for our hospitals on acceptable terms or without substantial
premium increases or at all, particularly if there is deterioration in our claims experience
history. Any successful claim against us not covered by or in excess of our insurance cover
could have a material adverse effect on our business, results of operation and prospects.
The levels of demand or patient acceptance of our smart hospital related services may
affect our business.
We have been building our brand name and reputation for our smart hospital, which we
believe enables our prompt adaptation to the rapidly expanding digital medical service market.
Our smart hospital enables online registration, online bill payment and online consultation,
among others. Our ability to maintain or increase user acceptance of our smart hospital is
primarily affected by the following factors:
 our ability to maintain superior user experience and the quality of services and
products provided through our smart hospital, including the delivery of care;
 the breadth of offerings of our services and products and their efficacy in addressing
our users’ needs and meeting their expectations;
 the reliability, security and functionality of our smart hospital;
 our ability to adopt new technologies or adapt our information infrastructure to
changing user requirements or emerging industry standards;
 the strength of our consumer protection measures; and
 our ability to increase brand awareness of our smart hospital among existing and
potential users through various marketing and promotional activities.
If we fail to address, among other things, any of the foregoing challenges, users may
become frustrated by or dissatisfied with our smart hospital services and may discontinue using
such services. As a result, our business, results of operations and financial condition could be
affected and our business expansion plan on the smart hospital may be slowed down.
Our reliance on our Controlling Shareholder may carry certain risks on our growth and
future prospects.
We are a healthcare service group established by Qisda Corporation, which was founded
in 1984 and listed on the Taiwan Stock Exchange (stock code: 2352.TW) in 1996. Qisda Group
is a global technology group with businesses spanning across IT, healthcare services and
products (comprising hospital operation through the Group as well as sales of medical
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equipment and medical products), smart solutions, networking, and communication. Its brand
influence and advanced technology will continue to provide us with synergetic business
opportunities. In addition, we benefit from our connections with Qisda Group with respect to
our precision management system, financial resources, human resources and information
system resources. However, our reliance on Qisda Group carries certain risks. For example, we
may not be able to maintain the strategic support we currently receive from Qisda Group, if,
for example, Qisda Group adjusts its brand development strategy and reduces its investment in
the healthcare business segment. In addition, should our major corporate decisions be subject
to approval by Qisda Group, we may miss out on certain development opportunities due to
Qisda Group’s opposition thereto. Moreover, given the overlap at the directors and senior
management level between Qisda Corporation and us, any adjustments to staffing arrangements
may negatively impact our corporate management and operations. For details, see “Directors
and Senior Management” in this prospectus. Furthermore, in the event that Qisda Connected
Persons terminated their continuing connected transactions with us, including that on provision
of healthcare services thereto, leasing of property thereto, and procurement of medical product
and equipment therefrom, our business could be negatively impacted. For details, see
“Connected Transactions” in this prospectus. Lastly, our reputation may also be affected if
Qisda Group suffers from negative publicity, which will negatively affect our growth and
future prospects.
Demand for our healthcare services is affected by macroeconomic and political conditions
that are outside of our control.
The demand for our healthcare services can be affected by a number of factors that are
beyond our control such as general macroeconomic conditions, conditions in the financial
services markets, geopolitical conditions and other general political and economic
developments. However, We may be more susceptible to changes in patient preference,
spending power, consumer sentiment and economic conditions than some of our competitors
who provide similar services at lower prices. In particular, our patients may become less
receptive to our high-margin services, and opt for more economic alternatives and cut back
spending on treatments, procedures or services that are not considered medically necessary. As
such, any changes in consumer spending power and economic conditions may have a material
adverse effect on our business, results of operations and prospects.
Apart from revenue generated under medical insurance programs, during the Track
Record Period, we also generated revenue from (i) self-pay patients who funded their
treatments themselves or sought reimbursement from commercial insurance programs; and (ii)
corporate customers who purchase employee healthcare services. The private medical
insurance market, the self-pay market and employee healthcare market are subject to
fluctuations in demand and are likely to be adversely affected in an economic downturn,
particularly if employers become unable to employ additional workers or provide health
benefits for their existing employees or if there is a decline in the number of people with
sufficient income or capital to pay for treatment themselves. To the extent our payers are
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negatively affected by a decline in the economy, we may experience further pressure on
commercial rates, less demand and a reduction in the amounts we expect to collect, any of
which could have a corresponding material adverse effect on our business, results of operations
and prospects.
On account of risks typically associated with the operation of healthcare facilities, we are
susceptible to in-hospital infections and related claims by patients and visitors.
Our operations involve the treatment of patients with a variety of infectious diseases.
Previously healthy or uninfected individuals may contract serious communicable diseases in
connection with their stay or visit at our hospitals. This may result in significant claims for
damages against us and, as a result of media coverage, damage of our reputation. Furthermore,
these germs of infections could also infect employees and thus significantly reduce the service
capacity at our hospitals. In addition to claims for damages, any of these epidemic events may
lead to limitations on the activities of our hospitals as a result of quarantines, closing of parts
of our hospitals at times for sterilization, regulatory restrictions on, or the withdrawal of,
permits and authorizations, and it may indirectly result, through a loss of reputation, in reduced
utilization of our hospitals. Any of these factors may have a material adverse effect on our
business, results of operations and prospects.
We may not be able to protect our name, trademarks or other intellectual property rights.
The “BenQ” (ਿ) name and trademark supports our business. We believe our reputation
and brand are associated with the “BenQ” (ਿ) name, and that this association has
contributed to the success of our business. Marketing efforts that are carried out to promote our
hospital services and to strengthen our position within the healthcare industry depend on the
association of the “BenQ” (ਿ) name with our reputation, and the “BenQ” (ਿ) name may
be damaged if it is used by third parties whose reputation or brand is not associated with
quality, or if such third parties are otherwise the subject of any adverse publicity.
We may need to initiate legal proceedings to defend the rights of the trademarks or brand
that we use against any infringement by third parties, which may be costly and time-
consuming, may require our management to devote substantial time and resources, and may not
ultimately achieve a favorable outcome. Furthermore, the scope and validity of laws governing
the protection of trademarks and brand names in the PRC may continue to evolve and the
outcome of any legal actions to protect our intellectual property rights may be unfavorable to
us. If we are unable to adequately protect or safeguard our intellectual property rights, our
business, results of operations and prospects may be adversely affected.
In addition, other parties may use or register trademarks that look similar to our registered
trademarks under certain circumstances, and may cause confusion among consumers. We may
not be able to prevent other parties from using trademarks that are similar to ours and our
patients may confuse our hospitals with others using similar trademarks. In such cases, the
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goodwill and value of our trademarks and the public perception of our brand and our image
may be adversely affected. A negative perception of our brand and image could have a material
and adverse effect on our sales, and therefore on our business, results of operations and
prospects.
We may be subject to intellectual property rights infringement or misappropriation
claims by third parties, which may force us to incur substantial legal expenses and, if
determined adversely against us, may materially disrupt our business.
We may be exposed to intellectual property rights infringement or misappropriation
claims by third parties during the course of our operations. We may also be subject to litigation
involving claims of trademark infringement or violation of other intellectual property rights of
third parties. Defense against any of these or other claims would be both costly and
time-consuming, and could significantly divert the efforts and resources of our management
and other personnel. An adverse determination in any such litigation or proceedings to which
we may become a party could subject us to significant liability to third parties, require us to
seek licenses from third parties, pay ongoing royalties, or subject us to injunctions prohibiting
the provision and marketing of the relevant brand or services. To the extent that licenses are
not available to us on commercially reasonable terms or at all, we may be required to expend
considerable time and resources sourcing alternative technologies or rebranding our services,
if any, or we may be forced to delay or suspend the relevant services or the promotion of our
brand. We may incur substantial expenses and require significant attention of management in
defending against these third-party infringement claims, regardless of their merit. Protracted
litigation could also result in our patients or potential patients deferring or canceling their visits
to our hospitals and other medical institutions. In addition, we could face disruptions to our
business operations as well as damage to our reputation as a result of such claims, and our
business, financial condition and results of operations could be materially and adversely
affected.
Our business is subject to seasonality.
We experience seasonal fluctuations in our revenue and profitability. Our hospitals
typically experience fewer patient visits during the Chinese New Y ear holiday period, as most
Chinese usually avoid hospitals visits during this period, as well as other public holidays. Our
hospitals generally experience more patient visits during the periods that are conducive to the
spread of infectious diseases, particularly in the colder months of the fourth quarter. During
these periods, the elderly or people with weaker dispositions are more susceptible to disease
in cold weather, leading to increased demands of our services. Therefore, our interim results
or results over the first three quarters of a year may fluctuate as a result of the foregoing and
may not be indicative of our performance over longer periods.
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RISKS RELATING TO REGULATORY COMPLIANCE
We are required to obtain and maintain the requisite licenses, permits or approvals
required in the jurisdictions where we operate our business, and if we are required to take
actions that are time consuming or costly in order to obtain and maintain such licenses,
permits or approvals, our business, financial condition and results of operations may be
materially and adversely affected.
The industry in which we operate is extensively regulated, and we are required to obtain
and maintain the requisite licenses, permits or approvals required in the jurisdictions where we
operate our business from different regulatory authorities. For details, see “Regulatory
Overview” in this prospectus. For details of our material licenses and permits, see “Business
— Licenses, Permits and Certificates” in this prospectus. We may also be required to take
actions that are time-consuming or costly in order to obtain and maintain such licenses, permits
or approvals, which may negatively affect our financial condition and results of operations.
As the regulatory regime for the industry in which we operate continues to evolve and in
the course of our expansion to new business operations, the government authorities may
continue to implement new laws and regulations, or interpretations and applications of existing
laws and regulations, applicable to us. As such, we may be required to obtain additional
licenses, permits or approvals so that we can continue to operate our existing or future
businesses, which may increase our costs for business operations. We cannot assure you that
we can successfully do so in a timely and cost-effective manner, or at all, considering the
possible future developments regarding the interpretation and implementation by the relevant
authorities of existing and future laws and regulations governing our business activities.
Similarly, there is no assurance that we can successfully update or renew the licenses, permits
or approvals required for our business upon revocation or expiration in a timely and
cost-effective manner, or at all, which may be due to various reasons. Moreover, if we fail to
obtain and maintain any of the required licenses, permits or approvals in any jurisdiction where
we operate our business, we may be subject to various penalties, such as confiscation of the
revenue generated through the unlicensed business activities, imposition of fines and
discontinuation or restriction of our operations. Any such penalties may disrupt our business
operations, negatively impact our reputation and materially and adversely affect our business,
financial condition and results of operations.
If we fail to properly manage the practice and employment registration of doctors and
other medical professionals at our hospitals, we may be subject to penalties against these
hospitals, which could materially and adversely affect our business and results of
operations.
Doctors, nurses, laboratory technicians and medical technicians who practice at medical
institutions must hold practicing licenses and may only practice within the scope of their
licenses and at the specific medical institutions at which their licenses are registered. If the
doctor issues a prescription in a medical institution not registered in his or her license, the
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relevant medical institution would also be subject to regulatory penalties, including a fine and,
in the worst-case scenario, revocation of the Medical Institution Practicing License. For
details, see “Regulatory Overview — Regulations on Medical Practitioners of Medical
Institutions” in this prospectus.
In addition, a doctor practicing in multiple institutions must apply to register or file with
competent in-charge administrative authorities and can only have the right to prescribe
medicine at the registered or filed practicing institution. We have multi-site practice physicians
practicing at our hospitals pursuant to the liberated physician registration regulation during the
Track Record Period. If there are new regulations on such practice in the future, we may not
be able to retain our current base of multi-site practice physicians. Moreover, in practice, it
takes some time for doctors and other medical professionals to transfer their licenses from one
medical institution to another or add another medical institution to their permitted practicing
institutions. Any delay in the transfer or update of the licenses of our multi-site practicing
doctors may subject us to the result of non-compliance with relevant laws and regulations,
which will materially and adversely affect our business operations and reputation.
Further, we cannot assure you that the medical professionals at our hospitals will always
strictly follow the requirements and will not practice outside the permitted scope of their
respective licenses. In addition, we cannot assure you that external doctors with whom we
collaborate will all complete the related government procedures to add our relevant hospitals
to their permitted practicing institutions timely or at all. Any failure by our hospitals to
properly manage the employment and registration of their doctors and other medical
professionals may subject us to administrative penalties against our hospitals, which could
materially and adversely affect our business.
We may be adversely affected by potential changes in regulations of digital healthcare and
internet-related business.
Both healthcare and internet industries are heavily regulated. Potential changes relating
to the laws and regulations of the internet hospital business, including evolving licensing
practices, give rise to the risk that some of our permits, licenses or operations may be subject
to challenge, which may be disruptive for us to provide smart hospital services, subject us to
punishments, or have other adverse effects on us. Further, the restrictions on processing
healthcare data, user data, personal information distributed online are convoluted. As a result,
we may be subject to potential liability, temporary blockage or even complete revocation of our
smart hospital services for any incompliance with the regulatory requirements. We cannot
assure you that we will not be subject to penalties or be forced to relinquish our interests in
those operations.
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We may fail to comply with relevant medical, health and safety or environmental laws and
regulations, including those in relation to the dealings of medical wastes.
Our operations are subject to PRC environmental laws and regulations that, among other
matters, impose limitations on the discharge of pollutants into the air and water and establish
standards for the treatment, storage and disposal of solid, hazardous and other medical waste
materials, remediation of releases of hazardous substances and reclamation of land. As part of
our normal business operations, we produce medical wastes, which may produce effects
harmful to the environment or human health. If we fail to comply with these regulations, we
could face sanctions or fines which could adversely affect our brand, reputation, business,
results of operation or prospects. If there are changes in applicable laws and regulations, we
may incur additional compliance costs which could in turn have a material adverse effect on
our business, results of operations and prospects. Failure to comply with applicable regulations
in the PRC could also result in us being held liable or fined and any of our licenses, permits,
approvals and certificates could be suspended or revoked by the relevant PRC health
authorities. Any of these consequences may have a material adverse effect on our business,
results of operations and prospects.
Health and safety risks are inherent in the services we provide and are constantly present
in our hospitals. A health and safety incident could be particularly serious as the patients at our
hospitals tend to be highly vulnerable. Some of our activities are especially susceptible to
medical risks, including disease management, operation of medical equipment and prescription
and administration of drugs. Our business operations are also exposed to risks relating to health
and safety, primarily in respect of food and water quality, as well as fire safety and the risk that
patients may cause harm to themselves, other patients or our employees. Should the competent
authorities find us to be non-compliant or liable in any of the aforementioned aspects, our
reputation, business operations and prospects would be adversely affected.
Failure to comply with anti-corruption, anti-money laundering and anti-bribery laws
could subject us to investigations, sanctions or fines, which may harm our reputation and
have a material adverse effect on our business, results of operations and prospects.
We are subject to risks in relation to actions taken by us, our employees, affiliates and
business partners that constitute violations of the anti-corruption and anti-bribery laws and
regulations. We have established internal policies mandating compliance with anti-corruption
and anti-bribery laws. There have been instances of corrupt practices in the medical service
industry, including, among other things, receipt of kickbacks, bribes or other illegal gains or
benefits by hospitals and medical practitioners from manufacturers, distributors and
pharmacies in connection with the prescription of pharmaceutical products. The PRC
government has recently increased its anti-bribery efforts by introducing a range of measures
such as the Key Points for Correcting Unethical Practices in the Medical Purchase and Sales
Field and Medical Services in 2024 (2024ʈЪ
ᓃ) to address improper payments that facilitate preferential treatment with respect to
services and drugs, and relevant provisions of such measures are required to be
strictly implemented and followed at Grade A Class III hospitals, such as our Nanjing
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BenQ Hospital. For example, Grade A Class III hospitals are required to: (i)
implement robust internal controls and risk management measures specifically
addressing bribery and corruption risks; and (ii) undergo inspections from relevant
regulatory authorities, which include their anti-bribery and corruption status. Moreover, on
May 27, 2024, the NHC and 14 other ministries issued a notice, calling for the rectification of
irregularities in the pharmaceutical procurement and sales sector, as well as in medical
services.
The recent anti-bribery measures introduced by the PRC government are likely to have a
significant impact on the operations, management and employees and financial performance of
hospitals including ours. Our Nanjing BenQ Hospital and Suzhou BenQ Hospital will have to
adapt quickly to the new compliance requirements, while also finding ways to maintain their
profitability and competitiveness in the market. Specifically,
 Our hospitals will have to focus on implementing internal controls and risk
management measures to address bribery and corruption risks, which will require
significant time and resources to establish and maintain. Our hospitals will also face
more frequent inspections and audits by regulatory authorities to ensure compliance
with anti-bribery and anti-corruption requirements, which could be disruptive to
normal hospital operations. Furthermore, under stricter scrutiny and oversight of
pharmaceutical procurement and medical service pricing, our hospital may need to
implement more rigorous and time-consuming procurement processes to ensure full
compliance with regulations, slowing down the acquisition of necessary drugs and
supplies. Besides, our hospitals may also experience delays or difficulties in
obtaining necessary approvals, licenses, or procurement contracts due to the
heightened focus on compliance.
 Our hospitals will need to provide extensive training and education to all employees
on the new compliance requirements and ethical business practices. These may
require medical professionals to continue allocating time to compliance training,
implementing new procedural safeguards, and integrating additional administrative
procedures into their clinical workflows.
 Our hospitals will face increased compliance-related costs, such as implementing
new internal controls, conducting risk assessments, and undergoing more frequent
regulatory audits. Our hospitals may be subject to fines or penalties if any directors,
senior management or other employees are found to be in violation of the new
anti-bribery and anti-corruption regulations. Maintaining profitability may be
difficult if our hospitals are unable to find alternative ways to offset the increased
compliance costs.
As of the Latest Practicable Date, no directors, senior management, hospital chiefs,
secretaries and other employees were investigated and sacked due to corruptive conduct under
recent stricter scrutiny. However, we cannot assure you that our management and staff will
fully comply with anti-corruption regulations at all times, or that our management will be able
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to detect and identify all instances of bribery involving our hospitals. We may also be subject
to adverse publicity based on allegations of bribery or corruption within our hospitals. In the
event that any bribery incident involving our management or employees materializes, we may
be subject to investigations, sanctions or fines, and our reputation could be significantly
harmed by any negative publicity stemming from such incidents, which may have a material
adverse effect on our business, results of operations and prospects.
Our business operations may be extensively affected by the laws and regulations
regarding cybersecurity and data security.
We are subject to privacy laws, information security policies and contractual obligations
related to data privacy and security. In recent years, cybersecurity, privacy and data protection
has become an increasing regulatory focus of government authorities across the world. The
PRC Government has enacted a series of laws, regulations and governmental policies for the
protection of cybersecurity and personal data in the past few years. For details, see “Regulatory
Overview — Regulations on Cybersecurity” and “Regulatory Overview — Regulations on
Personal Information or Data Protection” in this prospectus. With the continuous expansion of
our business and growth of our customer base, there can be no assurance that we will not be
subject to cybersecurity review or the recent tightening regulations on the collection and use
of personal information by relevant government authorities in China will have no effect to our
business operations in the future.
The interpretation and application of laws, regulations and standards on cybersecurity,
data protection and privacy are still evolving. We cannot assure you that the relevant measures
we have taken are, and will be, always considered sufficient under applicable laws and
regulations related to cybersecurity, data protection and privacy. Nor can we assure you that we
can meet all the requirements under such applicable laws and regulations related to
cybersecurity, data protection and privacy. In addition, such applicable laws and regulations
related to cybersecurity are still evolving and the interpretation or implementation of such laws
and regulations may also develop in the future. We may be subject to investigations and
inspections by Governmental Authorities regarding our compliance with such laws and
regulations and we cannot assure you that our practices will always be found to fully comply
with all applicable rules and regulatory requirements. Any accidental or willful security
breaches or other unauthorized access to our systems could cause confidential data to be stolen
and used for criminal purposes, and could also expose us to liability related to the loss of
information, time-consuming and expensive litigation and negative publicity. If security
measures are breached or if we fail to protect confidentiality of the personal data of our clients
otherwise, our clients may be deterred from choosing us, which could result in significant loss
of business and incurrence of significant liability, and our business and operations could be
adversely affected.
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We are subject to laws and regulations relating to the personal information of our
patients. Any failure to adequately protect our patients’ personal data and our operation
information from leakage or improper use could expose us to liability.
We collect and maintain medical data from the diagnosis and treatment of our patients.
We acknowledge that the personal information and privacy of our patients are particularly
essential to our operation and that they expect us to keep their information strictly confidential.
Our hospitals and employees are also subject to, among others, regulations on personal
information protection, which limit the use of personal information of our patients collected by
us for such purposes for which they were collected or for a directly related purpose or for
which are required or allowed by relevant laws and regulations. We cannot ensure that we will
be able to adapt to potential changes in relevant laws and regulations, which may affect our
ability to collect, store or use patients’ data for current permitted purposes and may also incur
additional costs and labors.
We cannot guarantee that our confidentiality policies and measures could always
effectively or completely prevent our patient information from leakage or unauthorized use.
Any system failure or compromise of our hospital network security may result in the
unauthorized access to or release of such data. In particular, we could be subject to attacks on
our systems by third parties or fraudulent or inappropriate behaviors by our employees,
third-party service providers or other business partners. Third parties may also gain access to
our data using computer malware, viruses, spamming, phishing attacks or other means.
Personal information we maintain could be leaked because of any theft or misuse of personal
information due to negligence. Any breach of our confidentiality obligations to our patients
could expose our Group and/or our medical professionals and management to potential
liabilities, such as claims, regulatory actions or litigations, or disciplinary actions, which may
have a material adverse effect on our brand image and reputation, business, results of
operations, financial conditions and prospects.
We are subject to strict regulatory requirements in labor-related laws and regulations of
the PRC.
According to PRC labor laws and regulations, we are required to pay various statutory
employee benefits, including pensions, unemployment insurance, childbirth insurance, work-
related injury insurance, public medical insurance and housing provident fund. For details, see
“Regulatory Overview — Regulations on Employment — Labor Law of the PRC” in this
prospectus. If we are found not in compliance with relevant laws and regulations, we may face
fines or penalties which could adversely affect our business, financial condition and results of
operations.
Moreover, as the interpretation and implementation of labor-related laws and regulations
are still evolving and the PRC government has recently enhanced its measures relating to
public medical insurance collection, which may lead to stricter enforcement, we cannot assure
you that our employment practices and policies will at all times be deemed to be in full
compliance with such laws and regulations, which may subject us to labor disputes or
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government investigations. If we are deemed to have violated the relevant labor laws and
regulations, we could be subject to related penalties, fines or legal fees, and our business,
financial condition and results of operations could be materially and adversely affected.
Non-compliance with PRC laws relating to advertisement and promotion of medical
services could subject us to potential fines and penalties.
We are obligated under PRC laws and regulations to monitor our advertising content to
comply with applicable laws. According to the Measures for the Administration of Medical
Advertisement () and Circular of the MOH on Strengthening the
Medical Advertisement Administration (), our
hospitals must apply for and obtain a Medical Advertisement Examination Certificate before
publishing a medical advertisement. Violation of these regulations may result in penalties
against our hospitals, including rectification, warnings, suspension of operations, revocation of
relevant diagnostic and therapeutic disciplines and the revocation of the hospitals’ Medical
Institution Practicing License. In addition, if the content of the published advertisement is
different from what is approved and documented in the Medical Advertisement Examination
Certificate, the competent authority may revoke the Medical Advertisement Examination
Certificate and refuse to accept any applications for advertisement examination for a period of
one year. Any violation of the relevant laws and regulations may subject us to governmental
penalties, impair our brand and adversely impact our financial condition and results of
operations.
Changes in political and economic policies may affect our business, financial condition,
results of operations and prospects.
Due to our extensive operations in the PRC, our business, financial condition, results of
operations and prospects are affected by political, economic and legal developments in the
PRC. The overall economic growth of PRC is influenced by the governmental regulations and
policies in relation to resource allocation, monetary policies, regulations of financial services
and institutions, preferential treatment to particular industries or companies and others. Any of
the foregoing would affect our business, financial condition, results of operations and
prospects. We shall comply with the applicable PRC laws, rules and regulations. With social
developments, the relevant PRC laws, rules and regulations in force at present may be amended
in the future, and their interpretation and implementation shall be determined in accordance
with relevant laws and regulations in force at the time. Any non-compliance with any existing
or new laws and regulations could materially and adversely affect our business, financial
condition, results of operations, cash flows and prospects.
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Y ou may have limited resources in effecting service of legal process and enforcing foreign
judgments against us and our management.
We are incorporated under the laws of the Cayman Islands, but substantially all of our
assets are located in the PRC. In addition, a majority of our Directors and senior management
personnel reside within the PRC, and substantially all their assets are located within the PRC.
As a result, it may be difficult for investors to directly effect service of legal process upon our
Directors and senior management personnel.
On January 18, 2019, the Supreme People’s Court of the PRC and the government of the
Hong Kong Special Administrative Region entered into the Arrangement on Reciprocal
Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of
the Mainland and of the Hong Kong Special Administrative Region (ಥतйБ
τર) (the “ 2019 Arrangement ”), which seeks
to establish a mechanism with greater clarity and certainty for recognition and enforcement of
judgments in wider range of civil and commercial matters between Hong Kong and the
mainland China, without including the requirement for a choice of court agreement in writing
by the parties. Under the 2019 Arrangement, any party concerned may apply to the relevant
PRC court or Hong Kong court for recognition and enforcement of the effective judgments in
civil and commercial cases subject to the conditions set forth in the 2019 Arrangement. The
2019 Arrangement will, upon its effectiveness, supersedes the Arrangement. Therefore, before
the 2019 Arrangement becomes effective, a choice of court agreement in writing by parties in
the dispute is generally required for enforcing a judgment rendered by a Hong Kong court in
mainland China.
We are subject to and shall comply with the Foreign Investment Law.
On March 15, 2019, the National People’s Congress of the PRC (“ NPC”) promulgated the
Foreign Investment Law of the PRC () (the “ Foreign
Investment Law ”), which took effect on January 1, 2020. Along with the Foreign Investment
Law, the Implementing Rules of Foreign Investment Law of the PRC ʕശɛ͏΍ձ਷̮ਠҳ
ૢԷ) promulgated by the State Council and the Interpretation of the Supreme
People’ s Court on Several Issues Concerning the Application of the Foreign Investment Law
promulgated by the Supreme People’s Court (ቇ͜<ʕശɛ͏΍ձ਷̮ਠ
ج>༆ᙑ) took effect on January 1, 2020. On June 28, 2018, the Ministry of
Commerce of the PRC (the “ MOC”) and the National Development and Reform Commission
of the PRC jointly promulgated the Special Administrative Measures for Access of Foreign
Investment (Negative List) (2021 Edition) (݄(૶ఊ)(2021 ϋ
و)) (the “ Negative List ”), which was later amended on June 30, 2019, June 23, 2020 and
December 27, 2021, with the latest version taking effect on January 1, 2022. The Negative List
promulgates certain areas which imposes restrictions on foreign investments. The Foreign
Investment Law provides that (i) foreign-invested entities operating restricted business are
required to obtain market entry clearance and other approvals from relevant PRC government
authorities; and (ii) foreign investors shall not invest in any prohibited business under the
Negative List. Moreover, according to the Negative List as well as the Interim Measures for
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Administration of Sino-Foreign Joint V enture and Cooperative Medical Institutions (ʕ̮Υ
) (the “ Sino-Foreign Medical Institutions Measures ”),
foreign equity share in medical institutions shall not exceed 70%. However, where the
Cross-Straits Economic Cooperation Framework Agreement (՘
ᙄ) (the “ ECFA”) and its subsequent agreements, or any international treaty or agreement to
which China is a contracting party or has acceded, contain more preferential provisions on
access treatment for overseas investors, such provisions may apply. On October 22, 2010, the
Ministry of Health of the PRC and the MOC promulgated the Interim Measures for the
Management of Sole proprietorship Hospitals Established by Taiwanese Service Providers in
Mainland China (), with an aim to
promote cross-strait economic cooperation and implement the ECFA. It stipulates that
Taiwanese service providers may, upon the approval of the competent PRC authorities,
establish wholly-owned hospitals in the PRC. The establishment of sole proprietorship
hospitals by Taiwanese service providers in mainland China is limited to Shanghai, Jiangsu,
Fujian, Guangdong, and Hainan provinces. Taiwanese service providers can establish Taiwan
funded wholly owned hospitals in mainland China and independently choose to operate for
profit or non-profit purposes. Based on the above, notwithstanding the restriction of foreign
shareholding in medical institutions under the Negative List and the Sino-Foreign Medical
Institutions Measures, we as a Taiwanese service provider can, subject to the approvals from
competent PRC authorities, establish Taiwan funded wholly-owned hospitals in the PRC in
accordance with the Taiwanese Sole Proprietorship Hospitals Measures. For more details, see
“Regulatory Overview — Regulations on Foreign Investment in China” in this prospectus. As
of the Latest Practicable Date, there are no ongoing conditions required to be fulfilled by our
Group to maintain the Taiwanese sole proprietorship status of the Nanjing BenQ Hospital and
Suzhou BenQ Hospital. However, if any of the foregoing laws and regulations and their
relevant interpretation evolve, and if we are prohibited or restricted from operating our
business according to evolving implementation and interpretation of relevant laws and
regulations or future laws and regulations, our business operations will be materially and
adversely affected.
We may be treated as a resident enterprise for PRC tax purposes and our income may
become subject to PRC tax.
Under applicable PRC tax laws, regulations and statutory documents, non-PRC resident
individuals and enterprises are subject to different tax obligations with respect to dividends
received from us or gains realized upon the sale or other disposition of our Shares. Non-PRC
individuals are generally subject to PRC individual income tax under the Individual Income
Tax Law of the PRC () (the “ IIT Law ”) with respect to PRC
source income or gains at a rate of 20% unless specifically exempted by the tax authority of
the State Council or reduced or eliminated by an applicable tax treaty. We are required to
withhold related tax from dividend payments. Pursuant to applicable regulations, domestic
non-foreign-invested enterprises issuing shares in Hong Kong may generally, when distributing
dividends, withhold individual income tax at the rate of 10%. However, withholding tax on
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distributions paid by us to non-PRC individuals may be imposed at other rates pursuant to
applicable tax treaties (and up to 20% if no tax treaty is applicable) if the identity of the
individual holder of the Shares and the tax rate applicable thereto are known to us.
Non-PRC resident enterprises that do not have establishments or premises in the PRC, or
that have establishments or premises in the PRC but their income is not related to such
establishments or premises are subject to PRC enterprise income tax at the rate of 10% on
dividends received from PRC companies and gains realized upon disposition of equity interests
in the PRC companies pursuant to the PRC Enterprise Income Tax Law and other applicable
PRC tax regulations and statutory documents, which may be reduced or eliminated under
special arrangements or applicable treaties between the PRC and the jurisdiction where the
non-resident enterprise resides. Pursuant to applicable regulations, we intend to withhold tax
at a rate of 10% from dividends paid to non-PRC resident enterprise holders of our Shares
(including HKSCC Nominees). Non-PRC resident enterprises that are entitled to be taxed at a
reduced rate under an applicable income tax treaty will be required to apply to the PRC tax
authorities for a refund of any amount withheld in excess of the applicable treaty rate, and
payment of such refund will be subject to the PRC tax authorities’ verification. The
interpretation and application of the relevant PRC tax laws by the PRC tax authorities may
continue to evolve, including whether and how individual income tax or enterprise income tax
on gains derived by holders of our Shares from their disposition of our Shares may be
collected. If any such tax is collected, the value of our Shares may be adversely affected.
Under the PRC Enterprise Income Tax Law, an enterprise established outside the PRC
with “de facto management bodies” within the PRC is considered a “resident enterprise,”
meaning that it is treated in a manner similar to a Chinese enterprise for PRC enterprise income
tax purposes. The implementing rules of the PRC Enterprise Income Tax Law define “de facto
management bodies” as “management bodies that exercise substantial and overall management
and control over the production and operations, personnel, accounting, and properties” of the
enterprise. In addition, the Notice Regarding the Determination of Chinese-Controlled
Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto
Management Bodies (֛
), or Circular 82, specifies that certain Chinese-controlled
offshore incorporated enterprises, defined as enterprises incorporated under the laws of foreign
countries or territories and that have PRC enterprises or enterprise groups as their primary
controlling shareholders, will be classified as resident enterprises if all of the following are
located or resident in the PRC: (i) senior management personnel and departments that are
responsible for daily production, operation and management; (ii) financial and personnel
decision-making bodies; (iii) key properties, accounting books, company seal, and minutes of
board meetings and shareholders’ meetings; and (iv) half or more of senior management or
directors having voting rights. The State Taxation Administration of the PRC, or the SA T, has
subsequently provided further guidance on the implementation of Circular 82.
As substantially all of the operational management of our Company is currently based in
the PRC, our offshore subsidiaries may be deemed to be “PRC resident enterprises” for the
purpose of the PRC Enterprise Income Tax Law. If our offshore subsidiaries are deemed PRC
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resident enterprises, they could be subject to the enterprise income tax at 25% on our global
income, except that the dividends we receive from our PRC subsidiaries may be exempt from
the enterprise income tax to the extent such dividend income constitutes “dividends received
by a PRC resident enterprise from its directly invested entity that is also a PRC resident
enterprise.” It is, however, unclear what type of enterprise would be deemed a “PRC resident
enterprise” for such purposes. The enterprise income tax on our subsidiaries’ global income
could increase our tax burden and adversely affect our cash flows and profitability.
The heightened scrutiny over acquisitions from the PRC tax authorities may have a
material and adverse impact on our business or acquisition strategies or the value of your
investment in us.
On February 3, 2015, the SA T issued the Announcement of the SA T on Several Issues
Concerning Enterprise Income Tax for Indirect Transfer of Assets by Non-Resident Enterprises
(ʮѓ) (the “ Circular
7”), which abolished certain provisions in the Notice on Strengthening the Administration of
Enterprise Income Tax on Non-Resident Enterprises (ה
) (the “ Circular 698 ”), which was previously issued by the SA T on
December 10, 2009, as well as certain other rules providing clarification on Circular 698.
Circular 7 provided comprehensive guidelines relating to, and also heightened the PRC tax
authorities’ scrutiny over, indirect transfers by a non-resident enterprise of assets (including
equity interests) of a PRC resident enterprise (the “ PRC Taxable Assets ”).
For example, Circular 7 specifies that the PRC tax authorities are entitled to reclassify the
nature of an indirect transfer of PRC Taxable Assets according to Article 47 of the PRC
Enterprise Income Tax Law (), when a non-resident
enterprise transfers PRC Taxable Assets indirectly by disposing of equity interests in an
overseas holding company directly or indirectly holding such PRC Taxable Assets, by
disregarding the existence of such overseas holding company and considering the transaction
to be a direct transfer of PRC Taxable Assets, if such transfer is deemed to have been conducted
for the purposes of avoiding PRC enterprise income taxes and without any other reasonable
commercial purpose.
Except as provided in Article 5 and Article 6 of Circular 7, transfers of PRC Taxable
Assets under the following circumstances shall be automatically deemed as having no
reasonable commercial purpose, and are subject to PRC enterprise income tax: (i) more than
75% of the equity value of the overseas enterprise is directly or indirectly from PRC Taxable
Assets; (ii) more than 90% of the total assets (cash excluded) of the overseas enterprise are
directly or indirectly composed of investment in the PRC at any time during the year prior to
the indirect transfer of PRC Taxable Assets, or more than 90% of the income of the overseas
enterprise is directly or indirectly from the PRC during the year prior to the indirect transfer
of PRC Taxable Assets; (iii) the overseas enterprise and its subsidiaries directly or indirectly
hold PRC Taxable Assets and have registered in the host countries (regions) in order to meet
the local legal requirements in relation to organization forms, yet prove to be lack of economic
substance due to their inadequate ability to perform their intended functions and withstand
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risks as their alleged organization forms suggest; or (iv) the income tax from the indirect
transfer of PRC Taxable Assets payable abroad is lower than the income tax in the PRC that
may be imposed on the direct transfer of such PRC Taxable Assets.
Although Circular 7 contains certain exemptions (including, (i) where a non-resident
enterprise derives income from the indirect transfer of PRC Taxable Assets by acquiring and
selling shares of a listed overseas holding company which holds such PRC Taxable Assets on
a public market; and (ii) where there is an indirect transfer of PRC Taxable Assets, but if the
non-resident enterprise had directly held and disposed of such PRC Taxable Assets, the income
from the transfer would have been exempted from enterprise income tax in the PRC under an
applicable tax treaty or arrangement), it requires further clarification whether any exemptions
under Circular 7 will be applicable to the transfer of our Shares that do not qualify for the
aforementioned situation or to any future acquisition by us outside of the PRC involving PRC
Taxable Assets, or whether the PRC tax authorities will reclassify such transaction by applying
Circular 7. Therefore, the PRC tax authorities may deem any transfer of our Shares by our
Shareholders that are non-resident enterprises, or any future acquisition by us outside of the
PRC involving PRC Taxable Assets, to be subject to the foregoing regulations, which may
subject our Shareholders or us to relevant PRC tax reporting obligations or tax liabilities.
Payment of dividends is subject to restrictions under PRC law and regulations.
Under PRC law and regulations, we may only pay dividends out of distributable profits.
Distributable profits are our after-tax profits, less any recovery of accumulated losses and
appropriations to statutory and other reserves that we are required to make. As a result, we may
not have sufficient or any distributable profit to enable us to make dividend distributions to our
Shareholders, including in periods for which our financial statements indicate we are
profitable.
Moreover, our operating subsidiaries in the PRC may not have distributable profit as
determined under the Generally Accepted Accounting Principles of the PRC (the “ PRC
GAAP ”). Accordingly, we may not receive sufficient distributions from our subsidiaries for us
to pay dividends. Failure by our operating subsidiaries to pay us dividends could adversely
impact our ability to make dividend distributions to our Shareholders and our cash flow,
including periods in which we are profitable.
Our operations are subject to and may be affected by changes in PRC tax laws and
regulations.
We are subject to periodic examinations on fulfillment of our tax obligation under the
PRC tax laws and regulations by PRC tax authorities. We cannot assure you that future
examinations by PRC tax authorities would not result in fines, other penalties or actions that
could adversely affect our business, financial condition and results of operations, as well as our
reputation. Furthermore, the PRC government may continue to adjust or revise its tax laws and
regulations. For example, under the IIT Law which was last amended on August 31, 2018 and
came into effect on January 1, 2019, foreign nationals who have no domicile in the PRC but
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have resided in the PRC for a total of 183 days or more in a tax year, would be subject to PRC
individual income tax on their income gained within or outside the PRC. Should such rule be
strictly enforced, our ability to attract and retain highly skilled foreign scientists and research
technicians to work in the PRC may be adversely affected, which may in turn have an adverse
effect on our business, financial condition, results of operations, cash flows and prospects.
Further adjustments or developments to tax laws and regulations could also have an adverse
effect on our business, financial condition and results of operations.
Government regulations on currency exchange may limit our ability to utilize our revenue
effectively in order to satisfy our foreign currency denominated obligations.
Government authorities in regions where we operate our business regulate the
convertibility and remittance of currencies. Shortages in availability of foreign currency may
then affect our ability to remit sufficient foreign currency to our offshore entities for our
offshore entities to pay dividends or make other payments or otherwise to satisfy our foreign
currency denominated obligations. The RMB is currently convertible under the “current
account,” which includes dividends, trade and service-related foreign exchange transactions,
but not under the “capital account,” which includes foreign direct investment and loans,
including loans we may secure from our onshore subsidiaries. Currently, we and our PRC
subsidiaries may purchase foreign currency for settlement of “current account transactions,”
including making dividend payments in foreign currencies, without the approval of the SAFE
by complying with certain procedural requirements. However, the relevant regulatory
developments may affect our ability to purchase foreign currencies in the future for current
account transactions. Since all of our revenue is denominated in RMB, any existing and future
regulations on currency exchange may affect our ability to utilize our revenue to fund our
offshore business activities or pay dividends in foreign currencies to holders of our Shares.
Foreign exchange transactions under the capital account require approvals from, registration
with, or filing with, SAFE and other relevant governmental authorities and competent banks.
This could affect our ability to obtain foreign currency through debt or equity financing for our
subsidiaries.
Regulations relating to offshore investment activities by PRC residents or entities may
affect our PRC subsidiaries’ abilities to pay dividends or make distributions to us and our
ability to increase our investment in our PRC subsidiaries.
The SAFE has promulgated several regulations requiring PRC residents and entities to
register with PRC government authorities before engaging in direct or indirect offshore
investment activities, including Circular of the State Administration of Foreign Exchange on
the Administration of Foreign Exchange Involved in Overseas Investment, Financing and
Roundtrip Investment through Special Purpose V ehicles Conducted by Domestic Residents via
Special-Purpose Companies (ʮ̡ྤ̮ҳፄ༟ʿ
)( “ SAFE Circular 37 ”), issued and effective on July 4,
2014. SAFE Circular 37 requires PRC residents and entities to register with local branches of
the SAFE in connection with their direct establishment or indirect control of an offshore entity,
for the purpose of overseas investment and financing, with assets or equity interests of onshore
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companies or offshore assets or interests held by the PRC residents and entities, referred to in
SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires
amendment to the registration in the event of any significant changes with respect to the special
purpose vehicle. If a shareholder who is a PRC citizen or resident does not complete the
registration with the local SAFE branches, the PRC subsidiaries of the special purpose vehicle
may be prohibited from distributing their profits and proceeds from any reduction in capital or
liquidation to the special purpose vehicle, and the special purpose vehicle may be restricted to
contribute additional capital to its PRC subsidiaries. Moreover, failure to comply with the
various SAFE registration requirements described above may result in liabilities for the PRC
residents and entities under PRC laws for evasion of applicable foreign exchange restrictions,
including (1) the requirement by the SAFE to return the foreign exchange remitted overseas
within a period of time specified by the SAFE, with a fine of up to 30% of the total amount
of foreign exchange remitted overseas and deemed to have been evasive and (2) in
circumstances involving serious violations, a fine of no less than 30% of and up to the total
amount of remitted foreign exchange deemed evasive.
We may not at all times be fully aware or informed of the identities of all our beneficiaries
who are PRC nationals, and may not always be able to compel our beneficiaries to comply with
the requirements of SAFE Circular 37 or other related regulations. As a result, we cannot
assure you that all of our Shareholders or beneficiaries who are PRC nationals will at all times
comply with, or in the future make or obtain applicable registrations or approvals with the
SAFE, the NDRC and the Ministry of Commerce of the PRC (the “ MOFCOM ”) or their local
branches which are required by SAFE Circular 37 or other related regulations, including
applicable NDRC and MOFCOM regulations.
PRC regulation of loans to and direct investment in PRC entities by offshore holding
companies and government regulations on currency exchange may delay or prevent us
from using the proceeds of our securities offerings to make loans or additional capital
contributions to our PRC subsidiaries.
Any funds we transfer to our WFOE, either as a shareholder loan or as an increase in
registered capital, are subject to approval by or registration with relevant governmental
authorities in the PRC. According to the relevant PRC regulations on foreign-invested
enterprises in the PRC, the information of capital contributions to our WFOE should be
reported to MOFCOM or its local branches and filed with other governmental authorities in the
PRC.
Additionally, any foreign loan procured by our WFOE is required to be registered with the
SAFE or its local branches, and our WFOE may not procure loans which exceed the difference
between its registered capital and its total investment amount as approved by MOFCOM or its
local branches. Any medium or long-term loan to be provided by us to our Consolidated
Affiliated Entities for a term of over one year must be approved by the NDRC and the SAFE
or its local branches. We may not obtain these governmental approvals or complete such
registrations on a timely basis, if at all, with respect to future capital contributions or foreign
loans by us to our PRC subsidiaries. If we fail to receive such approvals or complete such
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registrations, our ability to use the proceeds of the Global Offering and to capitalize our PRC
operations may be negatively affected, which could adversely affect our WFOE’s liquidity and
our ability to fund and expand our business.
On March 30, 2015, the SAFE issued the Circular of the State Administration of Foreign
Exchange on Performing the Administration Approach regarding the Foreign Exchange Capital
Settlement of Foreign-Invested Enterprises (̮ਠҳ༟Άุ̮ි༟
)( “ SAFE Circular 19 ”). SAFE Circular 19 allows foreign-
invested enterprises in the PRC to convert foreign currencies into Renminbi in order to pay
their registered capital and make equity investments in Renminbi. On June 9, 2016, SAFE
promulgated the Notice of the State Administration of Foreign Exchange on Reforming and
Standardizing the Foreign Exchange Settlement Management Policy of Capital Account ( ਷
)( “SAFE Circular 16 ”), which
reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against
using Renminbi capital converted from foreign currency-denominated registered capital of a
foreign-invested enterprises to issue Renminbi entrusted loans to a prohibition against using
such capital to issue loans to non-associated enterprises. As a result, SAFE Circular 19 and
SAFE Circular 16 may affect our ability to convert, transfer and use the net proceeds from the
Global Offering.
Our expansion plan and business operations in mainland China may be affected as a
result of Taiwanese investors’ interests in us as they may be required to obtain approvals
from the Department of Investment Review of the Ministry of Economic Affairs (the
“DIR”) for investments in mainland China, as well as the tensions between two sides of
the strait.
Pursuant to applicable rules and regulations for investments made by Taiwanese persons
in mainland China (collectively “ Mainland China Investment Approval Regulations ”), an
investment in mainland China made by individuals with Taiwan household registrations or
Taiwan-incorporated entities (each a “ Taiwanese Investor ”) requires prior approval from or
post reporting to the DIR. For details, see “Regulatory Overview – Regulations in Taiwan
Relating to Investment in PRC” of this prospectus. We cannot guarantee that the current
practice and policy of the DIR will remain the same in the future, and any changes in the
practice and policy may affect Taiwanese Investors’ likelihood in obtaining the DIR’s
approval.
If our Company conducts any equity capital increase into our mainland China subsidiaries
such that any of Taiwanese Investors’ total cumulative investment amount in us exceeds the
stipulated threshold, or Taiwanese Investors are unable to obtain the DIR’s approval, they may
be required to reduce her/his shareholding in our Company. We cannot assure you that she/he
will be able to reduce her/his shareholding in our Company in a timely and orderly manner, or
at all. If any Taiwanese Investor fails to reduce her/his shareholding in our Company in a
timely and orderly manner, our future investments through equity capital increase into our
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mainland China subsidiaries may be limited, which could affect our future expansion plans and
prospects in mainland China. In addition, any reduction of the shareholdings in our Company
by them may cause volatility in, or otherwise have a material adverse effect on the trading price
of our Shares.
Any penalties for violation of the Mainland China Investment Approval Regulations for
Taiwanese Investors’ investments in our Company would be directed at the violating Taiwanese
Investor(s), and any penalties for such breach will be ranging from NT$50,000 to
NT$25,000,000. Such penalties will not be directed at our Company or any mainland China
entities which the Taiwanese Investor(s) invest in. Nevertheless, any violation of the
investment quota or the failure of Taiwanese Investor(s) to obtain the requisite approval from
the DIR for their investment in our Group may delay our expansion plan as we will be required
to seek alternative routes to implement our expansion plan, which may involve additional time
and hence will affect our business operations.
Any violation of the Mainland China Investment Approval Regulations or the failure of
Taiwanese Investors to obtain the requisite approval from, or complete the required reporting
to, the DIR for their investments in our Group may delay our expansion plan as we will be
required to seek alternative routes to implement our expansion plan, which may involve
additional time and hence will affect our business operations.
In addition, we are ultimately controlled by investors in Taiwan and have incorporated
two wholly-owned hospitals in mainland China. As such, any tensions or escalation in tensions
between mainland China and Taiwan or news and rumors of any escalation could introduce
uncertainties to economic activities between mainland China and Taiwan, which in turn could
have a material adverse effect on our business, financial condition, and results of operations.
We may not be able to adequately anticipate, manage or mitigate the risks and challenges posed
by the geopolitical tension and instability in the regions where we operate or have significant
interests, or to adapt to the changing political, legal and economic conditions and expectations.
We may also face increased competition, pressure, scrutiny, and liability from our stakeholders,
regulators, investors and the public in relation to our involvement or exposure to the
geopolitical tension and instability. Any of these factors may have a material adverse effect on
our business, financials, and results of operations.
RISKS RELATING TO OUR FINANCIAL POSITION AND NEED FOR ADDITIONAL
CAPITAL
Our historical revenue growth may not be representative of our future performance.
Our historical results may not be indicative of future performance. Our financial and
operating results may not meet the expectations of our investors or public market analysts who
are tracking our performance, which may cause the future price of our Shares to decline. Our
revenue, cost, expenses, and operating results may vary from period to period as it could be
affected by various factors beyond our control. Such factors may include, but are not limited
to, changes in the general economic conditions, new trends in the PRC healthcare market,
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adjustments and changes in healthcare related policies, and our ability to control costs and
operating expenses. Historically, our operations have largely depended on our ability to treat
patients effectively and leveraging our success and reputation to attract new patients. To
maintain our growth and profitability, we must continue to maintain our strength in service
quality, strengthen our reputation, attract quality talent, adopt innovative technologies and
treatment processes, increase the awareness of our brand through effective marketing,
promotional activities and word-of-mouth, and utilize any growth in demand in the markets in
which we operate or intend to operate. We will also need to successfully expand our footprint
into new geographical locations where we have limited experience. We cannot assure you that
we will achieve any of the above. As a result, we believe that period-to-period comparisons of
our operating results during the Track Record Period may not be indicative of our future
performance and you should not rely such comparisons to predict the future performance of our
operating results or the Shares.
We may not obtain adequate or timely financing for existing and future investments in our
hospitals, and our improvement projects may not be completed within the expected time
frame and within our budget, or at all, and may not achieve the intended economic results.
In order to finance our growth and development, including any potential investments and
upgrades in our existing hospitals, we will require additional cash resources. If our internal
resources are insufficient to satisfy our cash requirements, we may seek additional financing.
If we raise additional financing by issuing additional equity, our shareholders may experience
dilution in their shareholdings.
Our ability to obtain additional capital on acceptable terms is subject to a variety of
uncertainties, some of which are beyond our control, including general economic and capital
market conditions, credit availability from banks or other lenders, receipt of necessary PRC
government approvals, investors’ confidence, general performance of the healthcare industry,
specific policies and legal requirements applicable to healthcare industry, and in particular, our
operating and financial performance. We cannot assure you that future financing will be
available in amounts or on terms acceptable to us, if at all. In the event that financing is not
available or is not available on terms acceptable to us, our business, results of operations and
prospects may be adversely affected.
Our improvement projects may not be completed within the expected time frame and
within our budget, or at all. Even if our improvement projects were consummated, we might
not be able to achieve the intended economic results from them due to a number of factors.
Any negative developments described above could disrupt our existing business and have
a material adverse effect on our business, reputation, financial condition and results of
operations.
To the extent we engage in debt financing, the indebtedness we incur would result in
increased debt service obligations and could result in operating and financing covenants that
may, among other things, restrict our operations or our ability to pay dividends. Serving our
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debt obligations could also be burdensome for our operations. In the event that we fail to
service any debt obligations or are unable to comply with such debt covenants, we could be in
default under the relevant debt obligations, which could trigger a default of other debt
obligations and materially and adversely affect our liquidity and financial condition.
We rely on major suppliers for a large portion of our procurement for supplies.
Purchases from our five largest suppliers in each year/period during the Track Record
Period amounted to RMB598.5 million, RMB807.0 million, RMB836.7 million and RMB389.6
million, respectively, representing 39.4%, 47.6%, 41.4% and 47.7% of our total purchases in
2022, 2023 and 2024 and the six months ended June 30, 2025, respectively. Purchases from our
largest supplier in each year/period during the Track Record Period amounted to RMB259.7
million, RMB340.5 million, RMB353.0 million and RMB175.2 million, respectively,
representing 17.1%, 20.1%, 19.0% and 21.4% of our total purchases in 2022, 2023 and 2024
and the six months ended June 30, 2025, respectively. We cannot assure you that we will be
able to secure a stable supply of qualified medical supplies and/or other products and services
at all times going forward. Specifically, we cannot assure you that we will be able to identify
an alternative qualified supplier in a timely manner, or at all, in the event that any of our
existing suppliers terminates its contract with us or is no longer qualified. Any change in
suppliers could also require significant efforts or investments in circumstances where the items
or services supplied are integral to our delivery of medical services, and the loss of existing
supply contracts could have a material adverse effect on us.
We are subject to credit risk in respect of our trade receivables, including that of medical
insurers, and any significant default on our trade receivables could materially and
adversely affect our liquidity, financial condition and results of operations.
Collection of our trade receivables, which primarily relate to the unpaid portion of the
medical bills we issue, is critical to our operating performance. We have a highly diversified
customer base, with no single customer accounting for more than 1.0% of our revenue in each
year/period during the Track Record Period. However, we have concentrated debtors’ portfolio,
as the majority of our patients will claim their medical bills from medical insurers, particularly
medical insurance programs. We may not be able to timely collect all such trade receivables
due to a variety of factors that are beyond our control, including the settlement cycle associated
with medical insurers because of their internal financial management and payment approval
processes. We cannot assure you that no default will arise from those medical insurers, or that
our uninsured patients will always settle bills with us in a prompt manner.
Our trade receivables cycle may expose us to cash flow shortages or liquidity gaps in our
operations, which would require us to obtain working capital from other sources, such as
external borrowings, in order to meet our obligations, which we may not be able to do on
commercially acceptable terms or at all. We expect to continue to face collection risk with
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respect to medical insurers, uninsured and underinsured patients going forward, especially as
we continue to scale up our operations. Any adverse developments in our ability to timely settle
our trade receivables may have a material adverse effect on our business, financial condition
and results of operations.
We face inventory obsolescence, shortage or excess risks.
During the Track Record Period, our inventory primarily included pharmaceuticals and
medical consumables. Maintaining an optimal level of inventory is important for the success
of our business. We may be exposed to inventory obsolescence, shortage or excess risks as a
result of a variety of factors beyond our control. We cannot assure you that we can accurately
predict these trends and events and avoid under-stocking or overstocking inventory, or that our
inventory management measures will be implemented effectively so that we will not have
significant levels of inventory obsolescence, shortage or excess. As a result of any unforeseen
or sudden events, we may experience slow movement of our inventory, fail to utilize or sell our
inventory swiftly, or face the risk of inventory obsolescence. Moreover, as we plan to continue
expanding our operations, we expect to include more materials in our inventory, which will
make it more challenging for us to manage our inventory effectively. Inventory levels in excess
of patient demand may result in inventory write-downs, expiration of materials or an increase
in inventory holding costs, and a potential negative effect on our liquidity. Further, rapid
technological advances in the healthcare industry and in other hospitals could also, at times,
lead to earlier-than-planned obsolescence or redundancy of equipment and result in asset
impairment charges. If we fail to manage our inventory effectively, we may also be subject to
a heightened risk of inventory obsolescence, which may have a material adverse effect on our
business, financial condition and results of operations.
The discontinuation of any of government grants currently available to us could adversely
affect our financial position, results of operations, cash flows and prospects.
We recognized government grants of RMB13.9 million, RMB1.7 million, RMB1.6
million, RMB1.1 million and RMB1.2 million in the consolidated statements of profit or loss
in 2022, and 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively.
Our eligibility for government grants and other favorable policies, and the corresponding
timing, amount and criteria of such government grants and policies are determined within the
discretion of the local government authorities and cannot be predicted with certainty before we
actually receive any financial incentive. Some of the government grants and policies may be
on a project basis and subject to the satisfaction of certain conditions, including compliance
with the applicable financial incentive agreements and completion of the specific projects
therein. We cannot assure you of the continued availability of such financial incentives and
subsidies in the future. The discontinuation of these subsidies could adversely affect our
financial condition and results of operations.
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Fluctuations in exchange rates could have an adverse effect on our business, results of
operations and prospects.
The value of the RMB against the Hong Kong dollar, the U.S. dollar and other currencies
fluctuates, is subject to changes resulting from the PRC government’s policies and depends to
a large extent on domestic and international economic and political developments as well as
supply and demand in the local market. It is difficult to predict how market forces or
government policies may impact the exchange rate between the RMB and the Hong Kong
dollar, the U.S. dollar or other currencies in the future. In addition, the PBOC regularly
intervenes in the foreign exchange market to limit fluctuations in RMB exchange rates and
achieve policy goals.
The proceeds from the Global Offering will be received in Hong Kong dollars. As a result,
any appreciation of the RMB against the Hong Kong dollar may result in the decrease in the
value of our proceeds from the Global Offering. Conversely, any depreciation of the RMB may
adversely affect the value of, and any dividends payable on, the Shares in foreign currency. In
addition, there are limited instruments available for us to reduce our foreign currency risk
exposure at reasonable costs. All of these factors could materially and adversely affect our
business, financial condition, results of operations and prospects, and could reduce the value
of, and dividends payable on, our Shares in foreign currency terms.
We had net current liabilities during the Track Record Period, which may adversely affect
our liquidity.
During the Track Record Period, we had net current liabilities of RMB713.2 million as
of December 31, 2022, RMB659.7 million as of December 31, 2023, RMB795.2 million as of
December 31, 2024 and RMB838.2 million as of June 30, 2025, which were primarily
attributable to the significant amount of trade payables and other payables and accruals. We
cannot guarantee that we will not continue to incur net current liabilities in the future. If we
are to record net current liabilities again, it will affect our liquidity, as well as our ability to
raise funds, obtain bank loans, pay debts when they become due and declare and pay dividends.
Specifically, our liquidity position may also be adversely affected by our failure to fulfill our
obligations in respect of our contract liabilities if we experience a shortage in cashflow
generated from operations. This, in turn, may impact our ability to execute our business
strategies.
We face challenges in mitigating losses or improving the financial performance of our
associates, which may adversely affect our liquidity and financial position and our ability
to meet our own financial obligations.
Our investments in associates, specifically Donghui Medical and Nanjing Yinxia
Healthcare, carry certain liquidity risks, which may impact our financial position and
investment in the associate is not as liquid as other investment products. Specifically, our share
of losses from associates increased from RMB22.1 million in 2022 to RMB23.8 million in
2023, stayed relatively stable at RMB23.4 million in 2024. For the six months ended June 30,
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2024 and 2025, our share of losses from associates decreased from RMB14.0 million to
RMB0.3 million. These losses are primarily attributable to the continuous losses recorded by
Donghui Medical. As our equity interests in associates result in a share of their financial
performance, sustained losses by the associates can negatively impact our financial results and
liquidity position. Furthermore, while we have “significant influence” to participate in the
financial and operating policy decisions of our associates, we do not have control or joint
control over them. This lack of control may limit our ability to influence financial and
operating policy decisions made by the associates. Consequently, we may face challenges in
mitigating losses or improving the financial performance of our associates, which can have a
direct impact on our liquidity position. Moreover, the continuous losses incurred by Donghui
Medical, one of our associates, raise concerns about the overall financial performance and
stability of our investments in associates. If the financial performance of Donghui Medical
does not improve or if further losses are incurred, it can strain our liquidity position, requiring
additional capital infusion or financial support to sustain our investments. Additionally, in the
event that the associates’ financial performance does not improve, we may face challenges in
realizing returns on our investments. If the associates’ losses persist or their financial condition
deteriorates, it may become difficult for us to recoup our investments or generate positive cash
flows from our share of results. This can adversely affect our liquidity position and our ability
to meet financial obligations. Further, if no dividend declared by Donghui Medical, even if it
recorded profit under the equity accounting, we will not be able to record cash inflow until
dividend received. Besides, the continuous losses incurred by Donghui Medical and the
associated increase in our share of losses may indicate potential impairment of the investments
in associates. If the fair value of the investments is lower than their carrying value, we may be
required to recognize impairments, which can further impact our financial position and
liquidity. In addition, in the event that the associates require additional funding to sustain their
operations or implement strategies for improving their financial performance, we may be called
upon to provide financial support. This can strain our liquidity position, as we may need to
allocate additional resources to support the associates, potentially impacting our ability to meet
our own financial obligations or pursue other investment opportunities. As a result, it is
essential for us to closely monitor and assess the financial performance and prospects of our
associates.
Any significant decrease in our profitability in the future would have a material adverse
effect on our ability to recover our deferred income tax assets, which could have a
material adverse effect on our results of operations.
As of December 31, 2022, 2023 and 2024 and June 30, 2025, we had deferred tax assets
of RMB57.2 million, RMB56.6 million, RMB60.8 million and RMB62.1 million, respectively.
We recognize deferred tax assets to the extent that our management estimates that it is probable
that we will generate sufficient taxable profit in the foreseeable future to offset against the
deductible losses. Therefore, the recognition of deferred tax assets involves significant
judgment and estimates of our management on the timing and level of future taxable profits.
When the expectation is different from the original estimate, such differences will impact the
recognition of deferred tax assets and taxation charges in the period in which such estimate is
changed, and the carrying amount of deferred tax assets may be reduced to the extent that it
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is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be utilized. Accordingly, if our profitability in the future is significantly lower than the
estimates of our management when our deferred tax assets were recognized, our ability to
recover such deferred tax assets would be materially and adversely affected, which could have
a material adverse effect on our results of operations. For more information regarding our
deferred tax assets recognized, see Note 27(b) to the Accountants’ Report in Appendix I to this
prospectus.
We are exposed to changes in the fair value of derivative financial instruments we utilized
to offset our exposure to currency risk, and valuation uncertainties due to the use of
unobservable inputs.
In 2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025, we recorded
net foreign exchange loss of RMB9.9 million, RMB1.6 million, RMB0.4 million, RMB0.7
million and RMB0.8 million, respectively, and net realized and unrealized gain on derivative
financial instruments of RMB9.5 million, RMB3.2 million, RMB1.4 million, RMB1.4 million
and nil, respectively. For more details, see “Financial Information — Description of Selected
Components of Consolidated Statements of Profit or Loss — Other Net Gain” in this
prospectus. We face exposure to fair value changes of derivative financial instruments.
We cannot assure you that we can recognize comparable fair value gains in the future and
we may on the contrary recognize fair value losses, which would affect our result of operations
for future periods. In addition, the valuation of fair value change of derivative financial
instruments is subject to uncertainties in estimations. Such estimated changes in fair values
involve the exercise of professional judgment and the use of certain bases, assumptions and
unobservable inputs, which, by their nature, are subjective and uncertain. As such, the
valuation of derivative financial instruments has been, and will continue to be, subject to
uncertainties in estimations, which may not reflect the actual fair value of these derivative
financial instruments and result in significant fluctuations in profit or loss from year to year.
RISKS RELATING TO OUR GENERAL OPERATIONS
We are subject to risks related to our construction work of our new hospital facilities.
We may incur additional costs if our construction work in relation to the expansion of
Nanjing BenQ Hospital and Suzhou BenQ Hospital is not commenced or completed on time.
Should we fail to complete our construction work according to the phases and the
corresponding target timeline, we would be subject to costs and expenses beyond our plans and
expectations, which may also cause diversion to our management’s attention and resources
originally allocated to our existing operations.
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Our operations could be impaired if our information technology systems fail or if our
databases are destroyed or damaged.
Our information technology systems help us operate and monitor the operational
performance of our hospitals and other medical institutions in various aspects, such as billing,
financial and budgeting data, customer records and inventory. We regularly maintain, upgrade
and enhance the capabilities of our information systems to meet operational needs. Any failures
associated with our information technology systems, including those caused by power
disruption or loss, natural disasters, computer viruses or hackers, network failures or other
unauthorized tampering, may cause interruptions in our ability to provide services to our
customers, keep accurate records, and maintain proper business operations. In particular, if the
information technology system relating to our billing and medical insurance reimbursements
were to malfunction and result in the loss of related records, we might not receive full payment
from customers and insurers, causing a material adverse effect on our business and results of
operations. In addition, we may be subject to liability or damage to our reputation as a result
of any theft or misuse of personal information stored on our systems, which may materially and
adversely affect our business, financial condition and results of operations.
Our Controlling Shareholders may have substantial influence over us and their interests
may not be aligned with the interests of our other Shareholders.
Our Controlling Shareholders will, through its/their voting power at the Shareholders’
meetings and delegates on the Board, have significant influence over our business and affairs,
including decisions in respect of mergers or other business combinations, acquisition or
disposition of assets, issuance of additional shares or other equity securities, timing and
amount of dividend payments, and our management. Our Controlling Shareholders may not act
in the best interests of our minority Shareholders. In addition, without the consent of our
Controlling Shareholders, we could be prevented from entering into transactions that could be
beneficial to us. This concentration of ownership may also discourage, delay or prevent a
change in control of our Company, which could deprive our Shareholders of an opportunity to
receive a premium for the Shares as part of a sale of our Company and may significantly reduce
the price of our Shares.
We face risks related to force majeure events, natural disasters, health pandemics and
other outbreaks of contagious diseases.
Our business could be materially and adversely affected by force majeure events, natural
disasters and extreme weather conditions, such as snowstorms, earthquakes, fires or floods, the
outbreak of a widespread health pandemic including COVID-19, the Severe Acute Respiratory
Syndrome or SARS, the H5N1 avian flu, the human swine flu, also known as Influenza A
(H1N1) or other events, such as wars, acts of terrorism, environmental accidents, power
shortage or communication interruptions. The occurrence of such a disaster or prolonged
outbreak of contagious diseases or other adverse public health developments could materially
disrupt our business and operations. Specifically, a prolonged global pandemic such as
COVID-19 pandemic could cause temporarily impact on our business, financial performance
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and results of operations. In addition, any weakened market condition resulting from the spread
of COVID-19 could decrease overall healthcare service spending. Such natural disasters,
pandemics and other outbreaks may also give rise to consequences straining our facilities and
employees, exposing our employees to personal risks, temporarily closing our hospitals,
imposing additional health or safety measures upon our office spaces, or exposing us to
potential liabilities for actions taken or not taken.
If any of our employees, especially our doctors and other medical professionals, has
contracted any contagious disease or condition, our patients may expose to infection risks on
one hand, and we may be short of medical professionals to support day-to-day operations. Such
restrictions may limit our ability to provide healthcare services. As a result, our business
operations would be materially and adversely affected.
The changes in international political relationships, trade policies and trade barriers, or
the escalation of trade tensions, may have an adverse effect on our business operations.
During the Track Record Period, our suppliers of pharmaceuticals, medical consumables
and medical equipment consist of distributors in mainland China. For more details, see
“Business — Our Suppliers — Procurement and Inventory” in this prospectus. Although we
operate within the PRC market and primarily purchase raw materials from local suppliers, our
suppliers may import such raw materials from global manufacturers in foreign
countries/regions. Such countries/regions may, to the extent needed, impose new or additional
import tariffs, trade restrictions or other trade barriers affecting the importation of such raw
materials, which may lead to higher procurement costs. Our business is therefore subject to
constantly changing international economic, regulatory, social and political conditions, and
local conditions in foreign countries and regions. We cannot assure you that we will always be
able to obtain a steady supply in time and at competitive prices. In that case, our profitability
and operational capabilities may be adversely affected by these changing trade policies.
In recent years, particularly following President Donald J. Trump’s re-election, the U.S.
government is expected to implement significant changes to its trade policies that may
materially impact international trade. These anticipated policies include the “America First
Trade Policy” which may impose additional tariffs of up to 10% on all imports and potentially
up to 60% specifically on Chinese products under certain circumstances. The U.S.
administration may also invoke the International Emergency Economic Powers Act (IEEPA) to
restrict certain commercial activities with PRC entities and implement modifications to
existing trade agreements such as the United States-Mexico-Canada Agreement (USMCA).
Furthermore, any escalation in existing trade tensions or the advent of a trade war, or news and
rumors of the escalation of a potential trade war, could affect consumer confidence and have
a material adverse effect on our business, results of operations and, ultimately, the market price
of our Shares. Rising political tensions could reduce levels of trades, investments,
technological exchanges and other economic activities between the relevant major economies,
which would have a material adverse effect on global economic conditions and the stability of
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global financial markets. If any new tariffs, legislation and/or regulations are implemented, or
if existing trade agreements are renegotiated, such changes could have an adverse effect on our
business, financial condition and results of operations.
RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our Shares and there can be no assurance that
an active market would develop, and the price and trading volume of our Shares may be
volatile.
Prior to this Global Offering, there has been no public market for our Shares. The Offer
Price for our Offer Shares was the result of negotiations among us and the Overall Coordinators
(for themselves and on behalf of the Underwriters) and the Offer Price may differ significantly
from the market price for our Shares following this Global Offering. We have applied for
listing of and permission to deal in our Offer Shares on the Stock Exchange.
A listing on the Stock Exchange, however, does not guarantee that an active and liquid
trading market for the Shares will develop, or if it does develop, that it will be sustained
following the Global Offering, or that the market price of the Shares will not decline following
the Global Offering. In addition, the trading price and trading volume of the Shares may be
subject to significant volatility in responses to various factors beyond our control, including the
general market conditions of the securities in Hong Kong and elsewhere in the world. In
particular, the business and performance and the market price of the shares of other companies
engaging in similar business may affect the price and trading volume of our Shares. In addition
to market and industry factors, the price and trading volume of our Shares may be highly
volatile for specific business reasons. For example:
 the performance and success of our healthcare services may significantly impact the
market perception of our value. Positive outcomes, such as successful treatments,
innovative services, or expansion into new markets, can drive increased investor
confidence and trading activities. Conversely, any setbacks or failures in delivering
quality healthcare services may lead to negative sentiment and volatility in share
price;
 changes in regulations and policies affecting the healthcare market may have a direct
impact on the our operations and financial performance. New regulations, medical
reimbursement policies, or legal developments can create uncertainty and volatility
in the market, influencing investor sentiment and trading activities;
 fluctuations in our revenue, earnings, cash flows, investments and expenditures may
contribute to share price volatility. Changes in such financial metrics can indicate
shifts in our financial health and performance, leading to fluctuations in share price
as investors reassess our business prospects and growth potentials;
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 relationships with our suppliers, such as pharmaceutical companies or medical
equipment providers, may affect our ability to deliver healthcare services
effectively. Disruptions in supply chain, changes in pricing or contracts, or conflicts
with suppliers can impact our operations and financial performance, potentially
leading to share price volatility;
 movements or activities of key personnel, such as the departure or appointment of
executives or key medical professionals, can influence investor perception and
confidence in our leadership and expertise. News regarding key personnel, including
their actions or involvement in other ventures, may trigger volatility in share price;
or
 actions taken by competitors may directly impact our market position and investor
sentiment. Factors such as new hospital openings, expansions, mergers, acquisitions,
or the introduction of specialized services can affect our perceived competitiveness
and market share. These industry-specific developments may lead to fluctuations in
share price and trading volume as investors reassess our competitive strength and
growth prospects within the healthcare industry.
Y ou will incur immediate and significant dilution and raising additional capital may cause
further dilution or restrict our operation.
The Offer Price of the Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to Shareholders after the creditors’ claims. If we raise
additional capital through the sale of equity or convertible debt securities, your ownership
interest will be diluted, and the terms of these securities may include liquidation or other
preferences that adversely affect your rights as a shareholder. Debt financing and preferred
equity financing, if available, may involve agreements that include covenants limiting or
restricting our ability to take specific actions, such as incurring additional debt, making capital
expenditures, limitations on our ability to acquire or license intellectual property rights or
declaring dividends, or other operating restrictions.
Future sales or perceived sales of a substantial number of our Shares in the public market
following the Global Offering could materially and adversely affect the price of our
Shares and our ability to raise additional capital in the future, and may result in dilution
of your shareholding.
Prior to the Global Offering, there has not been a public market for our Shares. Future
sales or perceived sales by our existing Shareholders of our Shares after the Global Offering
could result in a significant decrease in the prevailing market price of our Shares. Only a
limited number of the Shares currently outstanding will be available for sale or issuance
immediately after the Global Offering due to contractual and regulatory restrictions on disposal
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and new issuance. Nevertheless, after these restrictions lapse or if they are waived, future sales
of significant amounts of our Shares in the public market or the perception that these sales may
occur could significantly decrease the prevailing market price of our Shares and restrict our
ability to raise equity capital in the future.
We cannot assure you that we will declare and distribute any amount of dividends in the
future.
There can be no assurance that we will declare and pay dividends because the declaration,
payment and amount of dividends are subject to the discretion of our Directors, depending on,
among other considerations, our operations, earnings, cash flows and financial position,
operating and capital expenditure requirements, our strategic plans and prospects for business
development, our constitutional documents and applicable law. For more details on our
dividend policy, see “Financial Information — Dividends” in this prospectus.
We have not independently verified government statistics and facts in this prospectus.
This document, particularly the section headed “Industry Overview,” contains
information and statistics relating to the healthcare service market in the PRC. Such
information and statistics have been derived from third-party reports, either commissioned by
us or publicly accessible, and other publicly available sources. We believe that the sources of
the information are appropriate sources for such information, and we have taken reasonable
care in extracting and reproducing such information. The information from official government
sources has not been independently verified by us, the Joint Sponsors, the Overall
Coordinators, the Underwriters, any of their respective directors or any other party involved in
the Global Offering, and no representation is given as to its accuracy. Collection methods of
such information may be flawed or ineffective, or there may be discrepancies between
published information and market practice, which may result in the statistics being inaccurate
or not comparable to statistics produced for other economies. Y ou should, therefore, not place
undue reliance on such information. In addition, we cannot assure you that such information
is stated or compiled on the same basis or with the same degree of accuracy as or consistent
with similar statistics presented elsewhere, and such information may not be complete or up to
date. In any event, you should consider carefully the importance placed on such information
or statistics.
Y ou should read the entire prospectus carefully, and we strongly caution you not to place
any reliance on any information contained in press articles or other media regarding us
or the Global Offering.
Y ou should rely solely upon the information contained in this prospectus, the Global
Offering and any formal announcements made by us in Hong Kong when making your
investment decision regarding our Shares. Subsequent to the date of this prospectus but prior
to the completion of the Global Offering, there may be press and media coverage regarding us
and the Global Offering, which may contain, among other things, certain financial information,
projections, valuations and other forward-looking information about us and the Global
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Offering. We have not authorized the disclosure of any such information in the press or media
and do not accept any responsibility for the accuracy or completeness of any such press articles
or other media coverage, nor the fairness or appropriateness of any forecasts, views or opinions
expressed by the press or other media regarding our Shares, the Global Offering or us. We make
no representation as to the appropriateness, accuracy, completeness or reliability of any of the
projections, valuations or other forward-looking information about us in any such press articles
or media coverage. To the extent such statements are inconsistent with, or conflict with, the
information contained in this prospectus, we disclaim responsibility for them. Accordingly,
prospective investors are cautioned to make their investment decisions on the basis of the
information contained in this prospectus only and should not rely on any other information. By
applying to purchase our Shares in the Global Offering, you will be deemed to have agreed that
you will not rely on any information other than that contained in this prospectus.
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In preparation for the Listing, we have sought the following waivers from strict
compliance with the Listing Rules and an exemption from strict compliance with the
Companies (Winding Up and Miscellaneous Provisions) Ordinance.
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Rule 8.12 of the Listing Rules requires that a new applicant applying for a primary listing
on the Stock Exchange must have a sufficient management presence in Hong Kong. This
normally means that at least two of its executive directors must be ordinarily resident in Hong
Kong.
Our management, business operations and assets are primarily located outside Hong
Kong. The principal management headquarters of our Group are primarily based in the PRC.
Our Company considers that our Group’s management is best able to attend to its functions be
being principally based in the PRC. None of our executive Director or senior management
member is or will be ordinarily resident in Hong Kong after the Listing of our Company. Our
Directors consider that relocation of our executive Director to Hong Kong will be burdensome
and costly for our Company, and it may not be in the best interests of our Company and our
Shareholders as a whole to appoint additional executive Directors who are ordinarily resident
in Hong Kong. As such, we do not have, and for the foreseeable future will not have, sufficient
management presence in Hong Kong for the purpose of satisfying the requirements under Rule
8.12 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with the requirements under Rule 8.12 of the
Listing Rules, provided that our Company implements the following arrangements to maintain
effective communication between the Stock Exchange and us:
(a) pursuant to Rule 3.05 of the Listing Rules, the Company has appointed and will
continue to maintain two authorized representatives, namely, Mr. HSIAO Tze-Jung
and Ms. LAI Ying Tung, being the executive Director and the company secretary, to
be the principal communication channel at all times between the Stock Exchange
and our Company. Each of our Company’s authorized representatives will be
available to meet with the Stock Exchange within a reasonable time frame upon the
request of the Stock Exchange and will be readily contactable by telephone,
facsimile and email;
(b) as and when the Stock Exchange wishes to contact our Directors on any matters,
each of our authorized representatives has the means to contact all of our Directors
(including the independent non-executive Directors) promptly at all times;
(c) although our executive Director is not an ordinary resident in Hong Kong, each of
our Directors not ordinarily residing in Hong Kong possesses or can apply for valid
travel documents to visit Hong Kong and is able to meet with the Stock Exchange
within a reasonable period of time, when required;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 100 –


--- page 110 ---
(d) we have appointed UOB Kay Hian (Hong Kong) Limited as our compliance adviser
(the “ Compliance Adviser ”), pursuant to Rule 3A.19 of the Listing Rules, who will
have access at all times to our authorized representatives, Directors and senior
management, and will act as an additional channel of communication between the
Stock Exchange and us for the period commencing from the Listing Date to the date
on which our Company complies with Rule 13.46 of the Listing Rules in respect of
its financial results for the first full financial year commencing after the Listing
Date. The Compliance Adviser will maintain constant contact with the authorized
representatives, Directors and senior management through various means, including
regular meetings and telephone discussions whenever necessary. Our authorized
representatives, Directors and other officers of our Company will provide promptly
such information and assistance as the Compliance Adviser may reasonably require
in connection with the performance of the Compliance Adviser’s duties as set forth
in Chapter 3A of the Listing Rules;
(e) we have provided the Stock Exchange with the contact details of each Director
(including their respective mobile phone number, office phone number and e-mail
address), and in the event that any Director expects to travel or otherwise be out of
the office, he will provide the phone number of the place of his accommodation to
the authorized representatives; and
(f) we will also retain legal advisors to advise on on-going compliance requirements as
well as other issues arising under the Listing Rules and other applicable laws and
regulations of Hong Kong after Listing.
W AIVER AND EXEMPTION IN RESPECT OF THE PRE-IPO SHARE OPTION PLAN
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance prescribes certain disclosure requirements in relation to the share options granted by
our Company (the “ Share Options Disclosure Requirements ”):
(a) Rule 17.02(1)(b) of the Listing Rules stipulates that all the terms of a scheme must
be clearly set out in the prospectus. Our Company is also required to disclose in the
prospectus full details of all outstanding options and their potential dilution effect
on the shareholdings upon Listing as well as the impact on the earnings per share
arising from the exercise of such outstanding options;
(b) Paragraph 27 of the Appendix D1A of the Listing Rules requires our Company to set
out in the prospectus particulars of any capital of any member of our Group which
is under option, or agreed conditionally or unconditionally to be put under option,
including the consideration for which the option was or will be granted and the price
and duration of the option, and the name and address of the grantee; and
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 101 –


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(c) Paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires our Company to set out in the
prospectus, among other things, details of the number, description and amount of
any shares in or debentures of our Company which any person has, or is entitled to
be given, an option to subscribe for, together with the certain particulars of the
option, namely the period during which it is exercisable, the price to be paid for
shares or debentures subscribed for under it, the consideration (if any) given or to
be given for it or for the right to it and the names and addresses of the persons to
whom it was given.
As of the Latest Practicable Date, our Company had granted outstanding options under the
Pre-IPO Share Option Plan to 150 grantees to subscribe for an aggregate of 2,877,000 Shares,
representing approximately 0.92% of the total issued Shares immediately upon completion of
the Global Offering (assuming the options granted under the Pre-IPO Share Option Plan are not
exercised), on the terms set out in the paragraph headed “D. Pre-IPO Share Option Plan” in
Appendix V to this prospectus. Our Company will not grant any further options under the
Pre-IPO Share Option Plan on or after the Listing Date.
Our Company has applied to (i) the Stock Exchange for a waiver from strict compliance
with the requirements under Rule 17.02(1)(b) of and paragraph 27 of Appendix D1A to the
Listing Rules; and (ii) to the SFC for a certificate of exemption under section 342A of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting our Company
from strict compliance with paragraph 10(d) of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, on the ground that strict compliance
with the above requirements would be unduly burdensome for our Company and the waiver and
the exemption would not prejudice the interest of the investing public for the following
reasons:
(a) given that 150 grantees are involved, strict compliance with such Share Options
Disclosure Requirements in setting out full details of all the grantees under the
Pre-IPO Share Option Plan in this prospectus would be costly and unduly
burdensome for the Company in light of a significant increase in cost and time for
information compilation and prospectus preparation;
(b) as of the Latest Practicable Date, save for five grantees who are Directors, members
of senior management or connected persons of our Company, the remaining 145
grantees are other employees of our Group. Strict compliance with the applicable
Share Options Disclosure Requirements to disclose names, addresses and
entitlements on an individual basis in this prospectus will require a number of
additional pages of disclosure that does not provide any material information to the
investing public;
(c) the grant and exercise in full of the options under the Pre-IPO Share Option Plan
will not cause any material adverse impact on the financial position of the Company;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 102 –


--- page 112 ---
(d) lack of full compliance with the above disclosure requirements would not prevent
the Company from providing its potential investors with information for them to
make an informed assessment of the activities, assets, liabilities, financial position,
management and prospects of the Company; and
(e) material information relating to the options under the Pre-IPO Share Option Plan is
disclosed in this prospectus, including the details of options granted to the Directors,
members of senior management and other connected persons (if any), the total
number of Shares subject to the Pre-IPO Share Option Plan, the exercise price per
Share, the potential dilution effect on shareholding and impact on earnings per Share
upon full exercise of the options granted under the Pre-IPO Share Option Plan. The
Directors consider that the information reasonably necessary for the potential
investors to make an informed assessment of the Company in their investment
decision making process has been included in this prospectus.
The Stock Exchange has granted us a waiver from strict compliance with the relevant
requirements under the Listing Rules on the conditions that:
(a) on an individual basis, full details of the options granted under the Pre-IPO Share
Option Plan to each of our Directors, members of senior management of our
Company and connected persons of our Company and other grantees who have been
granted options to subscribe for 40,001 Shares or more are disclosed in the
paragraph headed “D. Pre-IPO Share Option Plan” in Appendix V to this prospectus,
including all the particulars as required under Rule 17.02(1)(b) of, and paragraph 27
of Appendix D1A to the Listing Rules;
(b) in respect of the options under the Pre-IPO Share Option Plan granted by the
Company to the remaining grantees other than those referred to in sub-paragraph (a)
above, disclosure is made on aggregate basis, categorized into lots based on the
number of Shares underlying the options granted under the Pre-IPO Share Option
Plan granted to each individual grantee, being (1) 1 to 10,000 Shares, (2) 10,001 to
20,000 Shares, (3) 20,001 to 30,000 Shares, and (4) 30,001 to 40,000 Shares. For
each lot, the following details are disclosed: (1) the aggregate number of grantees
and number of Shares underlying the Options granted under the Pre-IPO Share
Option Plan as of the Latest Practicable Date, (2) the consideration paid for the grant
of the options, and (3) the exercise period and the exercise price of the options
granted under the Pre-IPO Share Option Plan;
(c) the aggregate number of Shares underlying the options under the Pre-IPO Share
Option Plan and the percentage of the Company’s total issued share capital
represented by such number of Shares as of the Latest Practicable Date;
(d) the dilutive effect and impact on earnings per Share upon full exercise of the options
under the Pre-IPO Share Option Plan is disclosed in the paragraph headed “D.
Pre-IPO Share Option Plan” in Appendix V to this prospectus;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 103 –


--- page 113 ---
(e) a summary of the principal terms of the Pre-IPO Share Option Plan will be disclosed
in the paragraph headed “D. Pre-IPO Share Option Plan” in Appendix V to this
prospectus;
(f) the particulars of the waiver and the exemption will be disclosed in this prospectus;
(g) a full list of all the grantees (including those persons whose details have already
been disclosed in this prospectus) under the Pre-IPO Share Option Plan, containing
all the particulars as required under Rule 17.02(1)(b) of, and paragraph 27 of
Appendix D1A to, the Listing Rules, and paragraph 10 of Part I of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance,
be made available for public inspection in accordance with Appendix VI
“Documents Delivered to the Registrar of Companies and Available on Display” to
this prospectus; and
(h) the grant of a certificate of exemption under the Companies (Winding Up and
Miscellaneous Provisions) Ordinance from the SFC exempting the Company from
the disclosure requirements under paragraph 10(d) of Part I of the Third Schedule
to the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
The SFC has granted us the certificate of exemption under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance from strict compliance with paragraph
10(d) of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance on the conditions that:
(a) on an individual basis, full details of the options granted under the Pre-IPO Share
Option Plan to each of our Directors, members of senior management of our
Company and connected persons of our Company and other grantees who have been
granted options to subscribe for 40,001 Shares or more are disclosed in the
paragraph headed “D. Pre-IPO Share Option Plan” in Appendix V to this Prospectus,
including all the particulars required under paragraph 10 of Part I of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance;
(b) in respect of the Options granted under the Pre-IPO Share Option Plan granted by
the Company to the remaining grantees other than those referred to in sub-paragraph
(a) above, disclosure will be made on aggregate basis, categorized into lots based on
the number of Shares underlying the Options granted under the Pre-IPO Share
Option Plan granted to each individual grantee, being (1) 1 to 10,000 Shares, (2)
10,001 to 20,000 Shares, (3) 20,001 to 30,000 Shares, and (4) 30,001 to 40,000
Shares. For each lot, the following details are disclosed on an aggregated basis: (1)
the aggregate number of grantees and number of Shares underlying the Options
granted under the Pre-IPO Share Option Plan as of the Latest Practicable Date, (2)
the consideration paid for the grant of the options, and (3) the exercise period and
the exercise price of the Options granted under the Pre-IPO Share Option Plan;
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 104 –


--- page 114 ---
(c) a full list of all the grantees (including those persons whose details have already
been disclosed in this prospectus) under the Pre-IPO Share Option Plan, containing
all the particulars as required under paragraph 10 of Part I of the Third Schedule to
the Companies (Winding Up and Miscellaneous Provisions) Ordinance, will be
made available for public inspection in accordance with Appendix VI “Documents
Delivered to the Registrar of Companies and Available on Display” to this
Prospectus; and
(d) the particulars of the exemption will be disclosed in this prospectus and that this
prospectus will be issued on or before December 12, 2025.
Further details of the Pre-IPO Share Option Plan are set forth in the paragraph headed “D.
Pre-IPO Share Option Plan” in Appendix V to this prospectus.
W AIVER IN RELATION TO CONTINUING CONNECTED TRANSACTIONS
We have entered into, and expect to continue, certain transactions that will constitute
non-exempt continuing connected transactions of our Company under the Listing Rules upon
Listing. Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with Chapter 14A of the Listing Rules. See
“Connected Transactions” in this prospectus for further details.
W AIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
– 105 –


--- page 115 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors (including any proposed Director who is named
as such in this prospectus) collectively and individually accept full responsibility, includes
particulars given in compliance with the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V
of the Laws of Hong Kong) and the Listing Rules for the purpose of giving information with
regard to our Group. Our Directors, having made all reasonable enquiries, confirm that to the
best of their knowledge and belief the information contained in this prospectus is accurate and
complete in all material respects and not misleading or deceptive, and that there are no other
matters the omission of which would make any statement herein or this prospectus misleading.
CSRC FILING
According to the Trial Administrative Measures, we are required to complete the filing
procedures with the CSRC in connection with the proposed Listing. We have submitted the
filings with the CSRC for application for the Listing on April 9, 2024, and the CSRC issued
the filing notice dated January 20, 2025, confirming our completion of such filing.
UNDERWRITING AND INFORMATION ON THE GLOBAL OFFERING
This prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. The Global Offering comprises the Hong Kong Public
Offering of initially 6,700,000 Shares and the International Offering of initially 60,300,000
Shares (subject, in each case, to reallocation on the basis referred to in “Structure of the Global
Offering” in this prospectus).
The listing of our Shares on the Stock Exchange is sponsored by the Joint Sponsors and
the Global Offering is managed by the Overall Coordinators. The Hong Kong Public Offering
is underwritten by the Hong Kong Underwriters pursuant to the Hong Kong Underwriting
Agreement. The International Underwriting Agreement relating to the International Offering is
expected to be entered into on or about the Price Determination Date, subject to determination
of the Offer Price. Further information regarding the Underwriters and the underwriting
arrangements are set out in “Underwriting” in this prospectus.
The Hong Kong Offer Shares are offered solely on the basis of the information contained
and representations made in this prospectus and on the terms and subject to the conditions set
out herein. No person is authorized to give any information in connection with the Global
Offering or to make any representation not contained in this prospectus, and any information
or representation not contained herein must not be relied upon as having been authorized by
our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the
Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of their respective
directors, agents, employees or advisors or any other party involved in the Global Offering.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 106 –


--- page 116 ---
Neither the publication of this prospectus nor any subscription made under it shall, under
any circumstances, constitute a representation that there has been no change or development
reasonably likely to involve a change in our affairs since the date of this prospectus or imply
that the information contained in this prospectus is correct as of any date subsequent to the date
of this prospectus.
DETERMINATION OF THE OFFER PRICE
The Offer Shares are being offered at the Offer Price which will be determined by the
Overall Coordinators (for themselves and on behalf of the Underwriters) and us on or before
Thursday, December 18, 2025 and in any event no later than 12:00 noon on Thursday,
December 18, 2025.
If the Overall Coordinators (for themselves and on behalf of the Underwriters) and us are
unable to reach an agreement on the Offer Price by 12:00 noon on Thursday, December 18,
2025 or such later date or time as may be agreed between the Overall Coordinators (for
themselves and on behalf of the Underwriters) and us, the Global Offering will not become
unconditional and will lapse.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his/her acquisition of the Offer Shares to, confirm that
he/she is aware of the restrictions on offers and sales of the Offer Shares described in this
prospectus.
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation. The distribution of this prospectus and the offering and sale of the Offer Shares in
other jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom. In
particular, the Hong Kong Offer Shares have not been publicly offered or sold, directly or
indirectly, in the PRC or the United States.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the granting of
listing of, and permission to deal in, our Shares in issue prior to the Global Offering, may be
issued upon the exercise of all options granted under the Pre-IPO Share Option Plan and to be
issued pursuant to the Global Offering.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 107 –


--- page 117 ---
No part of our Shares or loan capital is listed on or dealt in on any other stock exchange
and no such listing or permission to list is being or proposed to be sought in the near future.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisors as to the taxation implications of subscribing for, purchasing, holding or disposal of,
and/or dealing in the Shares or exercising rights attached to them. None of us, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Underwriters, any of their respective directors, officers, employees,
agents or representatives or any other person or party involved in the Global Offering accepts
responsibility for any tax effects on, or liabilities of, any person resulting from the
subscription, purchase, holding, disposition of, or dealing in, the Shares or exercising any
rights attached to them.
HONG KONG REGISTER OF MEMBERS AND HONG KONG STAMP DUTY
The Company’s principal register of members will be maintained by its principal share
registrar, Harneys Fiduciary (Cayman) Limited, in the Cayman Islands. All of the Shares issued
pursuant to the Global Offering will be registered on the Company’s Hong Kong register of
members to be maintained in Hong Kong by its Hong Kong Share Registrar, Computershare
Hong Kong Investor Services Limited. Dealings in the Shares registered in our Company’s
Hong Kong register of members will be subject to Hong Kong stamp duty. Unless determined
otherwise by our Company, dividends payable in Hong Kong dollars in respect of Shares will
be paid to the Shareholders listed on the Hong Kong share register of our Company, by
ordinary post, at the Shareholders’ risk, to the registered address of each Shareholder.
SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the Shares on the Stock
Exchange and compliance with the stock admission requirements of HKSCC, the Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the Shares on the Stock Exchange
or on any other date as determined by HKSCC. Settlement of transactions between participants
of the Stock Exchange is required to take place in CCASS on the second settlement day after
any trading day. All necessary arrangements have been made enabling the Shares to be
admitted into CCASS. All activities under CCASS are subject to the General Rules of HKSCC
and the HKSCC Operational Procedures in effect from time to time.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
– 108 –


--- page 118 ---
Investors should seek the advice of their stockbroker or other professional advisors for
details of the settlement arrangements as such arrangements may affect their rights and
interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in “How to Apply
for Hong Kong Offer Shares” in this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
Details of the structure of the Global Offering, including its conditions, are set out in
“Structure of the Global Offering” in this prospectus.
EXCHANGE RATE CONVERSION
Solely for convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars. No representation is made that
the amounts denominated in one currency could actually be converted into the amounts
denominated in another currency at the rates indicated or at all. Unless indicated otherwise, the
conversions between (i) Renminbi and Hong Kong dollars were made at the rate of
RMB0.90897 to HK$1.00, (ii) U.S. dollars and Hong Kong dollars were made at the rate of
HK$7.7840 to US$1.00, and (iii) U.S. dollars and Renminbi were made at the rate of
RMB7.0754 to US$1.00.
LANGUAGE
If there is any inconsistency between the English version of this prospectus and the
Chinese translation of this prospectus, the English version of this prospectus shall prevail.
Names of any laws and regulations, governmental authorities, institutions, natural persons or
other entities which have been translated into English and included in this prospectus and for
which no official English translation exists are unofficial translations for your reference only,
and the names in their respective original languages shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments, or have been rounded to a set number of decimal places. Accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
preceding them. Any discrepancies in any table, chart or elsewhere between totals and sums of
amounts listed therein are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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--- page 119 ---
DIRECTORS
Name Address Nationality
Executive Director
Mr. HSIAO Tze-Jung ( ጽዣ࿲) Room 3071
Qisda Zhuyuan
No. 169, Zhujiang Road
High-tech Zone, Suzhou City
Jiangsu Province
PRC
Chinese
(Taiwan)
Non-executive Directors
Mr. CHEN Chi-Hong ( ௓Չ҃) 12th Floor
No 18-1, Baoluo Street
Taoyuan District
Taoyuan City
Taiwan
Chinese
(Taiwan)
Ms. HUNG Chiu-Chin
(ږ߇ݳ)
24F
No. 66, Yiwen 1st St.
Taoyuan District
Taoyuan City
Taiwan
Chinese
(Taiwan)
Dr. W ANG Liming (׼Room 2101, Building 8
Xindu Plaza
Industrial Park District, Suzhou City
Jiangsu Province
PRC
Chinese
Independent non-executive Directors
Dr. CHOW Hsing-Yi ( մБɓ) 12F-2
No. 165, Sec. 2, Xiuming Rd.
Wenshan District
Taipei City
Taiwan
Chinese
(Taiwan); the
United States
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 0–


--- page 120 ---
Name Address Nationality
Mr. W ANG Wen-Tsung
(ˮ˖ᑋ)
2F
No. 279, Wenxing Rd.
Zhubei City
Hsinchu County
Taiwan
Chinese
(Taiwan)
Mr. CHEN Ray-Jade (؏No. 8, Ln. 100
Xiaopingding
Tamsui Dist.
New Taipei City
Taiwan
Chinese
(Taiwan)
Further information is disclosed in the “Directors and Senior Management” section of this
prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 111 –


--- page 121 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors and Sponsor-
Overall Coordinators
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Citigroup Global Markets Asia Limited
50/F Champion Tower
Three Garden Road
Central
Hong Kong
Overall Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Citigroup Global Markets Asia Limited
50/F Champion Tower
Three Garden Road
Central
Hong Kong
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Citigroup Global Markets Asia Limited
50/F Champion Tower
Three Garden Road
Central
Hong Kong
CTBC Bank Co., Ltd.
28/F Two International Finance Centre
8 Finance Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 2–


--- page 122 ---
Joint Bookrunners and Joint
Lead Managers
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public Offering)
50/F Champion Tower
Three Garden Road
Central
Hong Kong
Citigroup Global Markets Limited
(in relation to the International Offering)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
CTBC Bank Co., Ltd.
28/F Two International Finance Centre
8 Finance Street
Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
TradeGo Markets Limited
Room 3405, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 3–


--- page 123 ---
UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
Capital Market
Intermediaries
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Citigroup Global Markets Asia Limited
(in relation to the Hong Kong Public Offering)
50/F Champion Tower
Three Garden Road
Central
Hong Kong
Citigroup Global Markets Limited
(in relation to the International Offering)
33 Canada Square
Canary Wharf
London E14 5LB
United Kingdom
CTBC Bank Co., Ltd.
28/F Two International Finance Centre
8 Finance Street
Central
Hong Kong
Futu Securities International (Hong Kong) Limited
34/F, United Centre
No. 95 Queensway
Admiralty
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 4–


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TradeGo Markets Limited
Room 3405, West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
UOB Kay Hian (Hong Kong) Limited
6/F, Harcourt House
39 Gloucester Road
Hong Kong
Legal advisors to
our Company
As to Hong Kong and U.S. laws
O’Melveny & Myers
31/F, AIA Central
1 Connaught Road Central
Hong Kong
As to PRC law
Commerce & Finance Law Offices
12-15/F, China World Office 2
No. 1 Jianguomenwai Avenue
Chaoyang District
Beijing
PRC
As to Cayman Islands law
Harney Westwood & Riegels
3501 The Center
99 Queen’s Road Central
Central
Hong Kong
As to Taiwan law
Lee and Li, Attorneys-at-Law
8F, No. 555, Sec. 4, Zhongxiao E. Road
Taipei, Taiwan
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 5–


--- page 125 ---
Legal advisors to the
Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws
Paul Hastings (Hong Kong) LLP
22/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
As to PRC law
Jingtian & Gongcheng
34/F, Tower 3, China Central Place
77 Jianguo Road
Beijing
PRC
Reporting accountants and
independent auditor
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central
Hong Kong
Industry consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
Suite 2504, Wheelock Square
1717 Nanjing West Road
Jing’an District
Shanghai
PRC
Property valuer Cushman & Wakefield Limited
27/F One Island East
Taikoo Place
18 Westlands Road
Quarry Bay
Hong Kong
Receiving bank China Construction Bank (Asia)
Corporation Limited
26/F
China Construction Bank Tower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–1 1 6–


--- page 126 ---
Registered Office in the Cayman Islands Vistra (Cayman) Limited
P . O. Box 31119 Grand Pavilion
Hibiscus Way
802 West Bay Road
Grand Cayman KY1-1205
Cayman Islands
Headquarters and Principal Place of
business in the PRC
71 Hexi Avenue
Jianye District, Nanjing City
Jiangsu Province
PRC
Principal place of business in Hong Kong Room 1901, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company website www.benqmedicalcenter.com
(Information contained on this website does
not form part of this prospectus)
Company secretary Ms. LAI Ying Tung
Room 1901, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized representatives Mr. HSIAO Tze-Jung
Room 3071
Qisda Zhuyuan
No. 169 Zhujiang Road
High-tech Zone, Suzhou City
Jiangsu Province
PRC
Ms. LAI Ying Tung
Room 1901, 19/F, Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
CORPORATE INFORMATION
–1 1 7–


--- page 127 ---
Audit committee Mr. W ANG Wen-Tsung (Chairperson)
Dr. CHOW Hsing-Yi
Ms. HUNG Chiu-Chin
Remuneration committee Mr. CHEN Ray-Jade (Chairperson)
Mr. W ANG Wen-Tsung
Mr. HSIAO Tze-Jung
Nomination committee Mr. CHEN Chi-Hong (Chairperson)
Mr. CHEN Ray-Jade
Dr. CHOW Hsing-Yi
Principal share registrar and
transfer office
Harneys Fiduciary (Cayman) Limited
4th Floor, Harbour Place
103 South Church Street
P .O. Box 10240, Grand Cayman KY1-1002
Cayman Islands
Hong Kong Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712–1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wan Chai
Hong Kong
Compliance Adviser UOB Kay Hian (Hong Kong) Limited
6/F Harcourt House
39 Gloucester Road
Hong Kong
Principal banks Agricultural Bank of China
Sanyuanxiang Branch
No. 240, Zhongshan South Road
Qinhuai District, Nanjing City
Jiangsu Province
PRC
Agricultural Bank of China
High-tech Zone Branch
No. 65, Shishan Road
Huqiu District, Suzhou City
Jiangsu Province
PRC
CORPORATE INFORMATION
–1 1 8–


--- page 128 ---
The information and statistics set out in this section and other sections of this
prospectus were extracted from the report prepared by Frost & Sullivan, which was
commissioned by us, and from various official government publications and other
publicly available publications. We engaged Frost & Sullivan to prepare the Frost &
Sullivan Report, an independent industry report, in connection with the Global Offering.
The information from official government sources has not been independently verified by
us, the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers or the Underwriters, any of their respective
directors and advisers, or any other persons or parties involved in the Global Offering,
and no representation is given as to its accuracy.
Accordingly, you should not place undue reliance on such information. For risks
relating to our industry, see “Risk Factors — Risks Relating to Our Business and
Industry” in this prospectus.
SOURCE OF INFORMATION
We have commissioned Frost & Sullivan, an independent market research and consulting
company, to conduct an analysis of, and to prepare the Frost & Sullivan Report on, the
healthcare service market in the PRC. Founded in 1961, Frost & Sullivan has 50 offices with
more than 3,000 industry consultants and market research analysts globally. Frost & Sullivan’s
services include technology research, independent market research, economic research,
corporate best practices advising, company valuation, client research, competitive intelligence,
and corporate strategy. We have agreed to pay a fee of RMB400,000 to Frost & Sullivan for
preparing the Frost & Sullivan Report. The Frost & Sullivan Report is prepared through
extrapolating publicly available data such as information provided by the government, annual
reports of public companies, trade and medical journals, independent research reports and Frost
& Sullivan’s own research database, and market data gathered by conducting interviews with
key industry experts and leading industry participants.
Specifically, Frost & Sullivan primarily collected healthcare market data from officially
released “China Health and Wellness Statistical Y earbook” (ϋᛡ) and
“China Statistical Bulletin on the Development of Health and Wellness” ( ʕ਷ሊ͛਄ੰԫุ೯
ʮజ), public information published by Health Commissions of various provinces and
cities in the PRC (ึ) and National Bureau of Statistics of China ( ਷
҅). Since the 2025 China Health and Wellness statistical Y earbook (2025 ϋʕ਷ሊ͛਄
ϋᛡ), which is expected to publicize healthcare market data in the PRC in 2024, has not
been published as of the Latest Practicable Date, certain market data in 2024, comprising the
revenue of hospitals in the PRC, the number of private and public hospitals in the PRC, the
number of graded private and public hospitals in the PRC, the number of private general
Hospitals in the PRC, the average bed turnover days, the average spending per inpatient visit,
the average spending per outpatient visit, the revenue of private and public hospitals in the East
China, the revenue of private and public hospitals in Jiangsu Province, the number of graded
private and public hospitals in Jiangsu Province and the number of graded private and public
hospitals in Guangxi Province was estimated by Frost & Sullivan with reference to currently
available sources, comprising healthcare market data in 2023 publicized by the 2024 China
Health and Wellness Statistical Y earbook (2024ϋᛡ), the 2024 China
INDUSTRY OVERVIEW
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Statistical Bulletin on the Development of Health and Wellness (2024 ϋʕ਷ሊ͛਄ੰԫุ೯
ʮజ), National Bureau of Statistics of China (҅) and public information
published by Health Commissions of the various provinces and cities in the PRC. There could
be discrepancies between the estimated data and future actual data publicized by the PRC
government.
Frost & Sullivan has exercised due care in collecting and reviewing the information so
collected. In compiling and preparing the research, Frost & Sullivan assumed that the social,
economic, and political environments in the relevant markets are likely to remain stable in the
forecast period.
HEALTHCARE SERVICE MARKET IN THE PRC
Healthcare services are the business that provides diagnosis, treatment and prevention of
human disease, illness, injury or dysfunction performed by healthcare professionals and their
supporting staff. The healthcare service providers in the PRC can be broadly categorized into
three types based on their roles and functions, primarily including hospitals, primary healthcare
institutions, and other healthcare institutions, among which hospitals take the foremost position
and dominate in the healthcare service market in the PRC.
Driven by rising per capita annual disposable income, increasing health awareness, the
expansion of public medical insurance coverage and development of commercial insurance, the
prevalence of chronic diseases as a result of busier living and a growing aging population, the
overall healthcare service market in the PRC has experienced a steady development in recent
years, with the total healthcare expenditure growing from RMB6,584.1 billion in 2019 to
RMB9,764.1 billion in 2024, representing a CAGR of 8.2% from 2019 to 2024. Moreover, the
total healthcare expenditure is expected to reach RMB14,549.9 billion in 2030, representing a
CAGR of 6.7% from 2025 to 2030, according to Frost & Sullivan. The following chart sets
forth the historical and projected total healthcare expenditure in the PRC for the periods
indicated:
China Healthcare Expenditure, 2019-2030E
2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E
6,584.1 7,217.5 7,684.5
8,532.7 9,057.6 9,764.1
11,273.1
12,062.2
12,870.4
13,700.5
10,506.1
14,549.9
Billion RMB
8.2%
6.7%
2019-2024
2025E-2030E
CAGRPeriod
Source: NHC, Frost & Sullivan Analysis
INDUSTRY OVERVIEW
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Healthcare Expense Payers in the PRC
In the PRC, healthcare expenses are generally covered either through out-of-pocket
payments made by patients or by reimbursed through public or commercial medical insurance
programs. Under the public social insurance regime in the PRC, the existing basic medical
insurance programs, namely Employee Basic Medical Insurance (ᎈ), Urban
and Rural Resident Basic Medical Insurance (ᎈ) and New Rural
Cooperative Medical Insurance (ᎈ) have provided coverage to a
significant portion of the population. In 2024, the number of participants in basic medical
insurance programs reached 1,326.63 million, representing a coverage rate of 95% of the total
population in the PRC. Commercial medical insurance programs provide additional coverage
beyond what is offered by the public medical insurance programs, and offer more flexibility
and customization options for individuals to tailor their insurance coverage and receive
high-quality healthcare services. As the PRC’s healthcare reform continues to deepen, the basic
medical insurance programs will continue to play a central role in ensuring affordable and
accessible healthcare services for the population as the insurance coverage keeps expanding
and the reimbursement rate keeps rising. At the same time, the commercial medical insurance
sector has witnessed a rapid growth in the PRC and it is poised for further development in the
foreseeable future. According to Frost & Sullivan, the expenditure of commercial health
insurance fund increased from RMB235.1 billion in 2019 to RMB405.2 billion in 2024,
representing a CAGR of 11.5% from 2019 to 2024. Moreover, the expenditure of commercial
health insurance fund is projected to reach RMB1,620.7 billion in 2030, representing a CAGR
of 23.5% from 2025 to 2030.
THE HOSPITAL MARKET IN THE PRC
Overview of the Hospital Market in the PRC
The largest providers of healthcare services in the PRC are hospitals. According to Frost
& Sullivan, there were approximately 39,450 hospitals in the PRC in 2024. In addition, the
revenue of hospitals in the PRC reached RMB5,248.0 billion in 2024, accounting for 75.3% of
revenue of the PRC’s healthcare institutions in the same year. The PRC’s hospitals can be
primarily classified into two categories: public hospitals and private hospitals, based on
ownership. Meanwhile, hospitals in the PRC are ranked into three classes (Class I, Class II, and
Class III, with Class III being the highest class attainable), based on, among others, the
hospital’s scale and capabilities, and each class is further divided into three sub-grades (Grade
A, Grade B, and Grade C, with Grade A being the highest sub-grade attainable). Additionally,
in terms of specialization, the PRC’s hospitals encompass general hospitals, specialized
hospitals, traditional Chinese medicine (TCM) hospitals, and other hospitals, such as hospitals
of integrated traditional Chinese and Western medicine ( ʕГᔼഐΥᔼ৫), ethnic minority
hospitals ( ͏ૄᔼ৫) and nursing homes ( ᚐଣ৫).
Public and Private Hospitals in the PRC
Public hospitals have traditionally held a prominent position in delivering healthcare
services in the PRC, but in recent years the private hospital sector has emerged as the rapidly
expanding segment in the PRC’s healthcare service industry. Public hospitals are typically
owned, managed and financially supported by the government or public entities, while private
hospitals are owned, managed and funded by private individuals, corporations, or
INDUSTRY OVERVIEW
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organizations. Private hospitals in the PRC can be typically classified as for-profit private
hospitals and non-profit private hospitals, with for-profit private hospitals holding a 66.5%
share in the PRC’s private hospital market in 2024. In addition, public hospitals are generally
accessible to the general public, with a mandate to provide healthcare services to all, regardless
of their ability to pay. On the other hand, private hospitals may have varying levels of
accessibility and often cater to patients seeking quality healthcare services or who have private
health insurance. Moreover, public hospitals often offer basic drugs and services at subsidized
rates, but private hospitals have more flexibility in service offerings and pricing, and in terms
of service offerings, public hospitals typically offer a wide range of healthcare services to serve
a larger population and usually have more medical resources and experiences, whereas private
hospitals often offer more customized services.
According to Frost & Sullivan, the revenue of private hospitals increased from RMB437.9
billion in 2019 to RMB944.7 billion in 2024, representing a CAGR of 16.6% from 2019 to
2024, and is expected to reach RMB1,882.7 billion in 2030, representing a CAGR of 14.3%
from 2025 to 2030. At the same time, the CAGR of revenue of public hospitals is 6.4% from
2019 to 2024 and is expected to be 7.7% from 2025 to 2030. The following chart sets forth the
historical and projected revenue of public and private hospitals in the PRC for the periods
indicated:
Revenue of Hospitals in the PRC, 2019-2030E
3,596.8
4,090.5
5,248.0
3,687.0
4,198.8
4,885.9
6,340.3
6,930.0
5,779.7
6.4%2019-2024
2025E-2030E
16.6%
7.7%
Billion RMB
8.9%14.3%
7.8%
CAGR
TotalPeriod Public Hospitals Private Hospitals
2019 2020 2021 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E2022
Public HospitalPrivate Hospital
3,621.3 3,988.7 4,303.3
4,813.8 5,198.1 5,607.1
6,039.7
6,493.6
6,968.7
3,158.8
3,214.6 3,538.2
437.9
552.3
944.7
472.4
577.5
897.2
1,142.2
1,322.9
7,546.7
1,507.0
8,188.2
1,694.5
8,851.4
1,882.7
965.9
Source: China Health and Wellness Statistical Yearbook (ϋᛡ), China Statistical Bulletin on the
Development of Health and Wellness (ʮజ), National Bureau of Statistics of China ( ਷
҅), public information published by Health Commissions of various provinces and cities in the PRC, NHFPC,
Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
INDUSTRY OVERVIEW
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The number of private hospitals in the PRC increased at a CAGR of 4.3% from 22,424
in 2019 to 27,652 in 2024 and is estimated to increase to 32,188 in 2030 at a CAGR of 2.4%
from 2025 to 2030, while the number of public hospitals in the PRC decreased from 11,930 in
2019 to 11,798 in 2024, and is estimated to decrease to 11,728 in 2030 according to Frost &
Sullivan. This decline in public hospitals is mainly attributed to the reformation of some public
hospitals into private entities through the introduction of social capital, aligning with the goal
set forth in the “Notice on Further Encouraging and Guiding Social Capital to Establish
Healthcare Institutions ()”,
which is to promote a more balanced distribution of healthcare institutions in the PRC.
Graded Hospitals in the PRC
According to Frost & Sullivan, due to the scarcity of medical resources in the PRC, out
of the total 39,450 hospitals in 2024, merely 10.6% or 4,162 hospitals were classified as Class
III hospitals. Class III hospitals typically refer to tertiary hospitals providing high-level
specialized medical services, servicing a wide geographic area and undertaking advanced
teaching and scientific research tasks. Public hospitals have been and are expected to continue
dominating and playing a crucial role among the PRC’s Class III hospitals. With regard to
private hospitals in the PRC, in 2024, Class III private hospitals merely accounted for 3.5% of
the total graded private hospitals, and the majority of graded private hospitals in the PRC was
rated as Class I, according to Frost & Sullivan. Further, the Class III hospitals are subdivided
into three subsidiary grades, namely A, B, and C grades, with Grade A Class III ( ɧॴ͠ഃ)
hospitals being the highest attainable hospital grade that excel in various aspects, such as
medical equipment and facilities, the ability to provide safe and high-level medical services
across various specialties, scientific research capabilities, as well as the operational efficiency.
The following chart sets forth a breakdown of the number of graded public and private
hospitals by class in the PRC for the periods indicated:
Number of Public and Private Graded Hospitals in PRC, 2019-2024
Class IUnrated Class IIIClass II
2019
Public
Hospital
2019
Private
Hospital
2020
Public
Hospital
2020
Private
Hospital
2021
Public
Hospital
2021
Private
Hospital
2022
Public
Hospital
2022
Private
Hospital
2024
Public
Hospital
2024
Private
Hospital
2023
Public
Hospital
2023
Private
Hospital
22,424
23,524
11,80411,870
24,766
11,746
25,230
11,930
26,583
8,560
1,276 1,104
8,694
1,050
8,443
1,182
9,378
1,018
8,284
9,985
2,338 2,193
10,456
2,125
10,690
2,267
8,926
2,036
11,216
6,461
5,912 5,718
4,571
5,586
5,130 5,559
5,833
3,775
5,485
345
2,789
408
2,985
486 538
2,5882,404 3,233
622
11,772
27,652
985
8,188
1,911
11,680
7,103
5,420
3,482
680
11,798
Source: China Health and Wellness Statistical Yearbook (ϋᛡ), China Statistical Bulletin on the
Development of Health and Wellness (ʮజ), National Bureau of Statistics of China ( ਷
҅), public information published by Health Commissions of various provinces and cities in the PRC, NHFPC,
Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
INDUSTRY OVERVIEW
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General and Specialized Hospitals in the PRC
General hospitals typically provide a broader range of medical services across various
specialties to offer comprehensive care, while specialized hospitals, on the other hand, focus
on specific medical fields or conditions and have specialized equipment, expertise, and
facilities tailored to the specific medical area they specialize in. Some large specialized
hospitals, in addition to their core focus on a specific medical field, also have other clinical
departments to diversify their expertise and revenue streams. In addition, general hospitals
often have a diverse team of healthcare professionals capable of managing a variety of medical
conditions, and specialized hospitals often have a team of healthcare professionals with
expertise and specialization within a specific medical field. Moreover, general hospitals serve
a broader patient population, including individuals with a wide range of medical conditions,
whereas specialized hospitals primarily serve patients with specific medical conditions or those
requiring specialized treatments or procedures within their area of expertise. General hospitals
often have a larger scale in terms of inpatient beds, medical professionals, as well as coverage
area compared to specialized hospitals. According to Frost & Sullivan, the number of private
general hospitals increased from 12,572 in 2019 to 14,322 in 2024, at a CAGR of 2.6% from
2019 to 2024, and is estimated to increase to 15,837 in 2030, at a CAGR of 1.4% from 2025
to 2030 while the number of public general hospitals decreased from 7,391 in 2019 to 6,964
in 2024, and is estimated to decrease to 6,116 in 2030.
Pain Points of the Hospital Market in the PRC
The substantial population size in the PRC, coupled with the continuous growth of the
aging population, has resulted in a demand for healthcare services surpasses the available
supply. In 2024, the PRC had a total of 39,450 hospitals, resulting in an average allocation of
approximately 5.8 beds per thousand people. In comparison, developed countries, such as
Germany and Japan, demonstrate lower pressure on healthcare resources, with bed allocations
of approximately 7.8 beds and 12.6 beds per thousand people, respectively.
In addition, there is an imbalanced distribution of medical resources in the PRC. In 2024,
Class III hospitals in the PRC, which merely account for 10.6% of total hospitals in the PRC,
are responsible for 2,869.0 million outpatient visits, representing a significant 63.2% of the
total outpatient visits in the PRC in the same year, according to Frost & Sullivan. The
demographic shift, uneven distribution of quality healthcare resources, overloaded operation in
Class III hospitals and inversion of medical resource and diagnosis demands, highlight the need
to ensure a more equitable distribution and to optimize utilization of medical resources in the
PRC.
INDUSTRY OVERVIEW
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Key Drivers for the Growth and Development of Hospital Market in the PRC
The strong growth of the hospital industry in the PRC was, and is expected to be,
primarily driven by: (i) the growing aging population and the increasing prevalence of
age-related disease. The number of individuals aged above 65 increased from 176.0 million in
2019 to 222.5 million in 2024, representing a CAGR of 4.8% over the period, and the number
of individuals aged above 65 is projected to reach 269.9 million by 2030, according to Frost
& Sullivan. In addition, age-related diseases such as chronic kidney diseases (CKD),
osteoarthritis, and stroke have become more prevalent. From 2019 to 2024, the number of CKD
patients increased from 126.5 million to 147.7 million, the number of Knee Osteoarthritis
patient increased from 113.4 million to 114.1 million, respectively; (ii) the increasing
prevalence of chronic disease is anticipated to affect healthcare expenditure, specifically in
response to the growing long-term demand for chronic disease treatment; (iii) advancements in
diagnostic technologies and academic research will contribute to better healthcare quality by
enabling earlier and more accurate disease detection and treatment, and in turn attract patients
who are seeking quality healthcare services, which, as a result, foster the market growth and
expansion; and (iv) government policies, aiming to achieve a more equitable distribution of
hospitals and medical resources across the PRC and to address the unmet needs of quality
medical services, contributing to the further development of hospital market in the PRC. For
example, the “14th Five-Y ear National Health Plan (“ ɤ̬ʞ”਷͏਄ੰ஝ྌ)” issued by the
PRC government outlines key policy directions for the healthcare industry, indicating the
government’s intention to expand the supply of medical service resources, guided by the
principles of improving medical quality and healthcare service provision efficiency.
Future Trends of the PRC Healthcare Service Market
In the future, the PRC’s healthcare will be characterized by a shift towards quality
medical services as rising disposable incomes and evolving patient preferences drive the need
for higher quality care. Private hospitals will play a significant role in meeting the growing
demands for healthcare services as they offer customized services and address the limitations
of overloaded public hospitals. In addition, the healthcare market will require enhanced
management and operational capabilities to ensure efficient and quality healthcare delivery.
Further, collaboration between medical institutions and health insurance organizations will be
closer to facilitate better access to healthcare services, streamline the payment process, and
improve overall healthcare affordability and efficiency.
THE PRIV ATE HOSPITAL MARKET IN THE PRC
Overview
Private hospitals in the PRC are owned and operated by private entities. While private
hospitals must adhere to government regulations and licensing requirements to ensure quality
and safety, they have more decision-making and management autonomy compared to public
hospitals. In terms of funding, public hospitals primarily rely on government budgets, patient
fees, and health insurance reimbursements, while private hospitals have a more diverse funding
INDUSTRY OVERVIEW
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model, including patient fees, health insurance payments, investment capital, and philanthropic
donations. This financial autonomy allows private hospitals to make strategic decisions,
allocate resources efficiently, invest in specialized medical fields, offer premium services, and
price their services more flexibly to meet market demand. The pricing independence, coupled
with the ability to provide specialized healthcare services and superior patient experiences,
positions private hospitals as a desirable choice for individuals seeking personalized and
premium healthcare services, which, in turn, helps private hospitals to optimize revenue
streams.
Key Metrics of Public and Private Hospitals in the PRC
The following table sets forth the key metrics of public and private hospitals in the PRC
in 2024:
Public Hospitals Private Hospitals
Average bed turnover days /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.2 19.9
Average spending per inpatient visit (RMB) /H1118/H1118/H1118/H1118/H111810,625.1 8,108.2
Average spending per outpatient visit (RMB) /H1118/H1118/H1118/H1118359.2 456.0
Source: China Health and Wellness Statistical Yearbook (ϋᛡ), China Statistical Bulletin
on the Development of Health and Wellness (ʮజ), National Bureau of Statistics
of China (҅), public information published by Health Commissions of various provinces and cities
in the PRC, NHFPC, Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with
experts
Entry Barriers to the Private Hospital Market in the PRC
New entrants to the private hospital market in the PRC face the following barriers to
entry:
 High Upfront Capital Requirement . Establishing a new hospital, especially in large
cities and prime locations, requires a significant amount of initial capital to cover
costs for land, construction, medical equipment and other expenses. In addition,
general hospitals typically require more capital investment than specialty hospitals
due to the necessity of establishing diverse clinical departments covering a broad
range of therapeutic areas.
 High Requirements for Medical Strength and Expertise . For private hospitals,
building a reputation for academic excellence and technological advancements takes
time and requires significant investments in infrastructure, equipment, and ongoing
research initiatives. Many private hospitals in the PRC face a shortage of seasoned
and esteemed healthcare talents, as public hospitals traditionally offer more research
and academic opportunities as well as a larger base of clinical cases.
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 Lack of Management Talent . The expansion of the private general hospitals
necessitates strong and effective management. Managing hospitals, especially
general ones, is a highly intricate and specialized task. However, many private
hospitals lack experienced management talents. This can lead to the potential
hindrance of development for private general hospitals.
 Investment in Brand Building . The healthcare market in the PRC is highly
competitive. While some private hospitals have successfully established strong
brand recognition and earned trust from patients, many others face challenges in
establishing and promoting their brand identities. Brand building encompasses
multiple aspects such as management philosophy and methods, which require a
significant amount of time and effort.
Key Drivers for the Growth and Development of Private Hospital Market in the PRC
The strong growth of the private hospital industry in the PRC has been, and is expected
to be, primarily driven by the following factors:
 Increasing Demand for Quality Healthcare Services . In the PRC, there are
significant unmet medical needs resulting from the prevalence of a wide range of
serious or complex medical conditions. With the development of society and
economy, people’s health awareness has gradually increased. There has been a
consistent rise in per capita health expenditure from RMB4,702.7 in 2019 to
RMB6,933.3 in 2024, indicating people’s heightened awareness over health,
increased investment in healthcare services and a growing demand for quality
healthcare services. The increasing demand for healthcare services in the PRC has
surpassed the capacity of existing healthcare institutions, burdening them with high
patient loads and leading to challenges in providing adequate care for all patients.
Private hospitals complement public hospital capacities by providing specialized
care and easing the strain on the healthcare system. The number of private hospitals
has seen a substantial increase from 22,424 in 2019 to 27,652 in 2024, as the demand
for more personalized and higher-quality healthcare services grows. This not only
improves patient outcomes but also creates opportunities for the growth and
development of private hospitals.
 Favorable Government Policy Towards Private Hospitals . The development of
private hospitals was designated as a priority in the Government Work Report and
the “14th Five-Y ear National Health Plan (“ ɤ̬ʞ”਷͏਄ੰ஝ྌ)” issued by the
PRC government. The government has emphasized the establishment of new private
hospitals in various regions. Additionally, efforts are being made to create a
favorable policy environment for private hospitals, including tax incentives and
other supportive measures. The policy has significantly accelerated the development
of healthcare institutions operated by social resources. Specifically, the “Opinion on
Promoting the Sustained and Healthy Development of Running of Medical
Institutions with Social Resources” (“จԈ”)
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which was issued by the National Health Commission, the National Development
Reform Commission and other departments, proposed to control the number and
scale of public hospitals and encourage the development for healthcare institutions
operated by social resources, namely those non-government institutions providing
medical services. The opinion also points out that for-profit healthcare institutions
operated by social resources will be entitled to tax benefits as small and micro
enterprise, and healthcare institutions operated by social resources can apply for
recognition as high-tech enterprises to receive corresponding tax incentives.
According to relevant tax policies, “small and micro-sized enterprises” can be
entitled to tax reduction where the first RMB1 million of annual taxable income is
eligible for 75% reduction and the income between RMB1 million and RMB3
million is eligible for 50% reduction at the applicable enterprise income tax rate of
20%, and high-tech enterprises can be entitled to a preferential tax rate of 15%.
According to the opinion, our Group, as a for-profit healthcare institution operated
by social resources, may apply for tax benefits and incentives, according to relevant
rules and regulations.
 Disproportionate Allocation of Medical Resources . Larger hospitals in the PRC have
been concentrated in the existing urban areas of major cities. However, as
urbanization progresses, there is a need to establish more hospitals in emerging
urban areas and suburbs (e.g. Guigang, Guangxi) to meet the healthcare needs of
local residents. This demand for expanded medical care options in these areas has
created an opportunity for the growth of private hospitals.
Future Trends of the PRC Private Hospital Market
The future trends of the PRC Private Hospital Market include the following:
 Striving for Standardized and Specialized Development . Private hospitals in the PRC
are looking to international standards and incorporating global experiences as they
pursue development in specialization, expertise, patient satisfaction, and
technological advancements. The industry’s focus lies on higher quality of
healthcare professionals, clinical expertise and services, aiming to establish
internationally recognized hospitals. In order to gain increased government
recognition and a competitive edge, private hospitals in the PRC are embracing
global experiences, adhering to international standards and actively constructing
specialized departments, with discipline leaders or experts in their respective fields.
As the PRC’s hospital market evolves, private hospitals that provide specialized
healthcare services, are better positioned for sustained growth.
 Formation of Regional Medical Alliances . As the PRC’s population continues to
grow and age rapidly, the private hospital market is evolving toward the formation
of regional medical alliances — collaborative networks that integrate different
levels of care across a geographic region. Firstly, by establishing referral networks
through collaborations between general hospitals and primary as well as other
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community-based healthcare institutions, these alliances will allow patients to
seamlessly transfer between different healthcare institutions based on their acuity
levels. Secondly, targeting at China’s rapidly aging population, the collaborative
integration of medical services with senior care and support services is also able to
provide comprehensive continuing care for the elderly that encompasses acute
treatment, rehabilitation and long-term care.
Key Challenges of the PRC Private Hospital Market
The key challenges of the PRC Private Hospital Market include the following:
 Changes in Healthcare Reform Policies. The gradual implementation of DRG and
disease-based integrated (“DIP”) payment schemes in the PRC has placed higher
demands on hospital management and cost control. Private hospitals often operate
under tight financial constraints, facing significant pressure to maintain profitability.
Under the DRG/DIP payment system, the total health insurance payments received
by most private hospitals have been reduced, negatively impacting their profitability
to a certain extent. The shift to DRG/DIP payment schemes requires hospitals to
enhance their capabilities of cost control and improve their operational efficiency to
ensure their financial sustainability.
 Competition with Public Hospital. Public hospitals in the PRC have a strong market
presence, benefiting from higher patient volumes due to longstanding public trust
and recognition. The inherent advantages of public hospitals have allowed them to
establish a dominant position in the healthcare landscape. Concurrently, the
government is actively promoting the high-quality development of public hospitals
and strengthening the construction of national and regional medical centers. These
government initiatives inevitably lead to further compression of the market share for
private hospitals.
 Shortage of Medical Professionals. Private hospitals in the PRC struggle to attract
top medical talents compared to public hospitals. This is due to the lack of job
security, limited academic resources, and less systematic management in private
hospitals. The shortage of professional talents greatly hinders the development of
private hospitals. Around 80% of healthcare professionals in the PRC have signed
contracts with public hospitals, benefiting from job stability and academic support.
In contrast, these advantages are lacking in private institutions, limiting the mobility
of well-respected and experienced doctors from public hospitals to their private
counterparts. The shortage of qualified and experienced healthcare professionals
poses a challenge on the growth of private hospitals.
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Competitive Landscape of Private General Hospitals in the PRC
The private hospital industry in the PRC is highly competitive and fragmented. The major
participants primarily include, China Resources Medical Holdings Co., Ltd. (01515.HK), Xi’an
International Medical Investment Company Limited (000516.SZ) and our Group, among
others. In 2024, there are approximately 14,322 private general hospitals in the PRC including
approximately 9,376 private for-profit general hospitals.
In 2024, the market share of each healthcare services, hospital management services and
services incidental to healthcare services was 94.5%, 4.4% and 1.1% in the PRC, respectively.
According to Frost & Sullivan, in terms of revenue generated from healthcare services in 2024,
our Nanjing BenQ Hospital ranks the third among all the private general hospitals and private
for-profit general hospitals in the PRC. The top five private general hospitals and top five
private for-profit general hospitals in the PRC are the same. The following table sets forth the
top five private/private for-profit general hospitals in the PRC in terms of revenue generated
from healthcare services in 2024:
Top Five Individual Private/Private For-Profit General Hospitals
in the PRC in Terms of Revenue Generated from Healthcare Services in 2024
Market ShareHealthcare Services Revenue
(billion RMB)CompanyRanking
0.5%3.19Hospital C1
0.4%2.39Hospital A2
0.3%1.67Nanjing BenQ Hospital3
0.3%1.49Hospital B4
0.2%1.25Hospital G5
Notes:
(1) Established in 2021 and located in Xi’an, Shaanxi Province, Hospital C is a Grade A Class III hospital
specializing in emergency and critical care, diagnosis and treatment of rare and difficult disease, as well as
interventional diagnosis and treatment. It has obtained the JCI accreditation and is a member hospital of Mayo
Clinic Alliance. Hospital C and Hospital J are two subsidiaries of a listed company on the Shenzhen Stock
Exchange.
(2) Established in 1958 and located in Foshan, Guangdong Province, Hospital A is a Grade A Class III hospital
specializing in spine orthopedics, urology, and women and children’s center. It was awarded as “Guangdong
Province Bethune-style Advanced Collective” (ό΋ආණ᜗), “Foshan Enterprise Postdoctoral
Workstation” (ʈЪ१) and “Mother-Baby Friendly Hospital” ( ͎Ꮓʾλᔼ৫), etc. Hospital A
is a subsidiary of a dual-listed company on Shanghai Stock Exchange and the Stock Exchange.
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(3) Established in 1995 and located in Dongguan, Guangdong Province, Hospital B is a Grade A Class III hospital
specializing in plastic surgery, cardiology, and medical imaging department. It was awarded with “Dongguan
Outstanding Social Contribution Award” (ึ௫্̈ᘠᆤ), and as “Dongguan Model Unit for
Honest Services” (ਕͪᇍఊЗ) and “Dongguan outstanding Unit for Comprehensive Hospital
Management Work” (୷̹ᔼ৫ၝΥ၍ଣʈЪᎴӸఊЗ). Hospital B is a subsidiary of a listed company on the
Stock Exchange.
(4) Established in 2002 and located in Xi’an, Shaanxi Province, Hospital J is a Grade A Class III hospital
specializing in cardiovascular surgery and general surgery. It is a member hospital of Mayo Clinic Alliance.
Hospital C and Hospital J are two subsidiaries of a listed company on the Shenzhen Stock Exchange.
(5) Established in 2015 and located in Hangzhou, Zhejiang Province, Hospital G is a Grade A Class III general
hospital specializing in hepatobiliary and pancreatic surgery, infectious diseases, nephrology, oncology, and
intensive care medicine. It has been recognized as one of the “Top Ten High-Quality Private Hospitals in
Zhejiang Province.
(6) The abovementioned listed companies include Xi’an International Medical Investment Company Limited,
Guangdong Kanghua Healthcare Group Co., Ltd., Shulan Health Management Co., Ltd. and Shanghai Fosun
Pharmaceutical (Group) Co., Ltd.
Source: Annual reports of the above hospitals, Frost & Sullivan Report and one-on-one interviews conducted by Frost
& Sullivan with experts
According to Frost & Sullivan, in terms of total revenue in 2024, our Nanjing BenQ
Hospital ranks the third among all the private general hospitals and private for-profit general
hospitals in the PRC. The top five private general hospitals and top five private for-profit
general hospitals in the PRC are the same. The following table sets forth the top five
private/private for-profit general hospitals in the PRC in terms of total revenue in 2024:
Top Five Individual Private/Private For-Profit General Hospitals
in the PRC in Terms of Total Revenue in 2024
Market ShareTotal Revenue (billion RMB)CompanyRanking
0.4%3.27Hospital C1
0.3%2.50Hospital A2
0.2%1.69Nanjing BenQ Hospital3
0.2%1.58Hospital B4
0.1%1.32Hospital G5
Source: Annual reports of the above hospitals, Frost & Sullivan Report and one-on-one interviews conducted by Frost
& Sullivan with experts
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According to Frost & Sullivan, in terms of revenue generated from healthcare services in
2024, we rank the seventh among all private for-profit general hospital groups in the PRC. The
following table sets forth the top seven private for-profit general hospital groups in the PRC
in terms of revenue generated from healthcare services in 2024:
Top Seven Private For-profit General Hospital Groups in the PRC
in Terms of Revenue Generated from Healthcare Services in 2024
Market ShareHealthcare Services Revenue
(billion RMB)*CompanyRanking
0.9%6.58Group A1
0.9%6.25Group F2
0.6%4.42Group D3
0.6%3.94Group B4
0.5%3.3Group H5
0.5%3.18Group C6
0.4%2.63Our Group7
Notes:
* Excluding revenue generated from not-for-profit businesses of each respective group.
(1) Established in 2011 and headquartered in Hong Kong, Group F primarily engages in the professional
integration and capital operation of medical resource, and has 146 healthcare institutions covering ten
provinces in the PRC. Group F is a listed company on the Stock Exchange.
(2) Established in 2010 and headquartered in Shanghai, Group A primarily engages in providing diagnostic and
treatment solutions and health management services, and holds shares in 18 healthcare institutions across five
major economics zones in the PRC, including the Pearl River Delta Greater Bay Area, the Y angtze River Delta,
the Huaihai Economic Zone, the Chengdu-Chongqing Economic Belt, and the Central China Economic Belt.
Group A is a subsidiary of a dual-listed company on Shanghai Stock Exchange and the Stock Exchange.
(3) Established in 1956 and headquartered in Xi’an, Shaanxi Province, Group D primarily engages in providing
healthcare services and modern medical technology transformation, and operates three hospitals across
Shaanxi Province in the PRC. Group D is a listed company on the Shenzhen Stock Exchange.
(4) Established in 2014 and headquartered in Shanghai, Group B primarily engages in industrial investment and
operations of healthcare institutions, and holds shares in 29 hospitals across areas with limited healthcare
resources in the PRC. Group B is a subsidiary of a listed company on the Stock Exchange.
(5) Established in 1997 and headquartered in Beijing, Group H primarily engaged in providing comprehensive
premium healthcare services in the PRC through a network of private hospitals and affiliated ambulatory
clinics.
(6) Established in 2003 and headquartered in Beijing, Group C primarily engages in industrial investment and
operations of healthcare institutions, and holds shares in over ten hospitals across over five provinces in the
PRC.
(7) The abovementioned listed companies include Xi’an International Medical Investment Company Limited,
China Resources Medical Holdings Co., Ltd., Shanghai Fosun Pharmaceutical (Group) Co., Ltd. and Far East
Horizon Limited.
Source: Annual reports of the above hospital groups, Frost & Sullivan Report and one-on-one interviews conducted
by Frost & Sullivan with experts
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According to Frost & Sullivan, in terms of total revenue in 2024, we rank the seventh
among all private for-profit general hospital groups in the PRC. The following table sets forth
the top seven private for-profit general hospital groups in the PRC in terms of total revenue in
2024:
Top Seven Private For-profit General Hospital Groups in the PRC
in Terms of Total Revenue in 2024
Market ShareTotal Revenue (billion RMB)*CompanyRanking
1.0%7.22Group A1
1.0%6.96Group F2
0.7%4.82Group D3
0.6%4.09Group B4
0.5%3.58Group C5
0.5%3.32Group H6
0.4%2.66Our Group7
Source: Annual reports of the above hospital groups, Frost & Sullivan Report and one-on-one interviews conducted
by Frost & Sullivan with experts
According to Frost & Sullivan, in terms of average revenue per registered bed in 2024,
we rank the first among all private for-profit general hospital groups in the PRC. The following
table sets the top five private for-profit general hospital groups in the PRC in terms of average
revenue per registered bed in 2024:
Top Five Private For-profit General Hospital Groups in the PRC
in Terms of Average Revenue per Registered Bed in 2024
Average Revenue per Hospital Bed*
(thousand RMB)CompanyRanking
745.41Our Group1
394.69Group A2
272.82Group G3
229.68Group E4
217.05Group H5
Notes:
(1) Average revenue per registered bed is equal to each group’s revenue generated from inpatient healthcare
services (excluding revenue generated from not-for-profit businesses) divided by the number of registered
beds.
(2) Established in 2013 and headquartered in Hangzhou, Zhejiang Province, Group G primarily engages in
providing healthcare services and hospital management services, and operates three hospitals across Zhejiang.
Province.
(3) Established in 2003 and headquartered in Beijing, Group E primarily engages in the investment and operation
of medical and healthcare industry, and operates two general hospitals in two provinces in the PRC.
Source: Annual reports of the above hospital groups, Frost & Sullivan Report and one-on-one interviews conducted
by Frost & Sullivan with experts
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THE HEALTHCARE SERVICE MARKET IN THE EAST CHINA REGION
Overview
The East China region refers to a geographical area encompassing the eastern coastal
region of the PRC. This region, including provinces of Anhui, Fujian, Jiangsu, Shandong,
Zhejiang, and Jiangxi, along with the municipality of Shanghai, is officially defined by the
Chinese Central Government for economic purposes and generally accepted. Encompassing
economically developed areas, the East China region has relatively higher levels of healthcare
infrastructure, medical resources, and access to advanced healthcare technologies. The
healthcare market in the East China region has been growing rapidly, driven by increasing
demand for quality and customized healthcare services. The revenue of public hospitals in the
East China region increased from RMB894.8 billion in 2019 to RMB1,267.5 billion in 2024,
with a CAGR of 7.2% from 2019 to 2024, and is projected to reach RMB1,994.7 billion in
2030, with a CAGR of 7.6% from 2025 to 2030. Meanwhile, the revenue of private hospitals
in the East China region increased from RMB157.6 billion in 2019 to RMB268.6 billion in
2024, with a CAGR of 11.3% from 2019 to 2024, and is projected to reach RMB559.9 billion
in 2030, with a CAGR of 12.6% from 2025 to 2030.
Competitive Landscape of Private General Hospitals in the East China Region
In 2024, there are approximately 3,450 private general hospitals in the East China region
including approximately 2,300 private for-profit general hospitals. In 2024, the market share
of each healthcare services, hospital management services and services incidental to healthcare
services was 92.0%, 6.7% and 1.3% in the East China Region, respectively. According to Frost
& Sullivan, among all the private general hospitals and private for-profit general hospitals in
the East China region, our Nanjing BenQ Hospital ranks the first in terms of revenue generated
from healthcare services in 2024. The top five private general hospitals and top five private
for-profit general hospitals in the East China region are the same. The following table sets forth
the top five individual private/private for-profit general hospitals in the East China region in
terms of revenue generated from healthcare services in 2024:
Top Five Individual Private/Private For-Profit General Hospitals in the East China
Region in Terms of Revenue Generated from Healthcare Services in 2024
Market ShareHealthcare Services Revenue
(billion RMB)CompanyRanking
0.7%1.67Nanjing BenQ Hospital1
0.5%1.40Hospital F2
0.5%1.36Hospital E3
0.5%1.34Hospital I4
0.5%1.31Hospital D5
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Notes:
(1) Established in 1905 and located in Suqian, Jiangsu Province, Hospital F is a Grade A Class III hospital
specializing in cardiovascular medicine, hepatobiliary and pancreatology, and gastrointestinal surgery, etc. It
was awarded as “National Reassuring Demonstration Hospital” (ːͪᇍᔼ৫), “Jiangsu Province
Advanced Health System Unit”(ሊ͛ӻ୕΋ආఊЗ) and “Jiangsu Province Mother-Baby Friendly
Hospital”(͎Ꮓʾλᔼ৫), etc.
(2) Established in 2006 and located in Suzhou, Jiangsu Province, Hospital E is a Grade A Class III hospital
specializing in cardiovascular internal medicine, neurosurgery, and medical imaging, etc. It was recognized as
a “China Chest Pain Center Demonstration Base” ( ʕ਷঍೨ʕːͪᇍਿή), and awarded as “Jiangsu Province
Mother-Baby Friendly Hospital” (͎Ꮓʾλᔼ৫) and “Suzhou Pre-disease Treatment Alliance Unit” ( ᘽ
͊षᑌຑఊЗ).
(3) Established in 1971 and located in Xuzhou, Jiangsu Province, Hospital D is a Grade A Class III hospital
specializing in neurology, cardiovascular internal medicine, respiratory internal medicine, orthopedics, and
radiation oncology. It was awarded as “National Demonstration Hospital for Improving Medical Services” ( Ό
ਕͪᇍᔼ৫) and “National Innovative Enterprise Hospital”(௴อΆุᔼ৫), etc.
(4) Established in 2006 and located in Ningbo, Zhejiang, Hospital I is a Graded B Class III general hospital
specializing women’s and children’s health, and rehabilitative medicine. It was awarded as “National
Baby-Friendly Hospital” (ฌᏃᔼ৫), “a safe and smart unit of Zhejiang Province” (̻τఊЗ࿬౽
τఊЗ), and “the Ningbo Mother Safety Gold Award” (ᆤ), etc.
Source: Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
According to Frost & Sullivan, among all the private general hospitals and private
for-profit general hospitals in the East China region, our Nanjing BenQ Hospital ranks the first
in terms of total revenue in 2024. The top five private general hospitals and top five private
for-profit general hospitals in the East China region are the same. The following table sets forth
the top five individual private/private for-profit general hospitals in the East China region in
terms of total revenue in 2024:
Top Five Individual Private/Private For-Profit General Hospitals
in the East China Region in Terms of Total Revenue in 2024
Market ShareTotal Revenue (billion RMB)CompanyRanking
0.7%1.69Nanjing BenQ Medical Center1
0.6%1.55Hospital F2
0.5%1.42Hospital E3
0.5%1.36Hospital D4
0.5%1.32Hospital G5
Source: Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
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According to Frost & Sullivan, among all the private for-profit general hospital group in
the East China region, we rank the first in terms of total revenue in 2024. The following table
sets forth the top five private for-profit general hospital groups in the East China region in
terms of total revenue in 2024:
Top Five Private For-Profit General Hospital Groups
in the East China Region in Terms of Total Revenue in 2024
Market ShareTotal Revenue (billion RMB)CompanyRanking
1.0%2.66Our Group1
0.6%1.60Group G2
0.4%1.00Group J3
0.4%0.97Group I4
0.3%0.71Group K5
Notes:
(1) Established in 2001 and headquartered in Zhangjiagang, Jiangsu Province, Group I primarily engages in
operating a large-scale medical service system based on basic medical care with specialized features and
operates five hospitals across Jiangsu Province in the PRC. Group I is a listed company on the Shenzhen Stock
Exchange.
(2) Established in 2014 and headquartered in Beijing, Group J primarily engages in industrial investment and
operations of healthcare institutions, and operates five hospitals across Jiangsu Province and Shanghai in the
PRC. Group J is a listed company on the Stock Exchange.
(3) Established in 2008 and headquartered in Taizhou, Zhejiang Province, Group K primarily engages in hospital
investment, hospital operation and medical equipment operation, and has seven hospitals and five research
institutions across Zhejiang Province in the PRC.
Source: Annual reports of the above hospital groups, Frost & Sullivan Report and one-on-one interviews conducted
by Frost & Sullivan with experts
THE HEALTHCARE SERVICE MARKET IN JIANGSU PROVINCE
Overview
Jiangsu Province, recognized as one of the PRC’s most developed regions, had a
population of approximately 85.3 million at the end of 2024. The GDP of Jiangsu Province
amounted to RMB13,700.8 billion, accounting for 10.2% of the national total. The per capita
annual disposable income of residents in Jiangsu Province reached RMB55,415 in 2024,
surpassing the nationwide figure of RMB41,314 for the same year. In addition, the average
medical expenses in Jiangsu Province exceeded the national average for both outpatient and
inpatient healthcare services. In 2024, the average outpatient medical expenses per visit in the
PRC were RMB375.0, whereas in Jiangsu Province, it was RMB390.2. Similarly, the average
inpatient medical expenses per visit in the PRC amounted to RMB10,223.1, whereas in Jiangsu
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Province, it reached RMB11,762.6. Fast-paced development of hospital market in Jiangsu
Province is fueled by the high population density, elevated disposable income, heightened
health awareness among local residents, and in turn significant demand for healthcare services.
In terms of revenue of hospitals in Jiangsu Province, private hospitals have demonstrated
more robust growth than public hospitals historically and are expected to continue to grow
faster than public hospitals in the near future. The following chart sets forth the historical and
projected revenue of public and private hospitals in Jiangsu Province for the periods indicated:
Revenue of Hospitals in Jiangsu Province, 2019-2030E
10.0%2019-2024
2025E-2030E
10.9%
6.6%
Billion RMB
7.8%10.9%
10.2%
CAGR
TotalPeriod Public Hospitals Private Hospitals
2019 2020 2021 2023 2024 2025E 2026E 2027E 2028E 2029E 2030E2022
Public HospitalPrivate Hospital
246.5
288.5
400.8 427.4
509.3
584.0
272.5247.6
360.8
191.4 189.3 205.0 216.4
308.2 344.0 390.3 439.5414.6366.8318.9279.8
55.2 58.2 67.5 72.1
92.6 108.4
142.5
474.0
130.0
169.4
546.4
621.7
156.1
182.2
81.0
Source: China Statistical Bulletin on the Development of Health and Wellness (ʮజ),
Jiangsu Province Health and Wellness Yearbooks (ሊ͛਄ੰϋᛡ), Jiangsu Province Statistical Bulletin on the
Development of Health and Wellness (ʮజ), NHFPC, Frost & Sullivan Report and
one-on-one interviews conducted by Frost & Sullivan with experts
Graded Private and Public Hospitals in Jiangsu Province
As the government encourages private sector to step into the healthcare service industry
and operate hospitals, the number of private hospitals in Jiangsu Province has experienced
remarkable growth. According to Frost & Sullivan, between 2019 and 2024, the number of
private hospitals in Jiangsu Province increased from 1,483 to 1,791, representing a CAGR of
3.8% from 2019 to 2024, while the number of public hospitals in the same area remained
stable, at 458 in 2019 and 459 in 2024.
With regard to the graded hospitals in Jiangsu Province, the composition of graded
hospitals in the private sector remains unbalanced in Jiangsu Province as compared to public
hospitals. In 2024, there were 216 Class III hospitals and 31 Class III private hospitals in
Jiangsu Province. In addition, Class III hospitals accounted for approximately 2.8% in the total
number of graded private hospitals in 2024, whereas they constitute approximately 44.7%, a
much larger proportion in the total number of graded public hospitals.
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Competitive Landscape of Private General Hospital in Jiangsu Province
In 2024, there are approximately 500 individual private for-profit general hospitals in
Jiangsu Province. In 2024, the market share of each healthcare services, hospital management
services and services incidental to healthcare services was 90.8%, 7.5% and 1.7% in Jiangsu
Province, respectively. According to Frost & Sullivan, among all the private general hospitals
and private for-profit general hospitals in Jiangsu Province, our Nanjing BenQ Hospital ranks
the first in terms of revenue generated from healthcare services in 2024. The top five private
general hospitals and top five private for-profit general hospitals in Jiangsu Province are the
same. The following table sets forth the top five individual private/private for-profit general
hospitals in Jiangsu Province in terms of revenue generated from healthcare services in 2024:
Top Five Individual Private/Private For-profit General Hospitals
in Jiangsu Province in Terms of Revenue Generated from Healthcare Services in 2024
Market ShareHealthcare Services Revenue
(billion RMB)CompanyRanking
2.0%1.67Nanjing BenQ Medical Center1
1.7%1.402
1.6%1.363
1.6%1.314
1.1%0.96Suzhou BenQ Hospital5
Hospital F
Hospital E
Hospital D
Source: Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
According to Frost & Sullivan, among all the private general hospitals and private
for-profit general hospitals in Jiangsu Province, our Nanjing BenQ Hospital ranks the first in
terms of total revenue in 2024. The top five private general hospitals and top five private
for-profit general hospitals in Jiangsu Province are the same. The following table sets forth the
top five individual private/private for-profit general hospitals in Jiangsu Province in terms of
total revenue in 2024:
Top Five Individual Private/Private For-profit General Hospitals in
Jiangsu Province in Terms of Total Revenue in 2024
Market ShareTotal Revenue (billion RMB)CompanyRanking
2.0%1.69Nanjing BenQ Medical Center1
1.8%1.55Hospital F2
1.7%1.42Hospital E3
1.6%1.36Hospital D4
1.1%0.97Suzhou BenQ Hospital5
Source: Frost & Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
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THE HEALTHCARE SERVICE MARKET IN GUANGXI
Overview
Healthcare resources in Guangxi, especially quality healthcare services, lag behind many
other provinces in the PRC, according to Frost & Sullivan. In 2024, for every thousand people,
Guangxi had 5.29 hospital beds and 3.10 (assistant) medical practitioners, both ranking in the
bottom 15% among all provinces in the PRC, according to Frost & Sullivan. Healthcare
services in Guangxi are under pressure to meet the healthcare needs of a population that is
rapidly expanding and this signifies growth opportunities in the healthcare services market in
Guangxi.
Graded Public and Private Hospitals in Guangxi
Driven by the increase in population, rapidly-growing demand and favorable policies
hospitals in Guangxi has indicated a strong growth. However, despite the significant increase
in the number of hospitals, there are substantial unmet medical needs in Guangxi. In 2024,
among all graded hospitals in Guangxi, Class III hospitals accounted for approximately 14.3%.
Additionally, Class III private hospitals only represented approximately 2.7% among all graded
private hospitals, indicating the scarcity of private hospitals providing advanced medical care.
Number of Public and Private Graded Hospitals in
Guangxi Zhuang Autonomous Region, 2019-2024
Class IUnrated Class III Class II
2019
Public
Hospital
2019
Private
Hospital
2020
Public
Hospital
2020
Private
Hospital
2021
Public
Hospital
2021
Private
Hospital
2022
Public
Hospital
2022
Private
Hospital
2024
Public
Hospital
2024
Private
Hospital
2023
Public
Hospital
2023
Private
Hospital
341
390
348343
455
353
497
337
535
76
27 17
84
15
91
22
68
18
95
201
32 41
225
44
232
38
180
38
240
188
204 207
107
208
135
162
204
88
203
5
83
6
86
11
12
7974 98
12
357
597
13
107
38
255
221
203
106
13
361
Source: Statistical Bulletin on the Development of Health and Wellness (ʮజ), Guangxi
Statistical Bulletin on the Development of Health and Wellness (ʮజ), NHFPC, Frost &
Sullivan Report and one-on-one interviews conducted by Frost & Sullivan with experts
INDUSTRY OVERVIEW
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Future Trends of Healthcare Service Market in Guangxi
The geographical proximity of Guangxi to several Southeast Asian countries, including
Vietnam, Laos, etc., has facilitated collaboration in healthcare services between the
neighboring nations. Recognizing the potential benefits of such cooperation, the “Notice of the
People’s Government of Guangxi Zhuang Autonomous Region on Printing and Issuing the
‘Fourteenth Five-Y ear Plan’ for Health and Wellness Development in Guangxi” ( ᄿГѯૄІ
࢝“ɤ̬ʞ”) emphasizes the need to
comprehensively advance international cooperation in the field of health and wellness. The
plan highlights the aim to contribute to the development of the “Health Silk Road” ( ਄ੰകၦ
ʘ༩) and actively promote the China-ASEAN Health Cooperation Forum. This cooperation
forum plays a crucial role in supporting the implementation of the Regional Comprehensive
Economic Partnership (RCEP) and the “Belt and Road” ( ɓ੭ɓ༩) Initiative, both of which
aim to foster regional economic integration and connectivity. As part of this initiative, Guangxi
is actively working towards establishing China-ASEAN cross-border medical service centers
and encouraging the collaboration, knowledge-sharing, and the provision of medical services
across national boundaries between the province and its neighboring Southeast Asian countries.
INDUSTRY OVERVIEW
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OVERVIEW
We are a private for-profit general hospital group in mainland China, and have adopted
the advanced hospital operation and management experiences from Taiwan. Our Company was
incorporated as an exempted company with limited liability in the Cayman Islands on January
5, 2009 as the holding company of our Group. Our Company has undergone multiple share
capital changes since our establishment. We have also received external equity financing to
support our expanding business operations. See “— Major Shareholding Changes of Our
Company” and “— Pre-IPO Investments” in this section.
BUSINESS MILESTONES
The following table sets forth certain development milestones of our Group:
Y ear Milestones
2003 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 The construction of Nanjing BenQ Hospital was
commenced
2005 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 The construction of Suzhou BenQ Hospital was commenced
2008 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 We commenced the operation of Nanjing BenQ Hospital
2013 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 We commenced the operation of Suzhou BenQ Hospital
2017 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Nanjing BenQ Hospital was recognized as one of the first
certified chest pain centers in 2017 in the PRC and a trauma
treatment center in Nanjing
2018 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Nanjing BenQ Hospital was recognized as a “National
Health Management Demonstration Base”
2019 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Nanjing BenQ Hospital was rated as AAA under medical
institution credit rating and obtained 5-star star-class rating
recognized by the Chinese Non-government Medical
Institutions Association
2020 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Suzhou BenQ Hospital passed the JCI international
certification, and implemented the “Patient Safety
Culture-Centered” service principle throughout the entire
medical process
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Nanjing BenQ Hospital was recognized as a certified stroke
center
 We commenced the construction of Phase II of Nanjing
BenQ Hospital
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Suzhou BenQ Hospital and Soochow University ( ᘽψɽኪ)
jointly established the “Soochow University BenQ Clinical
Medicine Research Institute”
 Nanjing BenQ Hospital was approved as a Grade A Class III
general hospital
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Suzhou BenQ Hospital was approved as a Class III general
hospital
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 Nanjing BenQ Hospital and Suzhou BenQ Hospital were
rated Grade A Class IV in the national medical and health
information interconnection standardization maturity test
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Establishment in 2009
In January 2009, our Company was incorporated in the Cayman Islands as the holding
company of our Group. The initial authorized share capital of our Company was
US$300,000,000.00 divided into 300,000,000 ordinary Shares with a par value of US$1.00
each Share. Upon incorporation, one Share was allotted and issued to Offshore Incorporations
(Cayman) Limited and was subsequently transferred to Qisda Corporation. On the same date,
additional 123,700,000 Shares were allotted and issued and our Company was owned as to
approximately 89.81% by Qisda Corporation (directly and indirectly through its wholly-owned
subsidiaries Darly2 V enture and QISDA SDN. BHD.) and approximately 8.97% and 1.21% by
Leader International Biomedicine Limited (“ Leader International ”) and Mr. TSAI Chiang-
Hai (ऎ)( “ Mr. Tsai ”), respectively. Leader International is an investment company and it
became acquainted with us through Mr. Tsai. For further details, see “— Pre-IPO Investments”
in this section.
Share transfers and share capital changes during 2011-2013
On July 27, 2011, the par value of the Shares was amended from US$1.00 per Share to
US$1.20 per Share. On the same day, our Company allotted and issued a total of 3,166,667
Shares at par value as share incentives to 23 individuals (including 20 then senior officers of
the Qisda Group and its affiliates including our Group and three of their spouses) (“ 2011 Share
Incentives ”). Also on the same day, Darly2 V enture and Leader International subscribed for
1,324,036 and 509,297 new Shares, respectively, at par value. The aforementioned transactions
were settled by the same day. Upon completion of such transactions, the issued share capital
of the Company comprised of 128,700,001 Shares with a par value of US$1.20 per Share.
On July 19, 2013, the par value of the Shares was amended from US$1.20 to US$1.00 per
Share. On the same day, our Company issued and allotted 45,000,000 Shares to the Qisda
Group at par value. In addition, certain share transfers took place (i) from an individual who
was a former president of Nanjing BenQ Hospital and another individual who was the spouse
of a former employee of our Group to Darly V enture (L) at par value as the repurchase by Darly
V enture (L) of the incentive Shares held by such individuals, (ii) between two individuals who
were both employees of Qisda Corporation then at par value for the purpose of adjustment of
incentive Shares, and (iii) from Leader International to Darly V enture (L) at par value after
arm’s length negotiation due to the then shareholder’s demands for funds. The aforementioned
transactions had been settled by July 20, 2013. After such shareholding changes, our Company
was owned as to 93.62%, 3.81%, 0.86% and 1.71% by Qisda Corporation and its subsidiaries,
Leader International, Mr. Tsai and other 21 individuals, respectively, and the issued share
capital of the Company comprised of 173,700,001 Shares at the par value of US$1.00 per
Share.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Pre-IPO investments in 2014 and 2015
In January 2014, CDH Medical Services Limited (“ CDH”) and ShareHope Medical Co.,
Ltd. (ʮ̡)( “ ShareHope ”) were introduced as investors of the Company.
On January 29, 2014, CDH entered into a share subscription agreement with our Company
and subscribed for 60,585,000 Shares for a total consideration of US$100,000,000. The
consideration was determined after arm’s length negotiation among the parties taking into
consideration the operations and status of our business and operating entities and fully settled
on March 31, 2014.
In December 2015, ShareHope purchased 5,258,048 Shares from Leader International at
a consideration of US$8,412,876.8. The consideration was determined after arm’s length
negotiation among the parties and with reference to the appraisal report issued by an
independent professional valuer and fully settled on May 12, 2016.
CDH and ShareHope were granted certain special rights. The special rights of CDH were
automatically terminated upon its exit as disclosed below. For details of the special rights of
ShareHope, see “— Pre-IPO Investments — Rights of the Pre-IPO Investors” in this section.
Shareholding changes during 2015-2022
In March 2015, Leader International transferred additional 597,800 Shares it held to
Darly V enture (L) at par value also due to the then shareholder’s demands for funds.
From May 2016 to August 2018, our Company had further undergone several rounds of
issuance of Shares and several transfers of Shares took place among the Shareholders. In March
2017, our Company issued 10,000,000 Shares to Darly V enture (L) at par value. In March 2017
and August 2018, our Company issued 660,000 Shares in aggregate to the then chief executive
officer of Nanjing BenQ Hospital and Suzhou BenQ Hospital, at par value, upon the exercise
in full of the vested share options granted to him in December 2013 (the “ 2013 Share
Incentives ”). In addition, several transfers of Shares took place (i) between Qisda Corporation
and one of its subsidiaries at nil consideration as its internal shareholding restructuring, (ii)
from Leader International to the then chief financial officer of Qisda Corporation, at US$1.60
per Share, after arm’s length negotiation among parties and considering the growth and
expansion of the Group, and (iii) from an individual, who was a former vice chairman of BenQ
Corp., to his son and daughter.
In April 2019, 1,640,000 Shares were transferred from Darly V enture (L) to several
employees of the Qisda Group at US$1.50 per Share as share incentives (the “ 2019 Share
Incentives ”). In February 2021, a retired former employee of the Qisda Group transferred all
the Shares he was awarded as incentive Shares under 2011 Share Incentives to an individual
who is the spouse of Mr. CHIANG Che-Min (our chief financial officer) at US$1.30 per Share,
which was slightly higher than the transferor’s initial award price. In November 2021, another
retired former employee of the Qisda Group transferred all the Shares she were awarded under
2019 Share Incentives to an individual who is the daughter of another senior officer of the
Qisda Group at US$1.50 per Share equivalent to the transferor’s initial award price.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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In August 2022, several former employees transferred all the Shares they were awarded
in 2019 to Qisda Corporation at US$1.50 per Share equivalent to the initial award price. The
aforementioned transactions were all settled during the relevant periods.
Exit of CDH in 2023
On August 17, 2023, CDH entered into a Share Sale and Purchase Agreement with Qisda
Corporation and our Company, according to which CDH agreed to sell, and Qisda Corporation
agreed to purchase 60,585,000 Shares held by CDH, representing approximately 24.73% then
equity interests in our Company, with a consideration of US$194,904,895 (“ Repurchase of
CDH Shares ”). The consideration was determined after arm’s length negotiation among the
parties taking into consideration the original subscription price with an annual premium rate as
agreed among relevant parties and was fully settled on September 27, 2023.
OUR SUBSIDIARIES
As of the Latest Practicable Date, our Company has eight wholly-owned subsidiaries,
namely BenQ BM, BenQ Healthcare Consulting, Nanjing BenQ Hospital, Suzhou BenQ
Hospital, Nanjing BenQ Hospital Management, Suzhou BenQ Investment, Nanjing BenQ
Nursing and Suzhou BenQ Nursing which are set forth below:
Place of
Incorporation
Date of
Incorporation Principal Business Activities
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC November 11, 2003 Hospital healthcare services
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC July 7, 2004 Hospital healthcare services
BenQ BM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Malaysia October 30, 2003 Investment holding
BenQ Healthcare Consulting /H1118/H1118/H1118/H1118/H1118Taiwan February 5, 2009 Management services
Nanjing BenQ Hospital
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
PRC November 14, 2005 Management services
Suzhou BenQ Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC September 16, 2015 Investment holding
Nanjing BenQ Nursing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC July 9, 2025 Nursing services
Suzhou BenQ Nursing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118PRC July 24, 2025 Nursing services
Establishment and Shareholding Changes of Major Subsidiaries
Nanjing BenQ Hospital
Nanjing BenQ Hospital was established on November 11, 2003 with a registered capital
of RMB300 million. At the time of its establishment, Nanjing BenQ Hospital was owned as to
70%, 20% and 10% by BenQ L, a wholly-owned subsidiary of Qisda Corporation, Nanjing
State-owned Assets Investment Management Holdings (Group) Co., Ltd. (ԯ̹਷Ϟ༟ପҳ༟
ٰ(ණྠ)ப΂ʮ̡)( “ Nanjing State-owned Assets Investment ”) and Nanjing
Hospital of C.M. (ԯ̹ʕᔼ৫)( “ Nanjing TCM Hospital ”), respectively. Also in 2003, the
construction of Nanjing BenQ Hospital was commenced. Having commenced operations in
May 2008, Nanjing BenQ Hospital has been rated as a Grade A Class III hospital since 2022,
being the first private hospital so rated in Nanjing, Jiangsu Province.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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On February 24, 2005, BenQ L transferred its equity interests in Nanjing BenQ Hospital
to BenQ BM, our wholly-owned subsidiary, and Nanjing BenQ Hospital became a non-wholly-
owned subsidiary of our Company.
On December 15, 2011, Nanjing TCM Hospital transferred its equity interests in Nanjing
BenQ Hospital to Nanjing State-owned Assets Investment at nil consideration as approved by
State-Owned Assets Supervision and Administration Commission of Nanjing Municipal
Government (ึ) and other relevant government
authorities and the registered capital of Nanjing BenQ Hospital was also increased from
RMB300 million to RMB600 million with the new share capital subscribed by BenQ BM.
Upon completion of the above-mentioned equity transfer and capital increase, Nanjing BenQ
Hospital was owned as to 85% by BenQ BM and 15% by Nanjing State-owned Assets
Investment, respectively.
On June 8, 2015, Nanjing State-owned Assets Investment transferred its equity interests
in Nanjing BenQ Hospital to BenQ BM for a consideration of RMB96.66 million after arm’s
length negotiation among the parties and with reference to the appraisal report issued by an
independent professional valuer and as a result, Nanjing BenQ Hospital became a wholly-
owned subsidiary of our Company. The abovementioned consideration was fully settled on
May 18, 2015.
After two rounds of capital increases in October 2015 and December 2015, respectively,
the registered capital of Nanjing BenQ Hospital was increased to US$156,540,757.93.
On March 6, 2018, for the purpose of specialization of different business segments, a new
project company Nanjing Yinxia Healthcare Industry Development Co., Ltd. (ԯვข਄ੰପ
ʮ̡)( “Nanjing Yinxia Healthcare ”) was established through division of Nanjing
BenQ Hospital and the registered capital of Nanjing BenQ Hospital was reduced to
US$152,014,983.65 accordingly.
After several rounds of further capital increase from June 2020 to October 2023, as of
October 19, 2023, the registered capital of Nanjing BenQ Hospital was US$192,014,983.65.
Suzhou BenQ Hospital
Suzhou BenQ Hospital was established on July 7, 2004 with a registered capital of
RMB240 million. At the time of its establishment, Suzhou BenQ Hospital was owned as to 70%
and 30% by BenQ L, a wholly-owned subsidiary of Qisda Corporation, and Suzhou SND Group
Corporation (ʮ̡) (formerly known as Suzhou High-tech Zone Economic
Development Group Headquarter (ණྠᐼʮ̡)) (“ Suzhou SND ”),
respectively. In December 2005, the construction of Suzhou BenQ Hospital was commenced.
Having commenced operations in May 2013, Suzhou BenQ Hospital is a private for-profit
general hospital that offers multi-disciplinary inpatient and outpatient diagnosis and
treatments, similar to those offered by our Nanjing BenQ Hospital, yet with an emphasis on
localized medical services.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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On October 17, 2006, BenQ L transferred all its equity interests in Suzhou BenQ Hospital,
to BenQ BM, our wholly-owned subsidiary, and Suzhou BenQ Hospital became a non-wholly-
owned subsidiary of our Company.
On August 20, 2015, Suzhou SND transferred its equity interests in Suzhou BenQ
Hospital to BenQ BM for a consideration of RMB77.402 million based on arm’s length
negotiation between the parties and with reference to the appraisal report issued by an
independent professional valuer, and as a result, Suzhou BenQ Hospital became a wholly-
owned subsidiary of our Company. The abovementioned consideration was fully settled on
August 14, 2015.
After two rounds of capital increases in March 2016 and February 2017, respectively, as
of February 20, 2017, the registered capital of Suzhou BenQ Hospital was increased to
RMB601,975,000, and it remains as a wholly-owned subsidiary of us owned as to
approximately 68.35% by BenQ BM and 31.65% by Suzhou BenQ Investment, respectively.
SHARE INCENTIVES AND SHARE OPTION PLAN
In recognition of the contribution of certain employees of Qisda Corporation and its
affiliates, several rounds of share incentives (i.e. 2011 Share Incentives, 2013 Share Incentives
and 2019 Share Incentives) were conducted. The awards under these schemes had been fully
granted to the relevant employees. For details, see “— Share transfers and share capital
changes during 2011 — 2013” an d “ — Shareholding changes during 2015 — 2022” in this
section.
In anticipation of the Listing, the Company amended its only existing share option plan
which first became effective in November 2018 and such amended share option plan is our
Pre-IPO Share Option Plan. The grantees of the Pre-IPO Share Option Plan are all employees
of our Group. The purpose of the Pre-IPO Share Option Plan is to enable our Company to
incentive and reward eligible participants for their contribution to our Group so as to
strengthen their sense of belonging, encourage them to contribute to the long-term growth of
the Company and to enhance the value of the Company and the benefit of Shareholders. As of
the Latest Practicable Date, we have granted options to 150 grantees to subscribe for 2,877,000
Shares as underlying shares, all of which will be vested after the Listing. Our Company will
not grant any further options under the Pre-IPO Share Option Plan on or after the Listing Date.
For details, see “Statutory and General Information — D. Pre-IPO Share Option Plan” in
Appendix V to this prospectus.
Our Company has applied for and has been granted (i) a waiver from the Stock Exchange
from strict compliance with the disclosure requirements under Rule 17.02(1)(b) of, and
paragraph 27 of Appendix DIA to the Listing Rules; and (ii) a certificate of an exemption from
the SFC from strict compliance with the disclosure requirements under paragraph 10(d) of Part
I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance. For further details, see “Waivers From Strict Compliance With the Listing Rules
and Exemption From Strict Compliance With the Companies (Winding Up and Miscellaneous
Provisions) Ordinance — Waiver and Exemption in Respect of the Pre-IPO Share Option Plan”
in this prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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PRE-IPO INVESTMENTS
Principal Terms of the Pre-IPO Investments
The below table summarizes the principal terms of the Pre-IPO Investments (4):
Investor /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Mr. Tsai Leader International ShareHope
Vendor /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118N/A N/A N/A Leader
International
Date of Settlement /H1118/H1118/H1118/H1118January 5, 2009 January 5, 2009 July 27, 2011 May 12, 2016
Consideration (US$) /H1118/H1118/H11181,500,000.00 11,100,000.00 611,156.40 8,412,876.80
Cost per Share (US$) /H1118/H11181.00 1.00 1.20 1.60
Post-money Valuation of
our Company
(US$)
(1)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
123.7 million 123.7 million 154.4 million 374.9 million
(Discount)/Premium to
the Offer Price (3) /H1118/H1118/H1118/H1118
(25.93)% (25.93)% (11.11)% 18.52%
Lock-Up Period /H1118/H1118/H1118/H1118/H1118/H1118The Pre-IPO Investors are not subject to any lock-up arrangement pursuant
to the relevant investment agreements.
Basis of consideration /H1118/H1118The considerations for the Pre-IPO Investments were based on arm’s length
negotiations between us and the Pre-IPO Investors after taking into
consideration the timing of the relevant investments and the status of our
business and operations.
Strategic benefits of the
Pre-IPO Investors
brought to our
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
At the time of each of the Pre-IPO Investments, our Directors were of the
view that our Company could benefit from the additional capital from the
Pre-IPO Investments and/or the Pre-IPO Investors’ knowledge and
experience. Our Pre-IPO Investors include a renowned company in relevant
industries which can help us achieve business synergies, and professional
industrial investor which can provide us with professional advice on our
Group’s development and improve our corporate governance. The Pre-IPO
Investments also demonstrate the Pre-IPO Investors’ confidence in the
business and operation of our Company.
Use of proceeds from
the Pre-IPO
Investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118
We have utilized all proceeds from the Pre-IPO Investments for business
expansion including the development of our hospitals and related capital
expenditure and as working capital of our Group.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) The post-money valuation of the Company is calculated by dividing the total consideration paid by the
Pre-IPO Investors by the shareholding percentage acquired by them immediately following the
investments. The increase in valuation was primarily due to the business and operation status of our
Group. In particular,
(a) when Mr. Tsai and Leader International first invested in our Company upon its establishment in
2009, Suzhou BenQ Hospital was still under construction while Nanjing BenQ Hospital just
began its operation and the Group had not incurred any substantial revenue yet. Therefore, these
investors subscribed for the Shares at par value;
(b) when Leader International further invested in the Company in 2011, Nanjing BenQ Hospital had
been in operation for around three years and started to generate stable revenue. Y et Suzhou BenQ
Hospital was still under construction. Therefore the valuation of the Group then increased slightly
compared to that in 2009;
(c) when ShareHope invested in the Company in 2016, both Nanjing BenQ Hospital and Suzhou
BenQ Hospital had began operation and the Group had started to make profit. Therefore the
valuation of the Group increased substantially compared to that in 2011.
(2) Since 2017, the Group’s business has experienced a rapid development as detailed under the section
headed “Business Milestone” above, and became the largest private for-profit general hospital group in
the East China region, with our market share being 1.1% in the East China region, and the seventh
largest private for-profit general hospital group nationwide, with our market share being 0.4% in the
PRC, as measured by total revenue in 2023, according to Frost & Sullivan, and therefore the Group’s
valuation substantially increased compared to that in 2016.
(3) Assuming the Offer Price of HK$10.51 per Share, being the mid-point of the indicative Offer Price
range.
(4) There are four individual shareholders, being Liu Chin-Chih, LIN Pi-Chu, CHENG Y uh-Wen and
HUANG Tina Yi-Ting (each holding 100,000, 100,000, 100,000 and 50,000 Shares, representing
approximately 0.04%, 0.04%, 0.04% and 0.02% of our Company’s total issued Shares as of the Latest
Practicable Date), who are relatives of certain senior officers of Qisda Corporation and its affiliates and
received Shares with a cost per Share generally in line with prices for the relevant share incentive award
prices. The relevant Shares were intended to be granted as share incentives to those senior officers of
Qisda Corporation and its affiliates. Due to their personal financial situation and/or estate planning
reasons, those senior officers delegated the rights to subscribe such incentive Shares to their spouses or
children. Given that these individual shareholders were able to acquire the Shares at the relevant prices
only because they are relatives of some senior officers of the Qisda Corporation and affiliates, and the
Company regarded such acquisitions as providing share incentives to employees of Qisda Corporation
and its affiliates by allowing their relatives to invest in the Company at a price close to nominal value,
we do not regard their shareholdings as Pre-IPO Investments but rather as share incentives. For details,
see “— Share transfers and share capital changes during 2011 – 2013” an d “ — Shareholding changes
during 2015 – 2022” in this section.
Rights of the Pre-IPO Investors
Certain special rights were granted to ShareHope under the relevant agreements between
shareholders. In particular, Qisda Corporation agreed to support and vote for the appointment
of one director nominated by ShareHope, which is a special right permitted under the Chapter
4.2 of the Guide for New Listing Applicants. The redemption right of ShareHope granted by
our Controlling Shareholder, Qisda Corporation, which has been terminated one day before our
Company filed its first listing application to the Stock Exchange, shall automatically be
reinstated if (i) our Company withdraws its listing application or (ii) the listing application is
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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rejected or returned by the Stock Exchange, while the Company was not a party to such
redemption rights. Saved as disclosed above, ShareHope’s other special rights will not survive
the Listing. The Company confirmed that (i) it does not have any obligation to fulfill the
abovementioned special rights granted by our Controlling Shareholder, Qisda Corporation,
including the redemption rights; and (ii) it has not provided any guarantee for the
abovementioned special rights granted by the Controlling Shareholder, Qisda Corporation, in
the event of a default by the Controlling Shareholder. Accordingly, no financial liability has
been recorded by the Company during the Track Record Period. See Note 29(c) to the
Accountants’ Report. Further, the Company confirmed that there is no side agreement in this
regard.
Information about our Pre-IPO Investors
Information of our Pre-IPO Investors is set out below:
ShareHope
ShareHope Medical Co., Ltd. (ʮ̡)( “ ShareHope ”) is a joint stock
limited company incorporated under the laws of Taiwan in November 2003 and listed on the
Taipei Exchange on March 1, 2011 (stock code: 8403.TPEx). ShareHope is an integrated
medical services provider in Taiwan specializing in health management and operation, the
human resource dispatch of medical professionals, the provision of medical, pharmaceutical
and healthcare devices, the rental of medical equipment and long-distance healthcare services.
Mr. Tsai
Mr. TSAI Chiang-Hai (ऎ)( “ Mr. Tsai ”) is an individual shareholder and an early
stage investor of our Company. He is the chairman of the board of directors of the China
Medical University Hospital (ணᔼ৫), a renowned hospital in the central of
Taiwan, who has extensive knowledge and expertise in the biomedical field and is an authority
in the field of hospital management. Mr. Tsai also serves as a director of Center Laboratories,
Inc. (ʮ̡), a company listed on the Taipei Exchange (stock code:
4123.TPEx).
Leader International
Leader International Biomedicine Limited (“ Leader International ”) is a limited liability
company established in Samoa and is held by Ying Chow as to 90% through Leader
International Holding Limited, a company wholly-owned by Ying Chow, and Lin Chia Chi as
to 10%, who are both Independent Third Parties. It principally engages in investment holding.
To the best knowledge and information of our Directors, the Pre-IPO Investors decided
to invest in our Company due to their confidence in the prospects of our Company and
potentials, and their investment reflects their financial and experiential support for the
development of our Group. To the best knowledge of our Directors, our Pre-IPO Investors and
their ultimate beneficial owners are all Independent Third Parties.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Public Float and Free Float
Upon completion of the Global Offering, Qisda Corporation will hold 232,736,837
Shares, directly or indirectly, representing approximately 74.61% of the total issued Shares.
Therefore, such Shares will not count towards the public float. In addition, Mr. HSIAO
Tze-Jung, Mr. CHEN Chi-Hong and Ms. HUNG Chiu-Chin, Directors of our Company, and the
spouse of Mr. CHIANG Che-Min, our chief financial officer and a director of our certain
subsidiaries, will become core connected persons of our Company under the Listing Rules upon
Listing. They will hold an aggregate of 770,000 Shares, representing approximately 0.25% of
our Company’s total issued Shares and those Shares will not count towards the public float.
Therefore, the 233,506,837 Shares held by our core connected persons, representing a total of
approximately 74.86% of our Company’s total issued Shares, will not count towards the public
float. Saved as provided above, as of the Latest Practicable Date, no other Shareholder will be
a core connected person of the Company upon Listing.
Pursuant to Rule 8.08(1) of the Listing Rules, assuming that the options granted under the
Pre-IPO Share Option Plan are not exercised, the expected market capitalization of the Shares
would not exceed HK$6 billion under all circumstances and therefore, the minimum prescribed
public float percentage applicable to our Company is 25.00%. Taking into account the above
and the Shares to be issued pursuant to the Global Offering (assuming the options granted
under the Pre-IPO Share Option Plan are not exercised), 78,438,164 Shares, representing
approximately 25.14% of the total issued share capital, will be counted towards the public float
for the purpose of Rule 8.08 of the Listing Rules, which is higher than the prescribed
percentage of Shares required to be held in public hands of 25.00% under Rule 8.08(1) of the
Listing Rules.
Each of the Cornerstone Investors has agreed to a lock-up period following the Listing
Date. As such, the Shares held by the Cornerstone Investors upon the Listing shall not be
counted towards the free float of the Shares at the time of Listing. Based on an Offer Price of
HK$9.34 per Offer Share (being the low-end of the indicative Offer Price range), the Company
will be able to satisfy the free float requirement under Rule 8.08A(1) of the Listing Rules.
Compliance with the Pre-IPO Investment Guidance
On the basis that (i) the consideration for the Pre-IPO Investments was irrevocably settled
more than 28 clear days before the first filing of the listing application by our Company with
the Stock Exchange, and (ii) the special rights granted to the Pre-IPO Investors have been or
will be terminated as disclosed in “— Rights of the Pre-IPO Investors” above, the Joint
Sponsors confirm that the Pre-IPO Investments are in compliance with the Pre-IPO Investment
Guidance in Chapter 4.2 of the Guide for New Listing Applicants.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CAPITALIZATION
The below table is a summary of the capitalization of our Company as of the Latest
Practicable Date and immediately upon completion of the Global Offering (assuming the
options granted under the Pre-IPO Share Option Plan are not exercised):
Shareholders Ordinary Shares
Ownership
percentage as of
the Latest
Practicable Date
Ownership
percentage upon
completion of the
Global Offering
Qisda Entities (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118232,736,837 95.02% 74.61%
Individual Shareholders (2) /H1118/H1118/H1118/H1118/H11184,746,667 1.94% 1.52%
Pre-IPO Investors
ShareHope /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,258,048 2.15% 1.69%
Mr. Tsai /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,500,000 0.61% 0.48%
Leader International /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118703,449 0.29% 0.23%
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,945,001 100% 78.52%
Other public Shareholders after
the Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,000,000 – 21.48%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,945,001 – 100%
Notes:
(1) Each of such entities is or is deemed to be a Controlling Shareholder. For details, see “Relationship With
Our Controlling Shareholders — Our Controlling Shareholders” in this prospectus.
(2) As of the Latest Practicable Date, LEI Huei, LEE Hsi-Hua, YU Ko-Y ung, LEE Kuen-Y ao, CHEN
Hsuan-Bin, LIU Chin-Chih (the spouse of CHEN Hsuan-Bin), CHENG Weishun, PENG Shuang-Lang,
HSIANG Fwu-Chyi, LEE Wen-Der, CHANG An-Tso, CHEN Chi-Hong (our chairperson and non-
executive Director), CHEN Zhien-Chi, LIN Pi-Chu, LIN Tien-Y u, CHIANG Ming-Chou, HSH
Tang-Lung, CHANG Y en-Shu, TSENG Wen-Chi, W ANG Deng-Rue, W ANG Wei-Lien, W ANG
Wei-Ping, CHEN Yi-Shan, HUANG Han-Chou, WU Rong-Whua, HUNG Chiu-Chin (our non-executive
Director), LIN Hung-Hsiang, W ANG Li-Shan, HSIAO Tze-Jung (our executive Director), CHENG
Y uh-Wen (the spouse of CHIANG Che-Min) and HUANG Tina Yi-Ting (the daughter of HUANG
Han-Chou), being the employees or former employees of Qisda Corporation and its affiliates or their
relatives (collectively, the “ Individual Shareholders ”), held 516,667, 200,000, 200,000, 500,000,
100,000, 100,000, 50,000, 100,000, 100,000, 100,000, 100,000, 500,000, 100,000, 100,000, 100,000,
100,000, 100,000, 50,000, 200,000, 100,000, 50,000, 50,000, 660,000, 100,000, 50,000, 50,000, 50,000,
50,000, 120,000, 100,000 and 50,000 Shares, representing 0.21%, 0.08%, 0.08%, 0.20%, 0.04%, 0.04%,
0.02%, 0.04%, 0.04%, 0.04%, 0.04%, 0.20%, 0.04%, 0.04%, 0.04%, 0.04%, 0.04%, 0.02%, 0.08%,
0.04%, 0.02%, 0.02%, 0.27%, 0.04%, 0.02%, 0.02%, 0.02%, 0.02%, 0.05%, 0.04% and 0.02% of the
total issued Shares of our Company, respectively.
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PRC LEGAL COMPLIANCE
Corporate Structure
Our PRC Legal Advisor has confirmed that all applicable regulatory approvals in relation
to the equity transfers in respect of the PRC companies in our Group as described above have
been obtained, such equity transfers have been legally completed, and the procedures involved
have been carried out in accordance with applicable PRC laws and regulations in all material
aspects.
M&A Rules
Pursuant to the Regulations on Mergers and Acquisitions of Domestic Companies by
Foreign Investors () (the “ M&A Rules ”), which
were jointly promulgated by the MOFCOM, the State Assets Supervision and Administration
Commission, the SA T, the SAMR, the CSRC and the SAFE on August 8, 2006, came into effect
on September 8, 2006 and subsequently amended on June 22, 2009, a foreign investor is
required to obtain necessary approvals when it
(i) acquires equity of a domestic enterprise so as to convert the domestic enterprise into
a foreign-invested enterprise;
(ii) subscribes for new equity via an increase in registered capital of a domestic
enterprise so as to convert the domestic enterprise into a foreign-invested enterprise;
(iii) establishes a foreign-invested enterprise through which it purchases the assets of a
domestic enterprise and operates these assets; or
(iv) purchases assets of a domestic enterprise, and then invests such assets to establish
a foreign-invested enterprise.
According to the Article 11 of the M&A Rules, where a domestic enterprise, or a domestic
natural person, through an overseas company established or controlled by it/him/her, acquires
a domestic enterprise which is related to or connected with it/him/her, approval from the
MOFCOM is required. The M&A Rules, among others, also require that an offshore special
purpose vehicle, or a SPV , formed for listing purposes and controlled directly or indirectly by
PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing and
trading of such SPV’s securities on an overseas stock exchange, especially in the event that the
SPV acquires shares of or equity interests in the PRC companies in exchange for the shares of
offshore companies.
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As advised by our PRC Legal Advisor, considering that none of the onshore subsidiaries
of our Company (namely, Nanjing BenQ Hospital, Suzhou BenQ Hospital, Nanjing BenQ
Hospital Management, Suzhou BenQ Investment, Nanjing BenQ Nursing and Suzhou BenQ
Nursing) was converted to a foreign-invested enterprise from a domestic enterprise as defined
in the M&A Rules or has purchased and then operated the assets of a domestic enterprise, the
establishment and the changes of the onshore subsidiaries of our Company are not subject to
the M&A Rules.
SAFE Circular 37
SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange
Control on Domestic Residents’ Offshore Investment and Financing and Round-tripping
Investment through Special Purpose V ehicles (ʮ̡ྤ̮ҳፄ༟
) (the “ SAFE Circular 37 ”) on July 14, 2014, which
replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE
on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches
of SAFE in connection with their direct establishment or indirect control of an offshore entity,
for the purpose of overseas investment and financing, with such PRC residents’ legally owned
assets or equity interests in domestic enterprises or offshore assets or interests, referred to in
SAFE Circular 37 as a “special purpose vehicle”. SAFE Circular 37 further requires
amendment to the registration in the event of any significant changes with respect to the special
purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share
transfer or swap, merger, division or other material event. In the event that a PRC shareholder
holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the
PRC subsidiaries of that special purpose vehicle may be prohibited from making profit
distributions to the offshore parent and from carrying out subsequent cross-border foreign
exchange activities, and the special purpose vehicle maybe restricted in its ability to contribute
additional capital into its PRC subsidiary. Furthermore, failure to comply with the SAFE
registration requirements described above could result in liability under PRC law for evasion
of foreign exchange controls.
On February 13, 2015, SAFE released the Notice on Further Simplifying the Improving
Policies for the Foreign Exchange Administration of Direct Investment (̮ි၍ଣ҅ᗫ
) (the “ SAFE Circular 13 ”), which
became effective from June 1, 2015. According to SAFE Circular 13, local banks shall examine
and handle foreign exchange registration for overseas direct investment, including the initial
foreign exchange registration and amendment registration under SAFE Circular 37. However,
there exists uncertainties with respect to its interpretation and implementation by governmental
authorities and banks.
Our PRC Legal Advisor has further advised that none of our shareholders is subject to the
foreign exchange registration under neither SAFE Circular 37 nor SAFE Circular 13.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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CORPORATE STRUCTURE
Our Corporate Structure Immediately Prior to the Completion of the Global Offering
The following chart sets forth our corporate structure immediately prior to the completion of the Global Offering.
1.94%2.15%0.29%0.61%
100.00%
5.78%10.21%26.55%8.17%44.32%
100.00%100.00%
100.00%
100.00%
BenQ BM
Our Company
Darly Venture
(L)(1)
Qisda
Corporation(1)
BenQ Corp.(1)
Mr. Tsai Leader
International ShareHope Individual
Shareholders(2)Darly Venture(1)Darly2
Venture(1)
31.65%
100.00%
Nanjing BenQ Hospital
Management
100.00%
Nanjing BenQ
Hospital
68.35%
Suzhou BenQ
Hospital
100.00%
Nanjing BenQ
Nursing
100.00%
Suzhou BenQ
Nursing
100.00%
Suzhou BenQ
Investment
BenQ Healthcare
Consulting
100.00%
Notes:
(1) Each of such entities is or is deemed to be a Controlling Shareholder. For details, see “Relationship With Our Controlling Shareholders — Our Contr olling Shareholders” in
this prospectus.
(2) For details of shareholding of the Individual Shareholders, see “— Capitalization” in this section.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Our Corporate Structure Immediately Following Completion of the Global Offering
The following chart sets forth our corporate structure immediately following the completion of the Global Offering (assuming the options
granted under the Pre-IPO Share Option Plan are not exercised).
1.52%1.69%0.23%0.48%4.54%8.01%20.84%6.41%34.80%
100.00%100.00%
100.00%
100.00%
Darly Venture
(L)(1)
Qisda
Corporation(1)
BenQ Corp.(1)
Mr. Tsai Leader
International ShareHope Individual
Shareholders(2)Darly Venture(1)Darly2
Venture(1)
21.48%
Other public
Shareholders
100.00%
BenQ BM
Our Company
100.00%
Nanjing BenQ Hospital
Management
100.00%
Nanjing BenQ
Hospital
68.35%
Suzhou BenQ
Hospital
100.00%
Suzhou BenQ
Investment
31.65% BenQ Healthcare
Consulting
100.00%
100.00%
Nanjing BenQ
Nursing
100.00%
Suzhou BenQ
Nursing
Notes:
(1) (2) See the notes to “— Our Corporate Structure Immediately Prior to the Completion of the Global Offering” in this section.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OVERVIEW
We are a private for-profit general hospital group in mainland China, and have adopted
the advanced hospital operation and management experiences from Taiwan. We currently own
and operate two general hospitals. As measured by total revenue in 2024, we are the largest
private for-profit general hospital group in the East China region, with our market share being
1.0% in the East China region, according to Frost & Sullivan. By the same measure, we are the
seventh largest private for-profit general hospital group nationwide, with our market share
being 0.4% in the PRC, according to the same source. As measured by average revenue per
registered bed in 2024, we also rank the first among all private for-profit general hospital
groups in mainland China, according to the same source.
As of June 30, 2025, our two hospitals had a total combined GFA of approximately
400,000 sq.m. and 1,850 registered beds, as well as a dedicated team featuring more than 1,000
doctors, including 35 experts from Taiwan or overseas. In 2024, we recorded over two million
outpatient visits and performed over 22,000 inpatient surgeries. We have established two
general hospitals, namely Nanjing BenQ Hospital and Suzhou BenQ Hospital:
 Nanjing BenQ Hospital. Having commenced operations in 2008, Nanjing BenQ
Hospital has been rated as a Grade A Class III hospital since 2022, being the first
private hospital so rated in Nanjing, Jiangsu Province. As measured by total revenue
in 2024, Nanjing BenQ Hospital is the third largest private for-profit general
hospital in the PRC, with its market share being 0.3% in the PRC, and the largest
private for-profit general hospital in Jiangsu Province, with its market share being
2.0% in Jiangsu Province, according to Frost & Sullivan. In addition, Nanjing BenQ
Hospital was recognized as one of the first batch of National Chest Pain Center
Accreditation Units and a National Health Management Demonstration Base of the
PRC. Nanjing BenQ Hospital has established various national and provincial key
disciplines and medical specialties.
 Suzhou BenQ Hospital. Having commenced operations in 2013, Suzhou BenQ
Hospital is a Class III general hospital. Suzhou BenQ Hospital was accredited by the
Joint Commission International (JCI) in 2020, and was also recognized as a National
Chest Pain Center, Certified Atrial Fibrillation Center and National Stroke
Prevention and Treatment Center of the PRC. With an acute understanding of market
demands, Suzhou BenQ Hospital has pursued a differentiated development strategy
and accumulated distinctive strengths in departments such as obstetrics and
gynecology, as well as pediatrics.
Driven by economic growth, favorable policies and expanding yet diversifying public
demands for healthcare services in recent years, private hospitals in the PRC have outpaced
public hospitals in growth due to their flexibility in management models, service offerings and
pricing. The market size of private hospitals in the PRC as measured by revenue increased from
RMB437.9 billion in 2019 to RMB944.7 billion in 2024, representing a CAGR of 16.6% from
2019 to 2024, whereas that of public hospitals was merely 6.4% during the same years. It is
estimated that the market size of private hospitals will reach RMB1,882.7 billion in 2030,
representing a CAGR of 12.2% from 2024 to 2030.
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With nearly two decades of dedication to the healthcare service market in mainland
China, we have built “BenQ Medical Center” into a brand for quality healthcare services. Our
“medical-teaching-research-operation” integrated private healthcare service platform
emphasizes comprehensive healthcare services and medical specialties, laying a solid
foundation for our future business expansion. Both of our hospitals are established to the
highest national standard as Class III general hospitals. Meanwhile, we have forged close
collaborations with various leading hospitals and medical schools in the PRC with a focus on
scientific research. We have also cultivated a large pool of leading healthcare talents. Our
medical team leads the industry in size, experiences and level of internationalization. For
multiple years, we have been ranked among the top ten best private hospital employers
nationwide in the PRC.
We adhere to a patient-centered approach that value patient wellbeing. We believe that
only by winning over patients can we retain and expand our market presence. By adopting
various well-established healthcare systems from Taiwan and overseas and flexibly adapting
and tailoring to local patient circumstances, we have institutionalized and put into practice
patient-centered principles that are reflected in every aspect of our hospital operations and
management, including the doctor-in-charge full-cycle responsibility system (ப
Փ), the inpatient nurse-in-charge full-cycle care system ( ˴ᚐᚐଣՓ), the pharmacist
medication counseling system (ኬՓ), and the outpatient accompanying nurse
assistance system ( ௑ൢՓ). For details, see “Our Healthcare Services — Our Treatment
Processes And Patient-Centered Care — Our Patient-Centered Care” in this section. In terms
of hospital environment and hardware facilities, we strive to create a comfortable atmosphere
centered around respecting, caring for, and fulfilling patients’ diverse needs. Our long-standing
commitment to patient-centered care has given us a unique advantage distinct from other
general hospitals, which helps us continuously improve patient experience, attract more
patients and strengthen patient loyalty, thus further unlocking our brand potential. For instance,
in July 2023, Nanjing BenQ Hospital was recognized as an “Advanced Unit for Patient
Satisfaction in Nanjing for the Y ear of 2022”. Even amidst the impact of the COVID-19
pandemic, the number of patient visits at our hospitals grew rapidly during the Track Record
Period. The total inpatient visits at our two hospitals in aggregate increased from 67.1 thousand
in 2022 to 81.9 thousand in 2023, and further to 86.2 thousand in 2024. The total outpatient
visits at our two hospitals in aggregate increased from 1,680.6 thousand in 2022 to 2,002.3
thousand in 2023, and further to 2,146.5 thousand in 2024.
Our Controlling Shareholder, Qisda Corporation, which was founded in 1984 and listed
on the Taiwan Stock Exchange (stock code: 2352.TW) in 1996, is a global technology group
with business spanning across IT, healthcare services and products (comprising hospital
operation through the Group as well as sales of medical equipment and medical products),
smart solutions networking and communication. Its brand influence and advanced technology
will continue to provide us with synergetic business opportunities. As the sole undertaker and
brand of Qisda Corporation healthcare services business, we plan to accelerate the expansion
of our hospital network and form regional medical alliances by strengthening cooperation with
primary, secondary and community healthcare institutions, thereby continuously identifying
new growth drivers. We believe that the extensive experiences accumulated from operating two
large-size general hospitals over the years and the support from our Controlling Shareholder
will continue to support our business expansion. This will enable us to successfully integrate
newly acquired or established healthcare institutions in different regions, so as to swiftly
replicate our success and achieve sustainable growth.
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OUR COMPETITIVE ADV ANTAGES
We believe that the following strengths have contributed to our success and differentiated
us from our competitors.
A Private For-Profit General Hospital Group with Brand Recognition and Influence
We currently own and operate two general hospitals. As measured by total revenue in
2024, we are the largest private for-profit general hospital group in the East China region, with
our market share being 1.0% in the East China region, according to Frost & Sullivan. By the
same measure, we are the seventh largest private for-profit general hospital group nationwide,
with our market share being 0.4% in the PRC, according to the same source. As measured by
average revenue per registered bed in 2024, we also rank the first among all private for-profit
general hospital groups in mainland China, according to the same source. As of June 30, 2025,
our two hospitals had a total combined GFA of approximately 400,000 sq.m. and 1,850
registered beds, as well as a dedicated team comprising nearly 3,000 healthcare professionals,
featuring more than 1,000 doctors (including 35 experts from Taiwan or overseas). In 2024, we
recorded over two million outpatient visits and performed over 22,000 inpatient surgeries.
With nearly two decades of dedication to the healthcare service market in mainland
China, we were among the earliest private hospital operators to enter Jiangsu Province. The per
capita annual disposable income of residents in Jiangsu Province in 2023 considerably
surpasses the nationwide average, according to Frost & Sullivan. The province also
accommodates numerous internationally renowned enterprises, and attracts a large pool of
domestic and overseas talents. This has formed a regional healthcare service market with
immense potential and strong demands for high-quality and internationalized healthcare
services to which we are committed. We have established two general hospitals, namely
Nanjing BenQ Hospital and Suzhou BenQ Hospital:
 Nanjing BenQ Hospital. Having commenced operations in 2008, Nanjing BenQ
Hospital has been rated as a Grade A Class III hospital since 2022, being the first
private hospital so rated in Nanjing, Jiangsu Province. As measured by total revenue
in 2024, Nanjing BenQ Hospital is the third largest private for-profit general
hospital in the PRC, with its market share being 0.3% in the PRC, and the largest
private for-profit general hospital in Jiangsu Province, with its market share being
2.0% in Jiangsu Province, according to Frost & Sullivan. In addition, Nanjing BenQ
Hospital was recognized as one of the first batch of National Chest Pain Center
Accreditation Units and a National Health Management Demonstration Base of the
PRC.
 Suzhou BenQ Hospital. Having commenced operations in 2013, Suzhou BenQ
Hospital is a Class III general hospital. Suzhou BenQ Hospital was accredited by the
JCI in 2020. The JCI accreditation represents the highest level of certification
system recognized by the World Health Organization for evaluating hospital
management, healthcare quality and service standards. It is acclaimed as the “gold
standard” for healthcare services. Suzhou BenQ Hospital was also recognized as a
National Chest Pain Center, Certified Atrial Fibrillation Center and National Stroke
Prevention and Treatment Center of the PRC. With an acute understanding of market
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demands, Suzhou BenQ Hospital has pursued a differentiated development strategy
and accumulated distinctive strengths in departments such as obstetrics and
gynecology as well as pediatrics.
 Besides, we have strategically invested in Donghui Hospital located in Guigang,
Guangxi, with an aim to further expand our national footprint.
Our years of operations have made “BenQ Medical Center” a brand for quality healthcare
services. Along with the rapid growth of the private hospital market in the PRC in recent years
driven by encouraging governmental policies, we have been able to produce the level of
widespread trust and strong brand recognition among patients comparable to public hospitals.
However, adhering to our healthcare philosophy that incorporates technology and care, we
have earned a reputation among patients through years of ethical medical practices and quality
service delivery. In July 2023, Nanjing BenQ Hospital was recognized as an “Advanced Unit
for Patient Satisfaction in Nanjing for the Y ear of 2022”. Furthermore, we have received
numerous prestigious industry awards for our healthcare capabilities, service quality,
reputation, credibility and social and corporate responsibility, such as the National Advanced
Unit of Hospital Medical Insurance Service Standardization by Chinese Hospital Association
Medical Insurance Management Committee and the Best Employer for Non-Public Healthcare
Organizations in 2022 by DXY (෤), a leading digital healthcare technology platform in
mainland China. We passionately believe that by leveraging our established leadership and
brand equity, we are well positioned to seize market growth opportunities brought about by
favorable policies and increasingly gain a competitive edge in the future.
A “Medical-Teaching-Research-Operation” Integrated Private Healthcare Service
Platform Emphasizing Both Comprehensive Healthcare Services and Medical Specialties
That Keeps Attracting Talents and Generating Business Synergies
From our establishment, we have strategically navigated ourselves towards the
construction of hospitals integrating medical treatment, teaching, research and operation. We
have also cultivated a large pool of leading healthcare talents. These have solidified our leading
position while laying a solid foundation for future business expansion. Specifically:
 Medical. Both of our hospitals are established to the highest national standard as
Class III general hospitals. We believe that talents are the core of healthcare
services, and have built a diverse, internationalized and highly experienced
professional medical team. As of June 30, 2025, we had a dedicated team of 1,015
doctors (consisting of 344 chief doctors and associate chief doctors, 347 attending
doctors and 324 resident doctors), as well as 1,878 other healthcare professionals.
In addition to a number of reputed experts in their respective fields, we also have
doctors from Taiwan or overseas, who keep informing us of internationally advanced
healthcare notions. For instance, we have collaborated with Prof. Philip Kuo-Ting
CHEN, a renowned expert in cleft lip and palate from Taiwan. We have appointed
Prof. Chen to provide outpatient consultations, perform surgeries and conduct
follow-up examinations at Suzhou BenQ Hospital. This has significantly enhanced
the hospital’s reputation in this field, and attracted numerous patients from across
the country to seek treatment.
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 Teaching. we have forged close collaborations with various leading hospitals and
medical schools in the PRC. For instance, Nanjing BenQ Hospital is an affiliated
hospital of Nanjing Medical University, as well as the Teaching Hospital for
Southeast University Medical School and Nanjing University of Chinese Medicine.
In addition, Nanjing BenQ Hospital was recognized as the Jiangsu Provincial
Postdoctoral Innovation Practice Base and a Provincial Blood Purification Training
Base. In each of 2022, 2023, and 2024, Nanjing BenQ Hospital accepted an average
of about 450 students, interns, postgraduates, residents and advanced trainees for
training and studying.
Suzhou BenQ Hospital has jointly established a Soochow University — BenQ
Clinical Medical Research Institute with Soochow University. Through an
innovative development model that integrates medical treatment, education, and
research, both parties are committed to establishing a new pathway for healthcare
science and technology innovation that meets international standards. Suzhou BenQ
Hospital also collaborates with medical universities such as Kaohsiung Medical
University to create a cross-strait medical transformation platform that promotes
scientific research and technological cooperation. Suzhou BenQ Hospital also serves
as a cross-strait clinical teaching base, receiving medical students from Taiwan for
internships each year.
 Research. We emphasize scientific innovation, striving to facilitate medical
advancement and stay at the forefront of modern healthcare services. For example,
the research carried out by our Intestinal Fistula Surgery Department of Nanjing
BenQ Hospital in maintaining the function of the bowel barrier has successfully
solved the problem of secondary infections in many critically ill patients and
improved the cure rate thereof. Moreover, as of June 30, 2025, members at our
Orthopedic Surgery Department of Nanjing BenQ Hospital had published 23
research papers on SCI journals and 44 research papers on national core journals,
demonstrating our medical research capabilities. Our medical research capabilities
also assist us in attracting, cultivating and retaining healthcare professionals deeply
interested in the latest healthcare developments. For instance, Nanjing BenQ
Hospital invited Prof. Xiaoyan W ANG, a nephrology expert, to establish a central
laboratory, and Prof. Y un ZHAO, a clinical specialist in surgical infection and
immunology, to establish a surgical laboratory. Under their leadership, Nanjing
BenQ Hospital has participated in a variety of projects including project of National
Natural Science Foundation, and key project of Jiangsu Commission of Health, with
over a hundred Science Citation Index (SCI) papers published in the past five years.
Soochow University — BenQ Clinical Medical Research Institute focuses its
research on three areas: orthopedics, obstetrics and oncology. In addition, we also
attach great importance to communication with hospitals from Taiwan and
international cooperations. With a view to deepening scientific research and
technological linkages with Taiwan, we have organized a number of academic
seminars.
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 Operation. Our operational capabilities enable us to effectively control costs,
improve operational efficiency and enhance profitability. We manage our two
hospitals through the establishment of our Operational Center at the Group level,
achieving a centralized management and group-based operation model. Under this
unified group operating system, our two hospitals leverage their respective strengths
and form a synergetic dynamic through information sharing. Combining overseas
and domestic market experiences, we also emphasize precision management by
continuously innovating and optimizing healthcare service processes for patients,
performance management systems for medical staff, and business and financial
management models for hospitals.
Disciplines and medical specialties with competitive advantages and brand effect can
effectively address market demands and enhance a hospital’s market influence. They are also
an important engine for our future business growth, while exerting a strong appeal to leading
talents in their respective fields. As of June 30, 2025, Nanjing BenQ Hospital had one National
Key Clinical Discipline (߅in Thoracic Surgery, one Jiangsu Provincial Key
Clinical Discipline (߅in the Department of Medical Imaging, one Jiangsu
Provincial Key Clinical Discipline Construction Unit (ணఊЗ)i nt h e
Department of Urology, and 16 Nanjing Municipal Key Medical Disciplines (ᓃ
߅with reputed experts acting as the respective discipline leader. With an acute
understanding of market demands, Suzhou BenQ Hospital has pursued a differentiated
development strategy and accumulated distinctive strengths in departments such as obstetrics
and gynecology, as well as pediatrics. Through its advanced medical technologies and
patient-centered healthcare services, Suzhou BenQ Hospital has earned a reputation among
local residents. Suzhou BenQ Hospital was recognized as an “Elderly-Friendly Medical
Institution in Jiangsu Province” by Jiangsu Commission of Health in 2023 and 2024. It was
also among the first batch of pilot medical institutions in Suzhou to offer palliative care ( τ
ྐྵᐕᚐ) services, according to Frost & Sullivan. Additionally, Suzhou BenQ Hospital
appointed Prof. Wei-Jei LEE, the President Advisor of the Asia Pacific Bariatric Surgery
Society, to establish and develop the hospital’s Metabolic & Bariatric Medicine Center, making
Suzhou BenQ Hospital a renowned brand in bariatric surgery in the PRC.
Apart from our comprehensive clinical departments, we also set up various medical
technology departments, which are equipped with the modern advancements in diagnostic,
testing and treatment equipment, and are staffed with dedicated teams of certified radiologists,
pathologists, and other clinical scientists. For example, we have in place testing laboratories
at each of our hospitals, conducting medical tests on samples of blood, urine, and secretions
from patients undergoing health check-ups, hospitalization, and outpatient visits. Particularly,
our testing laboratory at Nanjing BenQ Hospital has received the ISO15189 accreditation for
quality and competence in clinical laboratories. It is equipped with internationally advanced
automated analytical instruments, such as the Roche fully-automated biochemistry and
immunoassay analysis lines, and the Sysmex automated hematology and coagulation analyzers,
enabling it to handle a large volume of clinical tests efficiently while delivering reliable and
precise results. During the Track Record Period, we conducted most of the medical tests at our
in-house laboratories, with only a few special medical tests outsourced to external testing
facilities, such as genetic testing and testing for certain special drugs.
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Quality Healthcare Services with Patient-Centered Care, Resulting in Better Patient
Experience
We are a healthcare service group established by Qisda Corporation, which was founded
in 1984 and listed on the Taiwan Stock Exchange (stock code: 2352.TW) in 1996. It is a global
technology group with businesses spanning across IT, healthcare services and products
(comprising hospital operation through the Group as well as sales of medical equipment and
medical products), smart solutions, networking, and communication. As the healthcare system
reform deepens in mainland China, the public’s demands for quality healthcare services service
quality continuously increase beyond their basic medical needs being met. We believe that only
by winning over patients can we retain and expand our market presence, as well as have better
opportunities for growth. However, truly implementing patient-centered approach in hospital
operations is no easy feat, requiring systematic policies and management practices. By
adopting various healthcare systems from Taiwan or overseas and flexibly adapting and
tailoring to local patient circumstances, we have put into practice patient-centered principles,
reflecting “putting patients first” in our hospital’s daily operations and management.
We encourage mutual understanding between doctors and patients, and provide patients
with a comfortable and convenient healthcare service experience, which includes, among
others: (i) doctor-in-charge responsibility system (பՓ), which requires the
doctor-in-charge, i.e., the doctor who admitted the patient into our hospital to keep
well-rounded oversight from outpatient admission, surgery, to post-operative rehabilitation,
hence ensuring a more comprehensive understanding of patient’s conditions; (ii) inpatient
nurse-in-charge care system ( ˴ᚐᚐଣՓ), which requires the nurse-in-charge to be
responsible for a whole package of care and medication tasks for the same patient so that he
or she can directly go to the nurse-in-charge at any time should any issues arise; (iii)
pharmacist medication counseling system (ኬՓ), which requires clinical
pharmacists to provide medication counseling to patients, including discharge medication
counseling to guide the patients on the proper use of medication after being discharged; and
(iv) outpatient accompanying nurse assistance system ( ௑ൢՓ), which, by considering a
patient’s privacy and specific needs of services, requires the assigned nursing staff to
accompany patients throughout their medical visits, including measuring vital signs, assisting
during patient examinations, arranging additional medical tests, and coordinating medication
delivery.
In terms of hospital environment and hardware facilities, we strive to create a comfortable
atmosphere centered on respecting, caring for, and fulfilling patients’ diverse needs. For
example, our outpatient buildings are constructed with an open-air design that allows natural
light to be channeled into the interior of the hospitals, making the whole space well-lit and
well-ventilated, which provide added comfort for patients and reduce their sense of pressure.
The corridors in our hospitals’ outpatient areas are designed to be as wide as five to six meters,
allowing hospital beds and wheelchairs to freely move in and out, as well as the transportation
of patients by electric vehicles across different areas of our hospitals. We also adopt
child-friendly interior designs for Departments of Pediatrics and Pediatric Dentistry to improve
children’s experience of being treated at our hospitals. Moreover, there are special waiting
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areas for patients’ family members outside operating rooms and ICUs in our hospitals to
provide a comfortable waiting space therefor. Last but not least, we provide patients and their
families with a variety of living amenities and dietary choices, which include a designed food
court with a number of well-known food and beverage chain operators to be stationed in our
hospitals.
We believe that our commitment to patient-centered care has given us a unique advantage
distinct from other general hospitals, which helps us continuously improve patient experience,
attract more patients and strengthen patient loyalty. Even amidst the impact of the COVID-19
pandemic, the number of patient visits at our hospitals grew rapidly during the Track Record
Period. The total inpatient visits at our two hospitals in aggregate increased from 67.1 thousand
in 2022 to 81.9 thousand in 2023, and further to 86.2 thousand in 2024. The total outpatient
visits at our two hospitals in aggregate increased from 1,680.6 thousand in 2022 to 2,002.3
thousand in 2023, and further to 2,146.5 thousand in 2024.
Effective Operational Capabilities and Management Model That Drive Stable
Profitability
Our operational capabilities enable us to effectively control costs, improve operational
efficiency and enhance profitability, while ensuring the quality of our healthcare services.
During the Track Record Period, our average bed turnover days were 9.2 days, 8.2 days, 7.9
days and 7.8 days in 2022, 2023 and 2024, and the six months ended June 30, 2025,
respectively.
We have an efficient group-based management structure. We manage our two hospitals
through the establishment of our Operational Center at the Group level, under which the two
hospitals leverage their respective strengths and form a reciprocally facilitative and
complementary dynamic through information sharing. For example, in procurement, our Group
has established the Materials and Procurement Management Department responsible for price
negotiations for pharmaceuticals and other supplies, with hospitals providing necessary
coordination. Centralized negotiations and procurement enable us to obtain favorable terms
from suppliers. Moreover, our business management team and professional medical team
interact with each other efficiently while focusing on their respective responsibilities.
Specifically, our executive director is responsible for the unified operational management of
personnel, procurement, finance, information, construction etc. of our two hospitals to
maximize group functionalities, and the presidents of hospitals are committed to medical team
building, department development and daily operations. Our executive director and presidents
of hospitals lead separate roles in regards of our hospitals’ management and report periodically
to the Board, analyzing cost structures and input-output dynamics, as well as using financial
data to identify areas for further operational optimization to continuously improve efficiency.
Since 2010, our hospitals have set up Quality Control Circle (၍ਸ਼), through which all
departments fully participate to conduct Continuous Improvement Process on two to three
specific issues within each department, in order to constantly refine our operational processes.
As of December 31, 2024, our hospitals had accomplished nearly 600 improvement projects,
primarily focusing on topics such as improvement of medical service quality, enhancement of
patient satisfaction, streamlining of operation processes, and reduction of operational costs.
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We also maintain an advanced precision management system. For example, under the
DRG payment system, most hospitals’ profits are negatively impacted to a certain extent due
to the reduction in the total amount of health insurance payments, according to Frost &
Sullivan. We have also been affected by the DRG payment system. The average spending per
inpatient visits at both our of hospitals witnessed a decrease after their respective
implementation of the DRG payment system. However, with our precision management
system, we are able to effectively control costs and improve operational efficiency, maximize
hospital services delivery potential in the most cost-effective manner, and quickly adapt to
changes in the DRG reform. Specifically, we installed the Firesoon system ( ˦ዓӻ୕), a smart
DRG-analysis solution, for Nanjing BenQ Hospital since July 2021 and for Suzhou BenQ
Hospital since August 2021. The Firesoon system enables automated prediction of the
diagnosis-related group that each patient should be classified into based on their symptoms,
primary diagnosis, and main treatment methods, and provides physicians with clear
reimbursement standard under the relevant group as a reference for clinical treatment. With the
Firesoon system, we are able to make cost control during the process of treating patients, and
partially alleviate the business and financial challenges brought by the implementation of the
DRG payment system. Moreover, our precision management also contributes to a more
cost-effective drug and equipment management. We also periodically review our
pharmaceuticals usage and conduct payback period analysis for medical equipment, and carry
out continuous adjustment/follow-up. For more details, see “— Our Operation and
Management — Our Precision Management” in this section. Our Controlling Shareholder,
Qisda Corporation, has established a well-tested precision management system. By adopting its
precision management experiences and continuously adjusting and optimizing the same
through years of our hospital operations, we have similarly formed an advanced precision
management system for healthcare services, which allows us to maximize our hospital
services’ potential through the most cost-effective practices. We have been leveraging
technological empowerment to automate and intelligently transform various processes of our
healthcare services, effectively reducing staffing ratios and improving workforce productivity.
Meanwhile, we rely on information-driven data analytics to optimize our operations, including
enhancing doctors’ consultation efficiency and resource utilization rates for equipment and
beds. Our precision management permeates every detail of our pharmaceutical and equipment
management. For instance, we review the usage status of the top 20 drugs on a bimonthly basis
to continuously optimize our drug portfolio. For medical equipment, we also carry out
cost-benefit analysis, with all equipment over an investment amount of RMB500,000 subject
to payback period analysis and continuous follow-up. Our precision management system not
only allows us to maximize our hospital services delivery potential in the most cost-effective
manner, but also helps us quickly adapt to changes in healthcare reform policies, such as the
DRG payment system.
Furthermore, our management model is highly scalable and standardized. Large-size
general hospitals typically face substantial initial investments and long payback periods, which
imposes on the operators challenges of extensive hospital management experiences and a high
entry barrier. Our group-based management structure has enabled our hospitals to rapidly
establish effective operating systems upon commencement of their operations. We believe that
our precision management model and the extensive experiences accumulated from operating
two large-size general hospitals over the years will continue to support our business expansion.
This will enable us to successfully integrate newly acquired or established healthcare
institutions in different regions, so as to swiftly replicate our success and achieve sustainable
growth.
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A Higher Starting Point Backed by Our World-Renowned Controlling Shareholder, as
well as Synergies with Shareholder to Safeguard Our Long-Term Growth
Our Controlling Shareholder, Qisda Corporation, is a global technology group with
businesses spanning across IT, healthcare, smart solutions, networking, and communication. It
has been selected in the Thomson Reuters Top 100 Global Tech Leaders, Forbes the World’s
Best Employers, HR Asia Best Companies to Work for in Asia, and a winner of Taiwan
Corporate Sustainability Awards. Qisda Corporation’s globally leading position means a higher
starting point since our establishment, and throughout our development journey, Qisda
Corporation has continuously offered us valuable support in capital, talents and technologies.
With such capital support, both of our hospitals are established to the highest national standard
as Class III general hospitals. Qisda Corporation has also facilitated talent recruitment and
development for our key positions, as many of our senior management members have years of
management experiences at Qisda Corporation’s subsidiaries. As a world-renowned technology
group, Qisda Group has empowered us with the level of IT capabilities uncommon among
normal medical institutions, such as our self-developed Smart Management system for internal
use, and our self-built Smart Service platform realizing online payment, brand reporting, and
other functions for external use.
Qisda Group has been involved in the healthcare sector as one of its key future
development focuses for many years, into which it will continue to invest more resources. As
we are the sole undertaker and brand for Qisda Group’s healthcare services business, Qisda
Group’s global development in the healthcare sector keeps bringing us business opportunities.
Leveraging our experiences from successfully operating two general hospitals and shareholder
support, we plan to accelerate the expansion of our hospital network, thereby continuously
identifying new growth drivers. Besides healthcare services, Qisda Group’s healthcare sector
presence also covers medical devices, medical consumables, medical imaging and other fields
with its various medical products. Through internal resource integration, these businesses will
generate tremendous synergies with the operations and development of our hospitals.
Beyond the healthcare sector, Qisda Group has also achieved remarkable success in
information technology, intelligent solutions and network communications business. Its
multi-industry presence will provide us with diverse resources in talents, capabilities, and
management philosophies, etc. For instance, leveraging Qisda Group’s strengths in the
information technology industry and intelligent solutions, we have developed an innovative
“Smart Hospital” operating model and established a “three-in-one” hospital operation and
management system integrating Smart Healthcare, Smart Services and Smart Management. For
more details of our Smart Hospital system, see “— Our Healthcare Services — Our Treatment
Processes And Patient-Centered Care — Smart Hospital” in this section. Additionally, Qisda
Group has already established investment and operating entities in multiple provinces across
the PRC, with its subsidiaries operating nearly 200 service locations in nearly 30 countries
globally and products being marketed to over 100 countries worldwide. With our shareholder’s
in-depth understanding of local markets and established brand equity, we will be able to
exercise greater autonomy and have greater cost advantages when expanding into new regions.
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Leadership Team Possessing Expertise and Experiences
We also owe our success to our dedicated leadership team who possesses extensive
industry experiences. Mr. CHEN Chi-Hong, acting as our chairperson of the Board and a
non-executive Director as well as the chairman of Qisda Corporation, provides strategic
guidance for our business development while promoting synergistic growth between Qisda
Group and us. Our core management team has profound insights and rich experiences in the
healthcare sector and general hospital management, as well as complimentary and diverse
backgrounds and expertise. Specifically, Mr. HSIAO Tze-Jung, our executive Director and
chief executive officer, previously served as the vice president and the general manager of the
manufacturing division of Qisda Corporation, boasting extensive experience in corporate
management and leading our business operations for years. Mr. Hsiao oversees the operations
of our two hospitals, sharing with us Qisda Corporation’s precision management expertise in
effectively controlling costs, improving operational efficiency and enhancing profitability. YU
Zhenkun, M.D., president of Nanjing BenQ Hospital, joined us in June 2019 and is responsible
for the hospital’s daily operations, discipline building and strategic planning. Dr. Y u has been
involved in the hospital management and the field of otorhinolaryngology head and neck
surgery as an authoritative expert for over 30 years. Prior to joining us, he previously served
as the president of Nanjing Tongren Hospital. Ms. LO Tsui-Ling, president of Suzhou BenQ
Hospital, oversees the hospital’s daily operations, discipline building and strategic planning.
She is also the deputy chief executive officer of our Group and the vice president of Nanjing
BenQ Hospital. Having worked in our Group for more than 15 years, Ms. LO has a
commendable history of commitment and contribution to our Group. Mr. CHIANG Che-Min,
our chief financial officer, joined us in July 2014 and previously served as a treasury manager
at Qisda Corporation and worked at PricewaterhouseCoopers, Taiwan, accumulating over 20
years of experience in financial management. For their biographical details, see “Directors and
Senior Management” in this prospectus.
Besides, we have greatly benefited from the collective expertise and experiences of our
middle-level management team and administrative staff. Over the past decade of development,
we have built a substantial talent pool that we believe is crucial for our future business
expansion. We are convinced that our management team’s expertise and experiences will
continue to drive our future growth.
OUR STRATEGIES
We plan to implement the following strategies to realize our vision.
Solidify Our Advantage of “Comprehensive Healthcare Services Plus Medical Specialties”
and Enhance Medical Expertise through Academic Research to Continuously Improve
Healthcare Service Quality and Patient Satisfaction
We will continue to elevate the standards of our multidisciplinary medical expertise and
enhance our medical diagnostic and research capabilities. This will strengthen our ability to
treat complex and critical illnesses, so as to improve patient satisfaction and hospital
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reputation, and further expand our brand influence across Jiangsu Province and nationwide. As
of the Latest Practicable Date, we planned to proceed with obtaining Grade A Class III
accreditation for Suzhou BenQ Hospital within the next five years. At the same time, we will
further bolster the development of our disciplines and medical specialties, increasing the
number of municipal, provincial and national key clinical specialties. We will continually
improve our healthcare service quality by investing in advanced medical facilities, equipment
and technologies, while attracting more talented doctors and healthcare professionals to join
us.
We believe that talents are the key to our success. We plan to strengthen our
comprehensive human resource management system to further enhance the recruitment,
training, and retention of exceptional healthcare professionals. Complementing our
development of disciplines and medical specialties, we will continue to implement a high-level
talent strategy by continually recruiting chief doctors and associate chief doctors, as well as
other talents nationwide, especially renowned and influential discipline leaders in their
respective fields. This will not only help build branded disciplines, but also elevate our brand
recognition and reputation to attract more patients. Additionally, we will deepen our
collaboration with hospitals and universities across the Taiwan Strait to enhance our teaching
and research capabilities and promote the systematic training of young doctors.
Further Scale up Operations of Our Existing Hospitals to Expand Service Capabilities
We have immense self-expansion potential, with our two existing hospitals built upon
ample space to nearly double their respective service capacities at their current locations.
Specifically:
 Leveraging our successful track record, we aim to expand and enhance the
comprehensive operating capacities of Nanjing BenQ Hospital in the near future.
The construction and expansion of Nanjing BenQ Hospital has two phases in total.
The first phase had been put into operation since May 2008, whereas the second
phase was under construction as of the Latest Practicable Date, which was designed
into two separate stages. The first stage focuses on the construction of specialty
disciplines buildings (ᅽ), which had been completed by the end of 2024. We
have completed all material procedures required for building occupancy in
accordance with relevant PRC laws and regulations and put these buildings into
operation in February 2025. The second stage aims for the construction of a special
(high-end) medical service center ( तცʕː), which was scheduled to be
commenced in 2027.
 We aim to expand the operations of Suzhou BenQ Hospital and enhance its
competitive advantages in its key disciplines and medical specialties in the near
future. The construction and expansion of Suzhou BenQ Hospital has four phases in
total. The first phase had been put into operation since May 2013. The second phase
was designed into an office building (with no registered beds), which had been put
into operation since January 2024. As of the Latest Practicable Date, the third phase
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was designed to build a maternity and child center ( ੉̼ʕː), and the fourth phase
was designed to open a rehabilitation center (๫ʕː), the construction of
which was scheduled to commence in 2027 and expected to be completed in 2029,
respectively.
For details, see “— Our Hospitals” in this section and “Future Plans and Use of Proceeds
— Use of Proceeds” in this prospectus. We believe that as our existing hospitals expand in
scale, our overall healthcare service capabilities will be further enhanced, enabling us to attract
and serve more patients while solidifying our leading position.
Form Regional Medical Alliances that Covers the Full Cycle of Care Needs to Promote
Resource Sharing and Patient Transfers
We plan to leverage our leadership of operating Class III hospitals by strengthening
cooperation with primary, secondary and community healthcare institutions in the same regions
to form regional medical alliances. This will create a collaborative management model
facilitating resource sharing and responsibility allocation, and can also promote the
establishment of a patient transfer mechanism within the alliance. At the same time, we will
collaborate with elderly care service providers in the same regions to provide patients with an
integrated and convenient full-cycle service from disease diagnosis, treatment to rehabilitation
and long-term care.
The PRC has gradually entered an aging society. Taking Jiangsu Province as an example,
it was one of the earliest and highest aging provinces in the PRC, with the second largest
elderly population and the sixth highest aging rate nationwide, according to Frost & Sullivan.
To address the challenges of an aging population, the Jiangsu provincial government has
introduced a series of policies encouraging the establishment of an elderly service system that
coordinates between community and institutions, and integrates medical and elderly care
services. The goal is to continuously improve the integration of medical and elderly care
services by further standardizing cooperation between healthcare institutions and elderly care
service providers.
General hospitals as primary providers of healthcare services are an indispensable part of
the future elderly care industry chain. We have started to penetrate into the said chain by
integrating elderly care services organically into our existing healthcare service system at our
hospitals to enable patient referrals, aiming to cover the full-cycle care needs for patients being
diagnosed and/or treated. For example, Nanjing BenQ Hospital is located in a key healthcare
industry park constructed in the province, which focuses on the elderly care industry and plans
to create an elderly care complex introducing brands spanning real estate, health, entertainment
and culture centered in a medical and elderly care services integrated manner. We believe that
proactively forming regional medical alliances and participating in the elderly care service
industry chain will give rise to a new growth driver for us.
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Extend Our Healthcare Service Platform through Acquisitions
We intend to accelerate our expansion through selective acquisitions of suitable
healthcare institutions, particularly paying attention to those within areas with scarce
healthcare resources and unmet healthcare service demands. We will continue to identify
attractive acquisition targets nationwide to achieve synergies with our existing two hospitals
and expand our operational scale. To further align with Qisda Corporation’s global
development strategy for the healthcare sector, we also plan to identify acquisition targets in
Southeast Asia, including Malaysia and Vietnam, with a view to becoming a leading global
healthcare service platform. In addition, by adopting our operational model which centers on
an efficient management structure and precision management system, and could be globally
applied in our future operation of the potential target hospital in Southeast Asia, and by
leveraging Qisda Group’s extensive experience in investments and M&A, along with its
established presence in Southeast Asia, where it engages in business such as manufacturing and
sales of medical equipment and consumables and has amassed local resources and networks,
valuable market insights, and regulatory knowledge, we aim to effectively enter the Southeast
Asian market and pursue expansion opportunities.
In identifying acquisition targets, we will consider a number of factors, including but not
limited to the healthcare institution’s geographic location, demographic trends, financial and
operational performance, operational maturity, acquisition price, license status, past
compliance status, healthcare professionals’ experiences, post-acquisition growth prospects,
synergies with our existing hospitals and feasibility of integration into our group-level
operations. We believe that our efficient group-level management structure, precision
management model and the extensive experiences accumulated from operating two large-size
general hospitals over the years will enable us to successfully integrate newly acquired
healthcare institutions in different regions in a cost-efficient manner, so as to swiftly replicate
our success and achieve sustainable growth.
Continuously Develop Smart Healthcare Platform and Advanced Diagnosis and Solutions
to Improve Operational Efficiency and Service Standardization
Leveraging Qisda Group’s strengths in the information technology industry and
intelligent solutions, we plan to further reinforce our innovative “Smart Hospital” operating
model by upgrading the “three-in-one” hospital operation and management system integrating
Smart Healthcare, Smart Services and Smart Management. We have set up the Internet Hospital
Office, with specialists responsible for operating and managing the internet hospital, and
continually developing online healthcare services. In each year/period comprising the Track
Record Period, only 0.01% to 0.03% of our revenue was generated from the internet hospital
business, which primarily included the provision of online consultation services and was
recorded under the business segment of outpatient healthcare services. Other services under our
Smart Hospital system, such as online nursing services, were not revenue-generating but rather
functions aimed to improve our operational efficiency and enhance the quality of our
healthcare services. For more details of our Smart Hospital system, see “— Our Healthcare
Services — Our Treatment Processes And Patient-Centered Care — Smart Hospital” in this
section. We will continue to promote the internet hospital’s contact with the local communities,
homes for the elderly and nursing homes, as well as its online consultation functions, which
is expected to expand our online revenue channels while driving patients traffic into our offline
hospitals.
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Additionally, we will continuously introduce the most advanced service modes and
diagnosis and treatment technologies to improve operational efficiency and service
standardization. For example, we plan to increase the application of AI technology in providing
healthcare services to patients and in the future operation and management of our hospitals. We
intend to introduce AI voice-based robots to determine the appropriate department for patients
through AI-enabled conversations, as well as use the same to monitor departmental conditions
and reduce patient waiting periods. We also plan to apply AI technology in assisted diagnosis
to reduce doctors’ workloads and enhance efficiency. We believe that with the support of our
Controlling Shareholder Qisda Corporation’s leading technological capabilities and presence in
intelligent solutions, we will consistently remain at the forefront of technological innovation
in healthcare services.
OUR BUSINESS MODEL
We focus on providing a continuum of high-quality healthcare services to our patients
through our multi-disciplinary private for-profit general hospitals. During the Track Record
Period, we derived our revenue primarily from the provision of general healthcare services that
comprise inpatient healthcare services and outpatient healthcare services.
Our revenue increased from RMB2,336.4 million in 2022 to RMB2,687.6 million in 2023,
and slightly decreased to RMB2,659.0 million in 2024. Our revenue slightly decreased from
RMB1,330.1 million for the six months ended June 30, 2024 to RMB1,312.3 million for the
corresponding period in 2025. The following table sets forth the components of our revenue by
segment, in absolute amount and as a percentage of our total revenue, for the years/periods
indicated:
Y ear Ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Inpatient healthcare services /H1118/H1118/H1118/H11181,201,678 51.4 1,395,719 51.9 1,379,046 51.8 685,841 51.6 695,653 53.0
Outpatient healthcare services (1) /H1118/H11181,103,907 47.3 1,262,905 47.0 1,249,004 47.0 628,122 47.2 603,134 46.0
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,850 1.3 28,989 1.1 30,923 1.2 16,168 1.2 13,529 1.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
Notes:
(1) Apart from revenue generated from our offline outpatient healthcare services, also comprise (i) revenue
generated from our provision of physical examination service, which amounted to RMB97.3 million,
RMB94.0 million, RMB84.7 million, RMB30.8 million and RMB34.8 million, accounting for 4.2%,
3.5%, 3.2%, 2.3% and 2.7% of our total revenue in 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, respectively; and (ii) revenue generated from our provision of online consultation
services under the internet hospital business, which amounted to RMB0.4 million, RMB0.3 million, and
RMB0.6 million, RMB0.2 million and RMB0.4 million, accounting for 0.02%, 0.01%, 0.02%, 0.02%
and 0.03% of our total revenue in 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively.
(2) Comprise revenue generated from our provision of leasing services and car parking services.
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We own and operate two private for-profit general hospitals in Jiangsu Province, the PRC,
namely Nanjing BenQ Hospital and Suzhou BenQ Hospital. Nanjing BenQ Hospital is a Grade
A Class III general hospital located in Nanjing. According to Frost & Sullivan, it is the third
largest private for-profit general hospital in the PRC, with its market share being 0.3% in the
PRC, and the largest private for-profit general hospital in Jiangsu Province, with its market
share being 2.0% in Jiangsu Province in terms of total revenue in 2024. Suzhou BenQ Hospital
is a Class III general hospital located in Suzhou.
The following table sets forth certain key operating statistics of our hospitals as of the end
of or for the years/periods indicated:
As of/For the Y ear Ended
December 31,
As of/For the Six Months
Ended June 30,
2022 2023 2024 2024 2025
Inpatient healthcare
services
Number of registered
beds (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,700 1,850 1,850 1,850 1,850
Effective service capacity (2) /H1118620,500 675,250 677,100 336,700 334,850
Inpatient visits
(in thousand) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867.1 81.9 86.2 42.4 42.4
Number of inpatient
surgeries (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,451 20,511 22,774 11,108 10,947
Average spending per
inpatient visit (RMB) (5) /H1118/H111817,909 17,042 15,998 15,341 15,642
Average bed turnover
days (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189.2 8.2 7.9 8.0 7.8
Inpatient bed-days (7) /H1118/H1118/H1118/H1118/H1118/H1118572,153 669,963 657,588 324,663 352,154
Bed occupancy rate (%) (8) /H1118 92.2 99.2 97.1 96.4 105.2
Outpatient healthcare
services
Outpatient visits (in
thousand) (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,680.6 2,002.3 2,146.5 1,096.3 1,057.4
Average spending per
outpatient visit
(RMB)
(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599 584 542 545 537
Number of outpatient
surgeries (11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,882 5,251 4,367 2,120 2,598
Notes:
(1) Represents the number of beds that were registered in our hospitals’ practicing license as of the end of
the relevant year/period.
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(2) Represents the estimated inpatient service capacity of our hospitals during the given year/period,
calculated as the number of registered beds as of the end of such year/period multiplied by the number
of days in such year/period.
(3) Represents the total number of inpatients (with hospital stay) in our hospitals during the given
year/period.
(4) Represents the total number of inpatient surgeries performed in our hospitals during the given
year/period.
(5) Represents the average spending per inpatient visit calculated as the revenue from inpatient healthcare
services divided by the number of inpatient visits in our hospitals during the given year/period. During
the Track Record Period, the average spending per inpatient visit experienced a general decreasing trend
as a result of the implementation of the DRG payment system and aperiodic adjustment of the DRG
reimbursement standards.
(6) Represents the average turnover days per registered bed in our hospitals, as an indicator of the efficiency
of our delivery of inpatient healthcare services, calculated as the effective service capacity during the
given year/period divided by the total number of discharged patients during such year/period. During the
Track Record Period, there were 365 days, 365 days, 366 days, 182 days and 181 days in 2022, 2023,
and 2024, and the six months ended June 30, 2024 and 2025, respectively.
(7) Represents the aggregate length of stay (in terms of days) for all inpatient visits in our hospitals during
the given year/period.
(8) Represents the percentage of registered beds occupied by inpatients during the given year/period, as an
indicator of the utilization of registered beds, calculated as the inpatient bed-days during such
year/period divided by the effective service capacity during such year/period and multiplied by 100%.
(9) Represents the total number of outpatients (without hospital stay, and excluding the number of patients
receiving physical examination services) in our hospitals during the given year/period. Except for
inpatients who are readmitted to our inpatient department and/or are transferred to our inpatient
department from another hospital, most inpatients need to check in at the outpatient counter first before
they are admitted to the inpatient department and receive relevant inpatient healthcare services. As such,
a substantial number of inpatients in each year/period comprising the Track Record Period is also
counted in the number of outpatients in the corresponding year/period. As confirmed by Frost &
Sullivan, given that hospitals commonly require patients to check in at the outpatient counter before
being admitted to inpatient care, such method of dual counting is in line with the industry norm.
(10) Represents the average spending per outpatient visit calculated as the revenue from outpatient
healthcare services (excluding the revenue from physical examination services) divided by the number
of outpatient visits of our hospitals during the given year/period. During the Track record Period, our
revenue from outpatient healthcare services (excluding those from physical examination services) at
Nanjing BenQ Hospital amounted to RMB638.6 million, RMB727.3 million, RMB728.7 million,
RMB371.2 million and RMB365.0 million in 2022, 2023, and 2024 and the six months ended June 30,
2024 and 2025, respectively. Our revenue from outpatient healthcare services (excluding those from
physical examination services) at Suzhou BenQ Hospital amounted to RMB368.0 million, RMB441.6
million, RMB435.5 million, RMB226.1 million and RMB203.3 million in 2022, 2023, and 2024 and the
six months ended June 30, 2024 and 2025, respectively.
(11) Represents the total number of outpatient surgeries performed in our hospitals during the given
year/period. Despite the increases in total outpatient visits during the Track Record Period, the number
of outpatient surgeries decreased from 5,251 in 2023 to 4,367 in 2024, primarily due to reduced patient
demand for high-end services in the Department of Ophthalmology at Suzhou BenQ Hospital.
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OUR HOSPITALS
The table below sets forth certain key information of our in-network hospitals as of
June 30, 2025:
Hospital type Hospital class
Number of
registered
beds (1)
Number of
doctors (2)
Number of
other
healthcare
professionals (3)
Time of
commencement
of operation
Nanjing BenQ
Hospital /H1118/H1118/H1118
Private
for-profit
general
hospital
Grade A
Class III
1,050 628 1,140 May 2008
Suzhou BenQ
Hospital /H1118/H1118/H1118
Private
for-profit
general
hospital
Class III 800 387 738 May 2013
Total /H1118/H1118/H1118/H1118/H1118/H1118 1,850 1,015 1,878
Notes:
(1) Refers to the number of beds that were registered in the hospital’s practicing license. In February 2025,
we commenced the operation of Phase II of Nanjing BenQ Hospital. As the registration of additional
beds was still in progress, the number of registered beds remained unchanged as of June 30, 2025.
(2) This number represents the total number of doctors employed by us. It does not include doctors from
other healthcare facilities who engage in multi-site practice with us.
(3) Comprise nurses, pharmacists and other medical technicians.
The table below sets forth a breakdown of our revenue by hospital, in absolute amount
and as a percentage of our total revenue, for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H11181,454,259 62.2 1,707,895 63.5 1,693,791 63.7 844,792 63.5 864,585 65.9
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118882,176 37.8 979,718 36.5 965,182 36.3 485,339 36.5 447,731 34.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
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Nanjing BenQ Hospital
Having commenced operations since May 2008, Nanjing BenQ Hospital has been rated as
a Grade A Class III hospital since 2022, being the first private hospital so rated in Nanjing,
Jiangsu Province. According to Frost & Sullivan, Nanjing BenQ Hospital is the third largest
private for-profit general hospital in the PRC, with its market share being 0.3% in the PRC, and
the largest private for-profit general hospital in Jiangsu Province, with its market share being
2.0% in Jiangsu Province, as measured by total revenue in 2024. As a medical university
affiliated hospital that engages in medical treatment, teaching, research, and operation, it is a
large scale healthcare institution integrating multi-disciplinary clinical care and a platform for
medical training and research.
As of June 30, 2025, Nanjing BenQ Hospital had over 600 doctors, among which, eight
experts enjoyed the Special Allowance of the State Council (൨), three experts
were recognized as Jiangsu Provincial Y oung and Middle-Aged Experts With Outstanding
Contributions (࢕three experts were recognized as Jiangsu
Provincial Innovative and Entrepreneurial Talents (ᕐ௴ɛʑ), four experts were
recognized as Jiangsu Provincial Special Engaged Medical Experts (࢕and
six experts were doctoral supervisors (ࢪ.)
Geographic Location
Nanjing BenQ Hospital is located in Nanjing, Jiangsu Province. As a part of the East
China region which encompasses many economically developed areas and has relatively higher
levels of healthcare infrastructure, medical resources, and access to advanced healthcare
technologies, Jiangsu Province was recognized as one of the PRC’s most developed regions,
with a population of approximately 85.3 million at the end of 2024. Revenue of private
hospitals in Jiangsu Province increased from RMB55.2 billion in 2019 to RMB92.6 billion in
2024 with a CAGR of 10.9% from 2019 to 2024, and is expected to grow to RMB182.2 billion
in 2030 with a CAGR of 11.9% from 2024 to 2030. We believe we have benefitted from our
geographic location, which provides us with a large potential customer base for our future and
continuous growth.
Moreover, Nanjing BenQ Hospital was strategically established with a capacity and an
aim to serve a wider area of populations in the East China region. Nanjing BenQ Hospital has
been attracting a large population from regions outside Nanjing and even Jiangsu Province. In
2022, 2023, 2024 and the six months ended June 30, 2025, approximately 15.6%, 15.1%,
15.4% and 16.0% of Nanjing BenQ Hospital’s inpatients, respectively, were patients residing
outside Jiangsu Province.
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Operational Capacity
As of June 30, 2025, Nanjing BenQ Hospital had 1,050 registered beds, and 2,262
full-time staff (1,801 of which were healthcare professionals), with a GFA of approximately
234,000 sq.m. Nanjing BenQ Hospital provided a full spectrum of general healthcare services
across 42 clinical departments and 7 other medical technology departments.
The table below sets forth certain key information of Nanjing BenQ Hospital as of the end
of or for the years/periods indicated:
As of/For the Y ear Ended
December 31,
As of/For the Six Months
Ended June 30,
2022 2023 2024 2024 2025
Inpatient healthcare
services
Number of registered
beds (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118900 1,050 1,050 1,050 1,050 (12)
Effective service capacity (2) /H1118328,500 383,250 384,300 191,100 190,050
Inpatient visits (in
thousand) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.1 50.6 53.3 26.0 27.2
Number of inpatient
surgeries (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,055 13,865 14,399 6,951 7,322
Average spending per
inpatient visit (RMB) (5) /H1118/H111818,520 17,969 16,925 16,236 16,424
Average bed turnover days
(days) (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188.3 7.5 7.2 7.4 6.9
Inpatient bed-days (7) /H1118/H1118/H1118/H1118/H1118/H1118329,638 408,400 395,231 194,044 199,601
Bed occupancy rate (%) (8) /H1118 100.3 106.6 102.8 101.5 105.0
Outpatient healthcare
services
Outpatient visits (in
thousand) (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,114.6 1,327.6 1,435.7 727.5 724.7 (13)
Average spending per
outpatient visit
(RMB)
(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118573 548 508 510 504
Number of outpatient
surgeries (11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,980 1,871 2,298 1,199 1,100
Notes:
(1) Represents the number of beds that were registered in the hospital’s practicing license as of the end of
the relevant year/period.
(2) Represents the estimated inpatient service capacity of the hospital during the given year/period,
calculated as the number of registered beds as of the end of such year/period multiplied by the number
of days in such year/period.
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(3) Represents the total number of inpatients (with hospital stay) in the hospital during the given
year/period.
(4) Represents the total number of inpatient surgeries performed in the hospital during the given
year/period.
(5) Represents the average spending per inpatient visit calculated as the revenue from inpatient healthcare
services divided by the number of inpatient visits in the hospital during the given year/period. During
the Track Record Period, the average spending per inpatient visit experienced a general decreasing trend
as a result of the implementation of the DRG payment system and aperiodic adjustment of the DRG
reimbursement standards.
(6) Represents the average turnover days per registered bed in the hospital, as an indicator of the efficiency
of our delivery of inpatient healthcare services, calculated as the effective service capacity during the
given year/period divided by the total number of discharged patients during such year/period. During the
Track Record Period, there were 365 days, 365 days, 366 days, 182 days and 181 days in 2022, 2023,
and 2024 and the six months ended June 30, 2024 and 2025, respectively.
(7) Represents the aggregate length of stay (in terms of days) for all inpatient visits in our hospitals during
the given year/period.
(8) Represents the percentage of registered beds occupied by inpatients during the given year/period, as an
indicator of the utilization of registered beds, calculated as the aggregate length of stay (in terms of
days) for all inpatient visits during such year/period divided by the effective service capacity during
such year/period and multiplied by 100%. Bed occupancy rate exceeded 100% due to the addition of
temporary beds to satisfy the increasing market demand, which we believe was in line with our
hospital’s social responsibilities. Based on the Implementation Guidelines for Evaluation Standards of
Class III General Hospitals in Jiangsu Province as issued by the Health Commission of Jiangsu
Province, for a Class III hospital, the number of beds in operation as of the end of a given year can
deviate up to 15% above or below the number of registered bed as of the same date, and still be
considered compliant. As confirmed by Frost & Sullivan, in the PRC hospital industry, it is not
uncommon for hospitals to set up additional beds beyond the registered number of beds in order to
respond to temporary medical service demands.
(9) Represents the total number of outpatients (without hospital stay, and excluding the number of patients
receiving physical examination services) in the hospital during the given year/period. Except for
inpatients who are readmitted to our inpatient department and/or are transferred to our inpatient
department from another hospital, most inpatients need to check in at the outpatient counter first before
they are admitted to the inpatient department and receive relevant inpatient healthcare services. As such,
a substantial number of inpatients in each year/period comprising the Track Record Period is also
counted in the number of outpatients in the corresponding year/period. As confirmed by Frost &
Sullivan, given that hospitals commonly require patients to check in at the outpatient counter before
being admitted to inpatient care, such method of dual counting is in line with the industry norm.
(10) Represents the average spending per outpatient visit calculated as the revenue from outpatient
healthcare services (excluding the revenue from physical examination services) divided by the number
of outpatient visits of the hospital during the given year/period. During the Track record Period, our
revenue from outpatient healthcare services (excluding those from physical examination services) at
Nanjing BenQ Hospital amounted to RMB638.6 million, RMB727.3 million, RMB728.7 million,
RMB371.2 million and RMB365.0 million in 2022, 2023, and 2024 and the six months ended June 30,
2024 and 2025, respectively.
(11) Represents the total number of outpatient surgeries performed in the hospital during the given
year/period.
(12) In February 2025, we commenced the operation of Phase II of Nanjing BenQ Hospital. As the
registration of additional beds was still in progress, the number of registered beds remained unchanged
as of June 30, 2025.
(13) The decrease in outpatient visits between the six months ended June 30, 2024 and the same period in
2025 was primarily due to a decline in visits to the Emergency discipline, as the prevalence of influenza,
which was typically initially treated in the Emergency department, in Jiangsu province was more severe
in early 2024 than in 2025. According to the Jiangsu Provincial Center for Disease Control and
Prevention, (i) monthly influenza cases from February to June 2024 were consistently higher than the
corresponding months in 2025, and (ii) while influenza prevalence was higher in January 2025, it
coincided with earlier Chinese New Y ear holiday in 2025 during which patients tend to pay less visits
to hospitals. See “— Seasonality” for details.
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Top Five Medical Disciplines
The following tables sets forth revenue contribution of the top five medical disciplines of
Nanjing BenQ Hospital in terms of revenue generated in 2024, in absolute amount and as a
percentage of our total revenue, for the years/period indicated:
For the Y ear Ended December 31,
Six months
Ended June 30,
2022 2023 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
1 Pancreatology /H1118/H1118/H1118/H111871,633 3.1 116,569 4.3 131,059 4.9 Pancreatology 69,259 5.3
2 Obstetrics and
Gynecology /H1118/H1118/H1118
91,310 3.9 90,624 3.4 106,506 4.0 Orthopedics 51,577 3.9
3 Dentistry /H1118/H1118/H1118/H1118/H1118/H1118/H111885,599 3.7 99,412 3.7 96,585 3.6 Dentistry 47,531 3.6
4 Orthopedics /H1118/H1118/H1118/H1118/H111879,949 3.4 93,021 3.5 95,203 3.6 Obstetrics and
Gynecology
46,262 3.5
5 Emergency /H1118/H1118/H1118/H1118/H1118/H111885,049 3.6 100,227 3.7 91,984 3.5 Emergency 41,284 3.1
Subtotal 413,540 17.7 499,853 18.6 521,337 19.6 Subtotal 255,913 19.4
During the Track Record Period, revenue contribution of our medical disciplines at
Nanjing BenQ Hospital was relatively balanced, with the top-ranked discipline accounting for
only 3.1%, 4.3%, 4.9% and 5.3% of our total revenue in 2022, 2023, and 2024 and the six
months ended June 30, 2025, respectively. There was no material changes in the composition
of our top five medical disciplines in each year comprising the Track Record Period, nor was
there any material fluctuations in the revenue contribution of our top five medical disciplines
during the same years/period.
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Key Disciplines and Medical Specialties
Nanjing BenQ Hospital has established multiple key disciplines and medical specialties
that are highly regarded in the industry. As of June 30, 2025, Nanjing BenQ Hospital had (i)
one National Key Clinical Discipline in Thoracic Surgery; (ii) four Jiangsu Provincial Key
Clinical Disciplines in the Departments of Medical Imaging, Thoracic Surgery, Neurosurgery
and Nephrology; and (iii) 16 Nanjing Municipal Key Medical Disciplines. The following table
sets forth details of certain key medical disciplines and specialties as well as their service
highlights of Nanjing BenQ Hospital:
Key disciplines and
medical specialties Description Service highlights
Intestinal Fistula
Surgery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Since its inception of operation in 2019, the
Center for Intestinal Fistula and Abdominal
Infections has treated over 6,000 patients from
30 provinces of the PRC, in which patients from
outside of Nanjing take up a proportion of more
than 90%. In 2024, it treated over 3,500 patients.
Since its inception of operation and up to June
30, 2025, it has achieved an improvement rate of
higher than 95% (calculated as the number of
patients whose diseases were improved or fully
cured divided by the total number of patients
discharge from the Center for Intestinal Fistula
and Abdominal Infections from 2019 until June
30, 2025).
As of December 31, 2022, 2023, and 2024 and
June 30, 2025, we had 10, 10, 10 and 10 doctors
employed at the Intestinal Fistula Surgery
Department of Nanjing BenQ Hospital,
respectively.
Our Intestinal Fistula Surgery Department
combines clinical nutritional support and
infection control with comprehensive treatment
of abdominal infections, organ dysfunction,
intestinal failure, and malnutrition, as well as
targeted treatment of different types of fistulas.
We have also explored early definitive surgery
for intestinal fistulas, self-healing therapies, and
open laparotomy for severe abdominal
infections. Our research in maintaining the
function of the bowel barrier has also
successfully solved the problem of secondary
infections in many critically ill patients and
improved the cure rate thereof. In addition,
inflammatory bowel disease, which mainly
consists of crohn’s disease and ulcerative colitis,
is clinically characterized by an unknown
etiology, difficulty in diagnosis and cure, and
necessity for interdisciplinary treatment. We
have changed the traditional treatment model
characterized by separation of medical and
surgical treatment, and implemented a more
standardized diagnosis and treatment through
multidisciplinary treatment such as drug therapy,
nutritional support therapy, endoscopic therapy
and surgery, benefitting patients with
significantly enhanced cure effect.
In recognition of the excelling clinical
capabilities of our Intestinal Fistula Surgery
Department, the Fourth Clinical Medical
College of Nanjing Medical University and
Southeast University School of Medicine have
recognized our Intestinal Fistula Surgery
Department as a collaborative department for
students’ clinical practice and internships. In
collaboration with the Fourth Clinical Medical
College of Nanjing Medical University, we have
established the Nanjing Medical University
Surgical Infection and Immunity Clinical
Translational Research Center (the “Clinical
Translational Center”), which focuses on the
pathological mechanisms of infection and
immunity in the field of surgery, and carries out
basic research on abdominal infections,
intestinal mucosal barriers, and inflammatory
bowel disease, further solidifying our leading
position in scientific research and clinical
medical service capabilities in the field of
Intestinal Fistula Surgery. The Clinical
Translational Center has been certified as a
Nanjing Expert Studio, and Jiangsu Postdoctoral
Innovative Practice Base. Members of the
Clinical Translational Center have published a
number of essays in internationally-renowned
journals such as Clinical and Translational
Medicine, Cell Reports, Lancet and Cell Death
and Disease.
During the Track Record Period, the Intestinal
Fistula Surgery Department of Nanjing BenQ
Hospital had successfully organized two
provincial-level continuing medical education
classes, guided hospitals in regards of clinical
treatment of intestinal fistula, and accepted
medical professionals from outside hospitals for
advanced medical training.
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Key disciplines and
medical specialties Description Service highlights
Pancreatology /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Pancreatology Department of Nanjing BenQ
Hospital is a one-stop real-time full
multidisciplinary pancreatic team in the PRC,
comprehensively covering medical units
such as surgery, ICU, internal
medicine, endoscopy, anesthesia, radiology
intervention, pathology, nutrition,
pharmacology, clinical database, and
biospecimen library. In 2024, it conducted
approximately 700 pancreatic surgeries and
treated over 21,000 patients with pancreatic
disease.
As of December 31, 2022, 2023, and 2024 and
June 30, 2025, we had six, nine, 13 and 13
doctors employed at the Pancreatology
Department of Nanjing BenQ Hospital,
respectively.
The director of the department is a doctoral
supervisor and enjoys the special allowance of
the State Council. Most of the key experts in the
team are PhDs with foreign academic
backgrounds.
Nephrology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Nephrology Department of Nanjing BenQ
Hospital had over 16,000 outpatient visits and
admitted approximately 1,580 cases of various
renal patients in 2024, of which 46.7% were
difficult and critical renal diseases, with an
average annual number of discharges being
approximately 1,570. Approximately 480
difficult vascular access surgeries were
conducted in the Nephrology Department of
Nanjing BenQ Hospital in 2024. As of December
31, 2024, the Nephrology Department of
Nanjing BenQ Hospital was equipped with more
than 140 hemodialysis machines, enabling over
80,000 dialysis treatments in 2024. Such scale of
hemodialysis treatment is at a leading level in
the Jiangsu Province.
As of December 31, 2022, 2023 and 2024 and
June 30, 2025, we had 17, 20, 20 and 18 doctors
employed at the Nephrology Department of
Nanjing BenQ Hospital, respectively.
The Nephrology Department of Nanjing BenQ
Hospital has been recognized as a Nanjing Key
Medical Discipline, Blood Purification
Standardized Training Base of Jiangsu Province,
Geriatric Medicine Clinical Technology
Application Research Project Unit of Jiangsu
Province.
The two leaders of the department are both
enjoying the special allowance of the State
Council, and both are doctoral supervisors. As of
June 30, 2025, the medical professional team of
the Nephrology Department of Nanjing BenQ
Hospital had over 90 doctors, technicians and
nurses.
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Key disciplines and
medical specialties Description Service highlights
Otolaryngology Head
and Neck Surgery /H1118/H1118/H1118/H1118
The Otolaryngology Head and Neck Surgery
Department of Nanjing BenQ Hospital has four
subspecialty disciplines: otology, rhinology,
pharyngology, and head and neck surgery. Since
its start of operation in 2019, the number of
consultations in the Otolaryngology Head and
Neck Surgery Department has risen
continuously. As of June 30, 2025, it had 35
registered beds.
As of December 31, 2022, 2023 and 2024 and
June 30, 2025, we had 18, 19, 22 and 23 doctors
employed at the Otolaryngology Head and Neck
Surgery Department of Nanjing BenQ Hospital,
respectively.
The Otolaryngology Head and Neck Surgery
Department of Nanjing BenQ Hospital has led
the innovative research on stereotactic treatment
of laryngeal papilloma and cricoarytenoid joint
movement unit, and a distinctive specified
fishbone clinic at the night time.
The president of Nanjing BenQ Hospital,
YU Zhenkun, M.D., is also the director and a
chief physician at the Otolaryngology Head and
Neck Surgery Department of Nanjing BenQ
Hospital. He is a professor and postdoctoral,
doctoral and master’s supervisor at Nanjing
Medical University and a professor and doctoral
supervisor at Southeast University, and has been
recognized as a Jiangsu Province Innovative and
Entrepreneurial Talent. For details of Dr. Y u’s
biography, see “Directors and Senior
Management — Senior Management” in this
prospectus.
The Otolaryngology Head and Neck Surgery
Department of Nanjing BenQ Hospital has been
recognized as a Nanjing Key Medical
Discipline.
Orthopedics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Orthopedics Department of Nanjing BenQ
Hospital consists of several sub-specialties such
as sports medicine and joint surgery, spine
surgery, orthopedic traumatology and hand and
foot microsurgery. As of June 30, 2025, it had 65
registered beds. In 2024, it had over 2,900
patient discharges and performed over 2,700
surgeries.
As of December 31, 2022, 2023, 2024 and June
30, 2025, we had 29, 30, 28 and 29 doctors
employed at the Orthopedics Department of
Nanjing BenQ Hospital, respectively.
The Orthopedics Department of Nanjing BenQ
Hospital has been recognized as a Nanjing Key
Medical Discipline
The director of Orthopedics Department of
Nanjing BenQ Hospital is a doctoral supervisor,
and has been recognized as a Jiangsu Province
Innovative and Entrepreneurial Talent.
As of June 30, 2025, the Orthopedics
Department of Nanjing BenQ Hospital had
undertaken two key projects of Nanjing Medical
Science and Technology Development Project,
two projects of Nanjing Health Y oung Talent
Project, six common projects of Nanjing
Medical Science and Technology Program
Development Project, nine projects of
Nanjing Medical University School Fund, and
One Project of Student Innovation and
Entrepreneurship Program Fund at Provincial
Level. As of June 30, 2025, members of the
department had published 23 research papers on
SCI journals and 44 research papers on national
core journals.
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Key disciplines and
medical specialties Description Service highlights
Obstetrics and
Gynecology /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Obstetrics and Gynecology Department at
Nanjing BenQ Hospital encompasses various
subspecialties, including Gynecology,
Obstetrics, Reproductive Medicine, Uterine
Diseases, and Pelvic Floor Medicine. As of June
30, 2025, it had 65 registered beds.
As of December 31, 2022, 2023, 2024 and June
30, 2025, we had 31, 33, 35 and 34 doctors
employed at the Obstetrics and Gynecology
Department of Nanjing BenQ Hospital,
respectively.
The Obstetrics and Gynecology Department at
Nanjing BenQ Hospital has been recognized as a
Nanjing Municipal Clinical Key Specialty
(Gynecology). It is also rewarded as a “Baby-
Friendly Hospital” in Jiangsu Province.
The Obstetrics and Gynecology Department
provides clinical and theoretical teaching for
students from Nanjing Medical University and
Southeast University.
Emergency /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Emergency Department at Nanjing BenQ
Hospital is committed to provide patients with
timely, effective, and comprehensive emergency
care.
As of December 31, 2022, 2023, 2024 and June
30, 2025, we had 21, 24, 25 and 25 doctors
employed at the Emergency Department of
Nanjing BenQ Hospital, respectively.
The Emergency Department at Nanjing BenQ
Hospital has been designated as a key municipal
discipline in Nanjing. In 2017, the Emergency
Department was awarded the status of a Nanjing
Municipal Chest Pain Center and a Nanjing
Municipal Trauma Center. In 2018, it became
one of the first facilities in the PRC to receive
the National Chest Pain Center certification. In
2020, the department successfully passed the
Nanjing Municipal Stroke Center accreditation.
The integration of these “three major centers”
has enabled the department to optimize its
emergency response processes and deliver
comprehensive care to patients with chest pain,
stroke, and traumatic injuries.
Dentistry /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Dentistry Department at Nanjing BenQ
Hospital upholds the principle of “providing
patients with the right to comfortable treatment”
and offers a comprehensive range of dental
services. As of June 30, 2025, it had 4 registered
beds.
As of December 31, 2022, 2023, 2024 and June
30, 2025, we had 62, 63, 57 and 57 doctors
employed at the Dentistry Department of
Nanjing BenQ Hospital, respectively.
The Dentistry Department at Nanjing BenQ
Hospital is dedicated to providing patients with
a comfortable environment and treatment
experience, offering a variety of specialized
services. During the Track Record Period, the
department treats over 120,000 patients
annually.
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Construction and Expansion Plan
Leveraging our successful track record, we aim to expand and enhance the comprehensive
operating capacities of Nanjing BenQ Hospital in the near future. The construction and
expansion of Nanjing BenQ Hospital has two phases in total. The first phase had been put into
operation since May 2008, whereas the second phase was under construction as of the Latest
Practicable Date. Both phases were designed be built into a smart medical city with a number
of clinical medical centers. The second phase comprises two separate stages. The first stage
focuses on the construction of specialty disciplines buildings (ᅽ), which had been
completed by the end of 2024. We have completed all material procedures required for building
occupancy in accordance with relevant PRC laws and regulations and put these buildings into
operation in February 2025. The second stage of the second phase aims for the construction of
a special (high-end) medical service center ( तცʕː), which was scheduled to be commenced
in 2027 and expected to be completed in 2030.
The table below sets forth estimated details of our expansion plan for Nanjing BenQ
Hospital as of the Latest Practicable Date:
Phase Construction Plan Status
Planned Design
and Scale
Expected Time
of Completion
Total Estimated
Capital
Expenditure Source of Fund
Phase II /H1118Special
(high-end)
medical
service center
Construction
expected to
begin in
2027
 Planned GFA of
approximately
103,000 sq.m.
 Additional
400-600 beds
2030 Approximately
RMB850
million
Internal capital
resources and
bank financing
Moreover, we also plan to purchase and install additional medical equipment to facilitate
the service offerings in key disciplines of Nanjing BenQ Hospital, such as equipment used in
operating rooms, including surgical robots, and equipment for digital subtraction angiography
(DSA), and equipment used in tumor center, including linear accelerator and other treatment
equipment. We estimate that the total capital expenditure for the purchase of these equipment
will be approximately RMB270 million, and we plan to fund the investment through both net
proceeds from the Global Offering and our internal capital resources.
For details, see “Future Plans and Use of Proceeds — Use of Proceeds” in this prospectus.
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Infrastructure, Facilities and Equipment
Equipped with advanced medical facilities, we believe Nanjing BenQ Hospital has the
capability to diagnose and treat the most complex and critical medical emergencies and
conditions. The table below sets forth details of the major medical equipment and infrastructure
of Nanjing BenQ Hospital as of June 30, 2025:
Name of Medical Equipment Description
APEX CT Scanner with a
256-Row X-Ray
Structure /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Applying a number of technologies, it is able to achieve
accurate quantification-level diagnosis, discover earlier tiny
lesions, and help with early precision diagnosis and
treatment of serious diseases.
Medical-Use Air
Pressurized Oxygen
Chamber Group /H1118/H1118/H1118/H1118/H1118/H1118
Its chamber allows the beds of the critically ill patients to
directly go in and out, facilitating our comprehensive
treatment of serious neurological diseases.
Positron Emission
Tomography (PET)
Imaging System /H1118/H1118/H1118/H1118/H1118/H1118
As a large-scale medical equipment capable of detecting
functional and metabolic changes, it functions not only for
early screening of tumors, but also as an effective means to
accurately evaluate coronary artery microvascular lesions. It
is one of the most advanced medical equipment in early
screening of tumors within the industry according to Frost &
Sullivan, which represents our competitiveness in tumor
diagnosis in the industry.
Gamma ray stereotactic
radiotherapy system /H1118/H1118/H1118
Also known as SnipeRay Gamma Knife, it accurately
destroys the lesion in one go, achieving non-invasive,
non-hemorrhagic, non-infectious, rapid and painless
curative effect, satisfying the clinical requirements for the
precision treatment of brain tumors.
3.0T Magnetic Resonance
Imaging System /H1118/H1118/H1118/H1118/H1118/H1118
Featuring high imaging speed, stability and signal-to-noise
ratio, it allows head and whole-body scanning and imaging,
magnetic resonance spectral analysis and complex post-
processing, facilitating our diagnosis of complex medical
conditions.
High-End Cardiac
Intelligent Ultrasound
Equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Integrating the human anatomy data model, it enables
ultrasound to get access to the true anatomical structure of
human heart and carry out intelligent analysis based
thereon, representing our competitiveness in cardiac
ultrasound examination.
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Name of Medical Equipment Description
Surgical Microscope and
Surgical Navigation
System /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
It digitally analyzes the anatomical structure of the patient
as well as the nerves, blood vessels, and functional zones
based on image data, facilitating pre-operative planning and
intra-operative guiding for doctors, demonstrating our
hospital’s competitiveness in the minimally invasive and
delicate neurosurgical procedures in the Jiangsu Province.
Blood Purification
Center /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Equipped with more than 130 dialysis equipment as of the
Latest Practicable Date, its water treatment could reach the
standard of ultra-pure water with conductivity less than
0.1µs/cm, which provides above-standard technical support
for our function as a Provincial Blood Purification Training
Base.
Suzhou BenQ Hospital
Having commenced operations in May 2013, Suzhou BenQ Hospital is a private for-profit
general hospital that offers multi-disciplinary inpatient and outpatient diagnosis and
treatments, similar to those offered by our Nanjing BenQ Hospital, yet with an emphasis on
localized medical services. In August 2023, Suzhou BenQ Hospital obtained the Class III
hospital ranking. In addition, Suzhou BenQ Hospital has a notably strong reputation in the
Departments of Obstetrics and Gynecology as well as Pediatrics.
Geographic Location
Suzhou BenQ Hospital primarily serves the local communities in Suzhou. It is located in
Suzhou High-Tech District, an emerging and rapidly developing district. With the continuous
growth of its population and the increasing demand for high-quality healthcare services,
coupled with favorable incentives and supportive policies for businesses, we have the
capability to serve a significant number of potential patients in this region. Leveraging our
medical infrastructure, network of healthcare institutions, and teams of healthcare
professionals, we are well-positioned to meet the healthcare needs of this thriving community.
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Operational Capacity
As of June 30, 2025, Suzhou BenQ Hospital had 800 registered beds, and 1,456 full-time
staff (1,148 of which are healthcare professionals), with a GFA of approximately 172,000 sq.m.
The table below sets forth certain key information of Suzhou BenQ Hospital as of the end of
or for the years/periods indicated:
As of/For the Y ear Ended December
31,
As of/For the Six Months
Ended June 30,
2022 2023 2024 2024 2025
Inpatient healthcare
services
Number of registered
beds (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118800 800 800 800 800
Effective service
capacity (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118292,000 292,000 292,800 145,600 144,800
Inpatient visits (in
thousand) (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826.9 31.3 33.0 16.3 15.2 (12)
Number of inpatient
surgeries (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,396 6,646 8,375 4,157 3,625 (13)
Average spending per
inpatient visit (RMB) (5) /H1118 17,064 15,542 14,452 13,923 14,244
Average bed turnover days
(days) (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.7 9.2 8.9 8.9 9.5
Inpatient bed-days (7) /H1118/H1118/H1118/H1118/H1118242,515 261,563 262,357 130,619 125,553 (12)
Bed occupancy rate (%) (8) 83.1 89.6 89.6 89.7 86.7 (12)
Outpatient healthcare
services
Outpatient visits (in
thousand) (9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118566.0 674.7 710.8 368.9 332.7 (14)
Average spending per
outpatient visit
(RMB)
(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118650 655 613 613 611 (13)
Number of outpatient
surgeries (11) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,902 3,380 2,069 921 1,498 (13)
Notes:
(1) Represents the number of beds that were registered in the hospital’s practicing license as of the end of
the relevant year/period.
(2) Represents the estimated inpatient service capacity of the hospital during the given year/period,
calculated as the number of registered beds as of the end of such year multiplied by the number of days
in such year/period.
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(3) Represents the total number of inpatients (with hospital stay) in the hospital during the given
year/period.
(4) Represents the total number of inpatient surgeries performed in the hospital during the given
year/period.
(5) Represents the average spending per inpatient visit calculated as the revenue from inpatient healthcare
services divided by the number of inpatient visits in the hospital during the given year/period. During
the Track Record Period, the average spending per inpatient visit experienced a general decreasing trend
as a result of the implementation of the DRG payment system and aperiodic adjustment of the DRG
reimbursement standards.
(6) Represents the average turnover days per registered bed in the hospital, as an indicator of the efficiency
of our delivery of inpatient healthcare services, calculated as the effective service capacity during the
given year divided by the total number of discharged patients during such year/period. During the Track
Record Period, there were 365 days, 365 days, 366 days, 182 days and 181 days in 2022, 2023, and 2024
and the six months ended June 30, 2024 and 2025, respectively.
(7) Represents the aggregate length of stay (in terms of days) for all inpatient visits in our hospitals during
the given year/period.
(8) Represents the percentage of registered beds occupied by inpatients during the given year, as an
indicator of the utilization of registered beds, calculated as the aggregate length of stay (in terms of
days) for all inpatient visits during such year/period divided by the effective service capacity during
such year/period and multiplied by 100%.
(9) Represents the total number of outpatients (without hospital stay, and excluding the number of patients
receiving physical examination services) in the hospital during the given year/period. Except for
inpatients who are readmitted to our inpatient department and/or are transferred to our inpatient
department from another hospital, most inpatients need to check in at the outpatient counter first before
they are admitted to the inpatient department and receive relevant inpatient healthcare services. As such,
a substantial number of inpatients in each year/period comprising the Track Record Period is also
counted in the number of outpatients in the corresponding year/period. As confirmed by Frost &
Sullivan, given that hospitals commonly require patients to check in at the outpatient counter before
being admitted to inpatient care, such method of dual counting is in line with the industry norm.
(10) Represents the average spending per outpatient visit calculated as the revenue from outpatient
healthcare services (excluding the revenue from physical examination services) divided by the number
of outpatient visits of the hospital during the given year/period. During the Track record Period, our
revenue from outpatient healthcare services (excluding those from physical examination services) at
Suzhou BenQ Hospital amounted to RMB368.0 million, RMB441.6 million, RMB435.5 million,
RMB226.1 million and RMB203.3 million in 2022, 2023, and 2024 and the six months ended June 30,
2024 and 2025, respectively.
(11) Represents the total number of outpatient surgeries performed in the hospital during the given
year/period. Despite the increases in outpatient visits at Suzhou BenQ Hospital during the Track Record
Period, the number of outpatient surgeries at Suzhou BenQ Hospital decreased from 3,380 in 2023 to
2,069 in 2024, primarily due to reduced patient demand for high-end services in the Department of
Ophthalmology at Suzhou BenQ Hospital.
(12) The decreases in inpatient visits, inpatient bed-days, and bed occupancy rate for the six months ended
June 30, 2025, compared to the corresponding period in 2024, were primarily attributable to (i) the more
severe prevalence of influenza, which was typically initially treated in the Emergency department with
inpatient cases typically admitted to the Pediatrics or Respiratory departments, in early 2024 than in the
same period of 2025, directly resulted in fluctuations inpatient visits in the Pediatrics and Respiratory
disciplines and ultimately affected our inpatient bed-days and bed occupancy rate during the period. Our
inpatient visits in the Pediatrics and Respiratory disciplines decreased from 2,861 and 1,094 in the six
months ended June 30, 2024, to 2,155 and 732 in the corresponding period of 2025, respectively; (ii)
the decrease in inpatient visits in the Ophthalmology discipline, as we proactively shifted certain
surgeries to the outpatient department in response to the decrease in DRG reimbursement rates, as well
as the reduced patient demand for high-end services.
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(13) The decrease in the number of inpatient surgeries and the increase in the number of outpatient surgeries
between the six months ended June 30, 2024 and 2025 were primarily due to our proactive strategy to
promote outpatient daytime surgeries to enhance operational efficiency, as well as the growing
preference of patients for outpatient surgeries over hospitalization. The average spending per outpatient
visit between the six months ended June 30, 2024 and 2025 remained stable primarily due to (i) the
lower patient payments resulted from (a) the expansion of centralized procurement by the medical
insurance bureau, which led to a reduction in prices of pharmaceuticals products charged to patients; and
(b) the adjustment of reimbursement standards for certain diagnostic procedures by the medical
insurance bureau, and (ii) this was offset by the increase in the number of outpatient surgeries.
(14) The decrease in outpatient visits for the six months ended June 30, 2025 compared to the corresponding
period in 2024 was primarily due to: (i) the prevalence of influenza in early 2024 was more severe than
in the same period of 2025, leading to a fluctuation in both inpatient and outpatient visits; and (ii) the
reduced patient demand for high-end services in the Ophthalmology department.
Top Five Medical Disciplines
The following tables sets forth revenue contribution of the top five medical disciplines of
Suzhou BenQ Hospital in terms of revenue generated for each respective year/period during
Track Record Period, in absolute amount and as a percentage of our total revenue, for the
years/periods indicated:
For the Y ear Ended December 31,
For the
Six months
Ended June 30,
2022 2023 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
1 Obstetrics and
Gynecology /H1118/H1118/H1118127,878 5.5 113,310 4.2 135,482 5.1
Obstetrics and
Gynecology 67,319 5.1
2 Pediatrics /H1118/H1118/H1118/H1118/H1118/H111860,331 2.6 96,085 3.6 80,229 3.0 Dentistry 24,250 1.8
3 Dentistry /H1118/H1118/H1118/H1118/H1118/H1118/H111841,409 1.8 52,603 2.0 53,318 2.0 Oncology 18,382 1.4
4 Health Check-up /H1118/H111840,520 1.7 44,364 1.7 44,084 1.7 Cardiology 18,311 1.4
5 Ophthalmology /H1118/H1118/H111833,831 1.4 42,553 1.6 40,662 1.5 Geriatrics 18,290 1.4
Subtotal 303,969 13.0 348,915 13.1 353,775 13.3 Subtotal 146,552 11.1
During the Track Record Period, revenue contribution of our medical disciplines at
Suzhou BenQ Hospital was relatively balanced, with the top-ranked discipline accounting for
only 5.5%, 4.2%, 5.1%, and 5.1% of our total revenue in 2022, 2023, and 2024 and the six
months ended June 30, 2025, respectively. During the six months ended June 30, 2025, certain
medical disciplines did not rank among our top five revenue contribution disciplines due to
specific operational and external factors: (i) the revenue from Pediatrics discipline decreased
due to the prevalence of influenza in the beginning of 2024 was more severe as compared to
that in the same period of 2025, led to the fluctuation in patient visits; (ii) the Health Check-up
discipline typically records lower revenue in the first half of the year, as most corporate clients
schedule group check-ups during the second half, thereby impacting its revenue contribution
in the six months ended June 30, 2025; and (iii) the Ophthalmology discipline experienced a
decline in revenue due to the downward adjustment of DRG reimbursement rates implemented
by Suzhou Healthcare Security Administration, in accordance with the national healthcare
insurance policy, starting from the second half of 2024, as well as the reduced patient demand
for high-end services. Save as disclosed above, there was no material changes in the
composition of our top five medical disciplines in each year/period comprising the Track
Record Period, nor was there any material fluctuations in the revenue contribution of our top
five medical disciplines during the same years/periods.
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Key Disciplines and Medical Specialties
The following table sets forth details of certain key medical disciplines and specialties as
well as their highlights of Suzhou BenQ Hospital:
Key disciplines and
medical specialties Description Service highlights
Obstetrics and
Gynecology /H1118/H1118/H1118/H1118/H1118/H1118
The Obstetrics and Gynecology Department
at Suzhou BenQ hospital integrates medical
care with an international standard treatment
model, providing comprehensive healthcare
services, ranging from the prevention and
treatment of gynecological cancers to the
diagnosis and treatment of infertility and
sterility.
In 2024, over 3,300 surgeries were performed
at the Obstetrics and Gynecology Department
of Suzhou BenQ Hospital, with a growth rate
of 22.3% as compared with the number of
surgeries performed in 2023.
As of December 31, 2022, 2023, and 2024
and June 30, 2025, we had 29, 33, 35 and 35
doctors employed at the Obstetrics and
Gynecology Department of Suzhou BenQ
Hospital, respectively.
The Gynecology Department at Suzhou BenQ
Hospital is recognized as a training base for
single-port laparoscopic and hysteroscopic
surgeries, a training base for transvaginal
surgical techniques, a training base for
common diseases in gynecological
endocrinology, a research center for female
pelvic floor and postpartum comprehensive
rehabilitation, and a training center for high-
intensity focused ultrasound physical therapy.
With its technical strength in a leading
position within Suzhou, it holds a high
reputation in the national gynecological
community.
Pediatrics /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Pediatrics Department at Suzhou BenQ
Hospital offers a comprehensive range of
pediatric services, including general
pediatrics, pediatric intensive care unit
(PICU), neonatal intensive care unit
(unaccompanied NICU), child health care,
pediatric surgery, and pediatric emergency.
Since opening in 2013, this department has
achieved cumulative growth in the number of
outpatient visits and inpatient visits annually.
Specifically, the Pediatrics Department at
Suzhou BenQ Hospital had approximately
15,000 outpatient visits and approximately
550 inpatient visits in 2013. During the Track
Record Period, its outpatient visits reached
approximately 81,000 in 2022 and
approximately 112,000 in 2024, and its
inpatient visits reached approximately 5,000
in 2022 and approximately 6,500 in 2024.
Due to the concurrent spread of multiple
respiratory viruses in 2023, the Pediatrics
Department recorded notably higher revenue
of RMB96.1 million, with approximately
122,000 outpatient visits and 9,000 inpatient
visits in the same year.
As of December 31, 2022, 2023, and 2024
and June 30, 2025, we had 22, 29, 29 and 27
doctors employed at the Pediatrics
Department of Suzhou BenQ Hospital,
respectively.
The Pediatric Department at Suzhou BenQ
Hospital features a well-established team of
pediatricians proficient in diagnosing and
treating a wide range of childhood diseases,
with extensive experience in managing
conditions such as pediatric pneumonia,
childhood asthma, rotavirus gastroenteritis,
and pediatric urinary tract infections. It has
introduced lung function tests and pediatric
bronchoscopy examinations, and has
specially established a Pediatric Respiratory
Center.
It offers 24-hour pediatric medical services
for the convenience of its patients.
Additionally, it is decorated with a warm and
child-friendly atmosphere, designed to soothe
the anxious feelings of children. The
Pediatrics Department has gained recognition
from parents in the surrounding regions.
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Key disciplines and
medical specialties Description Service highlights
Dentistry /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Dentistry Department at Suzhou BenQ
Hospital offers a diverse range of treatments,
dedication to delivering high-quality dental
care tailored to each individual’s needs.
As of December 31, 2022, 2023, and 2024
and June 30, 2025, we had 37, 39, 35 and 33
doctors employed at the Dentistry
Department of Suzhou BenQ Hospital,
respectively.
The Dentistry Department at Suzhou BenQ
Hospital conducted approximately 500 dental
implant procedures annually during the Track
Record Period. In 2024, the Dentistry
Department at Suzhou BenQ Hospital
experienced a high volume of patients, with
approximately 80,500 patient visits recorded
throughout the year. This high engagement
reflects the trust and reliance of the
community on the department’s services. A
core aspect of the department’s philosophy is
to create a comfortable and welcoming
environment for patients, which is crucial in
alleviating anxiety related to dental visits. To
achieve this, various sedation techniques are
employed, including nitrous oxide sedation
and outpatient TCI (Target Controlled
Infusion) sedation, ensuring that patients feel
at ease during their procedures.
Hematology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Hematology Department at Suzhou BenQ
Hospital diagnoses and treats various blood
disorders, including anemia, leukemia, and
other malignancies, as well as bleeding
disorders such as hemophilia. As of June 30,
2025, it had 15 registered beds.
As of December 31, 2022, 2023, and 2024
and June 30, 2025, we had 5, 5, 5 and 5
doctors employed at the Hematology
Department of Suzhou BenQ Hospital,
respectively.
In 2024, the Hematology Department at
Suzhou BenQ Hospital demonstrated its
prominence by admitting a total of nearly
2,700 patients. This patient volume reflects
the trust placed in the department’s advanced
treatment protocols and expert care.
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Key disciplines and
medical specialties Description Service highlights
Ophthalmology /H1118/H1118/H1118/H1118/H1118/H1118The Ophthalmology Department at Suzhou
BenQ Hospital diagnoses and treats a variety
of eye diseases. A hallmark of the department
is its comprehensive approach to vision
health, catering to a wide range of
demographics. As of June 30, 2025, it had 7
registered beds.
As of December 31, 2022, 2023, and 2024
and June 30, 2025, we had 1, 8, 5 and 5
doctors employed at the Ophthalmology
Department of Suzhou BenQ Hospital,
respectively.
In 2024, the outpatient volume of the
Ophthalmology Department at Suzhou BenQ
Hospital reached over 42,000 patients,
accompanied by approximately 2,600
surgical procedures. This achievement not
only reflects the high demand for its services
but also signifies its reputation for delivering
satisfactory medical care.
Health Check-Up /H1118/H1118/H1118/H1118/H1118The Health Check-Up Center provides one-
stop comprehensive services including health
consultation, medical examination, health
management, post-examination outpatient
services, and family physician services.
Particularly, our medical examination
services cover various types of examinations,
including individual health examinations,
corporate employee benefit check-ups, pre-
employment and pre-admission physical
examinations, pre-pregnancy health
screenings, specialized pediatric
examinations, VIP one-on-one premium
health check-ups (including translation
services), and prestigious residential wellness
examinations, catering to the diverse needs of
different clients.
The Health Check-Up Center has deployed an
intelligent patient navigation system, which
automatically and dynamically optimizes
patient flow through real-time routing, triage,
and resource allocation, providing patients
with a more efficient and seamless
examination experience through a smart,
streamlined process management. In terms of
health management services, the center offers
differentiated services including management
of critical values and significant positive
results, free specialist referrals for abnormal
results, complimentary nutritional breakfast,
free parking, and free health lectures. These
services not only enhance customer
experience, but also help customers better
understand their health conditions and take
proactive health management measures.
Since opening in 2013, the Health Check-Up
Center has achieved cumulative growth in the
number of patient visits annually.
Specifically, the Health Check-Up Center had
approximately 49,000 patient visits in 2013.
During the Track Record Period, such number
reached approximately 90,000, 104,000, and
110,000 in 2022, 2023, and 2024,
respectively.
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Construction and Expansion Plan
We aim to expand the operations of Suzhou BenQ Hospital and enhance its competitive
advantages in its key disciplines and medical specialties in the near future. The construction
and expansion of Suzhou BenQ Hospital has four phases in total. The first phase had been put
into operation since May 2013. The second phase was designed into an office building (with
no registered beds), which had been put into operation since January 2024. As of the Latest
Practicable Date, the third phase was designed to build a maternity and child center ( ੉̼ʕ
ː), the construction of which commenced by the end of 2024 and was expected to
be completed by October 2027. The fourth phase was designed to build a rehabilitation center
(๫ʕː), the construction of which was scheduled to commence in 2027 and expected
to be completed in 2029, respectively.
The table below sets forth estimated details of our expansion plan for Suzhou BenQ
Hospital as of the Latest Practicable Date:
Phase Construction Plan Status
Planned Design
and Scale
Expected Time
of Completion
Estimated capital
expenditure Source of Fund
Phase III /H1118Maternity and
child center
Under
construction
 Planned GFA of
approximately
90,000 sq.m.
 Additional
500 beds
October 2027 Approximately
RMB640
million
Net proceeds
from the
Global
Offering and
internal
capital
resources
Phase
IV /H1118/H1118/H1118
Rehabilitation
center
Construction
expected to
begin in
2027
 Planned GFA of
approximately
88,000 sq.m.
 Additional
300 beds
2029 Approximately
RMB500
million
Internal capital
resources and
bank financing
Moreover, we also plan to purchase and install additional medical equipment to facilitate
the service offerings of Suzhou BenQ Hospital, such as equipment used in hemodialysis center,
laparoscopic systems used in operating rooms, and orthopedic O-arm machine set. We estimate
that the total capital expenditure for the purchase of these equipment will be approximately
RMB110 million, and we plan to fund the investment through both net proceeds from the
Global Offering and our internal capital resources.
For details, see “Future Plans and Use of Proceeds — Use of Proceeds” in this prospectus.
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Infrastructure, Facilities and Equipment
Similar to Nanjing BenQ Hospital, Suzhou BenQ Hospital is equipped with advanced
equipment to offer a wide range of medical diagnosis and procedures commonly required by
the general public. The table below sets forth details of the major medical equipment and
infrastructure of Suzhou BenQ Hospital as of June 30, 2025:
Name of Medical Equipment Description
6D Fast Blade
Radiotherapy /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Applied for tumor radiosurgery, it is one of the most
advanced radiation therapy technology in the world,
according to Frost & Sullivan. It can quickly and accurately
treat all kinds of tumors, including some tumors that are
difficult to be treated by conventional surgeries, thereby
enhancing the clinical therapeutic efficacy of our tumor
radiotherapy, while mitigating the acute side effects and
complications of patients.
Digital Subtraction
Angiograph (DSA)
Compound Operating
Room /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Equipped with a variety of devices at the industry’s
technological frontier, it breaks the restriction of traditional
angiography systems by combining high-definition image
quality and the lowest level of radiation, thereby
revolutionizing the treatment of strokes. Besides, with
unique algorithmic support, it reduces shadow caused by
patients’ heartbeat or respirational activities, ensuring
highly-reliable image quality. At the same time, by applying
comprehensive clinical software, it allows highly-efficient
and intelligent surgery navigation, thereby boosting surgery
efficiency.
Medical-Use Air
Pressurized Oxygen
Chamber Group /H1118/H1118/H1118/H1118/H1118/H1118
By synthesizing medical science, physics and engineering,
it combines advanced technological performance and high
safety functions, representing prominent features of its type.
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Name of Medical Equipment Description
Gamma Knife /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Integrating modern computer technology, stereotactic
technology and radiosurgery technology, gamma knife
produces gamma rays as the radiation source and focuses its
irradiation on the body lesions in a stereotactic fashion. It
achieves surgical resection of the body lesions in lieu of
traditional scalpels. Compared with traditional treatment
methods, it has the following advantages: (i) special and
complex preoperative preparation and medication are not
required; (ii) surgeries can be performed when the patient is
awake, thus reducing risks brought by anesthesia
procedures; (iii) surgeries can be safely and effectively
performed regardless of age, physical condition and
underlying medical conditions of the patient in question;
and (iv) after the surgery, there is no need for blood
transfusion, restriction on patients’ diet and activities, nor
side-effects such as hair loss, and the hospitalization stay is
short enough to enable patients to return to normal life as
soon as possible.
PET-CT Molecular
Imaging Center /H1118/H1118/H1118/H1118/H1118/H1118
As a novel type of imaging equipment, it integrates
metabolic imaging enabled by Positron Emission
Tomography scan (PET scan) and anatomical structure
imaging enabled by CT scan, therefore allowing both acute
discovery of functional and metabolic changes in lesions
supported by PET scan, while accurately locating the
lesions with the help of CT scan, thereby greatly improving
diagnostic accuracy, and providing guidance to doctors to
formulate treatment plans with enhanced precision.
3.0T Magnetic Resonance
Imaging System /H1118/H1118/H1118/H1118/H1118/H1118
It is an extensively used examination technology
characterized by being multi-dimensional, multi-parameter,
radiation-free with a large visual field, guaranteeing patient
safety and high image quality. In addition, the application of
the Life Matrix System allows the direct reading of the
patient’s anatomical structure, respiration status, magnetic
field and other human body information. Moreover, the use
of magnets of industry-leading quality improves patients’
comfort with shortened examination time while generating
precise medical images, significantly facilitating the
examination of more difficult body parts and the detection
of micro lesions, empowering the early diagnosis of
diseases.
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Name of Medical Equipment Description
Ultra High-End
Cardiovascular
Ultrasound Diagnostic
Instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Allowing one-step convenient operation, it helps realize a
number of functions from cardiac 4D structural imaging to
myocardial function imaging, covering both image
acquisition and data management. With advanced
ergonomics design, it features clear imaging, accurate
diagnostic capability, leading scientific research capability
and convenient operation process.
Laminar Flow Wards /H1118/H1118/H1118Equipped with air purification equipment, it sterilizes more
than 99.9% of dust particles above 0.3µm and bacteria,
thereby preventing various infections. In addition, the ward
is completely segregated from the outside, requiring
medical and nursing staff to take a bath, change clothes and
get disinfected before entering the laminar flow wards,
where the patients’ belongings and diets are strictly
disinfected, which facilitates the recovery of patients with
hematological diseases.
OUR HEALTHCARE SERVICES
Our Treatment Processes And Patient-Centered Care
Our Treatment Processes
The treatment processes of our healthcare services can be generally divided into two
categories: inpatient healthcare services and outpatient healthcare services. Inpatient
healthcare services involve treating patients hospitalized overnight or for a prolonged period
of time (the duration of which depend on each patient’s health needs and recovery process),
subject to the patients’ conditions and recovery. Outpatient healthcare services refer to the
treatment of patients who are hospitalized for less than 24 hours. Outpatient surgeries
involving minor to intermediate procedures that are less invasive are sometimes performed
without the need for overnight hospitalization. Within the scope of our outpatient healthcare
services, we also provide physical examination services where we will examine signs of
diseases and provide medical advices on healthcare issues. Individuals may seek such services
for a number of reasons, including routine check-ups, pre-employment health check, driver’s
check-ups, school admission and travels. In addition, corporations and government
administrations may also purchase our physical examination packages for their employees.
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Our Patient-Centered Care
Through decades of dedication and commitment to providing patient-centered care, we
have made “BenQ Medical Center” a trusted brand among patients. In our hospitals, we
endeavor to create an environment that enables patients to feel cared for and respected during
the entire treatment process, which can inculcate a sense of safety and security and help
patients achieve physical, spiritual, and sociocultural wellbeing, which can be demonstrated by
the following aspects:
 With unique structural design of a comfortable atmosphere, our hospitals feature a
congenial and hospitable environment, and provide suites, single to four-person
wards that cater to the varying needs of different patients;
 Our outpatient buildings are constructed with an open-air design that allows natural
light to be channeled into the interior of the hospitals, making the whole space
well-lit and well-ventilated, which we believe would provide added comfort for
patients and reduce their sense of stress;
 The corridors in our hospitals’ outpatient areas are designed to be as wide as five to
six meters, able to accommodate counter flow transport of hospital beds and
wheelchairs to freely move in and out, as well as the transportation of patients by
electric vehicles across different areas of our hospitals;
 We adopt child-friendly interior designs for Departments of Pediatrics and Pediatric
Dentistry to enhance children’s experience of being treated at our hospitals;
 There are special waiting areas for patients’ family members outside operating
rooms and ICUs in our hospitals to provide a comfortable waiting space therefor;
 To provide patients with the information they need in an easily-accessible way and
promptly relieve their concerns, our hospital beds are equipped with an advanced
smart bedside screen, on which our hospitalized patients can check disease-related
scientific education information in the form of text, pictures or videos at any time;
 We provide patients and their families with a variety of dietary choices to enhance
their level of comfort. We have constructed a designed food court with nearly 20
food and beverage stores, including a number of well-known and affordable food
and beverage chain operators to be stationed in our hospitals; and
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 Our volunteer workers are also important contributors in providing patients with
enhanced medical experience. With regards to atmosphere, the outpatient halls of
our hospitals are equipped with a grand piano, with volunteers scheduled to play
music during outpatient hours, delivering a sense of pleasure to patients and lifting
their sense of stress. In addition, volunteer guide desks are set up in each of the
outpatient clinic, registration, payment and examination areas, where volunteers
readily offer guidance to patients and assist them in going through the relevant
procedures. For details of some other major tasks that our volunteer workers take on,
see “— Environment, Social and Governance — Charity Work and Social
Contribution” in this section.
Below photos showcase our patient-centered care approach as reflected in environment
and atmosphere at our hospitals:



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With an aim to tackle the fragmentation and low-efficiency in patients’ diagnostic and
treatment processes commonly seen in the industry, we have adopted various innovative
healthcare systems and formally institutionalized them into our day-to-day operations.
Featuring efficient utilization of medical personnel resources and requiring a specific medical
personnel to take full charge of one aspect of medical service throughout the patients’ treatment
process, such innovative healthcare systems see to it that our medical services are delivered in
a full-cycle and orderly setting which cater to patients’ real-time needs in a highly convenient
and reliable manner. Listed below are specifics of our innovative healthcare systems:
 Doctor-in-charge responsibility system (பՓ): differing from other
hospitals where outpatient and inpatient treatment processes are conducted by
different doctors in a segregated manner during the treatment of a particular patient,
our hospital’s doctor-in-charge responsibility system requires the doctor-in-charge,
i.e., the doctor who admitted the patient into our hospital to keep well-rounded
oversight from outpatient admission, consultation, surgery, to post-operative
rehabilitation. Such policy reduces the information asymmetries of different medical
departments that arise during the same patient’s treatment and provides added
guarantee of a more comprehensive understanding of patients’ conditions throughout
the whole diagnosis and treatment process, so as to ensure that appropriate medical
services are delivered in a prompt, dynamic and precise manner.
 Inpatient nurse-in-charge care system ( ˴ᚐᚐଣՓ): in contrast with other
hospitals which generally assign various nursing tasks to nurses with different
functions, thereby leading to a number of nurses attending to different steps in the
same patient’s treatment process, our hospitals adopt a nurse-in-charge care system
in our inpatient medical services, where one nursing staff is responsible for a whole
package of care and medication tasks for the same patient. Such system provides
added convenience and easily accessible nursing support for patients, as they can
directly go to the nurse-in-charge at any time should any issues arise, without
suffering from any inefficiency caused by ambiguity of nurses’ duties.
 Pharmacist medication counseling system (ኬՓ): Our specialist
pharmacists provide professional medication counseling to patients across various
scenarios. Our hospitals set up medication counseling desks at pharmacies, where
clinical pharmacists provide accurate and detailed medication counseling to
patients, seeing to the safety and effectiveness of their medication. In addition, when
patients are discharged from our hospitals, such clinical pharmacists will also
specifically provide discharge medication counseling to guide the patients on the
proper use of medication after being discharged.
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 Outpatient accompanying nurse assistance system ( ௑ൢՓ): At our special
(high-end) medical service center, our nursing staff are assigned to accompany
patients throughout their medical visits. The accompanying nurse will walk the
patient into the consultation room, measure vital signs according to the patient’s
condition, and promptly provide assistance during patient examinations as
necessary. When an additional medical test is required, the accompanying nurse will
contact the relevant department to arrange the test and pay attention to the timing of
the test results, ensuring that the patient is duly informed and explained with the
process. When prescribed medication is needed, the accompanying nurse will call
the pharmacy for assistance with medication delivery and ensure medicine
registration at reception desk.
Smart Hospital
Leveraging Qisda Group’s strengths in the information technology industry and
intelligent solutions, we have developed an innovative “Smart Hospital” operating model and
established a “three-in-one” system integrating Smart Healthcare, Smart Services and Smart
Management.
 Smart Healthcare applies visualization and automation technologies throughout the
whole diagnosis and treatment processes. Leveraging intelligent IoT, it improves
patient satisfaction while enabling us to achieve efficiency improvement and risk
reduction. For example, our counter call system efficiently manages patient services
such as registration, payment, and medicine collection by directing them to different
service windows based on the current flow of people. This dynamic adjustment of
service categories speeds up the overall service efficiency, resulting in improved
operational effectiveness and a better patient experience at our hospitals. Our
outpatient check-in system streamlines the check-in process for patients,
automatically assigning numbers based on different appointment types, such as
follow-up visits or consultations after tests. This ensures that patients are
undisturbed during their visits, as the progress of their appointments is clearly
displayed on waiting boards or broadcast screens. Patients can easily track their
position in the queue, reducing anxiety and enhancing their overall satisfaction.
Furthermore, we have implemented electronic bedside cards that consume minimal
power and do not emit light, allowing patients to rest without any disruptions.
Through system integration, relevant patient information is promptly delivered by
the backend system, eliminating the need for manual updates by nursing staff. This
enables nurses to focus on providing care while also reminding family members of
their caregiving tasks, ultimately expediting patients’ recovery process. In addition,
our state-of-the-art Medical Intelligent Robot automates various processes,
alleviating the workload of operating room nurses and improving the overall quality
of medical care. Equipped with cloud-based systems and remote control capabilities,
it enhances hospital scheduling efficiency while minimizing the risk of infections.
Moreover, our smart nursing dashboard application provides real-time updates on
the status of patients, including injury classifications, ongoing examinations, and
consultations. This information is presented visually and color-coded on a single
screen, enabling medical staff to proactively manage delays and effectively diagnose
and treat patients.
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 Smart Services are mainly designed to enhance patients’ medical experience. For
example, we provide online registration, online bill payment, online consultation,
report query, medication consultation and management, and patient cuisine ordering,
at-home nursing care as well as nursing care consulting and other services on our
WeChat mini program. This will also help to drive online traffic to offline treatment.
 Smart Management mainly focuses on breaking data silos in hospital management,
which is mainly achieved by Enterprise Service Bus platform. By applying the
Enterprise Service Bus platform, we can realize the interconnection of basic
information of patients within our hospitals, thereby achieving more timely and
accurate medical management. Such shared data also supports the medical
departments’ disciplinary construction and development. In addition, as one of the
initiators of a collaborative platform comprising multiple hospitals, we and other
hospitals can collectively acknowledge patients’ test reports. This significantly
streamlines the process of diagnosing and treating patients across different hospitals.
During the Track Record Period, we generated 0.01% to 0.03% of revenue from the
internet hospital business, which primarily included the provision of online consultation
services and was recorded under the business segment of outpatient healthcare services. Other
services under our Smart Hospital system, such as online nursing services, were not
revenue-generating but functions aiming to improve our operational efficiency and enhance the
quality of our healthcare services. Pursuant to the Medical Institution Practicing Licenses of
both hospitals, we are authorized to carry on the internet hospital business, including the
provision of online consultation services, within the approved service scope. Moreover, as
confirmed by relevant competent authority during a phone consultation conducted by our PRC
Legal Advisor, an institution operating internet hospital business via online platform such as
online applications is required to obtain V alue-Added Telecommunications Services Operation
License for carrying out such business if the online application operated by such institution
also involves services provided by third parties. If the online application of the internet
hospital business is operated by the institution itself relying solely upon the institution’s offline
medical service business, such internet hospital business can be regarded as an online
extension of the institution’s offline business, and no V alue-Added Telecommunications
Services Operation License is required for conducting such business. According to our PRC
Legal Advisor, as our internet hospital business is fully self-operated and our online
applications do not involve any services provided by third parties or charge any platform
information service fees from the physicians and the patients, our internet hospital business
shall be regarded as an online extension of our offline medical service business, and we are
able to conduct such business without applying for such a license. Based on the foregoing, our
Directors and PRC Legal Advisor are of the view that during the Track Record Period and up
to the Latest Practicable Date, we possessed all material required licenses, permits and
approvals, including the Medical Institution Practicing Licenses of both Nanjing BenQ
Hospital and Suzhou BenQ Hospital with their internet hospitals registered as the second name
of physical medical institutions, to carry on the internet hospital business. Based on the
independent due diligence conducted by the Joint Sponsors and having considered the view and
basis of the PRC Legal Advisor as disclosed above, nothing has come to the Joint Sponsors’
attention that would reasonably cause them to cast doubt on the views of the Directors and PRC
Legal Advisor above in any material respect.
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Below set forth pictures of our employees and our equipment/devices showcasing the
“Smart Hospital” operating model:
Mobile Nursing Care
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In February 2024, both Nanjing BenQ Hospital and Suzhou BenQ Hospital were rated as
a Grade A Class IV Interconnection Hospital ( ̬͠ʝᑌʝஷᔼ৫). This achievement
symbolizes the hospitals’ advanced level of integration in terms of intelligent healthcare
information systems and their abilities to achieve comprehensive information sharing
throughout their respective entire institution. According to Frost & Sullivan, Nanjing BenQ
Hospital was the second private hospital in Nanjing to obtain such accreditation, and Suzhou
BenQ Hospital was the first in Suzhou to achieve the same.
In the future, we will further upgrade our technological infrastructure, invest in the
research and development of advanced technologies, and enhance our data-analytical
capability. For details, see “Future Plans and Use of Proceeds — Use of Proceeds” in this
prospectus.
OUR OTHER ACTIVITIES AND FUNCTIONS
Medical Research
Medical research is an integral part of our institutional practice. We emphasize research
and innovation and are committed to advancing medical development and being at the forefront
of healthcare. Our strong medical research capabilities also help us to attract, nurture and retain
healthcare professionals who have a keen interest in the latest medical developments. We
actively encourage our multi-disciplinary teams of healthcare professionals to undertake
research initiatives in conjunction with their clinical practice. We also seek to establish
collaboration with internationally-leading academic institutions or experts with a view to
expediting our research accumulations in the respective areas.
We have established the Central Laboratory of Nanjing Medical University Affiliated
Nanjing BenQ Hospital (“ Central Laboratory ”) in 2010, headed by Prof. W ANG Xiaoyan, a
nephrology specialist, who has joined the Nanjing BenQ Hospital in October 2019 as the
Central Laboratory director. Prof. W ANG Xiaoyan is a Professor and Doctoral Supervisor at
Nanjing Medical University. Her research conducted in the areas of kidney and hypertension
has been recognized with awards and grants from the National Kidney Foundation and the
Diabetes Action Research and Education Foundation. As of June 30, 2025, the Central
Laboratory had participated in one common project of the National Natural Science Foundation
and three projects under the administration of the Nanjing Municipal Commission of Health.
In addition, we have established the Surgical Laboratory of Nanjing Medical University
Affiliated Nanjing BenQ Hospital (the “ Surgical Laboratory ”) in 2019, which has been led
by Prof. ZHAO Y un, a clinical specialist in surgical infection and immunology, who joined the
Nanjing BenQ Hospital in September 2019 and was later appointed as the Surgical Laboratory
director. He has won a number of national scientific and technological progress awards, and
now also serves as an expert of the National Natural Science Foundation. As of June 30, 2025,
the Surgical Laboratory had participated in five common projects of the National Natural
Science Foundation, four projects of the Natural Science Foundation of Jiangsu Province, one
key project of Jiangsu Commission of Health and one Postdoctoral Supported Project in
Jiangsu Province.
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From time to time, our healthcare professionals publish research findings on peer-
reviewed scientific journals. As of June 30, 2025, Nanjing BenQ Hospital had an aggregate of
more than 300 projects under research and more than 260 Science Citation Index (SCI) papers
published.
As a recognition of our medical research abilities, Nanjing BenQ Hospital had been
funded by National Natural Science Foundation of China (NSFC) in nine projects and Natural
Science Foundation of Jiangsu Province in eight projects as of June 30, 2025. Suzhou BenQ
Hospital had been funded by NSFC in one project, Natural Science Foundation of Jiangsu
Province in one project, Jiangsu Province Science and Technology Program Special Fund in
one project, and six Suzhou municipal-level research projects as of June 30, 2025.
In a collaborative manner, Nanjing BenQ Hospital and the Fourth Clinical Medical
College of Nanjing Medical University has established the Translational Research Center for
Surgical Infection and Immunology of the Nanjing Medical University, which has been
recognized as a Key Disciplinary Laboratory of Nanjing Municipal Health Commission.
In search of the best treatments and cure for patients, Suzhou BenQ Hospital also
collaborated with renowned institutions, such as Soochow University. For example, Suzhou
BenQ Hospital has jointly established a Soochow University — BenQ Clinical Medical
Research Institute with Soochow University in 2021, focusing on three areas, including
orthopedics, obstetrics and oncology. with a view to comprehensively enhancing the clinical
research level through a collaborative manner.
In addition, we also attach great importance to communication with Taiwan hospitals.
With a view to deepening scientific research and technological linkages with Taiwan, we have
organized a number of academic seminars.
Medical Education
In addition to medical research, we commit substantial clinical resources to teaching and
training activities. Nanjing BenQ Hospital, being under the management of the Fourth Clinical
Medical College of Nanjing Medical University and as the Teaching Hospital for Southeast
University Medical School, has established a teaching function covering the whole stage of
medical education, including institutional education, post-graduation medical education and
continuing education, providing full-cycle, lifelong quality medical education which combines
theoretical knowledge and the practice of specific medical skills, forming a continuous and
unified process of medical education.
In each of 2022, 2023, and 2024, Nanjing BenQ Hospital accepted an average of about
450 students, interns, postgraduates, residents and advanced trainees for training and studying.
While offering high-quality medical training to the prospective medical talents, such training
and teaching activities enhance the reputation of Nanjing BenQ Hospital within the industry
and provide added attraction to hospital graduates, which further enhance Nanjing BenQ
Hospital’s competitiveness in regards of talent recruitment.
Suzhou BenQ Hospital also serves as the teaching and internship base for a number of
renowned academic institutions in Taiwan, such as Kaohsiung Medical University.
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OUR OPERATION AND MANAGEMENT
Our Operational Structure
We consolidate the operations of our hospitals at the Group level and implement a
centralized and standardized management approach. Diverging from the conventional
management systems prevalent in the industry (where hospital president is in charge of both
management and operations), we adopt a corporate management structure that clearly separates
the responsibilities of corporate management and hospital operations. Our executive director at
the Group level and the Presidents of our hospitals have distinct roles in managing our
hospitals, and both of them report directly to the BBHC Board of Directors. Our BBHC Board
of Directors serves as the highest decision-making body within our Group. They are
responsible for appointing the executive director and the Presidents of the hospitals.
Investments and major operational decisions that exceed a specified threshold require the
approval of our BBHC Board of Directors. To ensure efficient operations, we have established
an Operational Center at the Group level. The executive director oversees unified operational
management encompassing human resources, procurement, finance, information systems, and
engineering projects across our hospitals. Additionally, the executive director directly manages
the Presidents of the two hospitals. The Presidents focus on building medical teams,
departmental development, and day-to-day operations. They are supported by several vice
presidents, each responsible for managing specific departments within our hospitals.
Under such operational structure, substantial expenditures such as procurement and
engineering projects are managed by our executive director instead of directly under the
Presidents of the hospitals, thereby enhancing decision-making efficiency and transparency.
The following picture illustrates the organizational structure of our hospitals:
BBHC Board of Directors
Legal Department
Executive Director
Audit Department
Operational Center
Engineering
Information system
Finance
Procurement
Human resources
Presidents of Nanjing
BenQ Hospital and
Suzhou BenQ Hospital
Various Vice Presidents of hospital
Various Medical and Operational Departments
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Our Precision Management
We have established a precision management system to manage our hospitals in a
highly-efficient and cost-effective manner. While ensuring the quality of our medical services,
we have leveraged our operational capabilities to effectively control costs and improve
operational efficiency. During the Track Record Period, our average bed turnover days were 9.2
days, 8.2 days, 7.9 days and 7.8 days in 2022, 2023, and 2024 and the six months ended June
30, 2025, respectively. According to Frost & Sullivan, we rank the first among all private
for-profit general hospital groups in the PRC in terms of average revenue per registered bed in
2024. Our precision management system not only allows us to maximize our hospital services
delivery potential in the most cost-effective manner, but also helps us quickly adjust in
response to changes in healthcare reform policies, such as the DRG payment system.
Our mature and precision management comprises of a wide array of fine-grained policies
and measures. Since 2010, our hospitals have set up Quality Control Circle to conduct
Continuous Improvement Process of our internal operations. Such systematic approach aims at
achieving greater efficiency, quality, and effectiveness, enabling us to make continuous
changes and refinements to our internal operation systems and processes as well as
improvements to our services incrementally over time. As of June 30, 2025, our hospitals had
accomplished over 600 improvement projects, primarily focusing on topics such as
improvement of medical service quality, enhancement of patient satisfaction, streamlining of
operation processes, and reduction of operational costs. In addition, under the DRG payment
system, most hospitals’ profits are negatively impacted to a certain extent due to the reduction
in the total amount of health insurance payments, according to Frost & Sullivan. We have also
been affected by the DRG payment system. The average spending per inpatient visits at both
of our hospitals witnessed a decrease after their respective implementation of the DRG
payment system. However, leveraging advanced intelligent healthcare systems, we are able to
realize accurate prediction of DRG grouping and the amount of payment of a specific patient
based on the real-time diagnosis and treatment measures applied therefor, thus realizing a more
efficient allocation of our healthcare resources. Particularly, we installed the Firesoon system
(˦ዓӻ୕) for Nanjing BenQ Hospital since July 2021 and for Suzhou BenQ Hospital since
August 2021. The Firesoon system is a smart solution that enables automated prediction of the
diagnosis-related group that each patient should be classified into based on their symptoms,
primary diagnosis, and main treatment methods, and provides physicians with the
reimbursement standard under the relevant group as a reference for clinical treatment. With
clear reimbursement standards, our physicians are able to make appropriate adjustments to
medications, examinations, and treatment procedures, so as to complete patient care without
exceeding these standards, thereby reducing diagnosis and treatment costs. The Firesoon
system also integrates various other functions for handling DRG system, including, among
others, (i) in-process monitoring, which enables real-time monitoring of various high-risk
cases, assisting us in achieving optimized control of our treatment and diagnosis processes; (ii)
intelligent monitoring and early warning, which enables cost-risk warning, warning for
medical record quality control issues, and alert for unreasonable individual behaviors; and (iii)
DRG medical insurance settlement management, i.e., before settlement, it conducts compliance
check of data, quickly identifies high-risk cases, and makes recommendation for settlement
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methods, while after settlement, it provides precise statistical analysis when grouping appeals
takes place. With the Firesoon system, we are able to make cost control during the process of
treating patients, and partially alleviate the business and financial challenges brought by the
implementation of the DRG payment system. Moreover, our precision management also
contributes to a more cost-effective drug and equipment management. For instance, we adjust
our pharmaceuticals usage in a dynamic manner by periodically reviewing the use of drugs in
our hospitals, with a view to both ensuring the quality of medical care and providing patients
with a greater variety of pharmaceutical options. For medical equipment, we also carry out
cost-benefit analysis, with all equipment over an investment amount of RMB500,000 subject
to payback period analysis and continuous follow-up.
OUR STAFF
As of June 30, 2025, we had a total of 3,652 employees, all of whom were based in
mainland China. The following table shows a breakdown of our staff by general function as of
June 30, 2025:
Number
As a percentage
of total number
%
Doctors* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,015 27.8
Nurses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,485 40.7
Medical technicians /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280 7.7
Pharmacists /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113 3.1
Administrative /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118742 20.3
Research /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 0.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,652 100.0
Note:
* This number represents the total number of doctors employed by us. It does not include the number of
doctors from other healthcare facilities who engage in multi-site practice with us.
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Our Doctors and Other Healthcare Professionals
We have built a multidisciplinary medical team consisting of skillful and experienced
healthcare professionals to consistently maintain the high quality of our hospital services. The
table below sets forth, as of the dates indicated, a breakdown of our healthcare professionals
by hospital and by function:
As of December 31,
As of
June 30,
2022 2023 2024 2025
Nanjing BenQ Hospital
Doctors* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118520 566 624 628
Nurses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118814 827 919 883
Medical technicians /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169 175 180 178
Pharmacists /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877 78 78 79
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,580 1,646 1,801 1,768
Suzhou BenQ Hospital
Doctors* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332 364 387 387
Nurses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498 567 624 602
Medical technicians /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894 95 103 102
Pharmacists /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 30 34 34
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118950 1,056 1,148 1,125
Total number of healthcare
professionals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,530 2,702 2,949 2,893
Note:
* This number represents the total number of doctors employed by us. It does not include doctors from
other healthcare facilities who engage in multi-site practice with us.
The success and competitiveness of our hospitals depend on our ability to recruit and
retain qualified and experienced doctors. Our reputation plays a crucial role in recruiting
highly qualified and experienced doctors. Our resources and commitment in medical research
and education provide a valuable personal development platform for our doctors and are
instrumental for us in attracting talent. As of June 30, 2025, we had 35 doctors from Taiwan
or overseas, as important contributors in our multi-disciplinary medical team. Prior to joining
our hospitals, many of our doctors practiced at similar tier hospitals or were highly regarded
experts or leaders in their respective medical fields.
In the PRC, licensed doctors are subject to periodic assessment of their professional
skills, achievements and professional ethics by institutions or organizations authorized by the
public health department in the PRC. In the PRC, there are three professional qualification
ranks for doctors, which are, from the lowest to the highest rank: (i) junior qualification for
resident doctors (ࢪwho must have a medical degree, and typically undertake
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entry-level tasks such as patients’ medical records preparation and practice under the
supervision of attending doctors or other superiors; (ii) mid-end qualification for attending
doctors (ࢪwho may supervise resident doctors and typically undertake routine clinical
treatments, teaching, research and diseases prevention tasks; and (iii) senior qualification for
associate chief doctors (ࢪand chief doctors (ࢪwho typically command the
highest level of medical capability in a specific discipline and are generally the head of a
clinical practice, and may supervise attending and resident doctors, direct research work of a
specific discipline, as well as undertake complex and rare clinical treatments. As of June 30,
2025, our chief doctors had on average approximately 33 years of post-qualification practicing
experience, and our associate chief doctors had on average approximately 23 years of
post-qualification practicing experience. For other doctors, nurses, medical technicians, and
pharmacists, they had on average approximately five, six, six, and eight years of working
experience since joining our Group.
The table below sets forth, as of the dates indicated, the number of each rank of doctors
employed by us:
As of December 31,
As of
June 30,
2022 2023 2024 2025
Nanjing BenQ Hospital
Chief doctors and associate
chief doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190 191 211 214
Attending doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138 184 214 209
Resident doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192 191 199 205
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118520 566 624 628
Suzhou BenQ Hospital
Chief doctors and associate
chief doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103 107 130 130
Attending doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881 120 137 138
Resident doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148 137 120 119
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118332 364 387 387
Total number of doctors
employed by us /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118852 930 1,011 1,015
The slight decreases in the number of resident doctors of Suzhou BenQ Hospital from
December 31, 2022 to December 31, 2023, further to December 31, 2024 and to June 30, 2025
were primarily due to (i) the promotion of certain resident doctors to attending doctors and (ii)
the resignation of some resident doctors for personal reasons.
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The table below sets forth movement of our doctors during the Track Record Period:
For the Y ear Ended December 31,
For the
Six Months
Ended
June 30,
2022 2023 2024 2025
Number of doctors at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118847 852 930 1,011
Number of doctors who were
newly employed by us
during the year/period /H1118/H1118/H1118/H1118166 184 204 35
Number of doctors who
resigned during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118161 106 123 31
Number of doctors at the end
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118852 930 1,011 1,015
The above tables do not include the number of doctors from other healthcare facilities
who engage in multi-site practice with us.
During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to material reliance on any particular doctor, and nor do we expect us to rely on any
particular doctor going forward, because as a general hospital group offering a full spectrum
of general healthcare services, we have intentionally hired doctors with diverse areas of
expertise to ensure comprehensive healthcare coverage for our patients. None of our
department consisted of over 10% of our total revenue in each year comprising the Track
Record Period. By having a larger pool of doctors, we are able to better handle unexpected
events such as illnesses, vacations, or resignations, allowing for continuity of care and
minimizing disruptions to the hospitals’ operations. We also strive to ensure that workload is
distributed evenly among doctors, preventing overburdening of any individual doctor and
mitigating the risks associated with relying heavily on any one doctor. During the Track Record
Period, we have been expanding our operations and continuously hiring new doctors, so as to
ensure that there is a sufficient number of doctors to meet our patients’ growing demand for
high-quality healthcare services. This approach prevents any reliance on any particular doctor
and provides flexibility for our future growth.
We have various channels to recruit doctors and other medical professionals, such as
through college recruitment, referrals, professional recruitment agencies, recruitment meetings
and advertisements. We conduct background searches on the candidates to be recruited to
ensure they have the required working experience and qualifications for the designated
positions. We believe we provide our medical professionals with competitive compensation
packages to our doctors, continued medical education opportunities and a respectful and
professional working environment. With reference to laws and regulations such as the
Employment Contract Law, the Labor Law, and the Regulations on Work-Related Injury
Insurance, we have formulated a Work Rules Handbook for our human resources department
and our employees, which lays out the restrictions and conditions for hiring employees, as well
as the necessary procedures and must-know work rules for new hires after they join our
hospitals.
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The Human Resources Department in each of our hospitals regularly reviews the profile
of our doctors and reminds them to apply for their next professional rank when they become
eligible. We closely monitor the qualification registration and licensing records on a continuing
basis to ensure that all our doctors comply with all applicable requirements under PRC laws
and regulations, in particular, each doctor’s practice is within the scope of his or her
qualification and license. During the Track Record Period and up to the Latest Practicable
Date, we were not aware of any material complaints or penalties in relation to our doctors
practicing beyond the scope of their respective licenses.
We had a relatively stable medical team during the Track Record Period. We calculate the
turnover rate of our doctors and other healthcare professionals as the total number of
doctors/other healthcare professionals who resigned during a given year divided by the total
number of doctors/other healthcare professionals at the end of such year. In 2022, 2023, and
2024 and the six months ended June 30, 2025, the turnover rate of our doctors was 18.9%,
11.3%, 12.7% and 3.1% respectively, and the turnover rate of our other healthcare
professionals was 17.8%, 17.7%, 13.9% and 4.1% respectively. According to Frost & Sullivan,
the above turnover rates are generally in line with the industry averages.
Additionally, from time to time, we invite visiting specialist doctors, comprising
multi-site practicing doctors from mainland China and Taiwan, who do not have a direct
employment relationship with us to consult on difficult, highly unusual or complicated
conditions on an regular or ad-hoc basis. They may also be invited from other third-party
hospitals or medical institutions at the request of our doctors or patients. The visiting specialist
doctors, including multi-site practicing doctors, are entitled to receive remuneration from us
based on their performance and in accordance with our hospitals’ policy. The remuneration of
visiting specialist doctors who provide services on an ad-hoc basis is usually paid per
consultation, procedure or treatment performed. The remuneration of visiting specialist doctors
who provide consultancy services on a regular basis is usually a fixed sum. The rate of
remuneration of visiting specialist doctors is determined by their seniority, relevant experience
and industry reputation.
The implementation of the DRG payment system has increased the need for cost
management in determining the remuneration of both visiting specialist doctors and employed
doctors while maintaining our ability to attract and retain top-tier talents. Under the DRG
payment system, hospitals receive standardized reimbursements for treating specific diagnosis-
related groups, regardless of the actual costs incurred. This creates pressure to control costs,
as any expenses exceeding the fixed reimbursement amount are borne by the hospital itself. To
address this challenge, we regularly evaluate remuneration packages for both visiting specialist
doctors and employed doctors, ensuring that compensation remains competitive while aligned
with cost-control measures. Following each evaluation, we adjust compensation structures as
needed to reflect individual and departmental performance, market trends, and strategic
hospital goals. For visiting specialist doctors, we assess their compensation based on their
contributions to clinical outcomes, their expertise in managing complex medical cases, and
their overall value to our hospitals. For employed doctors, we focus on aligning their
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compensation structure with hospital performance and quality of care with particular emphasis
on the operational performance of the departments they belong to, which significantly
influences their evaluations and income, while ensuring compliance with cost-control
requirements.
To retain employed doctors, we have implemented several measures, including
professional development opportunities, clear career advancement pathways, competitive
benefits packages, and a supportive working environment that fosters collaboration and
innovation. In addition, we have implemented measures to enhance retention by fostering
strong professional relationships with visiting specialist doctors, offering flexible schedules,
and providing access to advanced medical equipment and facilities.
These measures are designed to address the cost pressures imposed by the DRG payment
system while maintaining the high quality of care at our hospitals. By balancing cost control
with talent retention, we aim to ensure that our hospitals continue to attract and retain qualified
specialists and deliver superior patient outcomes.
The table below sets forth, as of the dates indicated, the number of each rank of doctors
from other healthcare facilities who engage in multi-site practice with us:
As of December 31,
As of
June 30,
2022 2023 2024 2025
Nanjing BenQ Hospital
Chief doctors and associate
chief doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841 50 61 82
Attending doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891 61 82 2
Resident doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851 0 71 3
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855 76 86 117
Suzhou BenQ Hospital
Chief doctors and associate
chief doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857 51 50 58
Attending doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 0 91 01 3
Resident doctors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184322
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871 63 62 73
Total number of doctors
engaging in multi-site
practice with us /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118126 139 148 190
In the event of any medical disputes or claims arising from the course of diagnosis and
treatment by the multi-site doctors, we and the relevant multi-site practicing doctors agree to
engage in good faith negotiations to determine the allocation of liabilities and responsibilities,
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as stipulated in the agreement entered into between each multi-site practicing doctor and us,
and to the extent permitted by relevant laws and regulations. We are obligated to coordinate any
matters related thereto, and the multi-site practicing doctors shall not reach a private settlement
with the patients in the absence of our prior consent. Specifically, same as doctors directly
employed by our hospitals, visiting specialist doctors are also subject to the Civil Code of the
PRC in terms of any damaged caused by their diagnosis and treatment activities. If the visiting
specialist doctor is at fault for damage inflicted on a patient during diagnosis and treatment,
our hospitals shall first assume the compensatory liability to the patient, and then seek damages
from such doctor at fault. For more details, see “Regulatory Overview — Regulations on
Medical Malpractice — Tort Liability Law of PRC and the Civil Code of the PRC” in this
prospectus. During the Track Record Period and as of the Latest Practicable Date, our Group
maintains medical facility liability insurance and physician practice insurance for all diagnosis
and treatment activities carried out within our hospitals, whether performed by our employed
doctors or visiting specialist doctors. During the Track Record Period and up to the Latest
Practicable Date, we had not encountered any medical disputes or claims caused by our
multi-site practicing doctors which would materially and adversely affect our business
operations and prospect.
Training and Development
We are committed to keeping our staff abreast of the latest developments in the healthcare
industry by providing them with continuous education and assessments. We also identify and
sponsor our staff with high talent and potential to undertake further studies and professional
training in prestigious academic institutions. We also provide periodic training to our doctors
and other medical professionals on topics in their relevant fields and send them to other
well-established medical institutions for training. From time to time, we have visits by medical
professionals from various medical institutions for consultation sessions at our hospitals, and
such visits provide continuous learning and collaboration opportunities for our medical
professionals. We also occasionally host in-hospital training sessions for medical professionals
from external medical institutions, and send over our medical professionals to attend external
training sessions at other medical institutions to enhance their clinical skills and knowledge.
Employee Benefits and Code of Conduct
In compliance with the relevant PRC labor laws, we enter into standard employment
contracts with our employees covering matters such as terms, wages and bonuses, employee
benefits, confidentiality obligations and grounds for termination. We are required under
applicable PRC laws and regulations to contribute to employee social insurance and housing
provident funds at specified percentages of the salaries, bonuses and certain allowances of our
employees up to a maximum amount specified by the local governments from time to time.
In addition, we adopt various internal control policies to make sure that our doctors
practice in a compliant manner, without engaging in illegal or corruptive profitable
misconduct. Specifically, our healthcare personnel are not allowed to, among others, link their
income with revenue generated from prescription of pharmaceuticals and ordering of medical
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examinations, conduct commission-based billing and unauthorized charges, accept improper
donations and financial assistance from the public, participate in promotional activities and
unauthorized dissemination of medical advertisements, formulate prescriptions for commercial
purposes, procure and use medical products in an illegal way, and accepting “red envelopes”
or any form of gifts from their patients. These guidelines are in place to ensure that we maintain
the highest standards of integrity, professionalism, and ethical conduct among our healthcare
personnel. By adhering to these guidelines, we aim to ensure that patient care and treatment
decisions are made solely based on the best interests of the patients, free from any undue
financial influences.
As of the Latest Practicable Date, we had a labor union for our employees at Nanjing
BenQ Hospital. We believe that we maintain a good working relationship with our employees,
and, during the Track Record Period and up to the Latest Practicable Date, we had not
experienced any material disputes with our employees.
SALES AND MARKETING
We primarily rely on our reputation as a general hospital with strong multi-disciplinary
medical expertise and word-of-mouth recommendation to attract customers. Leveraging the
synergistic effect among our business segments, we further broaden our patient base. The
organic development of Nanjing BenQ Hospital and Suzhou BenQ Hospital attract potential
patients into seeking our medical services, the high-quality delivery of which in turn increases
the awareness of our “BenQ Medical Center” brand and strengthens our patient acquisition
capabilities. We have also set up our WeChat subscription account through which patients can
have easy access to information about our healthcare network and our services, various guides
on appointment, patient visits and insurance related matters. Our WeChat subscription account
also contributes to our brand building of a trustworthy medical services provider through the
multi-dimensional demonstration of our recognitions and accreditations, exemplary case
studies, charitable activities, high-caliber medical professional teams, and medical science
popularization.
In addition, we endeavor to apply intelligent and other technologies in our daily
operations which provide added convenience and an expedited consultation process to both
patients and doctors, intelligently transforming a wide array of procedures during medical
services, include online registration, online bill payment and online consultation, enabling us
to improve patients’ satisfaction level and increase our brand awareness among patients. We
also provide short science popularization videos on our WeChat subscription account and
WeChat mini program to promote our team of specialists and departments.
Moreover, our delivery of medical services have attracted mainstream media of national,
provincial and municipal tiers to publicize our brand, further facilitating our brand image of a
reliable and high-quality medical service provider.
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Our relationship with commercial insurance providers is also conducive to attracting
patients and providing accessible medical services in a cost-effective manner. Commercial
insurance providers usually maintain a list of designated hospitals that they have approved to
be appropriate providers of medical services. Generally, their clients will only be reimbursed
for treatments from hospitals included on such list. Our hospitals are included on the list of
designated hospitals of a number of commercial insurance providers.
OUR CUSTOMERS
Our hospitals have a broad patient base, with no individual patient accounting for more
than 1.0% of our revenue in each year/period during the Track Record Period. Our five largest
customers in each year/period during the Track Record Period also included business
corporations who purchased our group physical examination services (to which we typically
grant a credit term of 60 to 90 days), and lessees of our owned properties. Our five largest
customers in each year/period during the Track Record Period in aggregate contributed to less
than 1.0% of our revenue in the respective year/period.
We receive payments primarily from (i) public medical insurance programs under the
PRC public social insurance regime; (ii) commercial insurance providers who entered into
direct settlement protocols with us; (iii) patients who finance their medical treatments
themselves and/or are funded by commercial insurance providers; and (iv) business
corporations or government administrations who purchase our physical examination services
for their employees. We derive a considerable portion of our revenue from healthcare services
provided to patients covered under public medical insurance programs. Both Nanjing BenQ
Hospital and Suzhou BenQ Hospital are Medical Insurance Designated Medical Institutions. In
2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025 our revenue derived
from settlement through public medical insurance programs was RMB968.9 million,
RMB1,373.6 million, RMB1,410.4 million, RMB704.8 million and RMB700.9 million
respectively, accounted for 41.5%, 51.1%, 53.0%, 53.0% and 53.4% of our total revenue in the
same years/periods.
Except for Qisda Group, being our Controlling Shareholder and the largest customer in
each year during the Track Record Period, as of the Latest Practicable Date, none of our
Directors or any Shareholder, who to the knowledge of our Directors, owns more than 5% of
our issued share capital immediately following completion of the Global Offering (but without
taking into account the exercise of the options granted under the Pre-IPO Share Option Plan)
nor any of their respective associates had any interest in any of our five largest customers in
each year during the Track Record Period. For more details of our arrangements with Qisda
Group, see “— Overlapping Customers and Suppliers” below in this section, and “Connected
Transactions — Partially Exempt Continuing Connected Transactions — 2. Property Leasing
Framework Agreement” and “Financial Information — Related Party Transactions” in this
prospectus.
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Management of Patient Complaints
The subjective nature of the healthcare industry means that we occasionally receive
complaints from our patients. We have implemented a standardized customer complaint
management system with a view to promptly, accurately and comprehensively collecting
feedback from our patients, addressing our patients’ concerns, continuously improving our
clinical processes and ultimately delivering service of the highest standard to our patients.
We implement a “first complaint receiver in charge system.” When patients lodge
complaints with relevant departments, the staff receiving the complaints should try to resolve
them on the spot. For those that cannot be resolved immediately, the staff should proactively
guide the patients to register their complaints at our Patient Service Center.
Upon receiving complaints, our Patient Service Center staff will fill out a complaint
registration form and contact the relevant department that has been complained about to
understand the situation. Depending on the nature of the complaint, we generally categorize
complaints into medical quality, nursing quality, hospital management, medical ethics, pricing
issues, environmental and security issues, etc. These are then handed over to the respective
responsible departments for handling. For instance, medical quality issues are handled by the
Medical-Patient Service Department, pricing issues by the Finance Department, and
environmental and security issues by the Logistics Support Department.
Patients may lodge a complaint in person or by telephone and other ways convenient for
them. Our Patient Service Center is staffed from 8 a.m. to 5 p.m. to handle those complaints
on an everyday basis. We aim to be highly responsive to patients’ complaints and resolve them
in the shortest time frame, or on the spot if possible. For regular issues, we require our staff
to provide on-site responses, with further replies to be provided within three to five working
days for issues requiring investigation and verification. For more complex situations, we
require our staff promptly report to hospital management and provide responses within seven
to ten working days.
During the Track Record Period and up to the Latest Practicable Date, we received a total
of 307 patient complaints (which excluded medical disputes), the majority of which were
concerning inefficiencies in our service procedures, poor service attitude of certain medical
professionals, and inadequate patient communication and our management. We generally
resolved these patient complaints within seven days to the satisfaction of the relevant
complainants. Apart from the above patient complaints, due to the nature of the healthcare
industry and the inherent risks in treating patients, we are also exposed to risks of medical
disputes that we cannot entirely eliminate. For details of medical disputes and medical
malpractice we were involved, see “— Compliance and Legal Proceedings — Medical
Disputes and Legal Proceedings” in this section.
During the Track Record Period and up to the Latest Practicable Date, we were not aware
of any patient complaints, nor did we encounter any medical incidents, that would have a
material and adverse effect on our business, financial condition or results of operations.
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OUR SUPPLIERS
Our suppliers primarily consist of local distributors of pharmaceuticals, medical
consumables and medical equipment.We also procure from one Taiwan distributor of medical
equipment which is an Independent Third Party. For some medical products, such as vaccines,
we are required to obtain supplies directly from the Chinese Center for Disease Control and
Prevention. Our suppliers also include construction companies who are engaged by us for the
construction, decoration, and expansion of our hospitals, as well as collaborative healthcare
service providers who provide department consulting services to certain of our departments.
For more details, see “— Top Suppliers” below in this section and “Financial Information —
Description of Selected Components of Consolidated Statements of Profit or Loss — Cost of
Revenue” in this prospectus.
Our suppliers are cautiously selected for quality, reputation, price, product and service
offerings and delivery capability. We routinely assess our suppliers’ performance, credit-
worthiness, re-confirm their qualifications and ensure the compliance status and quality of our
supplies. The frequency of such assessments varies depending on the category of suppliers,
their criticality to our operations, and our internal risk management policies. For long-term
suppliers, we conduct comprehensive assessments annually to monitor their ongoing
performance and compliance. For one-time procurement suppliers, assessments are conducted
at the time of contract signing to verify their qualifications and ensure compliance with our
requirements.
For the principal pharmaceuticals, medical consumables and medical equipment involved
in our provision of healthcare services, we generally enter into an agreement with each
supplier. The table below sets forth the salient terms of our typical procurement agreements:
Relationship with Supplier /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Independent Third Parties and not that of a
principal and an agent.
Duration and option to renew /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The term of the agreement is generally 12
months starting from the effective date,
subject to a one-year automatic renewal in
absence of written notice of termination by
either party.
Purchasing Amount and Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The purchasing amount of each type of
products is specified in the agreement or our
procurement orders issued to the supplier
thereunder, and pricing for each type of
products to be procured is also stipulated in
the agreement.
Transportation and Delivery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The supplier shall deliver the products to the
location designated by us at its own expenses,
subject to our acceptance of the delivered
products.
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Payment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We normally settle with the supplier on a
payment upon delivery basis, with credit
terms granted thereby.
Price Protection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118During the term of the agreement, if the
supplier implements any price reductions for
the products, it shall promptly notify us and
the new reduced prices will apply to existing
undelivered procurement orders and all future
orders from us.
Warranty /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The supplier warrants that the products are
free from defects and the quality shall meet
the applicable regulatory standards, industry
standards, and/or that specified in the
procurement orders or similar documents,
where applicable.
Top Suppliers
Our five largest suppliers in each year/period during the Track Record Period together
accounted for 39.4%, 47.6%, 45.0% and 47.7% of our total purchases, in 2022, 2023 and 2024
and the six months ended June 30, 2025, respectively, and our single largest supplier in each
year/period during the Track Record Period accounted for 17.1%, 20.1%, 19.0% and 21.4% of
our total purchases during the same years/periods, respectively. The following table sets forth
certain information of our five largest suppliers in each year/period during the Track Record
Period:
Five Largest
Suppliers for
2022
Company
Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier A /H1118/H1118/H1118/H1118A PRC pharmaceutical
company listed on
the Shanghai Stock
Exchange and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals,
medical consumables,
and medical devices
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2008 60 days 259,715 17.1
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Five Largest
Suppliers for
2022
Company
Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier B /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals
Pharmaceuticals and
medical
consumables
2008 90 days 142,567 9.4
Supplier C /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
provision of
construction
contracting services
Construction services 2021 Monthly payment
per construction
progress and
settlement
payments upon
completion and
inspection
approvals
84,555 5.6
Supplier D /H1118/H1118/H1118/H1118A PRC pharmaceutical
company listed on
the Stock Exchange
and its affiliates,
principally engaging
in the distribution of
pharmaceutical,
medical consumables
and devices, and
healthcare products
Pharmaceuticals and
medical
consumables
2011 120 days 66,155 4.4
Supplier E /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals related
products
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2012 120 days 45,507 3.0
Total /H1118/H1118/H1118/H1118/H1118/H1118 598,499 39.4
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Five Largest
Suppliers for
2023
Company
Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier A /H1118/H1118/H1118/H1118A PRC pharmaceutical
company listed on
the Shanghai Stock
Exchange and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals and
medical devices
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2008 60 days 340,511 20.1
Supplier B /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals
Pharmaceuticals and
medical
consumables
2008 90 days 232,453 13.7
Supplier C /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
provision of
construction
contracting services
Construction services 2021 Monthly payment
per construction
progress and
settlement
payments upon
completion and
inspection
approvals
146,158 8.6
Supplier F /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
distribution of
pharmaceuticals and
medical devices
Pharmaceuticals 2008 90 days 52,802 3.1
Supplier G /H1118/H1118/H1118A private company in
Suzhou, Jiangsu
province, principally
engaging in the
distribution of medical
devices and provision
of consulting services
in medical device
sector
Department consulting
services*
2016 30 days 35,046 2.1
Total /H1118/H1118/H1118/H1118/H1118/H1118 806,970 47.6
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Note:
* We have entered into a department consulting service agreement with Supplier G for a term of 10 years. Under
the agreement, Supplier G will advise on various aspects of the development of our dentistry department,
including the hiring and management of dentists and other healthcare professional, the update of internal
policies regarding department operation, the upgrade and addition of dental instrument and equipment, and the
procurement of dental pharmaceuticals and relevant products. We will in turn pay Supplie r G a consulting
service fee as a percentage of the monthly profit of the dentistry department. We typically settle with Supplier
G on a monthly basis. Under such collaboration, we still retain management and ownership of our dentistry
department, which does not constitute outsourced management of the department to an Independent Third
Party. For more details, see “Financial Information — Description of Selected Components of Consolidated
Statements of Profit or Loss — Cost of Revenue” in this prospectus.
Five Largest
Suppliers
for 2024 Company Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier A /H1118/H1118/H1118/H1118A PRC pharmaceutical
company listed on
the Shanghai Stock
Exchange and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals and
medical devices
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2008 60 days 352,999 19.0
Supplier B /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals
Pharmaceuticals and
medical
consumables
2008 90 days 209,985 11.3
Supplier C /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
provision of
construction
contracting services
Construction services 2021 Monthly payment
per construction
progress and
settlement
payments upon
completion and
inspection
approvals
76,120 4.1
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Five Largest
Suppliers
for 2024 Company Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier E /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals related
products
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2012 120 days 67,931 3.7
Supplier H /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
provision of
construction and
decoration services
Construction and
decoration services
2023 Monthly payment
per construction
progress and
settlement
payments upon
completion and
inspection
approvals
61,703 3.3
Total /H1118/H1118/H1118/H1118/H1118/H1118 768,738 41.4
Five Largest
Suppliers for
the Six Months
Ended 2025 Company Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier A /H1118/H1118/H1118/H1118A PRC pharmaceutical
company listed on the
Shanghai Stock
Exchange and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals,
medical consumables,
and medical devices
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2008 60 days 175,182 21.4
Supplier E /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals related
products
Pharmaceuticals,
medical
consumables,
medical equipment,
and maintenance
services
2012 120 days 76,826 9.4
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Five Largest
Suppliers for
the Six Months
Ended 2025 Company Background
Products/Services
Purchased
Relationship
Since Credit Term
Purchase
Amount
Percentage
of Total
Purchase
RMB’000 %
Supplier C /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
provision of
construction
contracting services
Construction services 2021 Monthly payment
per construction
progress and
settlement
payments upon
completion and
inspection
approvals
65,906 8.1
Supplier B /H1118/H1118/H1118/H1118A PRC state-owned
enterprise and its
affiliates, principally
engaging in the
distribution of
pharmaceuticals
Pharmaceuticals and
medical
consumables
2008 90 days 55,139 6.8
Supplier F /H1118/H1118/H1118/H1118A PRC state-owned
enterprise, principally
engaging in the
distribution of
pharmaceuticals and
medical devices
Pharmaceuticals 2008 90 days 16,588 2.0
Total /H1118/H1118/H1118/H1118/H1118/H1118 389,641 47.7
Our five largest suppliers in each year during the Track Record Period were Independent
Third Parties. We typically make payments under a credit term of around 30 to 120 days to our
five largest suppliers in each year during the Track Record Period through bank transfer. As of
the Latest Practicable Date, none of our Directors or any Shareholder, who to the knowledge
of our Directors, owns more than 5% of our issued share capital immediately following
completion of the Global Offering (but without taking into account the exercise of the options
granted under the Pre-IPO Share Option Plan) nor any of their respective associates had any
interest in any of our five largest suppliers in each year during the Track Record Period.
Our Directors confirm that, during the Track Record Period and up to the Latest
Practicable Date, we did not encounter any business disruption due to shortage of medical
supplies and other consumables. We believe that any shortage or delay in the supply of
materials will not have any material impact on us as we can quickly shift to other suppliers with
comparable quality and price.
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Our Directors also confirm that, during the Track Record Period and up to the Latest
Practicable Date, we had not experienced any significant return of supplies that did not meet
our standards, and had not suffered any significant loss or damage caused by quality problems
with the supplies.
Procurement and Inventory
We have established the Materials and Procurement Management Department under our
Operational Center at the Group level, which centralizes the procurement of pharmaceuticals,
medical consumables, medical equipment and other non-medical supplies and services of all
departments in the hospital. Our Materials and Procurement Management Department is further
divided into two departments, namely, Procurement Department which specialized in the
procurement of IT infrastructure, medical devices and other basic facilities and infrastructure,
and Materials Department which mainly takes charge of procurement of pharmaceuticals and
medical consumables.
The Materials and Procurement Management Department aggregates the needs of both
hospitals and collectively negotiate with competitive suppliers for volume discounts for several
rounds, to achieve procurement prices at a favorable level, usually lower than the prevailing
market prices.
When selecting prospective suppliers, our Materials and Procurement Management
Department takes a comprehensive set of factors into account, including their qualifications
and certifications, supply capacity, product quality, financial capacity, subsequent maintenance
and support capacity, as well as patient demand. In addition, to maintain the integrity of our
procurement and mitigating the risks of misconduct of our suppliers, we sign a Good Faith
Trading Pact (ࣣ֛ߒ׸with each supplier that enters into commercial cooperation
with us, preventing the supplier from committing bribery and other illegal activities when
cooperating with us. Specifically, the Pact strictly prohibits suppliers from (i) providing or
promising any money, gifts, or tangible or intangible benefits to, or (ii) engaging in joint
ventures, cooperation, collusion, profit sharing, or any similar activities with, our hospitals,
employees (including their family members), and stakeholders. The Pact also requires suppliers
to guarantee not to (i) obtain transaction-related information or materials from our hospitals or
related personnel by any means or through unethical practices such as bid-rigging, or (ii)
attempt to enter into or engage in transactions with us. In the event that any supplier and its
personnel engage in the aforementioned behaviors, or any supplier fails to inform us in the case
where that supplier or related personnel entertains or provides benefits to our employees
(including their family members), we are entitled to immediately terminate the procurement
agreement and cease cooperation with that supplier, and charge a penalty deductible from the
payment we owe to that supplier. In addition, if any supplier fails to report to us in the case
where any of our employees requests benefits from that supplier and its personnel, we will
permanently terminate the cooperation relationship with that supplier. Moreover, our Audit
Office conduct regular audits of our procurement process. During the Track Record Period and
up to the Latest Practicable Date, we were not aware of any breaches of internal controls or
corporate governance procedures during our procurement process.
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Pursuant to the aforementioned procurement method, our Operational Center at the Group
level is responsible for the price of pharmaceuticals, medical consumables, medical equipment,
while the hospitals are responsible for defining the volume of such procured materials, thereby
formulating a benign interaction between the Group level and hospital level, and such
separation of different aspects of procurement also enhances our internal control.
In order to maintain close oversight, we have established a systematic approval process
involving various departments, dedicated governance committees and management for
different categories of procurement. For example, new drugs or medical consumables that are
not in the hospital’s formulary require specific approval by medical professionals and our
specialized committee who comprehensively considers a wide array of factors, such as
patients’ demand, whether the drug has been included in the National Reimbursement Drug
List, subsequent management difficulty and whether the procured item is supported by
published and authoritative scientific essays, to be admitted as a new procurement category,
thereby preventing the procurement and use of promotional drugs or medical consumables with
quality deficiencies.
Our general procurement process involves the following: (i) requisition; (ii) inventory
redundancy and clinical need check; (iii) feasibility study and approval by a governance
committee (if applicable for medical equipment, pharmaceuticals or medical consumables
procurement); (iv) approval by the procurement department; (v) approval by the vice president
in charge of procurement; and (vi) execution of purchase by the procurement department. Such
procurement process involves segregated approvals ensuring that no particular individual or
department has excessive authority, control or influence.
To sufficiently guarantee the stability in price and supply of our various kinds of procured
medical materials, in addition to one major supplier of a certain procured item, we generally
have two to three back-up suppliers so that to resort to alternative channels should we suffer
interruptions in supply from our major supplier. Therefore, we have low risk in terms of
supplier concentration in our operations.
Moreover, although we operate within the PRC market and primarily purchase raw
materials from local suppliers, our suppliers may import such raw materials from global
manufacturers in foreign countries/regions. Such countries/regions may, to the extent needed,
impose new or additional import tariffs, trade restrictions or other trade barriers affecting the
importation of such raw materials, which may lead to higher procurement costs. As confirmed
by Frost & Sullivan, distributors of pharmaceuticals, medical consumables and medical
equipment are widely and readily available in the PRC hospital market. As such, we are able
to select other distributors who are able to supply such raw materials at reasonable prices
satisfactory to us. We may also purchase alternative raw materials with same quality and
treatment effect. Besides, although both of our hospitals are Medical Insurance Designated
Medical Institutions and voluntarily follow the pharmaceutical zero-markup policy to price
pharmaceuticals at a tariff similar to public hospitals in the same region, we, as a private
for-profit general hospital group, are still able to adjust the prices of pharmaceuticals to the
extent reasonable to the market and our patients. For more details, see “Risk Factors — Risks
BUSINESS
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Relating to Our General Operations — The changes in international political relationships,
trade policies and trade barriers, or the escalation of trade tensions, may have an adverse effect
on our business operations” in this prospectus.
In addition, as advised by our PRC Legal Advisor, the storage of certain pharmaceuticals,
such as narcotics, psychotropic substances and radioactive drugs are regulated. For further
details, see “Regulatory Overview — Regulations on Pharmaceuticals and Medical Devices in
Medical Institutions” in this prospectus. We have various internal measures and policies to
manage the acceptance, storage and maintenance of our pharmaceuticals. Our Committee of
Pharmaceutical Administration and Pharmacotherapy provides comprehensive supervision and
guidance on matters related to pharmaceuticals. This includes the standardized management of
narcotics, psychotropic substances, medical toxic drugs, and radioactive drugs. Our internal
system sets strict requirements for the acceptance and storage of pharmaceuticals. For instance,
for the acceptance of special drugs, we implement a dual-person acceptance system, which
requires a thorough verification of drug information, and unpacking and inspection down to the
smallest packaging unit. In terms of storage and maintenance of pharmaceuticals, especially for
narcotics, class I psychotropic substances, and medical toxic drugs that require special
management, we adopt a dedicated personnel and locked storage/cabinet mechanism ( ਖ਼ɛਖ਼
ࢫ/ᓞ), with specialized accounts to ensure accurate inventory records. We also have stringent
requirements in place regarding temperature and humidity control in the storage environment.
As confirmed by our Directors, during the Track Record Period and up to the Latest Practicable
Date, we were in full compliance with the applicable laws and regulations in relation to the
storage of medical supplies in all material aspects.
Our inventories are strictly organized in terms of admission and expiry dates.
Pharmaceutical expiry dates are closely monitored to ensure expired items are not administered
and are safely disposed in accordance with applicable laws and regulations. We regularly carry
out physical inventory stock-takes and assessments to reconcile our internal records.
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OVERLAPPING CUSTOMERS AND SUPPLIERS
During the Track Record Period, Qisda Group, our Controlling Shareholder group and the
largest customer in each year/period during the Track Record Period, was also a supplier of us.
During the Track Record Period, we provided group physical examination services and
property rental services to Qisda Group. We purchased (i) medical consumables and equipment,
as well as (ii) legal and consulting services from it. The following table sets out our revenue
from and our purchases amount from Qisda Group during the Track Record Period:
Y ear Ended December 31,
Six months
Ended
June 30,
2022 2023 2024 2025
Provision of services to
Revenue (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,289 6,826 7,972 3,455
As a percentage of total
revenue (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.4 0.3 0.3 0.3
Purchases from
Purchase amount (RMB’000) /H1118/H111813,890 14,183 10,505 6,441
As a percentage of total
purchase (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.9 0.8 0.6 0.8
Note: During the Track Record Period, we also recorded lease expenses in relation to short-term leases we
entered into with Qisda Group.
For more details, see “Connected Transactions — Partially Exempt Continuing Connected
Transactions — 2. Property Leasing Framework Agreement” and “Financial Information —
Related Party Transactions” in this prospectus.
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During the Track Record Period, Supplier C, one of our five largest suppliers in each of
2022, 2023, and 2024 and the six months ended June 30, 2025, who principally engages in
construction contracting services was also a customer of us. Supplier C purchased our group
physical examination services for its employees in 2022 and 2024. By the end of 2021, we
engaged Supplier C to undertake the construction of the second phase of our Nanjing BenQ
Hospital. The following table sets out our revenue from and our purchases amount from
Supplier C during the Track Record Period:
Y ear Ended December 31,
Six months
Ended
June 30,
2022 2023 2024 2025
Provision of services to
Revenue (RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862 – 116 –
As a percentage of total
revenue (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.0 – 0.0 –
Purchases from
Purchase amount (RMB’000) /H1118/H111884,555 146,158 76,120 65,906
As a percentage of total
purchase (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185.6 8.6 4.1 8.1
Our Directors confirm that our purchases from and provision of services to the each of
Qisda Group and Supplier C were entered into after due consideration taking into account the
prevailing market prices at the relevant times, conducted on an arm’s length basis and on
normal commercial terms, and in line with our commercial interest. To the best knowledge of
our Directors, we did not have any other overlap between our other major customers and major
suppliers during the Track Record Period and up to Latest Practicable Date.
PRICING
Pricing for Pharmaceuticals and Medical Consumables
As private hospitals, we are not subject to the Pharmaceutical Zero Mark-Up Policy ( ᖹ
ഄ), which is a requirement for public hospitals only and under which essential
pharmaceuticals are sold to patients at cost and consequently the public hospitals do not make
a profit on the sale of these pharmaceuticals. However, as both of our hospitals are Medical
Insurance Designated Medical Institutions (ᓃᔼᐕዚ࿴), we voluntarily follow the
pharmaceutical zero-markup policy, and price these pharmaceuticals at a tariff similar to public
hospitals in the same region.
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Pricing for Healthcare Services
In terms of healthcare service pricing, private for-profit hospitals are generally entitled to
set the prices of healthcare services at their discretion based on their cost structures, market
demand and other factors. However, if a medical institution is a Medical Insurance Designated
Medical Institution, it may only charge medical fees according to pricing guidelines
established by local healthcare authorities and public medical insurance providers. These
guidelines specify the permissible fee ranges for patients covered by PRC public medical
insurance programs under the PRC public social insurance regime.
As of the Latest Practicable Date, both Nanjing BenQ Hospital and Suzhou BenQ
Hospital are Medical Insurance Designated Medical Institutions. As such, a considerable
number of our patients pay for their treatment primarily through public medical insurance
programs. In 2022, 2023, and 2024 and the six months ended June 30, 2024 and 2025, our
revenue derived from settlement through public medical insurance programs amounted to
RMB968.9 million, RMB1,373.6 million, RMB1,410.4 million, RMB704.8 million and
RMB700.9 million, respectively, accounting for 41.5%, 51.1%, 53.0%, 53.0% and 53.4% of
our total revenue in the same years/periods.
For high-end and tailored medical services that are not covered by the pricing guidelines,
we take into account the market price for similar healthcare services in the region and price our
medical services based on certain factors, including complexity of the treatment, operating
costs, local market conditions and competitors’ pricing of similar services. During the Track
Record Period, revenue generated from our provision of such high-end and tailored medical
services took up 5.1%, 4.0%, 4.0%, 4.3% and 4.3% of our revenue in 2022, 2023, and 2024 and
the six months ended June 30, 2024 and 2025, respectively.
Implementation of The DRG Payment System
Since 2019, the PRC government has initiated the DRG mechanism, which applies to
inpatient services only. The DRG payment system divides patients into several hundreds of
different diagnosis-related groups, and makes medical reimbursement payments according to a
standard set for each group instead of actual expenses incurred by treating the patients, taking
into account of a variety of factors, such as patient age, disease diagnosis, comorbidity,
complication, treatment, disease severity, outcome and resource consumption. It encourages
hospitals to treat patients efficiently, thereby reducing unnecessary costs to be reimbursed by
the national medical insurance program.
Currently, it is not mandatory to adopt the DRG payment system for hospitals in the PRC,
and the adoption of the DRG payment system is not a prerequisite for hospitals joining the
public medical insurance program. However, the adoption of the DRG payment system is
encouraged by the National Healthcare Security Administration, and many local medical
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insurance management agencies have implemented it. If a hospital is a Medical Insurance
Designated Medical Institution and the DRG payment system has been implemented in the
region where such hospital is located, that hospital must follow the requirements imposed by
the DRG payment system.
Jiangsu Province has adopted the DRG payment system since 2022, under which, the
DRG payment shall be supervised by local medical insurance management agencies and
managed by way of agreement. Relevant local medical insurance management agencies at city
level and Medical Insurance Designated Medical Institutions are required to incorporate DRG
payment-related provisions in their existing medical insurance service agreements, or
separately sign a supplemental agreement to implement the DRG payment system.
Accordingly, as Medical Insurance Designated Medical Institutions, our hospitals began to
adopt DRG payment system in 2022.
Before the implementation of the DRG payment system, the public medical insurance
funds would reimburse the hospitals for all expenses actually incurred in treating a patient,
subject to adjustments made by relevant local public medical insurance bureaus in the next year
taking into account the government-approved annual quota for medical fees for inpatient
healthcare services. We estimated reimbursement amounts and recorded revenue each month
based on our actual expenses and the historical reimbursement rates. We typically receive
reimbursement of a majority of medical fees within two months. The remaining portion of
medical fees will be settled by relevant local public medical insurance bureaus in the next year
as a result of their adjustments, which may lead to an increase or decrease in that next year’s
recognized revenue. In 2022, we received an additional payment of RMB1.3 million from
relevant local public medical insurance bureaus as the subsequent adjustment made to our
estimated revenue for 2021. Such upward adjustments were primarily because (i) we adopted
a relatively prudent strategy in estimating our revenue for 2021, and (ii) we were recognized
by relevant local public medical insurance bureaus for quality healthcare services and
performance during their annual assessment.
After the implementation of the DRG payment system, which stipulates the optimal
amount to be paid by public medical insurance funds for each disease group, as adjusted year
by year, a hospital will only be reimbursed the optimal amount in treating a patient belonging
to a certain disease group, and any fees the hospital incurred above the optimal amount in the
treatment process will be borne by the hospital itself. As required by the Nanjing Healthcare
Security Bureau and the Suzhou Healthcare Security Bureau, respectively, our Nanjing BenQ
Hospital and Suzhou BenQ Hospital implemented the DRG payment system in 2022, under
which, we estimated reimbursement amounts and recorded revenue each month based on our
predictions of the DRG groupings of the patients we treated and the relevant DRG policy. The
DRG policy categorizes diseases into groups based on factors such as the type of treatment,
length of hospitalization, and resource usage, with each group assigned a fixed reimbursement
amount. We typically receive reimbursement of a majority of medical fees within two months.
In the next year, we will compare the actual reimbursement we received with our estimate, and
if there is any material discrepancy between the two, we will make upward or downward
adjustments to such next year’s recognized revenue. In 2023 and 2024, we received an
additional payment of RMB8.2 million and RMB8.4 million as the subsequent adjustment
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made to our estimated revenue for 2022 and 2023, respectively. Such upward adjustments were
made based on two factors: (i) some patients were initially assigned to lower-cost DRG groups
under the DRG payment system, and following our applications, the Nanjing Healthcare
Security Bureau and the Suzhou Healthcare Security Bureau, where applicable, reviewed and
approved adjustments, reclassifying these patients into higher-cost DRG groups, thus the
reimbursement amounts were revised upward to better reflect the actual level of care provided;
and (ii) the additional amount awarded by the respective regulatory authorities following their
annual performance reviews, which evaluated our hospitals’ compliance with medical service
standards and operational efficiency under the DRG payment system. These annual
performance reviews are conducted by the relevant authorities to assess hospitals’ adherence
to DRG-related policies. Such adjustments reflect the emphasis placed by regulatory
authorities on encouraging hospitals to align their operations with DRG payment-related
policies. These policies are designed to promote cost control, operational efficiency, and
compliance with established standards, ultimately contributing to the effective use of public
healthcare resources. The quality of inpatient healthcare services is not a direct criterion for
determining reimbursement amounts.
Under the implications of the DRG payment system, most hospitals’ profits are negatively
impacted to a certain extent due to the reduction in the total amount of health insurance
payments, according to Frost & Sullivan. We have also been affected by the DRG payment
system. The average spending per inpatient visits at both of our hospitals witnessed a decrease
after their respective implementation of the DRG payment system. However, with our precision
management system, we are able to effectively control costs and improve operational
efficiency, and quickly adapt to changes in the DRG reform. Specifically, we installed the
Firesoon system ( ˦ዓӻ୕), a smart DRG-analysis solution, for Nanjing BenQ Hospital since
July 2021 and for Suzhou BenQ Hospital since August 2021. The Firesoon system enables
automated prediction of the diagnosis-related group that each patient should be classified into
based on their symptoms, primary diagnosis, and main treatment methods, and provides
physicians with clear reimbursement standard under the relevant group as a reference for
clinical treatment. With the Firesoon system, we are able to make cost control during the
process of treating patients, and partially alleviate the business and financial challenges
brought by the implementation of the DRG payment system.
SEASONALITY
Our business is subject to seasonality. We experience seasonal fluctuations in our revenue
and profitability. Our hospitals typically experience fewer patient visits during the Chinese
New Y ear holiday period, as most Chinese usually avoid hospitals visits during this period, as
well as other public holidays. Our hospitals generally experience more patient visits during the
periods that are conducive to the spread of infectious diseases, particularly in the colder months
of the fourth quarter. During these periods, the elderly or people with weaker dispositions are
more susceptible to disease in cold weather, leading to increased demands of our services.
Therefore, our interim results or results over the first three quarters of a year may fluctuate as
a result of the foregoing and may not be indicative of our performance over longer periods. See
“Risk Factors — Risks Relating to Our Business And Industry — Our business is subject to
seasonality” in this prospectus.
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QUALITY CONTROL, CLINICAL GOVERNANCE AND RISK MANAGEMENT
Quality Control
Our clinical practice guidelines cover the core procedures and systems of clinical quality
and safety promulgated by the NHC to which include proper procedures for initial diagnosis,
ward inspection, consultation, medical disputes handling, discussions of fatality cases, medical
records keeping, pre-operation discussions, care of critically ill patients and shift relief system,
etc. We have established standardized operational procedures and protocols based on national
and local laws, regulations and industry practice, which are implemented through each clinical
department. We have established a comprehensive quality control system. The system primarily
includes the following measures:
 Designated department. We established Medical Quality and Safety Management
Committee to supervise the quality and safety of our healthcare services. The
Committee evaluates our healthcare services regularly and regularly publishes
quality control information on our internal system, identifies areas of improvement,
proposes improvement measures and oversees implementation of such measures.
 Training programs. We have implemented a well-balanced curriculum of training
programs that are designed both to familiarize our professionals with all core
procedures of providing healthcare services and to provide the platforms for these
professionals to master their specialty areas.
 Medical verification system. We require our employees to strictly verify patient
information before dispersing prescription drugs, performing of surgeries, blood
transfusion and sample collection and delivering laboratory and medical reports.
 Patient feedback system. We encourage patients to express their opinions on their
healthcare services received through patient feedback systems, including inpatient
exit surveys, regular patient satisfaction surveys, regular ward visits by doctors to
discuss patient experiences and patient comment boxes.
Clinical Governance
We believe sound clinical governance is fundamental to the delivery of high quality
healthcare services in our hospitals. We maintain strong clinical governance oversight over our
hospitals. We have adopted a standardized and comprehensive risk management policy and
supporting procedures covering the assessment of risks throughout our hospitals, identifying,
analyzing and learning from medical disputes or near-miss situations, and the relevant
arrangements in case of emergencies.
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The application of root cause analysis, a systemic process for identifying the initiating
causes of a problem, is fundamental to our clinical governance. For every patient death,
surgical failure, patient complaint, patient complication and medical dispute, we are committed
to identifying the root cause, learning from these incidents and making the necessary changes
promptly to prevent future occurrences.
Our Medical Quality and Safety Management Committee oversees clinical governance
and seek assurance that clinical governance arrangements are working effectively to safeguard
patients and improve the quality of clinical care. One of the key functions of our clinical
governance is the comprehensive review of material medical disputes and any associated fatal
accident inquiries relating to clinical services and patient safety independent from the hospital
staff or department involved and making appropriate recommendations. Every material medical
dispute will be reviewed and analyzed in-depth by the appropriate governance committees.
Clinical Risk
Modern healthcare is a complex business with inherent risks. With the increasing
advancement of medical technology, treatment procedures, particularly those offered at our
highly specialized clinical departments, have become more sophisticated. The emergence of
complications, the side-effects of drugs, as well as the changes in patients’ conditions may also
increase the risks involved in treatment procedures.
We have formulated a special “Risk Management System”, which stipulates the
responsibilities of each department in risk management, as well as categorizes various types of
risks, assessment methods, response methods, and classification of risk levels. We try to
involve all staff in risk identification, prevention and control. Our Medical Quality and Safety
Management Committee is responsible for reviewing the overall risk assessment of our
hospitals, formulating risk management action plan and supervising follow-up implementation.
In addition, other specialty committees are responsible for guiding and supervising the risk
management of each specific area, reviewing the risk investigation, assessment and
improvement action plan, and coordinating and supervising follow-up implementation. V arious
medical departments are responsible for detailed risk management tasks, including conducting
emergency preparedness drills. We also proactively provide trainings to our employees on risk
management procedures and relevant polices.
We will designate each year “the annual Group-level significant risks” as the focus of risk
monitoring and prevention for the upcoming year. We prepare an annual report on risk
management after the end of a specific year, including the areas of risk distribution, major
unacceptable risks, and the occurrence of major accidents. We assess multi-dimensional risks
on an annual basis in finance, human resources, information technology systems, procurement,
and anti-corruption. The specific indicators for assessment include negative consequences of
the risks, initiatives to reduce the risks, the responsible unit, the current year’s actual
occurrences, the degree of negative impact, and an assessment of current risk level. In this way,
we can see the specific risks of our entire operations in a clear, quantitative and comprehensive
way, and take the initiatives to prevent, control and deal with them in a prompt manner. We
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have formulated specific risk plans for various emergencies, including violence incidents,
outbreaks of infectious diseases, leakage of medical waste, hazardous chemical accidents,
information technology system and network failures, radiology accidents, admission of
congregate food poisoning cases, and shortages of medicines, sanitary materials and general
supplies.
We seek to minimize the frequency and degree of instances of patient harm through
clinical risk management, as part of our overall clinical governance and quality framework
focusing on clinical quality and patient outcomes. In the event that an adverse medical event
occurs, it is of paramount importance to conduct a detailed analysis to find out whether it is
caused by known risks, complications, clinical conditions of the patient or human factors.
We foster a culture of open communication and actively encourage our staff to promptly
report all potential or suspected patient safety incidents through our reporting systems on a
prudent basis. This provides us with an opportunity to learn from the issues raised by our staff
so that we can continue to improve the quality of patient care.
We have formulated standard operating procedures (SOP) regarding medical disputes, and
we abide by such SOP in all aspects of medical disputes including ex ante prevention and ex
post remedy. After receiving a specific complaint from a patient, we distinguish whether the
cause of the dispute is in relation to medical techniques or medical services, and transfer the
dispute to a corresponding department for subsequent disposal. We also engage our Medical
Dispute Mediation Committee to mediate the dispute, where applicable.
Workspace Health and Safety Risk
We maintain an internal audit and inspection program to ensure the safety of our hospital
premises for patients, the public and staff. The aim of the audit process is to ensure that our
workplace is continuously monitored and that deficiencies in relation to set standards are
remedied. We ensure that each of our hospital departments is periodically inspected and audited
for safety issues, such as medical treatment safety, environment safety and occupational safety.
We actively encourage staff to report health and safety incidents and risks on a no-repercussion
basis, and the learning from proactive monitoring and findings from incident reviews is used
to improve further and refine training programs, policies and working practices.
We have also adopted various measures to maintain a safe and sustainable environment.
For instance, we conduct regular sanitization to contain the potential spread of infectious
diseases at our hospitals. We have established surveillance systems to closely monitor the
prevalence of nosocomial infections at our hospitals and ensure that they are maintained at very
low levels in compliance with national standards. We have also established a team that oversees
infectious disease prevention and reporting. Besides, each of our departments has an
occupational exposure protection measure that provides guidance for safety operation to all
doctors, technicians, nurses and other medical supporting personnel.
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We also provide periodical occupational safety education and training to augment our
staff’s awareness of safety issues. We provide our staff with regular health assessment to
monitor their overall health. In particular, we adopt stringent assessment protocols for our staff
that are regularly exposed to high-risk environments such as radiation and clinical wastes to
ensure their exposure is within acceptable safety limits.
Our Directors confirm that during the Track Record Period and up to the Latest
Practicable Date, no material work place accidents or work-related injuries occurred at either
of our hospitals that had a material adverse effect on our business, results of operations and
prospects. We believe our safety record has contributed towards creating a trusted brand that
signifies both safety and quality of our medical care.
Government Regulations and Inspections
We are subject to numerous rules and regulations that regulate the qualifications and
conduct of healthcare professionals and standards for healthcare services in the PRC. See
“Regulatory Overview — Regulations on Medical Practitioners of Medical Institutions” in this
prospectus. As part of our clinical governance framework, we are committed to complying with
the relevant rules and regulations in the PRC. For example, our clinical governance procedures
comply with the core procedures promulgated by the NHC to ensure healthcare safety, which
include proper procedures for initial diagnosis, ward inspection, consultation, medical disputes
handling, discussions of fatality cases, medical records keeping, pre-operation discussions,
care of critically ill patients and shift relief system. Additionally, our hospitals are subject to
unscheduled inspections by relevant government authorities, including the Nanjing Health
Commission and Suzhou Health Commission that review healthcare services provided by us,
inspect the implementation of the relevant rules and procedures, and determine areas that can
be further improved. Our Directors confirm that during the Track Record Period and up to the
Latest Practicable Date, we had not been notified of any material non-compliance of the
relevant rules and procedures promulgated by the relevant government authorities that could
materially and adversely affect our results of operations and prospects. During the Track
Record Period and up to the Latest Practicable Date, none of our hospitals has been found to
be in any material violations during the inspections conducted by the Nanjing Health
Commission and Suzhou Health Commission, the clearance of which is a prerequisite for our
hospitals to pass the annual inspection requirement of their Medical Institution Practicing
Licenses.
Anti-Bribery and Corruption Risk Management
The PRC government has recently enhanced its anti-bribery efforts by introducing a range
of measures to prevent improper payments and other benefits received by doctors, staff and
hospital administrators in connection with the procurement of pharmaceutical and medical
supplies and the provision of healthcare services. For example, Grade A Class III hospitals in
the PRC, such as our Nanjing BenQ Hospital, are subject to particularly stringent requirements,
including as part of the criteria for such ratings, requiring all such hospitals to (i) implement
internal controls and risk management measures addressing bribery and corruption risks; and
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(ii) undergo annual inspections from relevant regulatory authorities as to their anti-bribery and
corruption status. Moreover, on May 27, 2024, the NHC and 14 other ministries issued a notice,
calling for the rectification of irregularities in the pharmaceutical procurement and sales sector,
as well as in medical services. We are constantly subject to risks in relation to actions taken
by us, our employees, affiliates and business partners that constitute violations of the
anti-corruption and anti-bribery laws and regulations. If we fail to comply with any
anti-corruption, anti-money laundering, or anti-bribery laws, we will be subject to
investigations, sanctions or fines, which may harm our reputation and have a material adverse
effect on our business, results of operations and prospects. For more details, see “Risk Factors
— Risks Relating to Regulatory Compliance — Failure to comply with anti-corruption,
anti-money laundering and anti-bribery laws could subject us to investigations, sanctions or
fines, which may harm our reputation and have a material adverse effect on our business,
results of operations and prospects” in this prospectus.
We have implemented the following policies and procedures to address potential bribery
and corruption incidents:
 we adhere to the anti-bribery guidelines outline in the Code of Conduct of Qisda
Corporation, and our anti-bribery function is led by our human resources
department. This function is in charge of developing the overall framework of
anti-bribery and corruption policies and procedures and providing guidance and
supervision towards implementing them across our hospitals. Each of our hospitals
will immediately report any suspected incidents of bribery and corruption to our
human resources department, who will then carry out any further investigations if
necessary and determine the appropriate course of action;
 from time to time, we provide training to our staff and updates on recent anti-bribery
and corruption issues and practices as they arise;
 we have in place a whistle blower program accessible by our staff and business
partners, led by our human resources department, in the form of hotline, email, letter
or face-to-face report, to receive reports of alleged corruption on a no-repercussion
basis, with the option of anonymity, and conducted with strict confidentiality so as
to avoid harm to the whistle blower’s personal interest. We have established a
zero-tolerance policy towards our staff accepting any form of bribes. Such policy is
included in our staff handbook and code of conduct. Any of our staff found in breach
of our anti-bribery and corruption policy will be dismissed. We also take appropriate
measures to discourage our patients from offering any form of payment or gift to our
staff for better or priority services, including displaying the relevant policies and
laws in prominent places;
 we have close oversight over our procurement processes. We have established a
systematic multi-tier approval process involving various departments, dedicated
governance committees and management for different categories of procurement.
Our procurement processes are segregated and no particular individual or
department has excessive authority, control or influence, thereby minimizing the
risk of corruption or abuse. Before engaging in any business relationship with a new
supplier, we will conduct due diligence to ensure we have a reasonable
understanding of its background and its connection with us, including how such
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supplier was referred to us in the first place. We require our suppliers to agree to
anti-bribery and corruption provisions in our supply agreements. In particular, our
suppliers are prohibited from soliciting business with our staff directly. Any
violation will result in our immediate business termination with such suppliers; and
 as part of our key clinical governance, our prescription review group at each of our
hospitals regularly reviews drug prescription patterns. Any unreasonable or
inexplicable irregularities or red flags indicative of a deliberate attempt to
substantially increase the prescription of certain drugs will be promptly reported and
investigated.
PATIENT INFORMATION AND DATA PROTECTION
As licensed medical service providers primarily offering diagnostic and treatment
services to patients, our Nanjing BenQ Hospital and Suzhou BenQ Hospital, in accordance with
legal and regulatory requirements and as necessary for their daily service provision, mainly
collect personal information such as patients’ names, ages, phone numbers, ID card details,
medical insurance card information, medical records, and prescriptions. For patients
undergoing surgery, postoperative management, or physiological testing, our hospitals mainly
collect personal physiological information such as height, weight, blood type, and medical
imaging. Additionally, for non-patients such as guardians of minors or incapacitated patients,
the hospitals collect their names, and phone numbers for the purpose of contact in case of
emergency. Besides, for online services through WeChat mini-programs, our hospitals mainly
collect users’ names, phone numbers, ID cards, and medical insurance card numbers, medical
records, medical histories, allergens, and images of lesions.
The PRC laws and regulations require medical institutions to protect the privacy of their
patients and prohibit unauthorized disclosure of personal information. Patient information
protection is our long-held commitment, to which we attach the greatest importance. We have
taken various measures to maintain the confidentiality of our patients’ medical information,
including installing the advanced information technology systems to properly manage our
patients’ information, adopting firewalls to deter any hacking or other illegal data infringement
activities, and encrypting such information in our information technology systems so that it
cannot be accessed without authorization. In addition, each hospital operates independently
with its own system, through which it stores the personal information of users and patient
diagnosis and treatment information collected during its business operations. The systems used
by each hospital are not interconnected, so there is no data interaction regarding the
aforementioned information. At the Group level, the operation center of the Group only has
access to the operational and financial data of each hospital, and does not have access to the
user and patient information of each hospital.
We have in place various policies regarding the use, transfer, retention, and destruction
of patients’ information and data. Specifically, patient information collected by us will only be
used for our provision of diagnostic and treatment services to patients offline and for online
healthcare services such as registration, internet-based medical care, prescription dispensing,
online access to offline test reports, online stores, and inpatient meal ordering. We do not use
our patients’ personal information for other purposes or authorize third parties to use it without
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our patients’ consent or legal requirements. We have adopted the Personal Information
Protection Management System and the Personal Information Protection Impact Assessment
System for the internal control of the use of patient information. According to such policies,
we strictly regulate the storage of all patient information. For patient information collected
offline, we typically establish separate files for each patient and use a dedicated archive
management room for storage.
For patient information collected, our hospitals use their self-developed internet hospital
systems to store the personal information of their patients. According to the Data Security
Management System, our information security management department is responsible for
securely storing all data collected by us in the PRC, and ensuring the integrity and
confidentiality of the data through data backup methods such as local backup and remote
backup, implements data disaster recovery backup and storage media security management,
while regularly conducting data recovery tests.
In terms of the transmission of patient information, according to the Personal Information
Protection Management System and the Personal Information Protection Impact Assessment
System, our information security management department is responsible for our data
transmission matters and all transmitted data is encrypted. In addition, we only transmit data
through specific systems and set up interface security controls during the transmission process
to prevent data from being stolen by third parties under specific circumstances consented by
our patients or as permitted by laws and regulations.
According to Article 29 of the Regulations on the Management of Medical Records in
Medical Institutions , the retention period of outpatient (including emergency care) medical
records at medical institutions shall not be less than 15 years from the date of the patient’s last
visit. Inpatient medical records must be kept for no less than 30 years from the date of the
patient’s last hospital discharge. Due to these regulations, we have not deleted or destroyed any
patient information for the time being. According to our Data Security Management System,
our data storage period shall be implemented in accordance with laws, administrative
regulations, and user agreements. The data storage cycle should not exceed the retention period
set by laws, regulations, and data usage rules. For data with expiring storage periods, we have
established a data destruction system that clearly defines the requirements for destruction
objects, rules, processes, and technologies. Physical destruction and logical erasure methods
are adopted for data destruction.
In recent years, cybersecurity, privacy and data protection has become an increasing
regulatory focus of government authorities across the world. The PRC Government has enacted
a series of laws, regulations and governmental policies for the protection of cybersecurity and
personal data in the past few years.
For example, on December 28, 2021, the Cyberspace Administration of the PRC (the
“CAC”), jointly with other 12 governmental authorities, issued the revised Measures for
Cybersecurity Review (جthe “ CAC Measures ”), which became effective
from February 15, 2022. According to the CAC Measures, (i) critical information infrastructure
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operators (the “CIIO”) purchasing network products and services which affects or may affect
national security, must file for the cybersecurity review; (ii) the internet platform operators
holding personal information of more than one million users seeking a listing in a foreign
country must file for the cybersecurity review; and (iii) where members of the cybersecurity
review working mechanism believe that network products and services and data processing
activities affect or are likely to affect national security, the Cybersecurity Review Office shall
report to the Central Cyberspace Affairs Commission for approval as per procedure, and then
conduct a review in accordance with the Cybersecurity Review Measures. Moreover, on July
30, 2021, the State Council promulgated the Regulations for Safe Protection of Critical
Information Infrastructure (ᚐૢԷ) (the “ CIIO Regulation ”) which
came into effect on September 1, 2021. Pursuant to the CIIO Regulation, critical information
infrastructure refers to important network infrastructure and information system in public
telecommunications, information services, energy sources, transportation and other critical
industries and domains, in which any destruction or data leakage will have severe impact on
national security, the nation’s welfare, the people’s living and public interests. The CIIO
Regulation also stipulates the procedures for determining critical information infrastructure. It
provides that competent authorities shall promulgate detailed rules in designating critical
information infrastructure, identify critical information infrastructure in the relevant industries,
and notify operators of such critical information infrastructure in a timely manner. For details,
see “Regulatory Overview — Regulations on Cybersecurity” and “Regulatory Overview —
Regulations on Personal Information or Data Protection” in this prospectus.
As of the Latest Practicable Date, we had not been notified by any authorities of being
classified as a CIIO, involved in any cybersecurity review or received any investigation,
inquiry, notice, warning or sanctions by any governmental authorities on such basis. Our PRC
Legal Advisor conducted consultation via the hotline published by the CAC on a named basis
on behalf of us on January 18, 2024, with a staff of the China Cybersecurity Review,
Certification and Market Regulation Big Data Center (“ CCRC ”). The CCRC is a competent
authority on this consultation, because it is entrusted by the Cybersecurity Review Office under
the CAC with authority to accept and review of application materials and to set up a hotline
for consultation regarding the cybersecurity review, according to the official announcement by
the CAC. Based on such consultation, our PRC Legal Advisor was informed that we do not
need to proactively file for the cybersecurity review for our listing in Hong Kong, given Hong
Kong is part of China and does not belong to any “foreign country” as contemplated in the
Cybersecurity Review Measures.
We have implemented a confidential information security policy which requires, among
others, we designated a cybersecurity officer to monitor our ongoing compliance with the
relevant PRC laws and regulations, oversee the implementation of necessary safeguarding
measures, and promote continuous improvement of cybersecurity protection capabilities.
Specifically, (i) any collection of data and subsequent usage shall be clearly informed to the
patient in question and can only proceed with the prior consent of patients or as permitted by
laws and regulations; (ii) we implement strict and clear internal authentication and
authorization mechanisms to ensure that the data we process can only be accessed by
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authorized personnel, with visit records documented via system logs; (iii) all of our employees
to keep all patients data confidential and to receive mandatory training on our information
security policies; and (iv) to adopt security measures in the transmission, storage and disposal
of patient data.
Our core business information technology system has passed the National Information
Security Grade Protection Category 3 Certification. The national information security grade
protection certification is a national recognition and assessment granted by relevant public
security authorities to Chinese institutions and organizations, requiring that their information
security system has met certain criteria and is sound and safe. This national information
security grade protection has five different categories, among which, Category 3 covers more
than 100 stringent requirements in information technology security and information
management security. We believe this signifies that we have met the required standards set by
the public security authorities in areas such as data security, network security, application
security, and disaster backup recovery, and have established a mature information security
management system.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any breach of patient confidential information or any other patient information-
related incidents which could cause a material adverse effect on our business, financial
condition or results of operations, nor did we experience any material leakage of patient data.
COMPETITION
The largest providers of healthcare services in the PRC are hospitals. There were 39,450
hospitals in the PRC by the end of 2024. In recent years, the private hospital sector has emerged
as the rapidly expanding segment in the PRC’s healthcare service industry. Revenue of private
hospitals is increased from RMB437.9 billion in 2019 to RMB944.7 billion in 2024,
representing a CAGR of 16.6% from 2019 to 2024, and is estimated to reach RMB1,882.7
billion in 2030, representing a CAGR of 12.2% from 2024 to 2030. The private hospital
industry in the PRC is highly competitive and fragmented. We believe the key competitive
factors include, among others, high-quality medical capability, price and quality of services,
designated status under social and/or commercial insurance programs, relationship with
commercial insurance providers, comprehensive array of service offerings, convenience and
location in proximity to residential or business areas, brand recognition and reputation and
customized healthcare services. According to Frost & Sullivan, in terms of total revenue in
2024, we rank the seventh among all private for-profit general hospital groups in the PRC, with
our market share being 0.4% in the PRC. In terms of total revenue in 2024, our Nanjing BenQ
Hospital ranks the third among all private for-profit general hospitals in the PRC, with its
market share being 0.3% in the PRC. In terms of average revenue per registered bed in 2024,
we rank the first among all private for-profit general hospital groups in the PRC. For more
details on the competitive landscape and our market position, see “Industry Overview —
Competitive Landscape of Private General Hospitals in the PRC” in this prospectus. We believe
that we are well positioned to attract revenue opportunities presented by the expected growth
in the private hospital industry in the PRC.
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MAJOR A W ARDS AND RECOGNITIONS
We believe our high-quality and patient-oriented services have earned us a strong
reputation among the customers and industry peers alike. The following table sets forth the
major awards and achievements won by our Nanjing BenQ Hospital and Suzhou BenQ Hospital
as of the Latest Practicable Date:
Y ear Awards and Achievements Award Issuing Body
Nanjing BenQ Hospital
2019-2023 /H1118/H1118/H1118Among the Top 20 hospitals in Ailibi Top 100 Socially-Run
Independent Hospitals in the PRC (ึ፬ᔼ
ఊ᜗ᔼ৫100੶)
Institute of Asclepius Hospital
Management (޼
Ӻʕː)
2022 /H1118/H1118/H1118/H1118/H1118/H1118ISO15189 — “Medical laboratories — Requirements for
quality and competence” (ࠅ
Ӌ)
China National Accreditation Service
for Conformity Assessment
(ึ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118The Best Employer for Non-Public Healthcare Organizations
in 2022 (2022ʮᔼᐕዚ࿴)
DXY (෤)
2021 /H1118/H1118/H1118/H1118/H1118/H1118Nanjing Stroke Center Accreditation Unit (ԯ̹՗ʕʕːႩ
ᗇఊЗ)
China Stroke Center ( ʕ਷՗ʕʕː)
2019 /H1118/H1118/H1118/H1118/H1118/H1118Provincial Blood Purification Training Base (А૰ଋʷ
Ҧஔ੃৅ਿή)
Jiangsu Commission of Health
(ึ)
2018 /H1118/H1118/H1118/H1118/H1118/H1118Nanjing Trauma Rescue & Treatment Center (ԯ̹௴ෆહ
ʕː)
China Trauma Rescue & Treatment
Association (ᑌຑ)
2017 /H1118/H1118/H1118/H1118/H1118/H1118Among the first batch of National Chest Pain Center
Accreditation Units (঍೨ʕːႩᗇఊЗ)
China Chest Pain Center ( ʕ਷঍೨
ʕː)
Suzhou BenQ Hospital
2023 /H1118/H1118/H1118/H1118/H1118/H1118Elderly Friendly Hospital (ϼϋʾഛᔼᐕዚ࿴) Jiangsu Commission of Health ( Ϫᘽ
ึ)
2022 /H1118/H1118/H1118/H1118/H1118/H1118Ailibi Top 100 Socially-Run Independent Hospitals in the
PRC (ึ፬ᔼఊ᜗ᔼ৫100੶)
Institute of Asclepius Hospital
Management
(Ӻʕː)
2022 /H1118/H1118/H1118/H1118/H1118/H1118Winner in Intelligent Hospital HIC Case Competition (
౽ᅆ
ᔼ৫HICԷɽᒄ)
Institute of Asclepius Hospital
Management
(Ӻʕː)
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INFORMATION TECHNOLOGY SYSTEMS
Each of our hospitals maintains a clinical information technology system to ensure the
operational efficiency of hospital management involving patient registration, medical records,
treatment history, medical history, laboratory tests, radiology requests and drugs prescribed.
Such information technology system integrates the following:
 Picture Archiving and Communications System (PACS): the PACS manages
radiology requests (such as CT and MRI scans) and results and issues reports and
bills for our radiology services.
 Laboratory Information System (LIS): the LIS manages laboratory requests and
results, and issues reports and bills for our laboratory services.
 Hospital Information System (HIS): the HIS streamlines daily operations in our
hospitals, including the management of patient records and billing history,
outpatient registrations and inpatient admissions.
In addition, we endeavor to establish a “Smart Hospital” by applying AI and other
technologies in our daily operations which provide added convenience and an expedited
consultation process to both patients and doctors, intelligently transforming a wide array of
procedures during medical services, including online registration, online bill payment and
online consultation, enabling us to improve patients’ satisfaction level and increase our brand
awareness among patients.
In addition, we have implemented measures to provide multi-tier protection for the data
stored on our system and minimize system failures. We have implemented backup systems to
protect our data against catastrophic events and disaster recovery/business continuity plans. We
have established policies for protecting user data and maintaining network stability in each of
our hospitals.
During the Track Record Period and up to the Latest Practicable Date, we had not
experienced any disruption or failure in our information technology systems that would have
a material adverse impact on our business operations.
However, we are exposed to risks in relation to system and data security in our operations.
We may be targeted by cyberattacks, distributed denial of service attacks, hacking and phishing
attacks, security breaches, computer malware, and other malicious internet-based activity that
may compromise the security of our information technology systems and adversely affect our
reputation. For details of risks with respect to information technology system and data security
that we may encounter, see “Risk Factors — Risks Relating to Our General Operations — Our
operations could be impaired if our information technology systems fail or if our databases are
destroyed or damaged” in this prospectus.
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INTELLECTUAL PROPERTY
We have registered or applied for registration of certain trademarks and patents in the
PRC relating to the names and logos of our hospitals. As of the Latest Practical Date, we had
50 registered patents, one registered trademarks, five registered copyrights, and six registered
and filed domain names in mainland China which are or may be material in relation to our
business. See also “Statutory and General Information — B. Further Information About Our
Business — 2. Intellectual property rights” in Appendix V to this prospectus.
We recognize the importance of our intellectual property rights and will protect and
enforce our intellectual property rights if we become aware of any potential infringement. As
of the Latest Practicable Date, we were not aware of any material infringement of our
intellectual property rights and we believe that we have taken reasonable measures to prevent
infringement of our own intellectual property rights. Our Directors confirm that we were not
involved in any claims on our infringement of other third parties’ intellectual property rights
during the Track Record Period that would have a material adverse impact on our operations
and financial position and, as at the Latest Practicable Date, we did not have any pending or
threatened claims against us or any of our subsidiaries relating to the infringement of any
intellectual property rights owned by third parties.
PROPERTIES
Owned Properties
We own certain properties in mainland China in connection with our business operations.
We do not directly or indirectly hold or develop properties for letting or retention as
investments, nor do we purchase or develop properties for subsequent sales or for retention as
investments. We have engaged Cushman & Wakefield Limited, an independent property valuer,
to value our property interests as of October 31, 2025, whose report is included in Appendix
III to this prospectus (the “ Property Valuation Report ”). Except for the property interests set
forth in the Property V aluation Report, no single property interest that forms part of our
non-property activities had a carrying amount representing 15% or more of our total assets as
of October 31, 2025.
As of the Latest Practicable Date, we owned two parcels of land with a site area of
382,925.9 sq.m. in the PRC. We had building ownership rights to two properties with an
aggregate GFA of 500,198.5 sq.m.. We have obtained the land use right with respect to the
aforesaid land, which will expire in 2054, and the building ownership certificates for the
aforesaid buildings. As of the Latest Practicable Date, we also had one construction project
under development.
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The following table summarizes the properties we owned as of the Latest Practicable
Date:
No. Property Right Use of Property Location
Site Area/GFA
(sq.m.)
1 /H1118/H1118Land use right Hospital premises Nanjing, Jiangsu
Province
257,375.8
2 /H1118/H1118Building
ownership right
Hospital premises Nanjing, Jiangsu
Province
327,754.5
3 /H1118/H1118Land use right Hospital premises Suzhou, Jiangsu
Province
125,550.1
4 /H1118/H1118Building
ownership right
Hospital premises,
office and
dormitory
Suzhou, Jiangsu
Province
172,444.0
Leased Properties
As of the Latest Practicable Date, we had one leased property in Taiwan. The property
was leased by the lessor to a Qisda Connected Person for a term of ten years until July 2027,
who then subleased the property to us for a term of one year, which is automatically renewable
unless any party objects. The leased property is used for non-property activities as defined
under Rule 5.01(2) of the Listing Rules and is principally for office use. For more details, see
“Connected Transactions — Partially Exempt Continuing Connected Transactions — 2.
Property Leasing Framework Agreement” in this prospectus. As of the Latest Practicable Date,
we did not have any leased property in mainland China.
INSURANCE
As of the Latest Practicable Date, Nanjing BenQ Hospital and Suzhou BenQ Hospital
were insured with property insurance, employee fidelity insurance, cash insurance, medical
facility liability insurance, physician’s practice insurance and group comprehensive accident
insurance. As we continue to expand in scale and complexity of service offerings, we believe
it would be prudent from a risk management perspective to maintain such insurance going
forward.
However, our current insurance coverage may still be insufficient to cover our overall
risks during our business operations. For example, we do not maintain business interruption
insurance for our operations or key employee insurance for our management. See “Risk Factors
— Risks Relating to Our Business and Industry — We and our hospitals may not be adequately
insured against professional and other liabilities which may arise in our business” in this
prospectus.
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ENVIRONMENT, SOCIAL AND GOVERNANCE
We are subject to various PRC laws, rules and regulations with respect to environmental,
social and corporate governance (the “ ESG”) matters, including hospital sanitation, reduction
of occupational hazards in hospitals, prevention of medical accidents, disease control, disposal
of medical waste, and discharge of pollutants. For details, see “Regulatory Overview —
Regulations on Environmental Protection and Fire Prevention” in this prospectus.
We are committed to complying with PRC regulatory requirements, preventing and
reducing various hazards and risks associated with our operation, and ensuring the health and
safety of our patients and employees of our hospitals and surrounding communities.
ESG Oversight
We implement a top-down ESG framework and governance approach, from the Board of
Directors and the ESG Committee to the management of our hospitals.
The Board of Directors
Our Board has overall responsibility for our ESG strategy and reporting, it plays a
regulatory and decision-making role on ESG matters, including discussion of ESG’s key issues
and future developments, review of ESG strategies and policies, ESG action plans and
outcomes as well as the effectiveness of ESG management. The Board formulates, evaluates,
prioritizes, and manages important ESG-related matters (including risks to its business) and
reviews progress made against ESG-related goals and targets.
The ESG Committee
Although we have not established an ESG committee (“ the Committee ”) under the Board
of Directors at the Group level currently, we are committed to establishing an ESG committee
within six months of the Listing. The members of the Committee will consist of members of
the Board, management and other persons with ESG risk identification and management
capabilities. As an internal organization between the Board and the various business units and
subsidiaries, the ESG committee will be primarily responsible for the communication between
the upper and lower levels to coordinate and manage the ESG issues. We plan to develop clear
terms of reference for the ESG Committee according to Listing Rules Appendix C2 ESG
Reporting Guide and the Stock Exchange’s other ESG-related guidelines. In addition, the
Committee is also responsible for coordinating stakeholder communication and the materiality
analysis of ESG issues, formulating ESG strategies and approaches, formulating ESG action
plans, coordinating daily ESG management and information disclosure, and setting ESG goals
as well as regularly reviewing the progress. Besides, the Committee will develop appropriate
corrective measures when discrepancies are found against the ESG goals and targets.
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The Management
The management of our hospitals and other business units implements ESG-related
management systems and measures. They are also responsible for managing ESG-related
information and indicators (e.g. resource consumption, waste generation, turnover, etc.),
implementing ESG targets and regularly reporting the progress and relevant outcomes to the
ESG Committee. Management is also responsible for regularly monitoring ESG indicators,
industry trends and the ESG-related (including climate change) risks and opportunities facing
our business operations, understanding the potential and actual impact of these risks and
opportunities on us, and reporting to the ESG Committee and the Board as well as assisting
them on assessment and management of the risks and opportunities.
ESG-Related Risks
Cybersecurity and Data Security
We are exposed to risks in relation to system and data security in our operations. We may
be targeted by cyberattacks, distributed denial of service attacks, hacking and phishing attacks,
security breaches, computer malware, and other malicious internet-based activity that may
compromise the security of our information technology systems and adversely affect our
reputation. For details of risks with respect to information technology systems and data
security that we may encounter, see “Risk Factors — Risks Relating to Regulatory Compliance
— Our business operations may be extensively affected by the laws and regulations regarding
cybersecurity and data security” and “Risk Factors — Risks Relating to Regulatory
Compliance — We are subject to laws and regulations relating to the personal information of
our patients. Any failure to adequately protect our patients’ personal data and our operation
information from leakage or improper use could expose us to liability”. To mitigate these risks,
we have engaged external consultants to assist us in enhancing the security level of our core
business information technology systems in order to obtain The National Information Security
Grade Protection Level 3 Certification and daily information security maintenance, which
involved the cost of approximately RMB1.4 million during the Track Record Period. For
further details of mitigation strategies, see “— Patient Information and Data Protection” and
“— Information Technology Systems” in this section.
Employee Turnover
Our business and service provided are highly related to our medical professionals and
staff, the retention of skilled healthcare professionals, including doctors, nurses, and support
staff, is crucial for maintaining high-quality patient care and ensuring the smooth operation of
the hospitals. For details of the risk of turnover, see “Risk Factors — Risks Relating to our
Business and Industry — We depend on the continual service of our key personnel, and loss
of the services of one or more of our key executives or a significant portion of our management
personnel could weaken our management team and materially adversely affect our business,
results of operations and prospects.” in this prospectus. High turnover rates could lead to
increased recruitment and training costs, reduced operational efficiency, and potentially
compromise patient care quality. To mitigate such risk, we offer competitive wages and other
benefits to recruit and retain high-caliber medical professionals. The costs involved were the
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salaries, wages and other benefits we provided, for the amount of such costs, see “Accountant’s
Report — Appendi x I — 6(b) Staff Costs” in this prospectus. Additional health insurance and
retirement plans were also included in our remuneration package. Moreover, we are also
committed to substantial clinical resources for teaching and training activities, providing
medical education and practical experiences to an average of about 450 students, interns,
postgraduates, residents and advanced trainees for training and studying every year during the
Track Record Period. For details on the medical education we provide, see “— Our Other
Activities and Functions — Medical Education” in this section.
Climate Change
Our hospitals are subject to physical risks such as extreme weather events like rainstorms
and typhoons. In the short term, these events could disrupt our daily operations, increase safety
risks for employees and patients, and cause damage to our hospital buildings and facilities,
leading to potential service delays. The resulting loss of working days, repair costs, and patient
compensation claims may negatively impact our expenditures and revenues. Moreover,
extreme weather events may affect the supply and transportation of medicines in the short term,
impacting inventory and delaying delivery. The extension and intensification of the rainy
season in China, along with the increased frequency of typhoons and heavy rains, could lead
to shipping schedule delays and a higher probability of accidents, potentially harming our
business operations and financial performance. To address these risks, we have implemented
policies such as the Nanjing BenQ Hospital Climate Disaster Emergency Plan (ਿᔼ
) and the Emergency and Disaster Contingency Management Plan
(ྌ) and adopted disaster and flood prevention measures. We
also purchased approximately RMB1.1 million in property insurance and public liability
insurance during the Track Record Period, to minimize the financial impact brought by extreme
weather events.
Our Group is also subject to transition risks such as policy changes with regard to
addressing mitigation and adaptation of climate change and transition to a low-carbon
economy. To mitigate such risks, we partnered with a third-party new energy technology
company, for such costs involved, we provide approximately 10,000 sq.m. of our rooftop area
for installing solar panels. Renewable energy generated by these panels will be utilized by our
hospitals to enable us to reduce our reliance on fossil fuel-based electricity while also helping
to generate clean, renewable energy, thereby lowering our greenhouse gas emissions.
Hazardous Waste Production
We are subject to various laws, rules and regulations with respect to disposal of hazardous
waste. For details, see “Regulatory Overview — Regulations on Environmental Protection and
Fire Prevention” in this prospectus. To mitigate such risk, our hospitals have engaged qualified
recycling service providers, who are independent third parties, to dispose of medical and
chemical waste, which involved the total cost of approximately RMB9.5 million during the
Track Record Period. In addition, we have established various policies and procedures such as
the Nanjing BenQ Hospital Medical Waste Classification and Collection Policy (ਿᔼ
), the Nanjing BenQ Hospital Medical Waste Incident Handing
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Contingency Plan (), and the Suzhou BenQ
Hospital Medical Waste Handling Policy (). We also
provide comprehensive training to all employees involved in waste handling, emphasizing the
importance of proper waste segregation, storage, and disposal. Conduct regular refresher
courses and drills to maintain high levels of awareness and competence.
Safety Management for Patients and Employees
We are subject to health and safety risks and risks arising from potential medical disputes.
To mitigate these risks, we have established a Medical Quality Management Committee
responsible for coordinating with other relevant departments to supervise and examine safety
issues and quality control, such as medical treatment safety, environment safety and
occupational safety within our hospital. For details of our measures to ensure workspace health
and manage safety risk, see “— Quality Control, Clinical Governance and Risk Management
— Workspace Health and Safety Risk” in this section.
ESG-Related Opportunities
Recruitment
Our hospital in Nanjing has attained a Grade A Class III hospital rating, while the one in
Suzhou has been rated as Class III. The Grade A Class III hospital rating is the highest level
of classification for hospitals in China, and are recognized for their excellence in medical care,
research, and education. This prestigious status attracts highly qualified and experienced
healthcare professionals who seek to work in renowned institutions that offer cutting-edge
facilities, advanced technology, and opportunities for professional growth. Our hospitals are
equipped with the latest medical technology, advanced diagnostic tools, and modern facilities.
This cutting-edge infrastructure attracts healthcare professionals who want to work with the
best resources available, enabling them to provide high-quality care and stay at the forefront
of medical advancements.
Quality Management
We make use of innovative technologies, such as AI to maintain the service quality
provided to our patients. We have developed an innovative “Smart Hospital” operating model
and established a “three-in-one” hospital operation and management system integrating Smart
Healthcare, Smart Services and Smart Management. For more information on Smart Hospital,
see “— Our Healthcare Services — Smart Hospital” in this section. The Smart Hospital system
analyses vast amounts of medical data, including imaging scans, medication systems and
patient records, to assist doctors in making more accurate diagnoses. By identifying patterns
and anomalies that may be difficult for human eyes to detect, AI can help reduce diagnostic
errors and improve patient outcomes. We have engaged third-party innovation software
developers to help develop and maintain our system annually. By embracing AI technologies,
we can unlock numerous opportunities to improve patient care, increase operational efficiency,
and drive innovation.
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Measures in Place to Ensure a Compliance Culture
We aim to uphold the highest standards of ethical behavior, adhere to all relevant laws and
regulations, and ensure the safety and well-being of our patients and employees. Our
compliance culture is a fundamental pillar of our organization, supporting our mission to
deliver high-quality healthcare services to the communities we serve. We have adopted the
Integrity Handbook (˓̅) and stringent work rules and regulations such as the
Working Regulations () that clearly outline our employment principles,
compensation, training policies, and service code of conduct. Additionally, we have developed
internal policies, including the Hazardous Materials and Waste Management Plan (ي࢔
ྌ), the Nanjing BenQ Hospital Wastewater Treatment Station Operation
and Management System (), the Energy
Management System (), the Nanjing BenQ Hospital Employee Health and
Safety Plan (ྌ), the Supplier Evaluation Management
Measures (), the Nanjing BenQ Hospital Medical Dispute Handling
Standards (ॸஈଣ஝ᇍ), the Data and Information Security
Management System (), etc., addressing various critical areas,
including the management of medical and hazardous waste, wastewater, energy consumption,
preparedness for extreme climate events, employee health and safety, procurement, supply
chain management, medical incident response, data privacy and anti-corruption measures. All
these policies adhere strictly to applicable laws and regulations.
We view compliance as an ongoing process and continuously strive to improve our
compliance program. We regularly assess the effectiveness of our policies, training, and
monitoring activities, and we stay up-to-date with changes in laws and regulations. We also
seek feedback from employees and stakeholders to identify areas for improvement and ensure
that our compliance program remains relevant and effective.
Measures in Place to Ensure Environmental-Friendly Operations
We have also implemented the following measures, including, among others, (a) using
energy-saving light bulbs and encouraging staff to switch off unused office equipment, such as
computers and lights; (b) imposing temperature control for air conditioning and keeping indoor
air-conditioning temperature at 26°C in summers; (c) educating employees of the importance
of saving water and turning off the tap after use; (d) encouraging the use of low emissions
vehicles; and (e) reducing the use of paper documents and promoting printing on both sides.
In addition, in respect of our construction-in-progress, we specifically use energy-saving
windows, prefabricated panels and other building materials with an eco-friendly nature. In
terms of water and electricity use, we constructed filtration tanks in the construction site to
apply filtration to sewage water. We also apply the solid waste in recycling scenarios such as
temporary road repair. We apply on-site tower crane sprinkler system, high bar sprinkler
system and other automated equipment, to reduce the dust in our construction sites. Our
endeavors have won us the “Civilized Construction Site Award” (ʈήᆤ).
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During the Track Record Period and up to the Latest Practicable Date, we did not
encounter any non-compliance or complaints in relation to the environmental protection that
would materially affect our business operations.
Resources Consumption at Our Hospitals
We are committed to conserving energy and water and reducing our carbon footprint. We
primarily consume electricity, natural gas and water in our operational activities, which are the
main sources of our greenhouse gas emissions.
The following table sets forth a breakdown of our resource consumption during the Track
Record Period:
Y ear Ended December 31,
Six months
ended
30 June,
2022 2023 2024 2025
Total purchased electricity
consumption (MWh)* /H1118/H1118/H1118/H111841,100 42,254 48,909 22,722
Total natural gas consumption
(MWh)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,385 16,359 16,004 9,381
Total water consumption
(Tonnes)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118590,469 737,625 772,753 364,843
Note:
* During the Track Record Period, our purchased electricity consumption and water consumption
increased, which was generally in line with the organic growth of our business as a result of the
combined effects of, among others, the increased patient visits and the increased number of surgeries
we performed during the Track Record Period, despite the slight decreases in revenue and cost of
revenue as a result of the DRG payment system. However, the decrease in our natural gas consumption
from 2023 to 2024 was mainly due to our hospital management’s on-going monitoring of heating and
hot-water consumption based on the weather conditions, and certain facilities switching from consuming
natural gas to electricity.
We believe that the increases in our resources consumption during the Track Record
Period were within a reasonable range and were in line with our business expansions and result
of operations.
We evaluate our purchased electricity consumption using the metric of average annual
purchased electricity usage per sq.m and water consumption using the metric of average annual
water usage per sq.m at our hospitals. In 2022, 2023 and 2024, and the six months ended June
30, 2025, our estimated average purchased electricity usage per sq.m. was 106.8 kWh, 109.8
kWh, 127.1 kWh and 51.9 kWh, and average water usage per sq.m was 1,534.4 liters, 1,916.8
liters, 2,008.1 liters and 832.9 liters, respectively.
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Greenhouse Gas (“GHG”) Emissions
The following table sets forth a breakdown of our GHG emissions during the Track
Record Period:
Y ears Ended December 31,
Six months
ended
30 June,
Unit 2022 2023 2024 2025
Direct emission
(Scope 1) (1), (4) /H1118/H1118/H1118/H1118tCO2e 8,089 8,695 7,376 3,624
Energy indirect
emission
(Scope 2)
(2), (4) /H1118/H1118/H1118/H1118tCO2e 23,439 24,097 27,892 12,958
Other indirect
emissions
(Scope 3)
(3), (4) /H1118/H1118/H1118/H1118tCO2e 114 119 121 53
Notes:
(1) Our Group’s Scope 1 emissions mainly arise from the operation of gas boilers and vehicles.
(2) The major source of our Group’s Scope 2 emissions is purchased electricity.
(3) Due to the complexity and broad range of categories involved in Scope 3 emissions, the current
disclosure is limited to emission from sewage treatment only.
(4) During the Track Record Period, our Scope 2 and Scope 3 emissions increased due to the increase in
purchased electricity consumption and sewage treatment, which was generally in line with the organic
growth of our business as a result of the combined effects of, among others, the increased patient visits
and the increased number of surgeries we performed during the Track Record Period, despite the slight
decreases in revenue and cost of revenue as a result of the DRG payment system. However, the decrease
in our Scope 1 emissions was mainly due to the decrease in our natural gas consumption from 2023 to
2024.
We believe that the increases in our GHG emissions during the Track Record Period were
within a reasonable range and were in line with our business expansions and result of
operations.
To mitigate emissions from our supply chain, we have implemented internal control
measures such as prioritizing local suppliers whenever possible. By sourcing goods and
services from nearby businesses, we could reduce the transportation distances involved,
thereby minimizing the associated GHG emissions. Secondly, we have optimized our
procurement practices by purchasing in larger quantities each time whenever possible. This
approach allows us to reduce the overall number of logistics operations required to fulfill our
supply needs, further curtailing transportation-related emissions.
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We set targets and measures to reduce our GHG emissions and conserve energy and water.
Specifically,
 We aim to reduce our average natural gas consumption intensity and Scope 1 GHG
emission intensity by 5% over the next three years, using the average intensities of
the historical total natural gas consumption and Scope 1 GHG emission from
2022-2024 as a baseline. To reduce our consumption and emission, we have adopted
measure such as installing total heat recovery heat pumps that capture and reuse heat
generated, and controlling the hot water consumption in the wards. We have also set
guidelines for our drivers to promote fuel-efficient driving practices and regularly
monitor fuel consumption to identify and address inefficiencies. We will continue to
explore the possibility of increasing efforts for these measures in the future.
 We aim to reduce our average annual energy indirect emissions (Scope 2) by 5%
over the next three years, using the average of the historical Scope 2 emissions data
from 2022-2024 as a baseline.
 To reduce our Scope 3 emissions from sewage treatment, we have controlled and
reduced our overall water consumption. We have controlled the hot water
consumption in the wards and have installed sensor and foot pedal operated faucets.
We have also recycled greywater, like air conditioning condensate, and repurpose it
for toilet flushing, reducing the volume of water discharged to municipal sewage
facilities. Through these initiatives, we aim to reduce the average annual sewage
generation and the intensity of Scope 3 GHG emissions by 5% over the next three
years, using the average intensity of the historical Scope 3 emissions data from
2022-2024 as a baseline. We will continue to explore the possibility of increasing
efforts for these measures in the future.
In terms of financial impact, to achieve the above resources efficiency and emission
targets, initial investments in energy-efficient technologies, renewable energy sources,
water-saving systems, adoption of electric vehicles or the purchase of carbon offsets will be
required.
In terms of operational impact, the achievement of the targets will require changes to
existing processes, staff training, and the adoption of new technologies. The Group will need
to establish clear guidelines, monitoring systems, and reporting mechanisms to track progress
towards the targets and ensure continuous improvement. Staff training and awareness programs
will be crucial in promoting energy and water-saving behaviours and best practices.
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Hazardous Waste Production of Our Hospitals
The following table sets forth a breakdown of our hazardous waste production during the
Track Record Period. We believe that the fluctuation of our waste production during the Track
Record Period was within reasonable range.
Y ears Ended December 31,
Six months
ended
30 June,
Unit 2022 2023 2024 2025
Total Hazardous
Waste* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tonnes 585 585 600 312
Note:
* The hazardous waste generated by our Group mainly includes medical waste and chemical waste (e.g.,
waste liquids and empty reagent bottles generated from laboratory experiments). During the Track
Record Period, our hazardous waste production increased from 585 tonnes in 2022 and 2023 to 600
tonnes in 2024, which was generally in line with the organic growth of our business as a result of the
combined effects of, among others, the increased patient visits and the increased number of surgeries
we performed during the Track Record Period, despite the slight decreases in revenue and cost of
revenue as a result of the DRG payment system.
Gender Ratio & Turnover Rate
The following table sets forth a breakdown of our workforce-related data during the Track
Record Period, we believe that the fluctuation was within reasonable range, considering our
operations and performance:
As of December 31,
Six months
ended
30 June,
Unit 2022 2023 2024 2025
Gender Ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118Male % 27 27 27 27
Female % 73 73 73 73
For the Y ears Ended December 31,
Six months
ended
30 June,
Unit 2022 2023 2024 2025
Turnover Rate* /H1118/H1118/H1118/H1118/H1118% 1 9 1 674
Note:
* Our turnover rate decreased during the Track Record Period was mainly due to our implementation of
various staff welfare and benefits. Furthermore, the status of our Nanjing BenQ Hospital being a Grade
A Class III hospital since 2022 and Suzhou BenQ Hospital being a Class III general hospital since 2023
further enabled us to retain our talents.
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ESG Performance Compared With Peer Companies
The Group Performance Peers Performance in 2023 (1)
Y ears Ended December 31,
Six months
ended
30 June,
ESG Key Performance
Indicators (2) Unit 2022 2023 2024 2025 Minimum Maximum Average
Purchased Electricity
Consumption
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
MWh/
sq.m. 0.11 0.11 0.13 0.05 0.08 1.36 0.32
Water Consumption
Intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Tonnes/
sq.m. 1.53 1.92 2.01 0.83 1.28 11.54 3.76
GHG Emission
Intensity
(Scop e1&2 ) /H1118/H1118/H1118/H1118
tCO
2e/
sq.m. 0.08 0.09 0.09 0.04 0.06 0.90 0.26
Turnover Rate /H1118/H1118/H1118/H1118/H1118% 1 9 1 6 744 2 2 1 1
Notes:
(1) We selected six companies as peers for our comparative analysis. Our selection criteria for peer
companies include: (i) it was a company listed on the Stock Exchange Hong Kong as of December 31,
2024, and (ii) its main business covers hospital operation, which is comparable to our business coverage.
(2) To more accurately and fairly measure the performance of our ESG metrics with other industry players,
we adopted the intensity of each environmental performance indicator, which measures the amount of
emission or consumption for each sq.m. of gross floor area during the Track Record Period. We believe
this avoids the situation where a peer company’s certain ESG metric may appear exceptionally large or
small primarily as a result of the scale of its business operation.
Based on the table above, our key ESG performance indicators were well within the range
among our industry peers.
The Group was not in violation of any applicable environmental laws and regulations that
could materially and adversely affect our business operations and prospects during the Track
Record Period and up to the Latest Practicable Date.
Charity Work and Social Contribution
Since its inception of operation in 2008, Nanjing BenQ Hospital has been forming
volunteer teams to assist in treatment processes such as patient admission, as well as
recreational activities such as piano playing. As of December 31, 2024, such volunteer team
had a total of more than 2,000 registered volunteers, and achieved an average of over 8,000
hours of volunteer service per year. Among members of the volunteer team, a number of
volunteers have shown long-term commitment and have been serving for more than 10 years.
Nanjing BenQ Hospital also calls on medical interns, hospital staff and their family members
to participate in volunteer activities, and has cooperated with the local Home for the Disabled
to provide volunteering opportunities for the mentally challenged population, so as to enhance
their contact with the society and their sense of self-worth.
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Nanjing BenQ Hospital provides three levels of training for volunteers on a regular basis,
including (i) basic hospital culture, volunteer service skills, and firefighting training; (ii)
service training, which includes training in service etiquette, service skills, and knowledge of
the overall layout of the hospital; as well as (iii) other value-added training, such as event
photography skills, press release writing, hospice visiting skills, and other trainings based on
the specific needs of the volunteers.
In addition, we have established a medical social worker team since 2020. For terminal
patients, social workers accompany doctors during ward check-in, observe their psycho-social
status and improve their well-being at the end of life, and intervene in a timely manner by using
methods such as life review ( ͛նΫᚥ) and grief counseling ( ేෆႾኬ) if needed. Medical
social workers also identify patients with financial difficulties and organize fund-raising, apply
for financial assistance, provide psychological counseling to them and their families, as well
as contact community social workers to provide supportive services to their families.
During the COVID-19 pandemic, our volunteer services also included helping medical
workers by organizing recreational activities to boost their morale and improve their mental
health. We also provide psychology-related popularization to medical professionals from time
to time to improve their mental well-being. For instance, in the past, we have provided
community clinics on World Heart Day, World Diabetes Day and other specific holidays.
We have also cooperated with social welfare organizations to carry out the “Ding Ai
Angel” Cleft Lip and Palate Children’s Public Welfare Assistance Program (“ ཻฌ˂Դ”㓈൓
Յഁʮूહпධͦ) and the “Su Shan — Yi Xin Yi Yi” Public Welfare Program (“ ᘽഛूːᔼ
จ”ɽषᔼᐕહпʮूධͦ) to provide medical assistance for major illnesses. As of December
31, 2024, we have accumulatively provided public-welfare surgical assistance for over 400
individuals and health screenings for over 1,500 individuals through the “Su Shan — Yi Xin
Yi Yi” Public Welfare Program.
LICENSES, PERMITS AND CERTIFICATES
We operate in a heavily regulated industry in the PRC. As a result, we are required to
obtain various licenses, permits, approvals and certificates for our operations. For more
information, see “Regulatory Overview” in this prospectus. As advised by our PRC Legal
Advisor, we have obtained all material licenses, approvals, certificates and permits for our
business operations and we were not in violation of any relevant PRC laws and regulations in
relation to our business operations that could materially and adversely affect our business
operations and prospects during the Track Record Period and up to the Latest Practicable Date.
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The following table sets forth the major licenses, certificates and permits that are
necessary for the operation of our hospitals as at the Latest Practicable Date:
License Hospital Effective Date Expiration Date
Medical Institution
Practicing License ( ᔼᐕ
ዚ࿴ੂุ஢̙ᗇ) /H1118/H1118/H1118/H1118/H1118/H1118
Nanjing BenQ Hospital July 5, 2024 December 27,
2027
Medical Institution
Practicing License ( ᔼᐕ
ዚ࿴ੂุ஢̙ᗇ) /H1118/H1118/H1118/H1118/H1118/H1118
Suzhou BenQ Hospital November 15,
2022
November 14,
2027
In addition to the above licenses, we have also obtained other licenses relevant to our
business operations, such as Narcotic Drugs, Psychotropic Substances of Class I Purchase Seal
Card, License for Providing Technical Healthcare Services to Mothers and Infants, License for
Radiotherapy, Radiopharmaceutical Use License and Radiation Safety License.
We intend to apply for renewal of our key licenses and permits, the procedures for which
is expected to be initiated timely prior to their respective expiration date. The successful
renewal of our existing licenses, permits and approvals will be subject to our fulfillment of
relevant requirements. As of the Latest Practicable Date, our Directors were not aware of any
reason that would cause or lead to the non-renewal of our existing licenses, permits and
approvals. Our PRC Legal Advisor confirmed that, as of the Latest Practicable Date, there was
no substantial legal impediment for us to renew our existing licenses, permits and certificates
as long as we would comply with the relevant legal and regulatory requirements.
COMPLIANCE AND LEGAL PROCEEDINGS
Compliance
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any non-compliance that, in the opinion of our Directors, is likely to have a material
adverse effect on our business, financial condition or results of operations. As confirmed by our
PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we
were not in violation of any applicable PRC laws and regulations that would have a material
adverse effect on our business, financial condition or result of operations.
Medical Disputes and Legal Proceedings
We are subject to legal proceedings, disputes and claims that arise in the ordinary course
of business, which primarily included medical disputes brought by patients and/or their
families against our hospitals. These medical disputes are primarily related to complications
and physical injuries that the patients claim to have suffered during or after receiving
healthcare services at our hospitals. Due to the nature of the healthcare industry and the
inherent risks in treating patients, especially patients with complex medical conditions
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requiring intensive care or high-risk clinical procedures, we are exposed to risks of medical
disputes (including medical malpractice claims) that we cannot entirely eliminate. See “Risk
Factors — Risks Relating to Our Business and Industry — We are exposed to inherent risks of
medical disputes, including medical malpractice claims, and legal proceedings arising from our
operations, and resolving such disputes and proceedings could result in further costs and harm
to our reputation, and materially and adversely affect our results of operations and prospects”
in this prospectus.
Our clinical protocols mandate our healthcare professionals to fully inform our patients
of any known inherent risks and obtain their signed consents before conducting the relevant
treatments and procedures. One of the key objectives of our clinical governance is the early
identification, analysis and learning of all medical disputes. See “— Quality Control, Clinical
Governance and Risk Management” for further details. Medical disputes may generally be
resolved through judicial, administrative or mediation proceedings or through private
negotiation and settlement. We maintain records of all medical disputes, procedures taken,
findings, and resolution proceedings.
During the Track Record Period and up to the Latest Practicable Date, we were not
involved in any litigation or arbitration proceedings pending or, to our knowledge, threatened
against us or our Directors that could have a material adverse effect on our business, financial
condition or results of operations. The aggregate amount of monetary compensation and
waived treatment fees for settling medical disputes with patients and/or their families during
the Track Record Period and up to the Latest Practicable Date totaled approximately RMB20.2
million.
Most of the medical disputes with our patients and/or their families were settled through
direct negotiations. However, they may choose to seek claims against us through legal
proceedings if initial negotiation to reach a settlement fails. During the Track Record Period
and up to the Latest Practicable Date, we had a total of 303 medical disputes at our hospitals
that have resulted in or are likely to result in monetary compensation to and/or waived
treatment fees for our patients and/or their families, regardless of whether such medical
disputes had been resolved or were undergoing direct negotiations or legal proceedings.
Specifically,
 In terms of status, the majority of these 303 medical disputes have been fully settled
with immaterial compensation and/or waivers of treatment fees. As of the Latest
Practicable Date, 86 out of the 303 medical disputes remained unresolved and were
likely to result in monetary compensation to be paid by us and/or treatment fees to
be waived by us.
 In terms of monetary amount, where the disputed amount is determined, 31 out of
the 303 medical disputes had a claimed, court-awarded or compensated amount
exceeding RMB300,000 for each dispute. As of the Latest Practicable Date, five out
of these 31 medical disputes remained unresolved.
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 In terms of patient fatality, 63 out of the 303 medical disputes involved patient
fatalities. As of the Latest Practicable Date, ten out of the 63 cases remained
unresolved, among which, two cases had a claimed amount exceeding RMB300,000.
Given that the hospital industry bears inherent risks in treating patients, patient
fatalities may occur from time to time due to various complex reasons, such as the
old age of particular patients, and the severity of the diseases afflicting particular
patients. As such, patient fatalities are not necessarily indicative of any fault or
negligence on the part of the hospital or the healthcare professionals providing
treatment.
 In terms of medical malpractice, three out of the 303 medical disputes involved
medical malpractice appraised by professional medical associations supervised by
relevant health administrative authorities. As of the Latest Practicable Date, one out
of these three cases remained unresolved. As of the Latest Practicable Date, save for
the three cases in “— Medical Malpractice” below, none of these cases involved any
determination by professional medical association supervised by relevant health
administrative authorities that any of these medical disputes was a medical
malpractice, and none of our doctors or medical staff were involved in any material
disciplinary proceedings initiated by the relevant authorities due to medical
malpractice as determined by professional medical association supervised by
relevant health administrative authorities.
Medical Disputes by Status
As of the Latest Practicable Date, 86 out of the 303 medical disputes remained unresolved
and were likely to result in monetary compensation to be paid by us and/or treatment fees to
be waived by us, 12 of which were undergoing litigations initiated by our patients and/or their
families. As of the Latest Practicable Date, all these 12 ongoing litigations were under or
pending review by the trial courts. Among the 86 medical disputes, where the disputed amount
is determined, five had a claimed amount exceeding RMB300,000 for each dispute. For details
of these five cases, see the table below under “— Medical Disputes by Monetary Amount” in
this section.
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Our PRC Legal Advisor is of the view that, for these 86 unresolved medical disputes, the
total sum of compensation and other expenses already incurred, as sought by patients, their
families, or determined by trial court, stands at approximately RMB4.2 million, which is
subject to change as the claimed compensation amounts in certain cases are pending further
negotiations with the patients and/or judicial appraisal results*, and the rulings of certain cases
are pending review by the appellate courts. Our PRC Legal Advisor further confirms that, as
of the Latest Practicable Date, (i) save for the three cases in “— Medical Malpractice” below,
none of these cases involved any determination by professional medical association supervised
by relevant health administrative authorities that any of these medical disputes was a medical
malpractice; (ii) none of our doctors or medical staff were involved in any disciplinary
proceedings initiated by the relevant authorities due to medical malpractice as determined by
professional medical association supervised by relevant health administrative authorities in
these cases; and (iii) we were not involved in any material administrative penalty from any
PRC regulatory authorities due to our medical disputes arisen during the Track Record Period
and up to the Latest Practicable Date. Based on the above and as disclosed, as well as our past
experience in handling medical disputes, our Directors are of the view that the unresolved
medical disputes, collectively or individually, would not have any material adverse effect on
our business, financial condition or results of operations.
Medical Disputes by Monetary Amount
During the Track Record Period and up to the Latest Practicable Date, among the 303
medical disputes, where the disputed amount is determined, 31 medical disputes had a claimed,
court-awarded or compensated amount exceeding RMB300,000 for each dispute (the total paid
compensation and waived treatment fees of which, being RMB12.9 million, represent
approximately 61.7% of the total paid compensation and waived treatment fees of RMB20.2
million during the Track Record Period and up to the Latest Practicable Date, demonstrating
that the RMB300,000 monetary threshold captures cases that account for a material portion of
the financial impact). As of the Latest Practicable Date, 26 out of the 31 medical disputes
(where the disputed amount is determined) had been completely resolved, and the remaining
five medical disputes remained unsolved.
Note:
* According to the General Provisions on the Judicial Appraisal Procedure and other relevant PRC laws and
regulations, judicial appraisal refers to the activity where appraisers use science, technology and/ or
specialized knowledge to identify and assess special issues in litigation, and provide expert opinions.
According to the Civil Procedure Law of the People’s Republic of China and other relevant PRC laws and
regulations, a party may apply to the court for the appraisal of a specialized issue to verify certain facts. The
court may also initiate an appraisal if it deems it necessary to examine a specialized issue.
In medical disputes, according to the Interpretations of the Supreme People’s Court on Several Issues
Concerning the Application of Law in Hearing Cases Involving Disputes over the Liability for Medical
Damage , where a patient is unable to provide evidence of fault by the medical institution or relevant medical
staff, or evidence of causation between treatment and injury, the patient may request appraisal of medical
injury, which the court should permit.
Appraisal opinions shall be reviewed by the court and examined by the parties. Once verified by the court and
accepted by the parties, the court may use such appraisal opinion as a basis for ascertaining facts. However,
judicial appraisal results are subject to challenges or supplements by additional evidence or counter-appraisals.
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For the five ongoing medical disputes where the disputed amount is determined and each
had a claimed, court-awarded or compensated amount exceeding RMB300,000, see below table
for details.
No.
Hospital
Involved
Time of
Incident Nature of Incident
Approximate
Monetary
Exposure (1)
Disciplinary
and/or Remedial
Actions (2)
(RMB)
1 /H1118/H1118Nanjing BenQ
Hospital
From March to
August 2024
The patient underwent surgery for
intestinal obstruction and appendicitis
at a third-party hospital in March 2024.
The patient was subsequently admitted
to our hospital three times for
rehabilitation treatment from March to
August 2024. In September 2024, the
patient was diagnosed with a tumor at
a third-party hospital and died in
November 2024 due to a malignant
tumor.
1.5 million
(undetermined)
(3)
Under review by
the trial court
The patient’s family initiated litigation
against our hospital and two other
third-party hospitals in August 2025,
claiming that the hospital’s failure to
detect the tumor resulted in a delay in
the patient’s treatment.
2 /H1118/H1118Suzhou BenQ
Hospital
From November
2022 to
January 2023
The patient was admitted to our hospital
due to intestinal obstruction. The
patient underwent a surgery and later
died.
0.5 million Substantive court
proceedings
completed and
pending
judgment of the
trial courtThe patient’s family initiated a litigation
against the hospital in December 2023.
Substantive court proceedings of this
case have been completed and the
matter is pending judgment by the trial
court.
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No.
Hospital
Involved
Time of
Incident Nature of Incident
Approximate
Monetary
Exposure (1)
Disciplinary
and/or Remedial
Actions (2)
(RMB)
In June 2025, the Jiangsu Provincial
Medical Association issued a technical
appraisal in relation to the relevant
incident
(3), upholding the opinion of
the Suzhou Medical Association in
April 2024, that (i) the incident
constituted a Class 1(A) medical
malpractice due to the death of patient;
(ii) the primary cause of the incident
was the patient’s underlying medical
conditions, advanced age, and overall
health status, and (iii) Suzhou BenQ
Hospital bore only secondary liability
(ப΂) for the incident due to its
deficiencies related to the assessment
of the patient’s condition,
communication of alternative treatment
options, and the selection of treatment
options. See case No.3 in “— Medical
Malpractice.”
3 /H1118/H1118Suzhou BenQ
Hospital
From September
to October
2022
The patient was admitted to our hospital
in September 2022 due to mediastinal
mass and underwent surgery in October
2022. The patient was later sent to a
third-party hospital for further
treatment, where the patient was
informed that her mediastinal mass had
not been completely resected.
The patient initiated a litigation against
the hospital in March 2024, claiming
that the surgery was not successful.
The case is currently under review by
the trial court.
0.3 million Under review by
the trial court
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No.
Hospital
Involved
Time of
Incident Nature of Incident
Approximate
Monetary
Exposure (1)
Disciplinary
and/or Remedial
Actions (2)
(RMB)
4 /H1118/H1118Suzhou BenQ
Hospital
December 2024 The patient was diagnosed with leg
thrombosis during a medical
consultation and later claimed that the
doctor’s treatment considerations
caused psychological distress. The
patient is demanding compensation of
RMB300,000. The case is currently
under private negotiation between the
parties.
0.3 million Under private
negotiation
5 /H1118/H1118Suzhou BenQ
Hospital
From August to
December
2021
The patient was diagnosed with
adenomyosis at our hospital in August
2021. The patient was admitted for
surgery in December 2021, and was
subsequently discharged later that
month. After discharge, the patient was
diagnosed with abdominal burns and
infection at a third-party hospital in
January 2022.
In September 2025, the patient initiated
litigation against our hospital, claiming
that the surgery was not successful and
that injuries were caused by our fault.
0.6 million Under review by
the trial court
Notes:
(1) Refers to the amount claimed by the patient(s) and/or their family member(s).
(2) Currently, we cannot anticipate when the trial courts will render their judgments. According to the
relevant PRC laws and regulations, civil cases adjudicated by trial court under ordinary procedure shall
be concluded within six months from the date such case is filed with the court. Such period may be
extended by six months upon approval by the president of the trial court, and further by three months
upon additional approval from a superior court. However, periods of certain proceedings shall be
excluded from the calculation of the statutory trial period, including the periods of public
announcement, judicial appraisal, private negotiation between parties, examination of jurisdictional
objections raised by parties, and resolution of jurisdictional disputes between courts. As the duration of
these proceedings may vary significantly depending on the specific circumstances of each case and its
adjudication process, no conclusion can be made as to the longest period for trial courts to render their
judgments. Nevertheless, we will actively respond to the requirements of the trial courts so as to settle
these disputes in an effective manner.
(3) The total amount of RMB1.5 million is claimed against Nanjing BenQ Hospital and two other
third-party hospitals, with the amount attributable to Nanjing BenQ Hospital undetermined.
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(4) According to the Interim Measures for the Technical Identification of Medical Malpractice (݂
جsecondary liability (ப΂) refers to situations where the harm resulting from a
medical incident is primarily caused by other factors.
According to confirmation by the Suzhou New District (Huqiu District) Health Supervision Office ( ᘽ
ψ৷อਜ(˳ਜ)הthe “Office”), our PRC Legal Adviser is of the view that (i) the
determination of secondary liability (ப΂) in relation to the medical malpractice does not
constitute a serious circumstance of medical malpractice and will not have any criminal implications;
(ii) no material administrative penalties will be imposed by the Office on Suzhou BenQ Hospital which
may adversely affect Suzhou BenQ Hospital’s business operations, such as suspension of business or
revocation of medical institution practice license; and (iii) Suzhou BenQ Hospital is not currently
involved in any medical disputes requiring technical appraisals of medical malpractice other than the
incident. As further advised by our PRC Legal Adviser, the confirmations were issued by a competent
authority to conduct law enforcement activities relating to medical and healthcare services within the
administrative region where Suzhou BenQ Hospital is located, namely the Office, as entrusted by the
Suzhou New District (Huqiu District) Social Affairs Bureau ( ᘽψ৷อਜ(˳ਜ)ึԫุ҅). On this
basis and having considered our PRC Legal Advisor’s advice, our Directors believe that the likelihood
of the Suzhou BenQ Hospital being subject to material administrative penalties which may adversely
affect our business operations solely due to the abovementioned incident is minimal.
As of the Latest Practicable Date, we had not been subject to any administrative penalties in connection
with the incident, nor had any material provision been made in respect of the incident. Considering the
total claimed amount, our Directors are of the view that the incident has not had, and is not expected
to have, any material adverse impact on our Group’s business operations or financial position.
Medical Malpractice
During the Track Record Period and up to the Latest Practicable Date, among the 303
medical disputes, three medical disputes involved medical malpractice appraised by
professional medical associations supervised by relevant health administrative authorities, see
below table for details.
No. Hospital Time of Incident Nature of Incident Appraisal Result Status Administrative penalty
1/H1118/H1118Nanjing
BenQ
Hospital
From
September
2023 to
May 2024
The patient was
admitted to the
intensive care unit in
September 2023 due
to malnutrition,
somnolence, and
general weakness,
and was hospitalized
until death in May
2024
In December 2024, the Nanjing
Medical Association initially
determined that the case did not
constitute medical malpractice.
In March 2025, the Jiangsu
Provincial Medical Association
reappraised and determined that
(i) the incident constituted a
Class 1(A) medical malpractice
given patient fatality; (ii) the
primary cause of death was
attributed to complications
including infection and multiple
organ failure; and (iii) Nanjing
BenQ Hospital bore minor
responsibility ( Ⴠฆப΂)a s
there was a delay in diagnosing
certain conditions
Settled and resolved
with the patient’s
family after Nanjing
BenQ Hospital paid
compensation and
waived medical
expenses amounting
to approximately
RMB259,000 in
August 2025
In September 2025,
Nanjing BenQ
Hospital received an
administrative
penalty of warning
from the Nanjing
Municipal Health
Commission, as the
final penalty, without
pecuniary penalty
imposed and the case
is not expected to
result in any further
administrative
penalties
(Note)
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No. Hospital Time of Incident Nature of Incident Appraisal Result Status Administrative penalty
2/H1118/H1118Nanjing
BenQ
Hospital
February
2025
A qualified dentist
mistakenly extracted
the wrong tooth of a
patient when the
dentist performed a
dental procedure
In August 2025, the Nanjing
Medical Association issued a
technical appraisal which
determined that (i) the incident
constituted a Class 4 medical
malpractice; and (ii) Nanjing
BenQ Hospital bore full
responsibility
Settled and resolved
with the patient after
Nanjing BenQ
Hospital paid
compensation
amounting to
approximately
RMB82,000 in
October 2025
In November 2025,
Nanjing BenQ
Hospital received an
administrative
penalty of warning
from the Nanjing
Municipal Health
Commission, as the
final penalty, without
pecuniary penalty
imposed and the case
is not expected to
result in any further
administrative
penalties
(Note)
3/H1118/H1118Suzhou
BenQ
Hospital
From
November
2022 to
January
2023
The patient was
admitted to our
hospital due to
intestinal obstruction.
The patient
underwent a surgery
and later died. See
case No.2 in “–
Medical Disputes by
Monetary Amount”
In June 2025, the Jiangsu
Provincial Medical Association
issued a technical appraisal,
upholding the opinion of the
Suzhou Medical Association in
April 2024, that (i) the incident
constituted a Class 1(A) medical
malpractice given patient
fatality; (ii) the primary cause of
the incident was the patient’s
underlying medical conditions,
advanced age, and overall health
status, and (iii) Suzhou BenQ
Hospital bore only secondary
liability (ப΂) for the
incident due to its deficiencies
related to the assessment of the
patient’s condition,
communication of alternative
treatment options, and the
selection of treatment options
Substantive court
proceedings
completed and
pending judgment of
the trial court
As of the Latest
Practicable Date, we
had not been subject
to any administrative
penalties in
connection with the
incident
Note: Based on a consultation conducted with Nanjing Health Commission, which, as advised by our PRC Legal
Advisor, is the competent authority regarding the administrative management of medical malpractice cases,
each administrative penalty of warning received in connection with cases No. 1 and 2 is final. As such, our
PRC Legal Advisor is of the view that these two cases are not expected to result in any further administrative
penalties.
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To alleviate the risk for recurrence of similar incidents, medical disputes and medical
malpractice in the future, we have implemented enhanced internal control measures, including
(i) improving patient flow and care coordination across the wards; (ii) conducting regular
training for medical staff to reinforce professional standards; (iii) enhancing the real-time
incident reporting and monitoring system to promptly identify and address potential risks; (iv)
optimizing dispute resolution processes, engaging dedicated expert teams to develop effective
solutions, and conducting post-resolution case studies; and (v) strengthening the dedicated risk
management team responsible for periodic audits and continuous improvement of our services.
Our Directors are of the view that none of the medical disputes that we experienced
during the Track Record Period and up to the Latest Practicable Date (including the above (i)
31 medical disputes, where the disputed amount is determined and each had a claimed,
court-awarded or compensated amount exceeding RMB300,000, and (ii) three medical disputes
involving determinations of medical malpractice), individually or collectively, had or would
have any material adverse effect on our Group’s business operations, financial conditions, and
proposed Listing on the Stock Exchange. The reasons are as follows:
 In terms of the 26 resolved medical disputes (where the disputed amount is
determined and each had a claimed, court-awarded or compensated amount
exceeding RMB300,000), the aggregate amount of monetary compensation and
waived treatment fees for settling these medical disputes with patients and/or their
families was RMB12.9 million, representing only 0.5% of our total revenue in 2024.
 In terms of the five on-going medical disputes (where the disputed amount is
determined and each had a claimed, court-awarded or compensated amount
exceeding RMB300,000), the approximate monetary exposure were estimated solely
based on the amounts claimed by the patients and/or their families. Based on our
experience, the actual amount of monetary compensation and/or waived treatment
fees is likely to be much lower than the claimed amount, as we may be held by the
judicial authorities to have less liability, or even no liability at all, in these cases.
Even in the worst-case scenario, assuming that we are held liable for the claimed
amounts in these five on-going medical disputes, the maximum monetary exposure
for these five medical disputes would be a total of RMB3.2 million, representing
only 0.1% of our total revenue in 2024.
 In terms of cases No.1 and 2 in “— Medical Malpractice”, both cases have been
concluded and resolved and will not have any material impact on our ongoing
medical practice, business operations or financial positions, nor did they result in
any material administrative penalty. As advised by our PRC Legal Advisor, each the
administrative penalty of warning imposed in connection with these two cases does
not constitute material administrative penalty, and is final and not expected to result
in any further administrative penalties regarding these two cases. In terms of case
No.3 in “— Medical Malpractice”, according to confirmation by the Office and
having considered our PRC Legal Advisor’s advice, (i) we only bore secondary
liability (ப΂), which does not constitute a serious circumstance of medical
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malpractice and carries no criminal implications; and (ii) the likelihood of Suzhou
BenQ Hospital being subject to any material administrative penalty that may
adversely affect our business operations solely as a result of this case is minimal.
 As advised by our PRC Legal Advisor, as of the Latest Practicable Date, (i) save for
the three cases in “— Medical Malpractice” above, none of our medical disputes
initiated during the Track Record Period and up to the Latest Practicable Date
involved any determination by professional medical association supervised by
relevant health administrative authorities that any of these medical disputes was a
medical malpractice; (ii) none of our doctors or medical staff were involved in any
material disciplinary proceedings initiated by the relevant authorities due to medical
malpractice as determined by professional medical association supervised by
relevant health administrative authorities which is likely to have a material adverse
effect on our business, financial condition or results of operations; and (iii) we were
not involved in any material administrative penalty from any PRC regulatory
authorities due to our medical disputes arisen during the Track Record Period and
up to the Latest Practicable Date.
 As advised by Frost & Sullivan, modern healthcare is a complex business with
inherent risks in treating patients, and hospitals are exposed to risks of medical
disputes that cannot be entirely eliminated. Taking into account the nature of these
31 medical disputes and that of the medical disputes commonly arisen in the PRC
hospital industry, Frost & Sullivan confirms that medical disputes of similar nature
are considered to be common in the PRC hospital industry.
Our medical liability insurance programs also play a role in medical dispute resolution.
While such programs provide financial coverage for medical disputes, the insurers may
influence or offer recommendations regarding the resolution strategies, such as settlement
negotiations or litigation, depending on the terms of the insurance policies. Insurers under our
medical liability insurance programs actively participate in dispute resolution by providing
financial coverage, offering settlement or litigation recommendations, managing claims, and
supporting risk mitigation to protect both the company and its medical staff.
Having taken into account the factors above and views of the Directors, PRC Legal
Advisor and Frost & Sullivan, nothing has come to the Joint Sponsors’ attention that would
reasonably cause them to cast doubt on the Directors’ views above in any material respect.
As of the Latest Practicable Date, both of our Nanjing BenQ Hospital and Suzhou BenQ
Hospital had enrolled in medical liability insurance programs. For more details on our medical
liability insurance programs, see “— Insurance” in this section.
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REGULATIONS ON THE REFORM OF MEDICAL INSTITUTIONS
Opinions of the Central Committee of the Communist Party (the “CPC Central
Committee”) and the State Council on Deepening the Reform of the Medical and
Healthcare System
The Opinions of the CPC Central Committee and the State Council on Deepening the
Reform of the Medicine and Healthcare Systems (ଉʷᔼᖹሊ͛᜗Փ
จԈ) (the “ Opinions ”), which were promulgated by the CPC Central Committee and
the State Council on March 17, 2009, advocate a range of measures to reform medical
institutions in the PRC and to establish a basic healthcare system covering urban and rural
residents. The Opinions encourage private capital to invest in medical institutions (including
investments by foreign investors), the development of private medical institutions and the
reform of public medical institutions (including those established by state-owned enterprises)
through private capital investment.
Several Opinions on Promoting the Development of Healthcare Service Industry
Several Opinions on Promoting the Development of Healthcare Service Industry ( ਷ਕ
ʍจԈ) (the “ 2013 Opinions ”) was promulgated by the
State Council on September 28, 2013. The 2013 Opinions encourages the private sector to
invest in the healthcare service industry by various means including new establishment of the
non-profit medical institutions (the “ NMIs ”) and provision of basic medicine and health
services with social capitals. The 2013 Opinions proposes to take measures to further relax the
limitations for establishing hospitals based on Sino-foreign joint venture and cooperation, and
gradually expand the pilot project for qualified foreign capital to set up wholly foreign-owned
medical institutions.
Decision on Several Important Issues relating to Promoting Overall Reform
The Decision on Several Important Issues relating to Promoting Overall Reform ( ʕ΍
), which was promulgated by the Central
Committee of the Communist Party of China on November 12, 2013, encourages private
investors to invest in ill-funded and diversification-required service industries and also permits
physicians to practice in multiple locations, and allows private invested medical institutions to
be included in the medical insurance system.
Opinions on Accelerating the Development of Setup Medical Institutions by Social
Capitals
Opinions on Accelerating the Development of Setup Medical Institutions by Social
Capitals (ʍจԈ), which was promulgated by the NHFPC and
the Nation Administration of Traditional Chinese Medicine (the “ NATCM”) on December 30,
2013, stipulate the policies to support the development of private-invested healthcare
institutions, including but not limited to the (1) gradual relaxation of investment in healthcare
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institutions by foreign capital; (2) relaxation of requirements for service sectors, allowing
social capital’s investment in the areas which are not explicitly prohibited; (3) relaxation of
requirements for the deployment and use of large-scale medical equipment in private hospitals;
(4) improvement of supporting policies for the development of private hospitals in aspects such
as medical insurance and price control; and (5) acceleration of the approval procedures
regarding the establishment and operation of private hospitals.
Opinions on Encouraging Social Forces to Provide Multi-layered and Diverse Healthcare
Services
Opinions on Encouraging Social Forces to Provide Multi-layered and Diverse Healthcare
Services (จԈ), which was promulgated
by the General Office of the State Council on May 16, 2017, stipulates the policies to actively
support social forces to go deep into the niche service market, such as specialized medical
services, expand the effective supply of services, and foster professionalized advantages.
Several competitive branded service agencies will be formed at a rapid pace for such
specialties including but not limited to oncology.
Opinion on Promoting the Sustainable, Healthy and Regulated Development of Private
Medical Institutions
The Opinion on Promoting the Sustainable, Healthy and Regulated Development of
Private Medical Institutions (จԈ), which was
promulgated by the NHC and other departments on June 10, 2019, provides that the PRC
government aims to increase support to private medical institutions, including but not limited
to expanding the development space and land supply, promoting the government procurement
of services, implementing preferential tax policies, improving the efficiency of access
approval, as well as further relaxing planning restrictions.
Opinions on Deepening the Reform of the Medical Insurance System
In order to solve the problem of unbalanced and insufficient growth of medical insurance,
the CPC Central Committee and the State Council promulgated the Opinions on Deepening the
Reform of the Medical Insurance System (ٙࠧ
จԈ) (the “ Medical Insurance System Opinions ”) on February 25, 2020, the main opinions
of which are as follows: (1) improve the treatment guarantee mechanism; (2) establish the
robust and sustainable financing operation mechanism; (3) establish the feasible and efficient
medical insurance payment mechanism; and (4) build the rigorous fund supervision
mechanism. Based on the main opinions, the Medical Insurance System Opinions mainly target
on providing better guarantee for universal medical services.
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Opinion on Innovating the Investment and Financing Mechanisms in Key Areas and
Encouraging Social Investment
The Opinion on Innovating the Investment and Financing Mechanisms in Key Areas and
Encouraging Social Investment (ኬ
จԈ) (the “ 2014 Opinion ”), which was promulgated on November 16, 2014 by the State
Council, encourages the investment of social capital in certain key sectors. The 2014 Opinion
stipulates that the PRC government will continue to (i) promote the restructuring of eligible
public medical institutions with the participation of social capital; (ii) encourage social
capital’s participation in healthcare sector by means such as sole proprietorship, joint ventures,
cooperative ventures, joint operation and leasing; (iii) improve the implementation of
preferential tax policies on not-for-profit medical institutions and the exemption policies of
administrative and institutional fees on the constructions of not-for-profit, and half exemption
policies for for-profit medical institutions; and (iv) implement the same price policy with
regard to the utilization of electricity, water, gas and heat by both public and private medical
institutions, and relax the price control over the services provided by the private medical
institutions.
The Notice on Printing Guiding Principles for the Allocation Planning of Medical
Institutions (2021-2025)
The Notice on Printing Guiding Principles for the Allocation Planning of Medical
Institutions (2021-2025) (ۆࡡ2021-2025 ϋ)), which was
promulgated by the NHC on January 12, 2022, encourages the establishment of medical
institutions by social capital and stipulates no planning restrictions on the total number and
space for establishment of medical institution with social capital.
Notice on Printing and Distributing the Outline of the National Medical and Healthcare
Service System Plan (2015-2020)
The Outline of the National Medical and Healthcare Service System Plan (2015-2020)
(ࠅ2015-2020 ϋ)), which was promulgated by the General
Office of the State Council on March 6, 2015, stipulates that private medical institutions are
significant and integral parts of the medical and healthcare service system as well as an
effective approach to fulfilling people’s multi-level and diversified medical and healthcare
service needs. Private medical institutions may provide high-end services to fulfill extra needs
which are beyond basic needs. The pilot scheme of establishment of medical institutions solely
invested by qualified overseas capitals shall be expanded step by step. The restrictions on
service scope shall also be reduced and the social capitals shall be allowed to invest in areas
not explicitly prohibited by the laws and regulations.
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The Notice on Printing “14th Five-Y ear Plan” of the Jiangsu Provincial Medical and
Health Service System
The “14th Five-Y ear Plan” of the Jiangsu Provincial Medical and Health Service System
(ਕ᜗ӻ஝ྌ), which was promulgated by the Jiangsu Provincial
Development and Reform Commission and Health Commission of Jiangsu Province on
December 31, 2021, encourage high-level private hospitals that meet the conditions to create
a group of competitive brand service institutions across regions, and orderly carry out
cutting-edge medical services. The cooperation between social medical institutions and public
medical institutions in various forms such as medical services, subject construction, and talent
cultivation would be supported and further standardized. Private hospitals can voluntarily join
urban medical groups and county-level medical communities led by public hospitals, and
private hospitals with strong comprehensive or specialized capabilities can also take the lead
in forming. Private hospitals are supported in strengthening the construction of key specialties,
public and private hospitals are supported to form specialty alliances based on the principle of
equality and voluntariness, and encouraged to participate in public health construction, play a
role in responding to infectious disease pandemics and sudden public health events, and be
included in the infectious disease prevention and control and medical treatment system in
accordance with the law.
Key Points for Correcting Unethical Practices in the Medical Purchase and Sales Field
and Medical Services in 2024
On May 17, 2024, 14 governmental authorities including the NHC jointly issued the Key
Points for Correcting Unethical Practices in the Medical Purchase and Sales Field and Medical
Services in 2024 ( 2024ᓃ) (the “ 2024
Key Points ”), which strengthens investigations of all forms of bribery committed in the
pharmaceutical and medical services industry. The 2024 Key Points require to improve the
management of medical institutions in using selected drugs and medical consumables, focus on
combating illegal activities that drive up drug prices, disrupt the order of drug distribution, and
commercial bribery violations in the pharmaceutical field, and optimize internal management,
standardize business service behaviors, and establish and improve internal control systems to
effectively prevent and control internal operational risks, improve and implement core medical
systems to ensure reasonable examinations, medications, treatments, and standardized charges
during patient visits.
Regulations on Separation of Prescribing and Dispensing
On February 21, 2000, the State Council issued the Guiding Opinions on the Reform of
Urban Medicine and Health System (ኬจԈ) which
stipulate that prescribing and dispensing shall be accounted for and managed separately so as
to cut the direct economic ties between medical institutions and marketing of drugs.
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On March 17, 2009, the Opinions of the CPC Central Committee and the State Council
on Deepening the Reform of the Medicine and Healthcare Systems (׵
จԈ) further promote the separation of prescribing and dispensing,
and encourage effective attempts to gradually reform the “compensation system for the medical
cost through drug-selling profits”, such as gradually reform or cancel the cost mark-up policy
on drugs by adopting differential price mark-up on the purchasing and selling drugs, setting up
medication service charge, etc., and at the same time adopt such measures as adjusting
appropriately medical service prices, increasing government input and reforming payment
method to improve the compensation system of public hospitals.
In March 2012, the State Council promulgated the Plan and Implementation for
Deepening the Reform of the Medical and Health System During the 12th Five Y ear Plan
Period (), which proposes the
abolishment of the “compensation system for the medical cost through drug-selling profits”
and the separation of dispensing from prescription. The Plan initiated the gradual cancelation
of the drug markups in public hospitals, which would prohibit public hospitals from selling
drugs to patients at a price higher than the actual purchase price, reducing the three sources of
public hospital incomes that were government subsidies, services charges and drug markups to
government subsidies and services charges only. In September 2012, according to Notice on
promoting pharmaceutical price reform in county level public hospitals (પආጤॴʮͭ
) further released by the NDRC, zero markup drug policy
began to be implemented in county level institution.
On May 17, 2015, the General office of the State Council issued the Guiding Opinions on
the Pilot Comprehensive Reform Program for Urban Public Hospitals (̹ʮͭᔼ৫ၝ
ኬจԈ), which state that eliminating the practice of using drug-selling
profits to subsidize medical services is the key in establishing a scientifically-sound
compensation system of public hospitals, and launches the pilot programs on the separation of
dispensing from prescription in all urban public hospitals, and actively exploring a variety of
effective ways to reform the compensation system for the medical cost through drug-selling
profits.
In April 2016, the General Office of the State Council issued the Notice on Printing and
Distributing the Key Tasks of Deepening the Reform of the Medical and Health System in 2016
(ࠧ2016), proposing to promote the
separation of dispensing from prescription in various methods and prohibit public hospitals
from restricting the outflow of prescription.
On April 19, 2017, the National Health and Family Planning Commission (currently the
National Health Commission), the Ministry of Finance, the Medical Reform Office of the State
Council and other relevant government bodies issued the Notice on All-round Promotion of the
Comprehensive Reform of Public Hospitals (ஷ
), requiring that the comprehensive reform of public hospitals be fully promoted by
September 30, 2017, and that the drug markups (except for Chinese herbal medicine) be
canceled in all public hospitals.
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REGULATIONS OF HEMATOPOIETIC STEM CELL TRANSPLANTATION
Regulations of Non-Blood Hematopoietic Stem Cell Transplantation
According to the Technical Management Standards for Non-Blood Hematopoietic Stem
Cell Transplantation (୅ಔҦஔ၍ଣ஝ᇍ) promulgated by the Ministry
of Health of the PRC (the “MOH”) on July 7, 2006, the administrative department of health at
the provincial level is responsible for organizing the clinical application ability evaluation of
the application of hematopoietic stem cell transplantation technology. If the medical
institutions have passed the ability evaluation, the health administration department that has
issued the Practicing License of Medical Institution shall register the professional medical
service items corresponding the hematopoietic stem cell transplantation. On March 30, 2022,
the NHC promulgated Notice on the Issuance of Management Standards for the National
Restricted Technology Catalog and Clinical Application (2022 Edition) (ሊ͛਄ੰ։፬
ՓᗳҦஔͦ፽ձᑗґᏐ͜၍ଣ஝ᇍ(2022و)), including
Management Standards for the Allogeneic Hematopoietic Stem Cell Transplantation
Technology Clinical Application (୅ಔҦஔᑗґᏐ͜၍ଣ஝ᇍ) (the
“Standards”) and Allogeneic Hematopoietic Stem Cell Transplantation Technology Clinical
Application Quality Control Index (ᅺ),
and Management Standards for the Hematopoietic Stem Cell Transplantation Technology ( ி
୅ಔҦஔ၍ଣ஝ᇍ) was abolished on the same day. The Standards provide the
minimum standards of the medical institutions and the medical staff to implement allogeneic
hematopoietic stem cell transplantation technology, apply to the treatment of allogeneic
hematopoietic stem cell transplantation blood system disease technology, the hematopoietic
stem cell source including bone marrow, peripheral blood or umbilical cord blood from blood
(HLA or haplotype) and non-blood donor. The Standards clearly reiterate that hematopoietic
stem cell source must be legal and relaxation the number of cases of sibbing total-compatriots
allogeneic hematopoietic stem cell transplantation.
REGULATIONS OF CLINICAL RESEARCH AND APPLICATION OF MEDICAL
TECHNOLOGIES
Administrative Measures for the Clinical Application of Medical Technologies and
relevant notice
Administrative Measures for the Clinical Application of Medical Technologies ( ᔼᐕҦ
) was revised by NHC on August 13, 2018 and came into effect on
November 1, 2018. The Measures are hereby formulated to strengthen the clinical application
management of medical technologies. The State has established a negative list management
system for clinical application of medical technologies. Prior to this 2018 revision, autologous
stem cell, immune cell therapy technology and gene therapy technology are classified as the
third category of medical technology. The Notice of the NHFPC on the Cancelation of the
Approval for Access of the Clinical Application of the Third Category of Medical Technology ( ਷
), which came
into effect on June 29, 2015, cancels the approval procedure of the clinical application of the
third category of medical technologies, and implements the record management of the medical
technology that restricts the clinical application.
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The Administrative Measures on the Clinical Researches Conducted by Medical and
Health Institutions
The Administrative Measures on the Clinical Researches Conducted by Medical and
Health Institutions (), which was promulgated
by the NHFPC, the State Food and Drug Administration (the “ SFDA ”) and the NA TCM on
October 16, 2014, stipulates that the clinical research implements the project approval system
of medical institutions. The clinical research approved by the medical institution shall be filed
with the administrative department of health that issued the Practicing License of Medical
Institution within 30 days.
Regulations on the Administration of Drug Clinical Trial Institutions
On November 29, 2019, the National Medical Products Administration (the “NMPA”) and
the NHC published the Regulations on the Administration of Drug Clinical Trial Institutions
(), which came into effect on December 1, 2019 and replaced
the Measures for Certification of Drug Clinical Practice (Trial) (֛
ج(༊Б)). The new regulations stipulate that, instead of certification, clinical trial
institutions shall file on the Drug Clinical Trial Institution Filing Management Information
Platform (̨̻).
REGULATIONS OF BIOSECURITY
Biosecurity Law of the PRC
The Biosecurity Law of the PRC () (the “Biosecurity
Law”) was promulgated on October 17, 2020, by the Standing Committee of the National
People’s Congress (the “ SCNPC ”) and became effective from April 15, 2021. As per the
Biosecurity Law, the research and development activities of high-risk and medium-risk
biotechnology shall be carried out by a legal person established within the territory of China,
upon obtaining the approval or record-filing. The establishment of a pathogenic microorganism
laboratory shall be subject to approval or record-filing requirements in accordance with the
law. In addition, (i) collecting human genetic resources of important genetic families or
specific areas in China, or collecting human genetic resources of which the types and quantities
are subject to provisions of the competent department of science and technology under the
State Council, (ii) preserving China’s human genetic resources, (iii) using China’s human
genetic resources to carry out international scientific research cooperation, or (iv) transporting,
mailing, and carrying China’s human genetic resource materials out of the country shall subject
to approval of the competent department of science and technology under the State Council.
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REGULATIONS ON THE CLASSIFICATION AND THE ADMINISTRATION OF
MEDICAL INSTITUTIONS
Opinions on Implementing Classification Administration of Urban Medical Institutions
The Opinions on Implementing Classification Administration of Urban Medical
Institutions (จԈ) was jointly promulgated by the
MOH, NA TCM, the Ministry of Finance of the PRC (the “ MOF”), and the NDRC on July 18,
2000 and came into effect on September 1, 2000, provide that NMIs and for-profit medical
institutions (the “ PMIs ”) shall be classified based on their business objectives, service
purposes and implementation of various financial, taxation, pricing and accounting policies.
The pricing guidance stipulated by governments from time to time for medical service in NMIs
is not subject to PMIs. Also, PMIs may distribute their profit to their investors as economic
returns. Medical institutions shall file written statements of their not-for-profit/for-profit status
with relevant authorities of health when they go through application, registration, and
re-examination procedures in accordance with relevant laws, and the handling authority of
health shall, jointly with other relevant authorities, decide the not-for-profit/for-profit status
for such healthcare institution based on its source.
The Grading of Healthcare Institutions
The Basic Standard for Medical Institutions (For Trial Implementation) ( ᔼᐕዚ࿴ਿ͉
ᅺ๟(༊Б)), the Measures for the Assessment of Healthcare Institutions ( ᔼᐕዚ࿴൙ᄲ፬
) and the Interim Measures for the Assessment of Hospitals (),
which was promulgated by the MOH on September 2, 1994, July 21, 1995 and September 21,
2011 respectively, stipulates that healthcare institutions in the PRC are graded into three levels
(Class I, II and III) and three sub-levels (Grade A, B, C) based on the assessment of competent
authorities. Under the hospital classification system, Class II general hospitals are general
hospitals affiliated with a medium size city, county or district with a capacity exceeding 100
registered beds but less than 500, typically responsible for providing comprehensive healthcare
services and undertaking medical education and research on a regional basis, and Class III
general hospitals are general hospitals at the city, provincial or national level with a capacity
exceeding 500 registered beds, typically responsible for providing specialist healthcare
services, performing a bigger role with regard to medical education and scientific research, and
serving as medical hubs providing care to multiple regions. The assessment of Grades itself is
not a requisite for a private for-profit healthcare institution of any Class to carry out its
business. The Assessment Standard of Class III Hospitals (2022) ( ɧॴᔼ৫൙ᄲᅺ๟(2022 ϋ
وthe “ Assessment Standard ”) and the Implementing Rules of the Assessment Standard of
Class III Hospitals (2022) ( ɧॴᔼ৫൙ᄲᅺ๟(2022و)ۆthe “ Assessment
Standard Implementing Rules ”) promulgated and implemented by the NHC on December 6,
2022, provide detailed provisions for the assessment standard for Class III hospitals, which can
be used as reference by Class II hospitals. The Assessment Standard contains three parts and
107 sections, and sets 364 assessment standards and monitoring indices. The required points
for each Grade shall be determined by local health authorities at provincial level. According
to the Implementing Rules of the Assessment Standard of Class III General Hospitals of
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Jiangsu Province (2023) (ۆ2023وwhich contains
three parts on a 1000-point scale. The first part, the “prerequisite requirements”, includes
lawful establishment and practice, public welfare and integrity, and safety management and
major events. The second part, the “medical service capabilities and quality safety monitoring
indices”, includes six chapters, namely resource allocation and operating data indices, medical
service capabilities and hospital quality safety indices, key discipline quality control indices,
single disease payment quality control indices, clinical application of key medical technology
quality control indices, and economic performance indices, with 578 monitoring indices on a
600-point scale. The third part, the “onsite review”, includes hospital functions and missions,
clinical service quality and safety management, and hospital management with 540 line items
on a 400-point scale, and the review may be conducted by way of document and record review,
employee and patient interview and onsite examination. Grade A requires no less than 900
points in total with the second part no less than 360 points, Grade B 900, 320, and Grade C
700, 280. The highest standard is Grade A Class III ( ɧॴ͠ഃ). Under the relevant regulations,
each hospital will be assessed once every four years. The NHC and its Hospital Assessment
Committee are responsible for conducting all hospital assessments in the PRC. Health
administrative departments at the provincial level shall set up Hospital Assessment Leading
Groups, which are responsible for hospitals assessment at the provincial level. The Guidelines
for Hospital Management Evaluation () promulgated by the MOH on
May 13, 2008, aims to strengthen hospital management, scientifically, objectively and
accurately evaluate hospital management, guide hospitals to strengthen connotation
construction, adhere to patient-centered principal, improve management level, continuously
improve medical quality, ensure medical safety, improve medical services, control medical
expenses, and provide people with safe, effective, convenient and inexpensive medical and
health services. According to the Assessment Measures for Hospitals in Jiangsu Province ( Ϫ
), if a hospital’s class level changes, the hospital may apply for an
assessment of its grade level within that class after three years of operation following its last
change in class.
The Administrative Regulations on Medical Institutions and its Implementation Rules
The Administrative Measures on Medical Institutions ( ᔼᐕዚ࿴၍ଣૢԷ), which
was promulgated on February 26, 1994 by the State Council, came into effect on September 1,
1994 and amended on February 6, 2016 and March 29, 2022, and it’s Implementation Measures
(), which was promulgated by the MOH on August 29, 1994
and amended on November 1, 2006, June 24, 2008 and February 21, 2017, stipulate that the
establishment of a medical institution by an entity or individual that is required by the
provisions of the State Council to obtain an approval letter for the setup of a medical institution
shall go through the examination and approval procedures with the health administrative
department of the local people’s government at the county level or above and obtain the
approval letter for the setup of a medical institution. Medical institutions must be registered for
practice and obtain the Medical Institution Practicing License ( ᔼᐕዚ࿴ੂุ஢̙ᗇ) and
clinics may practice after filing a record with the health administrative department of the
people’s government at the county level in the places where they are located in accordance with
the provisions of the health administrative department of the State Council. The Medical
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Institution Practicing License shall not be forged, altered, sold, transferred or lent. Where a
medical institution violates the provisions hereof, and sells, transfers or lends the Medical
Institution Practicing License, the competent health department of the people’s government at
the county level or above shall order it to make corrections, confiscate its illegal gains, and
impose a fine of not less than five times but not more than 15 times the illegal gains. If the
illegal gains are less than RMB10,000, the amount shall be taken as RMB10,000 for
calculation. If the circumstance is serious, the Medical Institution Practicing License shall be
revoked.
The Measures for the Administration of Self-inspection of Medical Institutions’ Practice
by Law () promulgated by the NHC and the NA TCM on
September 8, 2020, comprehensively promote the comprehensive regulatory system of the
medical and health industry, implement the main responsibility of self-management of medical
institutions in accordance with laws, standardize the practice behavior of medical institutions,
and formulate these measures in accordance with relevant laws and regulations on health.
Law on the Promotion of Basic Medical Care, Hygiene and Health
Pursuant to the Law of the PRC on the Promotion of Basic Medical Care, Hygiene and
Health (), which was released by the SCNPC
on December 28, 2019 and came into effect on June 1, 2020, stipulates that lawful registration
and classified management for not-for-profit and for-profit medical institutions shall be
implemented. Government-run medical institution shall not set up non-independent legal
person medical institution with other organizations or cooperate with social capital to establish
for-profit medical institutions. It also provides that the government will take measures to
encourage and guide social resources to set up medical institution, and such institution will
enjoy similar benefits as government-run institution, in certain areas including basic medical
insurance coverage, research and teaching, access to specific medical technologies, and title
assessment of medical staff, etc.
The Administrative Measures for the Verification of Medical Institutions (for Trial
Implementation)
The Administrative Measures for the V erification of Medical Institutions (for Trial
Implementation) (ج(༊Б)), which were promulgated by the MOH
and came into effect on June 15, 2009, stipulate that the Medical Institution Practicing License
(ᔼᐕዚ࿴ੂุ஢̙ᗇ) is subject to periodic examinations and verification by registration
authorities. V erification period shall be three years for general hospitals, hospitals of TCM,
hospitals of western medicine and TCM, hospitals of ethnic minority medicine and specialized
hospitals, as well as sanitariums, rehabilitation hospitals, maternity and children’s health care
centers, emergency centers, clinical laboratories and specialized disease prevention institutions
equipped with more than 100 beds, while the verification period shall be one year for other
medical institutions (including Sino-foreign joint venture medical institutions). Pursuant to the
Interim Measures for the Management of Sole Proprietorship Hospitals Established by
Taiwanese Service Providers in Mainland China (ίɽ௔ணͭዹ༟ᔼ৫၍ଣ
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), the verification period of the Medical Institution Practicing License for the
Taiwan funded wholly owned hospitals is three years. In the event that a medical institution
fails to apply for verification as required and post re-verification procedures or unsuccessful
in its re-verification application, the registration authorities may cancel its Medical Institution
Practicing License.
Administrative Measures on Radiodiagnosis and Radiotherapy
According to Administrative Measures on Radiodiagnosis and Radiotherapy (ൢᐕ
), which was promulgated by the MOH on January 24, 2006 and amended on
January 19, 2016 by NHFPC, medical institutions engaged in the radiodiagnosis and
radiotherapy shall be equipped with conditions suitable for the radiodiagnosis and radiotherapy
services. Prior to carrying out radiodiagnosis and radiotherapy, medical institutions shall
submit relevant materials, including but not limited to the Medical Institution Practicing
License or the Approval Certificate for Establishment of a Medical Institution, the list of
radiodiagnosis and radiotherapy equipment and apply for the License for Radiotherapy (࢛׳
ൢᐕ஢̙ᗇ) issued by the competent public health administrative departments. After obtaining
the License for Radiotherapy, medical institutions shall undertake registration of the relevant
diagnosis and treatment subjects with health administrative practice registration departments,
which issued the Medical Institution Practicing License. The License for Radiotherapy and the
Medical Institution Practicing License shall be verified at the same time. Medical institutions
shall formulate contingency plans for the prevention and disposition of radiation events and
shall conduct investigation and disposition in a timely manner where certain radiation events
occurs. Where a medical institution violates the provisions hereof, and works on radiodiagnosis
and radiotherapy without getting the License for Radiotherapy, or fails to handle the
registration of diagnosis and treatment subjects, or fails to conduct the verification according
to the relevant provisions, the health administrative department of the people’s government at
the county level or above shall give a warning and impose a fine of not more than RMB3,000.
Where the circumstance is serious, the Medical Institution Practicing License shall be revoked.
Regulation on the Safety and Protection of Radioisotopes and Radiation-emitting Devices
and Measures for Administration of the Safety Licensing of Radioactive Isotopes and
Radioactive Equipment
According to Regulation on the Safety and Protection of Radioisotopes and Radiation-
emitting Devices (ᇞༀໄτΌձԣᚐૢԷ), which was promulgated by
the State Council on September 14, 2005 and amended on July 29, 2014 and March 2, 2019,
and Measures for Administration of the Safety Licensing of Radioactive Isotopes and
Radioactive Equipment (), which was
promulgated by the State Environment Protection Administration on January 18, 2006, last
amended on January 4, 2021, any entity conducts activities of production, sale, and use of
radioactive isotopes and radial equipment within the territory of the PRC shall obtain the
Radiation Safety Licenses (τΌ஢̙ᗇ).
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Administrative Measures for Food Operation Licensing
According to the Administrative Measures for Food Distribution Licensing (຾ᐄ
) promulgated by the China Food and Drug Administration (the “ CFDA ”,
predecessor of NMPA) on August 31, 2015 and amended on November 17, 2017, a Food
Distribution Licensing (຾ᐄ஢̙ᗇ) shall be obtained in accordance with the law to
engage in food selling and catering services within the territory of PRC.
REGULATIONS ON THE PRICE OF HEALTHCARE SERVICES AND MEDICINE
Notice of Issues Related to the Implementation of Market Price Adjustment by
Non-Public Medical Institutions
According to the Notice of Issues Related to the Implementation of Market Price
Adjustment by Non-Public Medical Institutions (ਕྼБ̹ఙሜ
) promulgated and implemented on March 25, 2014 by NDRC, the
NHFPC and the MOHRSS, the price of healthcare services provided by non-public medical
institutions to be set with reference to the market level. Non-public medical institutions which
are for-profit in nature may set the price list for their healthcare services at their own
discretion. Non-public medical institutions which are non-profit in nature shall set the price list
for their healthcare services according to the National Standard Price List of Healthcare
Services (ධͦ஝ᇍ). For non-public medical institutions qualified to
become designated medical institutions covered by medical insurance, they should be included
as a designated service providers covered by social insurance such as basic medical insurance
for employees and urban residents, new-type rural cooperative medical insurance, work-related
injury insurance and maternity insurance in accordance with relevant procedures and adopt the
same payment policy as in public hospitals. To efficiently utilize funds, medical insurance
agents should determine specific payment methods and standards with such non-public medical
institution by ways of negotiation under the requirements of medical insurance payment system
reform.
Notice on the Pilot Scheme for Deepening the Reform of Medical Service Price
The Pilot Scheme for Deepening the Reform of Medical Service Price (ਕ
), which was promulgated by the NHC, the NDRC and other relevant
departments on August 25, 2021, stipulates that the medical services provided by non-public
medical institutions shall implement the market price adjustment policy, and those included in
the payment of medical insurance fund shall be managed according to the medical insurance
agreement.
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Opinions on Promoting Drug Pricing Reform
The Opinions on Promoting Drug Pricing Reform (จԈ), which
was promulgated by the NDRC, the NHFPC, the SFDA, the Ministry of Commerce of the PRC
(the “ MOC”) and other three departments on May 4, 2015, sets forth that from June 1, 2015,
except for narcotic drugs and Class I psychotropic drugs, the restrictions on the prices of the
drugs that were subject to government pricing will be canceled. Specifically, the prices of
narcotic drugs and Class I psychotropic drugs are still subject to maximum factory prices and
maximum retail prices set by the NDRC for the time being. The medical insurance regulatory
authority shall, along with other competent departments, draw up provisions in relation to the
standards, procedures, basis, and methods of the payment of drugs paid by medical insurance
funds. Regarding patented drugs and exclusively produced drugs, the prices thereof are set
through transparent and public negotiation among multiple parties. The prices for blood
products not listed in the Medical Insurance Drugs List, immunity and prevention drugs that
are purchased by the PRC government in a centralized manner, and AIDS antiviral drugs and
contraceptives provided by the PRC government for free, shall be set through tendering
purchase or negotiation. Except as otherwise mentioned above, the prices for other drugs may
be determined by the manufacturers and the operators on their own based on production or
operation costs and market supply and demand. The Multiple Policy Measures for Further
Deepening the Reform of the Medicine and Healthcare Systems through the Centralized
Procurement and the Use of Drugs as a Breakthrough Point (މ
), which was promulgated by the
Leading Group of the State Council on November 29, 2019, requires to comprehensively
deepen the reform of centralized procurement and the use of medicines organized by the State,
build a national public procurement market for medicines and a multi-party linked procurement
pattern, improve the quality level of medicines, ensure the stable supply of medicines, improve
the efficiency of payment for medicines, promote the construction of a unified and open market
pattern for the production and circulation of medicines across the country, promote the
dynamic adjustment of the price of medical services and other linkage reforms, vigorously
promote the reform of the remuneration system, enhance the standardized management of
medicines use, promote the implementation of medicines payment standards for medical
insurance, deepen the reform of the payment method for medical insurance, improve the
regulatory mechanism of the medicine insurance funds, promote the fine-tuned supervision of
medical services, sound the national medicine price monitoring system, and accelerate the
construction of information technology.
Regulations on Medical Insurance and Medical Liability Insurance for Urban Employees
According to the Interim Measures for the Administration of Medical Insurance
Designated Medical Institutions and the Provision of Basic Medical Insurance for Urban
Employees (), which was promulgated
by the MOH, the Ministry of Labor and Social Security and the NA TCM on May 11, 1999, and
the Decision of the State Council on Canceling the First Batch of 62 Items Subject to
Administrative Examination and Approval of Local Governments Designated by the Central
Government (ୋɓҭ՟ऊ62), which
was promulgated by the State Council on October 11, 2015 and the Guiding Opinions of
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MOHRSS on Improving the Management of Designated Medical Institutions and Pharmacies
of Basic Medical Insurance through Agreements (ڭ
ኬจԈ) promulgated by MOHRSS on December 2, 2015, and
became effective on the same day, the license for qualifying a medical institution as a
designated medical institution to provide medical service to urban employees with basic
medical insurance was canceled. Agencies and the medical institutions should strictly comply
with the stipulations in the service agreement and perform the agreement seriously. The
defaulting party shall be held liable to the violations of the agreement.
Diagnosis Related Group (DRG) Payment Classification System
On 2017, the MOHRSS and NHFPC, in conjunction with the MOF and the NA TCM,
established a pilot working group for payment based on DRG, and in 2017, selected some
regions to carry out pilot payment based on DRG and strengthened the technical guidance.
Pursuant to Notice on Applying for National Pilot Program of Payment by Diagnosis Related
Groups () promulgated by the National
Healthcare Security Administration (the “ NHSA ”) on December 10, 2018, the NHSA is
researching and formulating diagnosis-related group (DRG) standards suitable for China’s
medical service system and medical insurance management capabilities, and has launched a
pilot program of paying by DRGs in certain cities.
The NHSA officially released Technical Specification for National Health Insurance DRG
Grouping and Payment (ღDRGʱଡ଼ၾ˹൬Ҧஔ஝ᇍ) and National Health
Insurance DRG (CHS-DRG) Grouping Scheme (ღDRG(CHS-DRG))
on October 16, 2019. The data requirements for DRG grouping, data quality control,
standardized upload specifications, grouping strategies and principles, and methods for
determining weights and rates are regulated, and it is clear that the national health insurance
disease DRG is a unified standard for the national health insurance sector to carry out DRG
payment work.
The Notice on the Issuance of the Subdivision Grouping Scheme (V ersion 1.0) of
Healthcare Diagnosis-Related Grouping (CHS-DRG) (ᗫʱଡ଼
(CHS-DRG)ࣩ1.0و)), which was promulgated by the Office of the NHSA
on June 12, 2020, explains that each pilot city should refer to the grouping results, comorbidity
complication/serious comorbidity complication table, grouping rules, and naming format of the
CHS-DRG subdivision group to develop local DRG subdivision group.
According to the Notice on the Issuance of A Three-year Action Plan for the Reform of
the DRG/DIP Payment Methods (Ι೯DRG/DIP)
promulgated by the NHSA on November 19, 2021, from 2022-2024, the reform of DRG/DIP
payment methods shall be comprehensively completed and medical insurance shall be
promoted with high-quality. By the end of 2024, all coordinated regions across the country will
carry out the reform of DRG/DIP payment methods, and pilot areas will be launched to
continuously consolidate the achievements of the reform. By the end of 2025, the DRG/DIP
payment method will cover all eligible medical institutions providing inpatient services,
basically achieving full coverage of disease types and medical insurance funds.
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Regulation of the Receival of Medical Treatment Covered by the Basic Medical Insurance
Away from Home
According to Notice on Further Strengthening the Regulation of the Receival of Medical
Treatment Covered by the Basic Medical Insurance Away From Home (ආɓӉ̋੶ਿ͉
), which was promulgated by the General Office of the
MOHRSS on December 19, 2016 and became effective on the same day, handling agencies in
all the regions under the overall planning shall include the receival of medical treatment away
from home into the agreement-based administration of medical institutions, making it an
indicator for the assessment of medical institutions, detailing and improving the clauses of the
agreements, specifying that the services and management regarding, among others, the
selection of medical institutions, the recording of medical information, the monitoring of
medical practices and the examination and the auditing of medical expenses which are offered
to the persons receiving medical treatment away from home are the same as the one to the local
insured, and protect the rights and interests of the persons receiving medical treatment away
from home.
REGULATIONS RELATING TO THE ONLINE MEDICAL SERVICES
The Guiding Opinions of the State Council on Vigorously Advancing the “Internet Plus”
Action
According to the Guiding Opinions of the State Council on Vigorously Advancing the
“Internet Plus” Action (ጐ฽પආʝᑌၣ+ኬจԈ) issued by the
State Council on July 1, 2015, the new mode of online medical treatment and public health
shall be promoted. It is imperative to develop online medical treatment and public health
services based on the internet, support third-party institutions to build the service platforms for
sharing medical information such as medical images, health archives, testing reports, electronic
medical records and other medical information, and gradually set up the standard system for
cross-hospital sharing and exchange of medical data. The mobile internet shall be vigorously
used to provide online appointments for diagnosis and treatment, reminder of waiting for
diagnosis, pricing and payment, inquiry about diagnosis and treatment reports, drug delivery
and other convenient services. Medical institutions shall be guided in providing basic-level
checkups, higher-level diagnosis and other long-distance medical care services to small and
medium-sized cities and rural areas. Internet enterprises shall be encouraged to cooperate with
medical institutions in establishing online medical information platforms, strengthen the
integration of regional medical care and health service resources, make full use of the internet,
big data, and other means, and improve the capability to prevent and control major diseases and
breaking public health events. Internet-extended doctor’s advice, electronic prescription and
other internet medical care and health service applications shall be vigorously explored.
Qualified medical inspection institutions and medical service institutions shall be encouraged
to collaborate with internet enterprises to develop gene testing, disease prevention and other
health service modes.
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The Opinions on Promoting the Development of “Internet Plus Health Care”
In April 2018, the Opinions on Promoting the Development of “Internet Plus Health Care”
(ආʝᑌၣ+จԈ) issued by the General Office
of the State Council encouraged medical institutions to apply the internet and other information
technologies to expand the space and content of health care services, build an online and offline
integrated health care service model that covers the whole process of health care. Internet
hospitals depending on medical institutions shall be allowed. Medical institutions may use
internet hospitals as their secondary name and, based on the physical hospitals, use Internet
technology to provide safe and appropriate health care services, allowing follow-up online
subsequent visits for some common diseases and chronic diseases. After acquiring documents
on the medical records of patients, physicians shall be allowed to write prescriptions online for
some common diseases and chronic diseases. Medical institutions and qualified third-party
institutions shall be supported in setting up Internet information platforms to provide
telemedicine, health consultation, and health management services so as to promote the
effective communication among hospitals, medical personnel, and patients.
The Measures for the Administration of Internet Hospitals (for Trial Implementation)
(ج(༊Б))
On July 17, 2018, the NHC and the NA TCM jointly promulgated the Measures for the
Administration of Internet Hospitals (for Trial Implementation) (ج(༊
Б)). Pursuant to the Measures for the Administration of Internet Hospitals (for Trial
Implementation), “internet hospitals” include: (a) internet hospitals as the second name of
physical medical institutions, and (b) internet hospitals that are independently established by
relying on the physical medical institutions. A medical institution that has obtained the Medical
Institution Practice License and intends to engage in Internet diagnosis and treatment activities
with the internet hospital as its secondary name should submit application materials to the
issuing authority of its Medical Institution Practice License. Those internet hospitals passing
the review will be registered. NHC at the local level is responsible for the supervision of the
internet hospitals and internet hospitals shall strictly comply with relevant laws and regulations
on information security and medical data privacy.
The Notice on Printing Jiangsu Province Internet Medical Service Approval Procedure
The Company’s internet hospitals business mainly practices in Jiangsu. On April 4, 2019,
Health Commission of Jiangsu Province issued the Notice on Printing Jiangsu Province
Internet Medical Service Approval Procedure (Ι೯<ਕᄲҭ೻ҏ>
), provide guideline for setting up internet hospitals, using internet hospitals as the
second name for physical medical institutions, and for medical institutions planning to carry
out internet diagnosis and treatment activities.
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REGULATIONS ON PHARMACEUTICALS AND MEDICAL DEVICES IN MEDICAL
INSTITUTIONS
Medical Product Administration Law of the PRC and its Implementing Rules and
Measures for Supervision and Administration of Drugs of Medical Institutions (for Trial
Implementation)
According to the Drug Administration Law of the PRC (၍ଣ
), which was promulgated by the SCNPC on September 20, 1984 and amended on
February 28, 2001, December 28, 2013, April 24, 2015 and August 26, 2019, and took effect
on December 1, 2019, the Regulations for the Implementation of the Drug Administration Law
of the PRC (ૢԷ), which was promulgated by State
Council on August 4, 2002 and amended on February 6, 2016, March 2, 2019 and the Measures
for Supervision and Administration of Drugs of Medical Institutions (for Trial Implementation)
(ج(༊Б)), which was promulgated by the CFDA and came into
effect on October 11, 2011, medical institutions must purchase medical products from
marketing authorization holders or enterprises qualified for the manufacture or distribution of
medicinal products. For import drugs, the drug importer shall file a record with the local drug
regulatory department in the place where the port is located with the Import Drug License or
Pharmaceutical Product License and other documents. The NMPA publicly solicited opinions
on the Regulations for the Implementation of the Drug Administration Law of the PRC
(Revised Draft for Comment) (ૢԷ(ᅄӋจԈ
ᇃ)) on May 9, 2022, which further strengthens drug supervision and regulation. This draft
regulation has not yet come into effect, and the relevant provisions of such regulation is subject
to the officially final version to be promulgated upon effective.
Opinions of the General Office of the State Council on Promoting the Centralized
Volume-based Procurement of Drugs in a Normalized and Institutionalized Manner
The Opinions of the General Office of the State Council on Promoting the Centralized
V olume-based Procurement of Drugs in a Normalized and Institutionalized Manner ( ਷ਕ৫
จԈ), which was promulgated
by General Office of the State Council on January 22, 2021, sets forth the following basic
principles for the centralized volume-based procurement of drugs: (1) adhere to demand
orientation and give priority to quality. Based on the clinical demand of drugs and in light of
the medical insurance fund and patients’ affordability, reasonably determine the scope of drugs
to include in centralized volume-based procurement regime, ensure drug quality and supply,
and meet the people’s basic needs for drugs; (2) adhere to market leadership and promote
competition, establish an open and transparent market competition mechanism, guide
enterprises to conduct fair competition based on cost and quality, and improve the market price
discovery mechanism; (3) adhere to the combination of bidding and procurement and the
connection between quantity and price, specify procurement quantity, cut price based on
quantity, ensure usage, smooth the process of procurement, use, settlement and other
procedures, and effectively control drug rebates; and (4) adhere to policy convergence and
departmental coordination, refine the supporting policies for drug quality supervision and
administration, production and supply, circulation and distribution, medical services, medical
insurance payment, market regulation, etc., strengthen departmental coordination, pay
attention to the integration, collaboration and efficiency of systematical reform to support and
promote the system of centralized volume- based procurement of drugs.
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The Measures for the Administration of Radioactive Pharmaceuticals
The Measures for the Administration of Radioactive Pharmaceuticals (၍ଣ
), which were promulgated by the State Council and came into effect on January 13,
1989 and revised on January 8, 2011, March 1, 2017 and March 29, 2022, require healthcare
institutions to comply with relevant national regulations and rules when engaging in research
work, production, business, transportation, consumption, examination, supervision and
administration work related to radioactive drugs. Any healthcare institution that wants to use
radioactive pharmaceuticals must obtain the Permit for the Use of Radiopharmaceuticals (࢛׳
Դ͜஢̙ᗇ) from the drug supervision administrative departments at the provincial,
regional or municipal levels. The Permit for the Use of Radioactive Pharmaceuticals is valid
for five years and is of varying grades based on the competence of the nuclear medicine
technicians and the equipment conditions of the healthcare institution.
Regulations on the Administration of Narcotic Drugs and Psychotropic Drugs
According to the Regulations on the Administration of Narcotic Drugs and Psychotropic
Drugs (၍ଣૢԷ), which was promulgated by the State Council on
August 3, 2005, amended on December 7, 2013 and February 6, 2016, any medical institution
needs to use narcotic drugs and the psychotropic drugs of category I shall be subject to the
approval of the competent department of health, and obtain the seal card for purchasing
narcotic drugs and the psychotropic drugs of category I (ᒅ͜Ιᛡ
̔). If a medical institution which holds the License of Preparations of Medical Institution ( ᔼ
ᐕዚ࿴Ⴁኒ஢̙ᗇ) and a Seal Card needs to dispense for clinical use any narcotic
pharmaceutical or psychotropic substance which is not available on the market, the preparation
shall be subject to approval by the competent provincial, regional or municipal drug
supervision and administration department. Entities using narcotic drugs and the psychotropic
drugs of category I shall set up special warehouses or special cabinets to store narcotic drugs
and the psychotropic drugs of category I. The special warehouses shall set up security facilities
and install alarm device, and the special cabinets shall use safes. The management of double
key with two persons in charge shall be applied to the special warehouses and the special
cabinets. The pharmaceutical preparations of a narcotic pharmaceutical or psychotropic
substance dispensed by the medical institution may only be used in the institution itself and
may not be marketed.
The Law of the PRC on Maternal and Infant Healthcare and its Implementation
Measures, the Management Measures of Special Technology Services Licensing and
Personnel Qualification of Maternal and Infant Care
According to the Law of PRC on Maternal and Infant Healthcare ( ʕശɛ͏΍ձ਷͎
), which was promulgated by the SCNPC on October 27, 1994 and revised on
November 4, 2017 and its Implementation Measures (፬
), which was promulgated by the State Council on June 20, 2001, and revised on July 20,
2023 and the Management Measures of Special Technology Services Licensing and Personnel
Qualification of Maternal and Infant Care (၍ଣ፬
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), which was promulgated by the NHC on August 7, 1995 and revised on January 8, 2021,
medical institutions carry out pre-marital medical examination, genetic disease diagnosis and
pre-natal diagnosis, ligation operations and operations for termination of gestation must be
approved by health administrative authorities at various levels in accordance with regulations
and obtain relevant qualification certificates.
Regulations on Supervision and Administration of Medical Devices
Pursuant to the Measures on Business Operations of Medical Devices, in the PRC,
medical devices are classified into three different categories, Class I, Class II and Class III,
based on the risk levels associated with each medical device. According to the Regulations on
Supervision and Administration of Medical Devices ( ᔼᐕኜ૛္ຖ၍ଣૢԷ)
promulgated by the State Council on January 4, 2000, amended on March 7, 2014, May 4, 2017
and February 9, 2021, for Class I medical devices, the record-filing administration shall be
implemented, while for Class II and Class III devices, the registration administration shall be
implemented. To engage in the operation of Class II medical devices, an operating enterprise
shall make a record-filing with the medical products administration. To engage in the operation
of Class III medical devices, an operating enterprise shall apply for the Medical Device
Distribution License ( ᔼᐕኜ૛຾ᐄ஢̙ᗇ). Meanwhile, medical institutions that purchase and
use large-scale medical equipment are required to obtain the License for Deployment of
Large-scale Medical Equipment (ᔼ͜ண௪ৣໄ஢̙ᗇ) issued by the health departments
at province level or above. Any entity that purchases or uses large-scale medical equipment
without permission shall be ordered by the health department at the county level or above to
stop the use, given a warning, and its illegal income be confiscated. If the illegal income is less
than RMB10,000, a fine of not less than RMB50,000 but not more than RMB100,000 shall be
imposed. If the illegal gains are more than RMB10,000, a fine of not less than ten times but
not more than 30 times the illegal income shall be imposed. Where the circumstances are
serious, the application for purchase license for large-sized medical equipment filed by the
relevant liable persons and entities shall not be accepted within five years, the income of the
legal representative, the primary person in charge, the directly responsible person in charge,
and other liable persons of the illegal entity obtained from the entity during the period when
the violation of laws occurs shall be confiscated, and a fine of not less than 30% of nor more
than three times the income obtained shall be imposed.
Administrative Measures on the Deployment and Use of Large-scale Medical Equipment
(for Trial Implementation)
Administrative Measures on the Deployment and Use of Large-scale Medical Equipment
(for Trial Implementation) (ج(༊Б)) jointly
promulgated by the NHC and NMPA on May 22, 2018 and came into effect on the same day,
stipulates that the large-scale medical equipment refers to the large-scale medical devices that
adopt complex technology, require large capital investment, have high operation costs, have
significant impact on medical expenses, and have been included in the large-scale medical
equipment catalog management. The catalog of large-scale medical equipment shall be
proposed by the NHC in consultation with the relevant department under the State Council,
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reported to the State Council for approval, and issued for implementation. The State
administrates large-scale medical equipment through the classified and hierarchical allocation
plan and through the issue of License for Deployment of Large-scale Medical Equipment ( ɽ
ᔼ͜ண௪ৣໄ஢̙ᗇ) according to the catalog. The large-scale medical equipment
allocation management catalog is divided into Category A and Category B. The large-scale
medical equipment of Category A shall be allocated and managed by the NHC and issued with
License for Deployment of Large-Scale Medical Equipment by it. The large-scale medical
equipment of Category B shall be allocated and managed by provincial health administrative
departments and issued with License for Deployment of Large-scale Medical Equipment by
them. The NHC and provincial health administrative departments shall respectively formulate
the implementing rules for the allocation licensing management of Category A and Category
B large-scale medical equipment.
The Notice of the Issuance of Large-scale Medical Equipment Allocation and
Management Catalog (2023)
The Notice of the Issuance of Large-scale Medical Equipment Allocation and
Management Catalog (2023) (ᔼ͜ண௪ৣໄ஢̙၍ଣͦ፽(2023 ϋ))
promulgated by the NHC on March 3, 2023, stipulates the Category A and Category B of
large-scale medical equipment.
REGULATIONS ON MEDICAL PRACTITIONERS OF MEDICAL INSTITUTIONS
Physicians Law of PRC
Pursuant to the PRC Physicians Law () promulgated by the
SCNPC on August 20, 2021 and came into effect from March 1, 2022, physicians shall adhere
to the safe, effective, economical, and reasonable drug use principles, use drugs rationally by
following the guiding principles, for the clinical application of drugs, guidelines for clinical
diagnosis and treatment, and drug instructions. In the absence of effective or better treatment
methods or under other special circumstances, after obtaining patients’ clear and informed
consent, physicians may adopt drug usage not expressly specified in the drug instructions if
there is an evidence-based practice of implementing such treatment.
Administrative Measures for the Registration of Practicing Physicians
Pursuant to the Administrative Measures for the Registration of Practicing Physicians
() promulgated by the NHFPC on February 28, 2017 and became
effective on April 1, 2017, medical physicians must register and obtain the Physician Practicing
Certificate (ࣣbefore they commence practice and, those who fails to obtain the
Physician Practicing Certificate upon registration are not allowed to engage in medical,
preventive and healthcare services. The contents of the registration of a practicing physicians
include place of practice, category of registered specialty and scope of practice. The place of
practice refers to the provincial administrative division of the location of the medical,
preventive and healthcare institutions where the physician is practicing. For practicing
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physician who wants to practice in multiple institutions at the same place of practice, he/she
shall determine one institution as the main practicing institution, apply for registration with the
competent health authority which approved the aforesaid institution’s operation. As to other
institutions where the practitioner is to practice, the practicing physician shall apply the record
filing with the health authorities competent to approve the institutions’ operation and indicate
the name of the institutions.
Notice on Certain Opinions on Promoting and Standardizing Multi-site Practice of
Physicians from Ministry of Health
The Notice on Certain Opinions on Promoting and Standardizing Multi-site Practice of
Physicians from the MOH (ʍจԈ) jointly
promulgated by 5 departments, on November 5, 2014, and became effective on the same date,
stipulates clinical physicians, dentists and Chinese medicine physicians are permitted for
practicing at multiple sites. Physicians practicing in multiple sites shall have intermediary or
above technical skills and has been in the same profession for more than five years. Practicing
physicians practicing outside of their first practice site shall practice the same registered
specialty as their first practice site and the scope of practice shall be the same as Class II
diagnosis and treatment of the first practice site.
Interim Administrative Measures on Foreign physicians’ Short-term Medical Practice in
China
According to the Interim Administrative Measures on Foreign physicians’ Short-term
Medical Practice in China (), promulgated by the
MOH on October 7, 1992, became effective on January 1, 1993 and amended on November 28,
2003 and revised by the NHFPC on January 19, 2016, foreign doctors practicing medicine in
China must be registered and obtain the Temporary License for Foreign Physician to Practice
Medicine in PRC (೵ಂБᔼ஢̙ᗇ).
Regulations on Nurses
The Regulations on Nurses ( ᚐɻૢԷ) which was promulgated by the State Council
on January 31, 2008, came into effect on May 12, 2008 and amended on March 27, 2020,
provides that for nursing practice, a nurse must go through the practice registration and obtain
the Nurse Practicing Certificate (ࣣwhich is valid for five years. A medical
institution shall be equipped with at least enough number of nurses as prescribed by the health
administration department of the State Council, otherwise the medical institution shall be
ordered to make a correction within a time limit and given a warning by the health department
of the local people’s government at or above the county level. If it fails to make a correction
within the time limit, its diagnosis and treatment subjects shall be checked and reduced as well
as the number of lawful practicing nurses in the medical and health institution, or its practices
shall be suspended for not less than 6 months but not more than one year.
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Administrative Measures for the Registration of Practicing Nurses
Pursuant to the Administrative Measures for the Registration of Practicing Nurses ( ᚐ
) promulgated by the MOH on May 6, 2008 and became effective on
May 12, 2008 and amended by NHFPC on January 8, 2021, nurses must register and obtain the
Nurse Practicing Certificate before they practice nursing at the registered practicing place. The
Nurse Practicing Certificate shall indicate the nurse’s name, gender, date of birth and other
personal information, as well as the certificate serial number, registration date and place of
practice.
REGULATIONS ON MEDICAL MALPRACTICE
Tort Liability Law of PRC and the Civil Code of the PRC
On May 28, 2020, the Civil Code of the PRC (Պ) was adopted
by the third session of the 13th National People’s Congress, which became effective on January
1, 2021 and simultaneously replace the Tort Liability Law of the PRC. The Civil Code of the
PRC provides that if a medical institution or its medical personnel is at fault for damage
inflicted on a patient during diagnosis and treatment, the medical institution shall assume the
compensatory liability, which further clarifies that either the medical institution or its medical
personnel is at fault, the medical institution should bear the relevant responsibilities.
The Regulations on the Handling of Medical Malpractice
The Regulations on the Handling of Medical Malpractice (ஈଣૢԷ), which
was issued by the State Council on April 4, 2002 and came into effect on September 1, 2002,
provides a legal framework and specific regulations regarding the prevention, authentication,
compensation and penalties of or relating to cases involving personal injury to patients caused
by medical institutions or medical personnel due to malpractice.
Regulations on Prevention and Handling of Medical Disputes
Regulations on Prevention and Handling of Medical Disputes (ॸཫԣձஈଣૢ
Է), which was promulgated by the State Council on July 31, 2018 and came into effect on
October 1, 2018, provides a legal mechanism formulated in a bid to prevent and properly
handle medical disputes.
REGULATIONS ON MEDICAL ADVERTISEMENT
Advertising Law of the PRC
Pursuant to the Advertising Law of the PRC () (the
“Advertising Law”) promulgated by the SCNPC on October 27, 1994, amended on April 24,
2015, October 26, 2018 and April 29, 2021, advertisements shall not contain any false or
misleading content or defraud or mislead consumers. Advertisements on medical service, drug
and medical instrument are subject to censorship in accordance with relevant rules before being
distributed by broadcasting, movies, television, newspapers, journals or otherwise. No such
advertisement shall be published without being reviewed.
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Administrative Measures on Medical Advertisement
Pursuant to the Administrative Measures on Medical Advertisement ( ᔼᐕᄿѓ၍ଣ፬
), which was jointly promulgated by the MOH and the State Administration of Industry
and Commerce (the “ SAIC ”) on September 27, 1993 and amended on September 28, 2005 and
November 10, 2006 and came into effect on January 1, 2007, any medical institution that
intends to publish any medical advertisement shall apply for medical advertisement
examination and obtain the Examination Certificate for Medical Advertisements ( ᔼᐕᄿѓᄲ
׼The Examination Certificate for Medical Advertisements shall be valid for one year.
Circular of the MOH on Strengthening the Medical Advertisement Administration
According to the Circular of the MOH on Strengthening the Medical Advertisement
Administration (), which was promulgated by
the MOH on July 17, 2008 and became effective on the same date, the Examination Certificate
for Medical Advertisements shall be examined strictly, the medical advertisement monitoring
system shall be gradually established and improved, and the penalty for illegal medical
advertisement shall be increased.
Measures for the Administration of Internet Advertising
Pursuant to the Measures for the Administration of Internet Advertising ( ʝᑌၣᄿѓ၍
) promulgated by the SAMR on February 25, 2023 and became effective on May 1,
2023, no advertisement of any medical services, drugs, formula food for special medical
purpose, medical instrument, pesticides, veterinary drugs, dietary supplement or other special
commodities or services which are subject to examination by an advertising examination
authority as stipulated by laws and regulations shall be published unless it has passed such
examination.
Interim Administrative Measures for the Administration of Censorship of Advertisements
on Drugs, Medical Devices, Dietary Supplements and Formula Food for Special Medical
Purposes
Pursuant to the Interim Administrative Measures for the Administration of Censorship of
Advertisements for Drugs, Medical Devices, Dietary Supplements and Formula Food for
Special Medical Purposes (၍
), which were promulgated by the SAMR on December 24, 2019 and came into
effect on March 1, 2020, an enterprise seeking to advertise its drugs, medical devices, dietary
supplement or food for special medical purpose must apply for an advertisement approval
number. The validity period of the advertisement approval number concerning a drug, medical
device, dietary supplement or food for special medical purpose shall be consistent with the
minimum validity period of the product’s registration certificate, filing certificate or
production license. Where no validity period is set forth in the registration certificate,
record-filing certificate or the production license of the product, the advertisement approval
number shall be valid for two years. The content of an approved advertisement may not be
altered without prior approval. Where any alteration to the advertisement is needed, a new
advertisement approval shall be obtained.
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REGULATIONS ON MOBILE INTERNET APPLICATION INFORMATION SERVICES
Mobile internet applications are specifically regulated by the Administrative Provisions
on Mobile Internet Application Information Services (ਕ၍ଣ஝
) (the “ Mobile Application Administrative Provisions ”), which was promulgated by the
CAC on June 28, 2016 and revised on June 14, 2022 and took effect on August 1, 2022.
Pursuant to the Mobile Application Administrative Provisions, to provide information services
through mobile internet apps, application providers shall, in accordance with laws, regulations
and the relevant provisions of the PRC, formulate and disclose management rules, and sign
service agreements with registered users to specify the relevant rights and obligations of both
parties, and shall process personal information by following the principles of legitimacy,
rightfulness, necessity and good faith, have clear and reasonable purposes, disclose processing
rules, comply with the relevant provisions on the scope of necessary personal information,
regulate personal information processing activities, and take necessary measures to ensure the
security of personal information. Application providers shall not, for any reason, force users to
consent to personal information processing, or refuse users to use their basic functions and
services on the ground that users do not agree to provide unnecessary personal information.
Furthermore, on December 16, 2016, the Ministry of Industry and Information Technology of
the PRC (“ MIIT ”) promulgated the Interim Measures on the Administration of Pre-Installation
and Distribution of Applications for Smart Mobile Terminals ( ୅ਗ౽ঐ୞၌Ꮠ͜ழ΁ཫໄձ
) (the “ Mobile Application Interim Measures ”), which came into force
on July 1, 2017. The Mobile Application Interim Measures require that the internet information
service providers must ensure that the content of the application are legal, users’ rights are
protected, and relevant information of the application are expressed clearly, and the mobile
application, as well as its ancillary resource files, configuration files and user data, among
others, can be uninstalled by the users on a convenient basis, unless it is a basic function
software, which refers to a software that ensures the normal operation of hardware and
operating system of a mobile smart device.
On July 21, 2023, the MIIT issued the Notice on the Filing of Mobile Internet
Applications by the Ministry of Industry and Information Technology (׵
). The stock APP filing stage was from September
2023 to March 2024. APPs that have conducted business before the release of this notice shall,
in accordance with the requirements of this notice, complete the filing procedures with the
provincial communication management bureau where they reside through their network access
service providers and distribution platforms. Among them, for those who have completed the
website registration procedures, only the relevant information of their APP needs to be
supplemented and improved, and there is no need to repeatedly fill in the true identity
information of the organizer. For those without website registration information, the
registration procedures shall be completed in accordance with the provisions of this notice.
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REGULATIONS ON CYBERSECURITY
Cybersecurity Law
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC ( ʕ
)( “ Cybersecurity Law ”), which became effective on June 1,
2017. The Cybersecurity Law requires network operators to comply with laws and regulations
and fulfill their obligations to safeguard security of the network when conducting business and
providing services. The Cybersecurity Law further requires network operators to take all
necessary measures in accordance with applicable laws, regulations and compulsory national
standards to safeguard the safe and stable operation of the networks, respond to cybersecurity
incidents effectively, prevent illegal and criminal activities, and maintain the integrity,
confidentiality and usability of network data.
Cybersecurity Review Measures
On December 28, 2021, the CAC and other related authorities promulgated the
Cybersecurity Review Measures (), which became effective on
February 15, 2022. The Cybersecurity Review Measures proposes the following key matters:
(1) the network platform operators who are engaged in data processing are subject to the
regulatory scope; (2) the CSRC is included as one of the regulatory authorities for purposes of
jointly establishing the state cybersecurity review working mechanism; (3) the network
platform operators holding personal information of more than one million users and seeking a
listing in foreign countries shall file for cybersecurity review with the Cybersecurity Review
Office; and (4) the purchase of network products and services by critical information
infrastructure operator, which affects or may affect national security, shall be subject to
cybersecurity review in accordance with the present Measures.
Regulations for Safe Protection of Critical Information Infrastructure
On July 30, 2021, the State Council promulgated the Regulations for Safe Protection
of Critical Information Infrastructure (ᚐૢԷ) (the “ CIIO
Regulation ”) which came into effect on September 1, 2021. Pursuant to the CIIO Regulation,
critical information infrastructure refers to important network infrastructure and information
system in public telecommunications, information services, energy sources, transportation and
other critical industries and domains, in which any destruction or data leakage will have severe
impact on national security, the nation’s welfare, the people’s living and public interests. The
CIIO Regulation also stipulates the procedures for determining critical information
infrastructure. It provides that competent authorities shall promulgate detailed rules in
designating critical information infrastructure, identify critical information infrastructure in
the relevant industries, and notify operators of such critical information infrastructure in a
timely manner.
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Regulations on the Administration of Cyber Data Security
On September 24, 2024, the Regulations on the Administration of Cyber Data Security
(ၣഖᅰኽτΌ၍ଣૢԷ) (the “Cyber Data Security Regulations”) was promulgated by the
State Council and will come into effect on January 1, 2025. The Cyber Data Security
Regulations reiterate the general regulations for data processing activities and rules of personal
information protection, important data security protection, network data cross-border transfer
management, and internet platform service providers’ obligations.
Administration Measures on the Security Protection of Computer Information Network
with International Connections
In December 1997, the Ministry of Public Security issued the Administration Measures on
the Security Protection of Computer Information Network with International Connections
(), which was further revised on January 8,
2011 and prohibits using the internet in ways which, among others, result in a leakage of state
secrets or a spread of socially destabilizing content.
Several Provisions on Regulating the Market Order of Internet Information Services
Under the Several Provisions on Regulating the Market Order of Internet Information
Services () issued by the MIIT in December 12,
2011, an internet information service provider may not collect any personal information of a
user or provide any such information to third parties without the user’s consent. It must
expressly inform the user of the method, content and purpose of the collection and processing
of such user’s personal information and may only collect information to the extent necessary
to provide its services. An internet information service provider is also required to properly
maintain users’ personal information, and in case of any leak or likely leak of such information,
it must take immediate remedial measures and, in the event of a serious outcome, report to the
telecommunication regulatory authority immediately.
Provisions on Technological Measures for Internet Security Protection
According to the Provisions on Technological Measures for Internet Security Protection
() promulgated by the Ministry of Public Security and came
into effect on March 1, 2006, internet service providers and networking entities should
implement the following internet security protection technical measures: (a) the technical
measures for preventing computer viruses, network intrusion and attack damage and other
matters or acts that endanger network security; (b) important databases and systems of major
equipment redundant backup measures; (c) technical measures for recording and retaining the
users’ login and exit time, caller ID, account number, internet address or domain name, log files
of system maintenance; and (d) any other technical measures for internet security protection to
be implemented as prescribed by any law, regulation or rule. Furthermore, the technical
measures for record retention implemented by internet service providers and networking
entities in accordance with the Provisions on Technological Measures for Internet Security
Protection shall have the function of keeping records as a backup for at least 60 days.
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Provisions on the Administrative of Account Information of Internet Users
On June 27, 2022, the CAC promulgated the Provisions on the Administrative of Account
Information of Internet Users (), which took effect on
August 1, 2022. These provisions apply to the registration, use, and management of internet
users’ account information by internet information service providers. These provisions
stipulate that internet information service providers must, among other things, equip
themselves with professional and technical capabilities appropriate to the scale of services,
establish, improve and strictly implement the authentication of real identity information,
verification of account information, security of information content, ecological governance,
emergency responses, protection of personal information and other management systems.
These provisions also require that the internet information service providers should protect and
handle internet users’ account information in accordance with law, and take measures to
prevent unauthorized access, as well as leakage, tampering, and loss of personal information.
The internet information service providers shall set up a convenient portal for complaints and
whistleblowing at an eye-catching position, release the ways of complaints and
whistleblowing, improve the acceptance, screening, disposal and feedback mechanisms,
specify the handling process and feedback time limit and timely handle the complaints and
whistleblowing of users and the public.
REGULATIONS ON PERSONAL INFORMATION OR DATA PROTECTION
The Data Security Law of the PRC
The Data Security Law of the PRC (), promulgated by
the SCNPC on June 10, 2021, which came into effective on September 1, 2021. The Data
Security Law clarifies the scope of data to cover a wide range of information records generated
from all aspects of production, operation and management of government affairs and
enterprises in the process of the gradual transformation of digitalization, and requires that data
collection shall be conducted in a legitimate and proper manner, and the theft or illegal
collection of data is not permitted. Data processors shall establish and improve whole-process
data security management rules, organize, and implement data security training and take
appropriate technical measures and other necessary measures to protect data security. In
addition, data processing activities shall be conducted based on the graded protection system
for cybersecurity. Monitoring of data processing activities shall be strengthened, and remedial
measures shall be taken immediately in case of discovery of risks regarding data security
related defects or bugs. In case of data security incidents, responsive measures shall be taken
immediately, and disclosure to users and report to the competent authorities shall be made in
a timely manner. In addition, the Cybersecurity Law provides that: (1) to collect and use
personal information, network operators shall follow the principles of legitimacy, rightfulness
and necessity, disclose rules of collecting and using personal information, clearly express the
purposes, means and scope of collecting and using the information, and obtain the consent of
the persons whose data is gathered; (2) network operators shall neither gather personal
information unrelated to the services they provide, nor gather or use personal information in
violation of the provisions of laws and administrative regulations or the scopes of consent
given by the persons whose data is gathered, and shall dispose of personal information they
have saved in accordance with the provisions of laws and administrative regulations and
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agreements reached with users; and (3) network operators shall not divulge, tamper with or
damage the personal information they have collected, and shall not provide the personal
information to others without the consent of the persons whose data is collected. However, if
the information has been processed and cannot be recovered and thus it is impossible to match
such information with specific persons, such circumstance is an exception. Furthermore, under
the Cybersecurity Law, network operators of critical information infrastructure generally shall,
during their operations in the PRC, store the personal information and important data collected
and produced within the territory of the PRC.
Personal Information Protection Law of the PRC
On May 28, 2020, the NPC adopted the Civil Code of the PRC (ج
Պ), which came into effect on January 1, 2021. Pursuant to the Civil Code of the PRC, the
personal information of a natural person shall be protected by the law. Any organization or
individual shall legally obtain such personal information of others when necessary and ensure
the safety of such information, and shall not illegally collect, store, use, process or transmit
personal information of others, or illegally buy or sell, provide or make public personal
information of others.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law
of the PRC () (the “Personal Information Protection
Law”), which came into effect on November 1, 2021. The law aims to protect the rights and
interests of personal information and regulate the processing of personal information. The
Personal Information Protection Law stipulates certain important concepts with respect to
personal information processing: (1) “personal information” refers to all kinds of information
related to identified or identifiable natural persons recorded by electronic or other means,
excluding the information processed anonymously; (2) “processing of personal information”
includes the collection, storage, use, processing, transmission, provision, disclosure and
deletion, etc. of personal information; and (3) “personal information processor” refers to an
organization or individual that independently determines the purpose and method of the
processing in the processing of personal information. Except as otherwise provided in the
Personal Information Protection Law, a personal information processor may only process
personal information under the circumstances where the relevant individuals’ consents have
been obtained or where certain contractual arrangements, employment relationships, public
emergencies, performance of statutory duties or obligations or publishing of press release for
public interests require so.
Administrative Measures for the Cybersecurity of Medical and Healthcare Institution
On August 8, 2022, the NHC, NA TCM, and National Bureau of Disease Control and
Prevention jointly promulgated the Administrative Measures for the Cybersecurity of Medical
and Healthcare Institution () with immediate effect.
Administrative Measures for the Cybersecurity of Medical and Healthcare Institutions require
full life-cycle management of cyber security and data security, including but not limited to
strengthening system construction, implementing daily network maintenance, and monitoring,
conducting annual self-inspection and rectification, and classifying and grading data assets.
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Pursuant to the Regulations for Medical Institutions on Medical Records Management
(2013 V ersion) (֛2013و)) released by the NHFPC and the
NA TCM on November 20, 2013, and effective from January 1, 2014, the medical institutions
and medical practitioners shall strictly protect the privacy information of patients, and any
leakage of patients’ medical records for non-medical, non-teaching or non-research purposes is
prohibited.
Measures for Administration of Population Health Information (for Trial
Implementation)
The NHFPC issued the Measures for Administration of Population Health Information
(for Trial Implementation) (ج(༊Б)) on May 5, 2014, which refers
the medical health service information as the population healthcare information, and
emphasizes that such information cannot be stored in offshore servers, and the offshore servers
shall not be hosted or leased.
Management Measures of Standards, Safety and Service of National Health and Medical
Big Data (for Trial Implementation)
Pursuant to the Management Measures of Standards, Safety and Service of National
Health and Medical Big Data (for Trial Implementation) (਄ੰᔼᐕɽᅰኽᅺ๟eτΌձ
ج(༊Б)), promulgated by the NHC on July 12, 2018, the medical institutions
should establish relevant safety management systems, operation instructions and technical
specifications to safeguard the safety of healthcare big data generated in the process of health
management service or prevention and cure service of diseases. And it also stipulates that such
healthcare big data should be stored in onshore servers and shall not be provided overseas
without safety assessment.
Decision on Strengthening the Protection of Online Information, Provisions on Protection
the Personal Information of Telecommunication and Internet Users and Scope of
Necessary Personal Information for Common Types of Mobile Internet Applications
Pursuant to the Decision on Strengthening the Protection of Online Information (׵
), issued by the SCNPC in December 2012, and the Provisions on
Protection the Personal Information of Telecommunication and Internet Users (ձʝᑌ
), issued by the MIIT in July 2013, any collection and use of any
user personal information must be subject to the consent of the user, and abide by the
applicable law, rightfulness and necessity of the business and fall within the specified
purposes, methods and scopes in the applicable laws. In addition, the CAC, the MIIT, the
Ministry of Public Security and the SAMR jointly issued the Notice on Promulgation of the
Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet
Applications () in March 2021,
effective from May 1, 2021, specifying that the operator of an internet application shall not
refuse an user to use the App’s basic functional services on the ground that the user disagree
with the collection of unnecessary personal information.
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Measures for Data Security Management in the Industrial and Information Technology
Sector (Trial) (ج(༊Б))
On December 8, 2022, the MIIT promulgated the Measures for Data Security
Management in the Industrial and Information Technology Sector (Trial) (ʷჯਹ
ج(༊Б)), which came into effect on January 1, 2023. The Measures for
Data Security Management in the Industrial and Information Technology Sector (Trial) makes
detailed provisions on classified and tiered data management, data life cycle security
management, data security monitoring and early warning and contingency management. It
clearly stipulates that the data in the industrial and information fields can be divided into three
levels: general data, key data and core data, and stipulates that the data processors in the
industrial and information fields have the obligation to file with the relevant authorities their
catalogs of important data and core data recognized in according to the identification criteria
for important data and core data in industrial and information technology sector published by
the MIIT.
The Notice on Further Improving the Service Capabilities of Mobile Internet Applications
()
On February 6, 2023, the MIIT promulgated the Notice on Further Improving the Service
Capabilities of Mobile Internet Applications (ආɓӉ౤ʺ୅ਗʝᑌၣᏐ
), which came into effect on February 6, 2023. The Notice on Further
Improving the Service Capabilities of Mobile Internet Applications stipulates that users shall
be informed of personal information processing rules in a concise, clear and easy-to-understand
way, and in case of changes, users shall be informed of the latest development in time. The data
processors shall highlight the purpose, method and scope of sensitive personal information
processing activities, and establish a list of personal information that has been collected, and
do not induce users to agree to personal information processing rules with default check, small
prints or lengthy texts.
Notice on Special Governance of Illegal Collection and Use of Personal Information via
Apps
On January 23, 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT,
the Ministry of Public Security, and the SAMR jointly issued the Notice on Special Governance
of Illegal Collection and Use of Personal Information via Apps (࢝App༼஝ϗණ
ʮѓ), which underlines that App operators shall, by following the
principles of lawfulness, legitimacy and necessity, not collect personal information that is not
related to the services provided. When collecting personal information, they shall display the
rules for the collection and use of personal information in an easy-to-understand, simple and
clear manner, and personal information subjects shall independently choose and give consent.
They shall not force the users to make authorization in the forms of default, bundling, stopping
installation and use, etc., and may not collect personal information in violation of laws and
regulations or against the agreements with users.
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Measures to Identify Illegal Collection and Usage of Personal Information by Apps
On November 28, 2019, the CAC, MIIT, the Ministry of Public Security and SAMR
jointly issued the Measures to Identify Illegal Collection and Usage of Personal Information by
Apps ( App), which lists six types of activities as
illegal collection and usage of personal information, including “not publishing rules on the
collection and usage of personal information” and “not providing privacy rules.”
Provisions on Strengthening the Confidentiality and Archives Administration of Overseas
Securities Issuance and Listing by Domestic Enterprises
On February 24, 2023, the CSRC and other relevant government authorities promulgated
the Provisions on Strengthening the Confidentiality and Archives Administration of Overseas
Securities Issuance and Listing by Domestic Enterprises (̋੶ྤʫΆุྤ̮೯БᗇՎձ
)( “ Provision on Confidentiality ”), which became
effective on March 31, 2023. Pursuant to the Provision on Confidentiality, where a domestic
enterprise provides or publicly discloses to the relevant securities companies, securities service
institutions, overseas regulatory authorities and other entities and individuals, or provides or
publicly discloses through its overseas listing subjects, documents and materials involving
state secrets and working secrets of state organs, it shall report the same to the competent
department with the examination and approval authority for approval in accordance with the
law, and submit the same to the secrecy administration department of the same level for filing.
Domestic enterprises providing accounting archives or copies thereof to entities and
individuals concerned such as securities companies, securities service institutions and overseas
regulatory authorities shall perform the corresponding procedures pursuant to the relevant
provisions of the State. The working papers formed within the territory of the PRC by the
securities companies and securities service institutions that provide corresponding services for
the overseas issuance and listing of domestic enterprises shall be kept within the territory of
the PRC, and those that need to leave the PRC shall go through the examination and approval
formalities in accordance with the relevant provisions of the State.
REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Trademark Law of the PRC and its Implementing Rules
Trademarks are protected by the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷ਠᅺ
) which was promulgated on August 23, 1982 and subsequently amended on February 22,
1993, October 27, 2001, August 30, 2013, April 23, 2019 and took effect on November 1, 2019
as well as the Implementation Regulation of the PRC Trademark Law ( ʕശɛ͏΍ձ਷ਠᅺ
ૢԷ) adopted by the State Council on August 3, 2002 and revised on April 29, 2014.
In the PRC, registered trademarks include commodity trademarks, service trademarks,
collective marks and certification marks. The Trademark Office of National Intellectual
Property Administration handles trademark registrations and grants a term of 10 years to
registered trademarks, renewable every 10 years where a registered trademark needs to be used
after the expiration of its validity term.
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Patent Law of the PRC and its Implementing Rules
According to the Patent Law of the PRC (), promulgated by
the SCNPC on March 12, 1984 and further amended on September 4, 1992, August 25, 2000,
December 27, 2008, October 17, 2020 and came into effect on June 1, 2021 and the
Implementing Rules of the Patent Law of the PRC (),
promulgated by the China Patent Bureau Council on January 19, 1985, and further amended on
December 21, 1992, June 15, 2001, December 28, 2002, January 9, 2010 and came into effect
on February 1, 2010, the term “invention-creations” refers to inventions, utility models and
designs. The duration of a patent right for inventions shall be 20 years and the duration of a
patent right for utility models shall be 10 years and the duration of a patent right for designs
shall be 15 years, both commencing from the filing date. In the event that a dispute arises due
to a patent being exploited without the prior authorization of the patentee, that is to say an
infringement upon the patent right of the patentee.
Administrative Measures for Internet Domain Names
The Administrative Measures for Internet Domain Names (),
which was promulgated by the MIIT on August 24, 2017 and became effective on November
1, 2017, regulates the “.CN” and the “.zhongguo (in Chinese character)” shall be China’s
national top level domains. Any party that engages in internet information services shall use
its domain name in compliance with laws and regulations and in line with relevant provisions
of the telecommunications authority, but shall not use its domain name to commit any
violation.
Copyright Law of the PRC and Measures for the Registration of Computer Software
The Copyright Law of the PRC (), which was promulgated
by the SCNPC on September 7, 1990, came into effect on June 1, 1991 and was amended on
October 27, 2001, February 26, 2010 and November 11, 2020, specifies that works of Chinese
citizens, legal persons or other organizations, including literature, art, natural sciences, social
sciences, engineering technologies and computer software created in writing or oral or other
forms, whether published or not, shall enjoy the copyright. Copyright holder can enjoy multiple
rights, including the right of publication, the right of authorship and the right of reproduction.
The Measures for the Registration of Computer Software Copyright (ၑዚழ΁ഹЪ
), which was promulgated by the National Copyright Administration on February
20, 2002, and came into effect on the same day, regulates the registration of software copyright,
the exclusive licensing contract and assignment contracts of software copyright. The National
Copyright Administration is mainly responsible for the registration and management of
national software copyright and designates the China Copyright Protection Center as the
agency for software registration. The China Copyright Protection Center will grant certificates
of registration to computer software copyright applicants.
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REGULATIONS ON ENVIRONMENTAL PROTECTION AND FIRE PREVENTION
Environmental Protection Law and Environmental Impact Assessment Law of the PRC
Pursuant to the Environmental Protection Law of the People’s Republic of China ( ʕ
) promulgated by the SCNPC on December 26, 1989 and became
effective on the same day, amended on April 24, 2014 and became effective on January 1, 2015,
the pollutant discharge licensing system has been implemented in the PRC and entities that
implement the pollution discharge license management shall obtain a Pollutant Discharge
License ( રϮ஢̙ᗇ). Furthermore, installations for the prevention and control of pollution at
a construction project must be designed, built and commissioned together with the principal
part of the project. Pursuant to the Regulations on the Administration of Pollutant Discharge
License ( રϮ஢̙၍ଣૢԷ), which was promulgated by the State Council on January 24,
2021 and became effective from March 1, 2021, enterprises, public institutions and other
production operators (“ pollutant discharge entities ”) shall apply for and obtain a Pollutant
Discharge License; and may not discharge a pollutant, if the pollutant discharge entities fail to
obtain a Pollutant Discharge License. Administrative Measures for Pollutant Discharge
Licensing (for Trial Implementation) (ج(༊Б)), which was promulgated
by the Ministry of Environmental Protection (repealed) on January 10, 2018, and amended on
August 22, 2019, stipulates that pollutant discharge entities included in the Classified
Management Catalog of Pollutant Discharge License for Stationary Sources of Pollution ( ո
๕રϮ஢̙ʱᗳ၍ଣΤ፽) shall apply for and obtain a Pollutant Discharge License as
per the prescribed time limit; and those are not included in the catalog are not required to do
so for the time of being.
Environmental Impact Assessment and Completion Acceptance
Pursuant to the Environmental Impact Assessment Law of PRC ( ʕശɛ͏΍ձ਷ᐑྤ
) promulgated by the SCNPC on October 28, 2002, became effective on
September 1, 2003 and amended on July 2, 2016 and December 29, 2018, the State implements
administration by classification on the environmental impact of construction projects according
to the level of impact on the environment. The construction entity shall prepare an
environmental impact report, or an environmental impact form or complete an environmental
impact registration form (the “Environmental Impact Assessment Documents”) for reporting
and filing purpose. If the Environmental Impact Assessment Documents of a construction
project have not been reviewed by the approving authority in accordance with the law or have
not been granted approval after the review, the construction entity is prohibited from
commencing construction works.
According to the Regulations on the Administration of Construction Project
Environmental Protection (ᚐ၍ଣૢԷ) promulgated by the State Council
on November 29, 1998 and amended on July 16, 2017 and effective on October 1, 2017, and
the Interim Measures for the Acceptance Examination of Environmental Protection Facilities
of Construction Projects () promulgated by the
Ministry of Environmental Protection on November 20, 2017 and effective from the same date,
the State implements classified management on the environmental impact assessment of
construction projects in accordance with the degree of impact of construction projects on the
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environment. Construction units shall organize the preparation of environmental impact report,
environmental impact report form or filling in environmental impact registration form in
accordance with the degree of impact of construction projects on the environment. The
construction unit is the major entity responsible for the environmental protection acceptance of
construction unit is the major entity responsible for the environmental protection acceptance of
protection facilities, prepare the acceptance report, disclose relevant information, accept social
supervision, and ensure that the supporting environmental protection facilities and the main
part of the construction project are put into operation or use at the same time.
Regulation on the Management of Medical Waste and the Implementation Measures of the
Management of Medical Waste
According to the Regulation on the Management of Medical Waste (၍ଣૢ
Է), which was promulgated by the State Council on June 16, 2003 and amended on January
8, 2011, and the Implementation Measures of the Management of Medical Waste ( ᔼᐕሊ͛
), which was promulgated by the MOH on October 15, 2003 and
came into effect on the same day, medical or health institution shall register medical wastes,
manage medical wastes under classification and undertake management of duplicate forms for
transfer of hazardous waste in accordance with the Catalog of Classified Medical Wastes ( ᔼ
ʱᗳͦ፽), and deliver medical wastes to an entity for centralized disposal of medical
wastes and licensed by a relevant environment protection administrative department for
dispose. Sewage generated by any health institution and excretion of its patients or suspected
patients of infectious diseases shall be sterilized in strict accordance with the relevant
provisions, and shall not be discharged into sewage disposal systems until the discharging
standards are met.
Fire Prevention Design and Acceptance
The Fire Prevention Law of the PRC () (the “ Fire Prevention
Law”), was promulgated on April 29, 1998, then became effective on September 1, 1998 and
last amended on April 29, 2021. According to the Fire Prevention Law, for special construction
projects stipulated by the housing and urban-rural development authority of the State Council,
the developer shall submit the fire safety design documents to the housing and urban-rural
development authority for examination, while for construction projects other than those
stipulated as special development projects, the developer shall, at the time of applying for the
construction permit or approval for work commencement report, provide the fire safety design
drawings and technical materials which satisfy the construction needs.
According to Interim Regulations on Administration of Examination and Acceptance of
Fire Control Design of Construction Projects (
promulgated by the Ministry of Housing and Urban-Rural Development of the PRC on April
1, 2020, then became effective on June 1, 2020 and last amended on August 21, 2023 and
became effective on October 30,2023, an examination system for fire prevention design and
acceptance only applies to special construction projects, and for other projects, a record-filing
and spot check system should be applied.
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REGULATIONS ON FOREIGN INVESTMENT IN CHINA
Foreign Investment Law of PRC
The establishment, operation and management of corporate entities in the PRC are
governed by the Company Law of the PRC () (the “ Company
Law”) promulgated by the SCNPC in December 1993 and amended in December 1999, August
2004, October 2005, December 2013 and October 2018, respectively. The Company Law was
further amended on December 29, 2023 and the latest amendments will become effective on
July 1, 2024. The Company Law generally regulates two types of companies, namely, limited
liability companies and joint-stock limited companies. The PRC Company Law should also
apply to foreign-invested companies. On March 15, 2019, the 2nd meeting of the 13th SCNPC
approved the Foreign Investment Law of PRC () (the “ FIL”),
which became effective on January 1, 2020. According to the FIL, the “foreign investment”
refers to investment activities carried out directly or indirectly by foreign natural persons,
enterprises or other organizations (the “ Foreign Investors ”), including the following: (1)
Foreign Investors establishing foreign-invested enterprises in China alone or collectively with
other investors; (2) Foreign Investors acquiring shares, equities, properties or other similar
rights of Chinese domestic enterprises; (3) Foreign Investors investing in new projects in China
alone or collectively with other investors; and (4) Foreign Investors investing through other
ways prescribed by laws and regulations or the State Council. The State adopts the management
system of pre-establishment national treatment and negative list for foreign investment. The
pre-establishment national treatment refers to granting to foreign investors and their
investments, in the stage of investment access, the treatment no less favorable than that granted
to domestic investors and their investments. The negative list refers to special administrative
measures for access of foreign investment in specific fields as stipulated by the State. The State
will give national treatment to foreign investments outside the negative list. The negative list
will be released by or upon approval by the State Council. After the FIL came into effect, the
FIL replaced the Law of PRC on Sino-Foreign Equity Joint V entures ( ʕശɛ͏΍ձ਷ʕ̮
), the law on Sino-Foreign Contractual Joint V entures ( ʕശɛ͏΍ձ਷ʕ
) and the Wholly Foreign-Owned Enterprise Law of the PRC ( ʕശɛ͏
), became the legal foundation for foreign Investment in the PRC.
The Implementing Rules of Foreign Investment Law
Along with the FIL, the Implementing Rules of Foreign Investment Law of the PRC ( ʕ
ૢԷ) (the “FIL Implementing Rules”) promulgated by the
State Council and the Interpretation of the Supreme People’s Court on Several Issues
Concerning the Application of the Foreign Investment Law (ቇ͜<ʕശɛ
ج>༆ᙑ) promulgated by the Supreme People’s Court became
effective on January 1, 2020. The Implementing Rules of Foreign Investment Law further
clarified that the state encourages and promotes foreign investment, protects the lawful rights
and interests of foreign investors, regulates foreign investment administration, continues to
optimize foreign investment environment, and advances a higher-level opening.
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According to the FIL Implementing Rules, investments made within the PRC by
Taiwanese investors such as our Group shall be subject to the Law of the PRC on the Protection
of Investment by Taiwan Compatriots () (the
“Taiwanese Investment Protection Law”) and its Implementing Rules, and matters not provided
for in the Taiwanese Investment Protection Law and its Implementing Rules shall be governed
by the FIL and the FIL Implementing Rules.
Interim Measures for the Administration of Record-filing on the Incorporation and
Changes in Foreign-invested Enterprises, and Measures on Reporting of Foreign
Investment Information
On December 30, 2019, the MOC and the SAMR jointly promulgated the Measures on
Reporting of Foreign Investment Information (), which took effect
on January 1, 2020 and replaced the Interim Measures for the Administration of Record- filing
on the Incorporation and Changes in Foreign-invested Enterprises. Foreign investors carrying
out investment activities in the PRC directly or indirectly shall submit investment information
to the commerce administrative authorities pursuant to the Measures on Reporting of Foreign
Investment Information.
Special Administrative Measures for Access of Foreign Investment (Negative List) (2021
Version) and Encouraged Foreign Investment Catalog (2022 Version)
The Restricted Foreign Investment Industry List and the Prohibited Foreign Investment
Industry List under the Foreign Investment Catalog was replaced by the Special Administrative
Measures for Access of Foreign Investment (Negative List) (݄(ࠋ
૶ఊ)) (the “ Negative List ”) which was jointly promulgated by the MOC and NDRC on
June 28, 2018 amended on June 30, 2019, June 23, 2020 and December 27, 2021, and the latest
version took effect on January 1, 2022. The Encouraged Foreign Investment Industry List
under the Foreign Investment Catalog was replaced by the Encouraged Foreign Investment
Catalog ( ོᎸ̮ਠҳ༟ପุͦ፽) which was promulgated by the NDRC on June 30, 2019,
amended on December 27, 2020 and October 26, 2022, and the latest version became effect on
January 1, 2023. According to the Negative List and the Interim Measures for Administration
of Sino-foreign Joint V enture and Cooperative Medical Institutions ( ʕ̮Υ༟eΥЪᔼᐕዚ
), foreign equity share in medical institutions shall not exceed 70%.
However, where the Mainland and Hong Kong Closer Economic Partnership Arrangement
(τર) and its subsequent agreements, the
Mainland and Macau Closer Economic Partnership Arrangement (ͭһၡ
τર) and its subsequent agreements, the Cross-Straits Economic Cooperation
Framework Agreement (՘ᙄ) and its subsequent agreements, or
any international treaty or agreement to which China is a contracting party or has acceded
contain more preferential provisions on access treatment for overseas investors, such
provisions may apply.
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The Provisions on Guiding Foreign Investment Direction
The Provisions on Guiding Foreign Investment Direction (),
which was promulgated by the State Council on February 11, 2002 and came into effect on
April 1, 2002, classify all foreign investment projects into four categories: (1) encouraged
projects, (2) permitted projects, (3) restricted projects, and (4) prohibited projects. If the
industry in which the investment is to occur falls into the encouraged category, foreign
investment in certain cases may enjoy preferential policies or benefits. If the industry invested
falls into the restricted category, foreign investment may be conducted in accordance with
applicable legal and regulatory restrictions.
Domestic Regulations on Establishment of Taiwanese Sole Proprietorship Hospitals
The Taiwanese Investment Protection Law, which was promulgated by the SCNPC on
March 5, 1994, amended on September 3, 2016 and December 28, 2019, and the latest version
of which took effect on January 1, 2020, and the Implementing Rules of the Taiwanese
Investment Protection Law of the PRC (),
which was promulgated by the State Council on December 5, 1999 and amended and took
effect on November 29, 2020, stipulate that the State shall, according to the law, protect
investments made by Taiwanese investors, returns on their investments, and any other
legitimate rights and interests enjoyed by them. The establishment of investment enterprises
funded by Taiwanese investors shall conform to the State’s industrial policies, and aid in the
development of the national economy. Matters not provided for therein shall be governed by
other PRC foreign-related economic laws and administrative regulations. Regulations of the
State Council on Encouraging Investment by Taiwan Compatriots (ߤ
), which was issued and implemented by the State Council on July 3, 1988,
Taiwanese investors can invest in industries such as industry, agriculture, services, and other
industries in line with the direction of social and economic development in mainland China.
Taiwanese investors can choose investment projects from the projects announced by relevant
departments of local people’s governments, or they can submit their own investment project
intentions and apply to the foreign economic and trade department of the intended investment
area or the approval authority designated by the local people’s government. The state
encourages Taiwanese investors to invest in and establish product export enterprises and
advanced technology enterprises and provides corresponding preferential treatment.
The Notice on Printing and Distributing the Interim Measures for the Management of Sole
proprietorship Hospitals Established by Taiwanese Service Providers in Mainland China ( ̨
), which was promulgated by the MOH and
MOC on October 22, 2010 in order to strengthen and promote cross-strait economic
cooperation and implement the Cross-Straits Economic Cooperation Framework Agreement
(՘ᙄ), stipulates that the establishment of sole proprietorship
hospitals by Taiwanese service providers in mainland China is limited to Shanghai, Jiangsu,
Fujian, Guangdong, and Hainan provinces. Taiwanese service providers can establish Taiwan
funded wholly owned hospitals in mainland China and independently choose to operate for
profit or non-profit purposes.
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According to the Interim Measures on Determining the Trans-investment of Taiwanese
Investors through a Third Place () (the
“Measures”), which was promulgated by the Ministry of Commerce of the PRC and Taiwan
Affairs Office of the State Council on February 20, 2013 and last amended on December 31,
2019, a Taiwanese investor who has invested to establish enterprises in Mainland China
through a third place company, enterprise or other economic organization (the “Third-Place
Investor”), which is directly or indirectly owned or controlled by a Taiwanese investor, may
file an application to recognize such Third-Place Investor as a deemed Taiwanese investor. The
term “owned” refers to the situation that the Taiwanese investor owns more than 50% equity
of the Third-Place Investor. The term “controlled” refers to any of the following situation
where the requirements of “owned” hereof are not met: (i) where the Taiwanese investor
actually owns more than half of the voting power of power organs of the Third-Place Investor
such as the board of directors, the general meeting of shareholders, etc.; (ii) where the
Taiwanese investor has the right to appoint more than half of the members of the power organs
of the Third-Place Investor such as the board of directors, and the operation decision-making
and other matters of the Third-Place Investor are determined by such power organs; (iii) where
the Taiwanese investor has the right to determine the operation, finance, human resource and
other matters of the Third-Place Investor; and (iv) other circumstances as provided by the MOC
together with the Taiwan Affairs Office of the State Council.
Taiwanese service providers who apply to establish sole proprietorship hospitals shall be
legal entities with the capabilities of independently assuming civil responsibilities, have direct
or indirect experience in medical care investment and management and satisfy any of the
following requirements: (i) able to provide advanced hospital management experience,
management model and service model; or (ii) able to provide internationally leading medical
technologies. Any Taiwan funded wholly owned hospital which is to be established shall meet
the following conditions: (i) it shall be an independent legal entity; (ii) if it is a Class III
hospital, its total investment amount shall be no less than RMB50,000,000, and if it is a Class
II hospital, its total investment amount shall be no less than RMB20,000,000; and (iii) it shall
meet the standards for Class II hospitals and above. If such hospital is to be set up in former
revolutionary base areas, ethnic group areas, border areas and poverty-stricken areas, the
requirement for its total investment amount may be lowered appropriately. The health
administrative department (including the competent department of traditional Chinese
medicine, the same below) and the commercial department of the local people’s government at
or above the city level with districts shall be responsible for the daily supervision and
management of Taiwan funded wholly owned hospitals within their respective administrative
areas. For-profit Taiwanese sole proprietorship hospitals shall comply with the relevant
regulations of the mainland China on foreign-invested enterprises and accept supervision from
relevant departments in the mainland China.
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REGULATIONS RELATING TO OVERSEAS LISTINGS
The Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with
the Law
On July 6, 2021, the Opinions on Strictly Cracking Down Illegal Securities Activities in
Accordance with the Law (จԈ) was jointly issued by
the General Office of the Communist Party of China Central Committee and the General Office
of the State Council, which steps up scrutiny of overseas listings by companies and calls for
strengthening cooperation in cross-border regulation, amending relevant laws and regulations
on cyber security, cross-border data transmission and confidential information management,
including the confidentiality requirement and file management related to the issuance and
listing of securities overseas, enforcing the primary responsibility of the enterprises for
information security of Chinese-based overseas listed companies and promoting the
construction of relevant regulatory systems to deal with the risks and incidents faced by
Chinese-based overseas-listed companies.
The Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures and five
relevant guidelines, which came into effect on March 31, 2023. The Trial Administrative
Measures provide that (i) domestic companies that seek to offer or list securities overseas, both
directly and indirectly, should complete a filing procedure and submit relevant information to
the CSRC. In the event of subsequent offering and occurrence of certain major events, domestic
companies shall also complete relevant filing procedures and submit information to the CSRC.
If a domestic company fails to complete the filing procedures, omits any material fact, falsifies
any content or contains any misleading statement in its filing documents, such domestic
company may be subject to administrative penalties, such as an order to rectify, warnings,
fines, and its controlling shareholders, actual controllers, the person directly in charge and
other directly liable persons may also be subject to administrative penalties, such as warnings
and fines; (ii) if both of the following conditions are met, the overseas offering and listing shall
be determined as an indirect overseas offering and listing by a domestic company: (a) any of
the revenue, total profit, total asset, or net asset of the domestic operating entities of the issuer
in the most recent accounting year accounts for more than 50% of the corresponding figures
in the issuer’s audited consolidated financial statements for the same period; and (b) its major
operational activities are carried out in the PRC or its main place of business is in the PRC,
or members of the senior management in charge of business operation and management are
mostly Chinese citizens or are domiciled in the PRC; (iii) where a domestic company seeks to
indirectly offer and list securities in an overseas market, the issuer shall designate a major
domestic operating entity as the responsible entity for the filing procedures with the CSRC; and
(iv) where an issuer makes an application for initial public offering and listing in an overseas
market, the issuer shall file with the CSRC within three business days after such application
is submitted.
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REGULATIONS ON EMPLOYMENT
Labor Law of the PRC
The Labor Law of PRC (), which was promulgated by the
SCNPC on July 5, 1994, came into effect on January 1, 1995, and was amended on August 27,
2009 and December 29, 2018, provides that an employer shall develop and improve its rules
and regulations to safeguard the rights of its workers. Labor safety and health facilities must
comply with relevant national standards. Workers engaged in special operations shall have
received specialized training and obtained the pertinent qualifications.
Labor Contract Law of PRC and its Implementation Regulations
The Labor Contract Law of PRC (), which was
promulgated by the SCNPC on June 29, 2007, came into effect on January 1, 2008, and was
amended on December 28, 2012, and came into effect on July 1, 2013, and the Implementation
Regulations on Labor Contract Law (ૢԷ) which was
promulgated and came into effect on September 18, 2008 by the State Council, regulate the
relations of employer and the employee, and contain specific provisions involving the terms of
the labor contract.
REGULATIONS ON SUPERVISION OVER THE SOCIAL SECURITY INSURANCE
AND HOUSING FUNDS
The Law on Social Insurance (), which was promulgated
by the SCNPC on October 28, 2010 and came into effect on July 1, 2011, and was amended
on December 29, 2018 regulates basic pension insurance, unemployment insurance, maternity
insurance, work injury insurance and medical insurance, and has elaborated in detail the legal
obligations and liabilities of employers who do not comply with relevant laws and regulations
on social insurance. According to the Provisional Regulations on the Collection and Payment
of Social Insurance Premium (ᎈ൬ᅄᖮᅲБૢԷ), the Regulations on Work Injury
Insurance (ᎈૢԷ), the Regulations on Unemployment Insurance (ᎈૢ
Է) and the Trial Measures on Employee Maternity Insurance of Enterprises ( Άุᔖʈ͛
), enterprises in China must provide benefit plans for their employees, which
include basic pension insurance, unemployment insurance, maternity insurance, work injury
insurance and medical insurance. An enterprise must provide social insurance by processing
social insurance registration with local social insurance agencies and must pay or withhold
relevant social insurance premiums for or on behalf of employees. According to the
Interpretation (ll) of the Supreme People’s Court on Issues Concerning the Application of Law
in the Trial of Labor Dispute Cases (༆
ᙑ(ɚ)), which became effective on September 1, 2025, where the employer fails to make
social insurance contributions in accordance with the law, and the employee requests to
terminate the labor contract and claim economic compensation in accordance with relevant
provisions of the Labor Contract Law of the People’s Republic of China ( ʕശɛ͏΍ձ਷
), the people’s court shall uphold such claim.
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The Regulations on the Administration of Housing Provident Fund (၍ଣૢ
Է), which was promulgated on April 3, 1999 and came into effect on the same date, and was
amended on March 24, 2002 and March 24, 2019, stipulates that housing provident fund
contributions paid by an individual employee and housing provident fund contributions paid by
his or her employer shall all belong to the individual employee.
REGULATIONS OF LAND USE RIGHT AND CONSTRUCTION
Pursuant to Land Administration Law of the PRC ()
promulgated by the SCNPC on June, 1986 with the latest amendment in August 2019, which
became effective in January 2020, and Civil Code, any entity that needs land for the purposes
of construction must obtain land use right and must register with local counterparts of Land and
Resources Ministry. Land use right is established at the time of registration. According to the
Measures for Control and Administration of Grant and Assignment of Right to Use Urban
State-owned Land () promulgated by the
Ministry of Housing and Urban-Rural Development on December, 1992 with the amendment
in January 2011, and the PRC Law on Urban and Rural Planning (ඊ஝ྌ
) promulgated by the NPC on October, 2007 and became effective in January 2008 with
the latest amendment in April 2019, the Measures for Administration of Permission for
Commencement of Construction Works () promulgated by the
Ministry of Housing Construction and Urban-Rural Development with the latest amendment in
March 2021, the Interim Administrative Measures for Archival Filing on Inspection Upon
Completion of Buildings and Municipal Infrastructure (ʈ೻
) promulgated by the Ministry of Housing and Urban-Rural
Development in April 2000 and most recently amended in October 2009, and the Regulations
on the Quality Management of Construction Engineering (ணʈ೻ሯඎ၍ଣૢԷ)
promulgated by the State Council in January 2000 and most recently amended in April 2019,
after obtaining land use right, the owner of land use right must obtain construction land
planning permit, construction works planning permit from the relevant municipal planning
authority, and a construction permit from relevant construction authority in order to commence
construction. After a building is completed, an examination of completion by the relevant
governmental authorities and experts must be organized.
REGULATIONS ON TAX IN THE PRC
Enterprise Income Tax Law
According to the Enterprise Income Tax Law of the PRC (੻೼
) (the “ EIT Law ”), which was promulgated on March 16, 2007 and last amended on
December 29, 2018 and became effective on the same date, and the Implementation Rules to
the EIT Law (ૢԷ), which was promulgated on
December 6, 2007, last amended on December 6, 2024 and became effective on January 20,
2025, enterprises are divided into resident enterprises and non-resident enterprises. A resident
enterprise shall pay enterprise income tax on its income deriving from both inside and outside
China at the rate of enterprise income tax of 25%. A non-resident enterprise that has an
establishment or place of business in the PRC shall pay enterprise income tax on its income
deriving from inside China and obtained by such establishment or place of business, and on its
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income which derives from outside China but has actual relationship with such establishment
or place of business, at the rate of enterprise income tax of 25%. A non-resident enterprise that
does not have an establishment or place of business in China or has an establishment or place
of business in China but the income has no actual relationship with such establishment or place
of business, shall pay enterprise income tax on its income deriving from inside China at the
reduced rate of enterprise income tax of 10%.
Value-added Tax
According to the Provisional Regulations on V alue-added Tax of the PRC ( ʕശɛ͏΍
೼ᅲБૢԷ) (the “ V AT Regulations ”), which was promulgated by the State
Council on December 13, 1993 and came into effect on January 1, 1994 and last revised on
November 19, 2017, the Implementation Regulations to the V A T Regulations of the PRC ( ʕ
), which was promulgated by MOF on December 25,
1993 and last revised on October 28, 2011, and the Notice of the MOF and the SA T on Overall
Implementation of the Pilot Program of Replacing Business Tax with V alue-added Tax ( ৌ
), which was promulgated
on March 23, 2016 and came into effect on May 1, 2016, and last revised on March 20, 2019,
all business tax payers in the consumer service industry shall pay value-added tax instead of
business tax from May 1, 2016. If the taxpayer of the pilot project has already enjoyed tax
incentives of business tax according to relevant policies and regulations before the application
of the pilot collection of V A T in lieu of business tax, he may, in the remaining period of tax
incentives, enjoy tax incentives of V A T in accordance with the relevant provisions.
Furthermore, according to the Pilot Program, medical services provided by medical
institutions, which are listed in the Specifications for Pricing Items of National Medical
Services, shall be exempted from V A T.
As provided in Circular of the MOF and the SA T on the Relevant Tax Policies in Respect
of Medical and Hygiene Institutions (݁
), which was promulgated by the MOF and the SA T on July 10, 2000 and became
effective on the same date and further revised by the MOF on May 18, 2009 and became
effective on January 1, 2009, medical services income obtained by NMIs at the price set by the
state shall be exempted from any taxes. In respect of those medical services income which is
not obtained at the price set by the state, this exemption policy shall not apply. Taxes on the
income obtained by the PMIs shall be imposed according to the relevant provisions.
REGULATIONS ON FOREIGN EXCHANGE IN THE PRC
Pursuant to Foreign Exchange Administration Rules of the PRC ( ʕശɛ͏΍ձ਷̮ි
၍ଣૢԷ) (the “ Foreign Exchange Administration Rules ”), which was promulgated by the
State Council of the PRC on January 29, 1996, came into effect on April 1, 1996 and further
amended on January 14, 1997 and August 5, 2008. Under these rules, Renminbi is generally
freely convertible for payments of current account items, such as trade and service-related
foreign exchange transactions and dividend payments, but not freely convertible for capital
account items, such as capital transfer, direct investment, investment in securities, derivative
products or loans unless the prior approval by the competent authorities for the administration
of foreign exchange is obtained.
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Under the Foreign Exchange Administration Rules, foreign-invested enterprises in the
PRC may purchase foreign exchange without the approval of the SAFE for paying dividends
by providing certain evidencing documents (board resolutions, tax certificates, etc.), or for
trade and services-related foreign exchange transactions by providing commercial documents
evidencing such transactions. They are also allowed to retain foreign currency (subject to a cap
approval by SAFE) to satisfy foreign exchange liabilities. In addition, foreign exchange
transactions involving overseas direct investment or investment, and trading in securities,
derivative products abroad are subject to registration with the competent authorities for the
administration of foreign exchange and approval or filings with the relevant governmental
authorities (if necessary).
Pursuant to the Circular of the SAFE on Further Simplifying and Improving the Direct
Investment related Foreign Exchange Administration Policies (ආɓӉ
), which was promulgated on February 13, 2015,
implemented on June 1, 2015 and subsequently amended on December 30, 2019, the initial
foreign exchange registration for establishing or taking control of an SPV by domestic
residents can be conducted with a qualified bank, instead of the local foreign exchange bureau.
According to the Circular of the SAFE on the Reform of the Management Method for the
Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (̮ි၍ଣ҅ᗫ
) promulgated by the SAFE on March
30, 2015 and came into effect on June 1, 2015 and subsequently amended on December 30,
2019 and March 23, 2023, and the Circular of the SAFE on the Reform and Standardization of
the Management Policy of the Settlement of Capital Projects (ձ஝
) promulgated by the SAFE on June 9, 2016, the settlement
of foreign exchange by foreign invested enterprises shall be governed by the policy of foreign
exchange settlement on a discretionary basis. However, the settlement of foreign exchange
shall only be used for its own operation purposes within the business scope of the foreign
invested enterprises and following the principles of authenticity.
According to the Notice of the SAFE on Optimizing Foreign Exchange Administration to
Support the Development of Foreign-related Business (Ꮄʷ̮ි၍ଣ˕
), which was issued by the SAFE on April 10, 2020 and took effect
from the same day, under the prerequisite of ensuring true and compliant use of funds and
compliance with the prevailing administrative provisions on use of income under the capital
account, enterprises which satisfy the criteria are allowed to use income under the capital
account, such as capital funds, foreign debt and overseas listing, etc. for domestic payment,
without prior provision of proof materials for veracity to the bank for each transaction.
Dividend Distribution
The SAFE promulgated the Notice on Improving the Check of Authenticity and
Compliance to Further Promote the Reform of Foreign Exchange Control (ආɓӉપආ
) in January 2017, which stipulates several capital
control measures with respect to outbound remittance of profits from domestic entities to
offshore entities, including the following: (1) under the principle of genuine transaction, banks
shall check board resolutions regarding profit distribution, the original version of tax filing
REGULATORY OVERVIEW
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records and audited financial statements; and (2) domestic entities shall hold income to account
for previous years’ losses before remitting the profits. Moreover, domestic entities shall make
detailed explanations of sources of capital and utilization arrangements, and provide board
resolutions, contracts and other proof when completing the registration procedures in
connection with an outbound investment.
Foreign Exchange Registration of Offshore Investment by PRC Residents
In July 2014, the SAFE promulgated the Notice of the State Administration of Foreign
Exchange on Issues concerning Foreign Exchange Administration of the Overseas Investment
and Financing and the Round-tripping Investment Made by Domestic Residents through
Special-Purpose Companies (೻ҳ༟̮ි၍
) (the “ SAFE Circular 37 ”). The SAFE Circular 37 requires PRC
residents, including PRC individuals and PRC corporate entities, to register with SAFE or its
local branches in connection with their direct or indirect offshore investment activities.
Under the SAFE Circular 37, PRC residents who make, or have prior to the
implementation of the SAFE Circular 37 made, direct or indirect investments in an offshore
special purpose vehicle (the “ SPV”) are required to register such investments with SAFE or its
local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV ,
is required to update its registration with the local branch of SAFE with respect to that SPV ,
to reflect any change of basic information or material events. If any PRC resident shareholder
of such SPV fails to make the required registration or to update the registration, the subsidiary
of such SPV in China may be prohibited from distributing its profits or the proceeds from any
capital reduction, share transfer or liquidation to the SPV , and the SPV may also be prohibited
from making additional capital contributions into its subsidiaries in China.
REGULATIONS IN TAIW AN RELATING TO INVESTMENT IN PRC
 General
The Act Governing Relations between the People of the Taiwan Area and Mainland Area
(ૢԷ)( “ Relations Act ”) covers a broad spectrum of cross-
Taiwan Strait matters, including documentation verification, employment, inheritance,
transportation, advertisements, business activities, and civil and criminal penalties.
The Relations Act authorized the Ministry of Economic Affairs ( ຾᏶௅) (the “ MOEA ”)
to promulgate the Permission Rules for Investment or Technical Cooperation in Mainland
China (جand the Review Principles for Investments
or Technical Cooperation in Mainland China (ۆࡡݟ)
collectively, “ Mainland China Investment Approval Regulations ”). Among other things,
the Mainland China Investment Approval Regulations set forth a list of items in which
Taiwanese Investors (as defined below) may or may not invest or cooperate with mainland
China (“ Investment List ”). Currently, the Investment List is divided into two categories:
general items ( ɓছᗳ) and prohibited items ( ຫ˟ᗳ). “Prohibited items” are those items for
REGULATORY OVERVIEW
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which a Taiwanese Investor’s investment or technical cooperation is prohibited because of
reasons linked to (i) international conventions, (ii) national security, (iii) major infrastructure
projects, and (iv) industrial developments (such as core technologies and essential
components). Items not identified as prohibited are “general items” for which investment is
permitted with prior approval from or post reporting to the Taiwan Department of Investment
Review of the MOEA (the “ DIR”).
 Definition of Investment in Mainland China
According to Article 3 of the Permission Rules for Investment or Technical Cooperation
in Mainland China, an investment in mainland China made by individuals with Taiwan
household registrations or Taiwan-incorporated entities (“ Taiwanese Investor ”) includes: (i)
establishing a new company or enterprise in mainland China; (ii) increasing capital in an
existing company or enterprise in mainland China; (iii) obtaining shareholding in an existing
company or enterprise in mainland China (excluding the purchase of shares of a listed
company); and (iv) establishing or expanding a branch or enterprise in mainland China.
Under the Mainland China Investment Approval Regulations, investment made by a
Taiwanese Investor in a company in a third region (i.e. not in Taiwan or mainland China) which
directly or indirectly conducts any of the aforementioned investment activities in mainland
China and where the Taiwanese Investor (a) acts as director, supervisor, manager or holds an
equivalent position or (b) holds a shareholding or capital contribution of more than 10% in
such third region company, the investment in such third region company would also be deemed
as an investment in mainland China under the Mainland China Investment Approval
Regulations. This type of investment requires prior approval from or post reporting to the DIR.
Further, under the ruling issued by the DIR, a Taiwanese Investor is required to apply for
prior approval from, or make post reporting to, the DIR for investment in the mainland China
pursuant to the Mainland China Investment Approval Regulations, if the third region company
already has any direct or indirect investment in mainland China at the time when the Taiwanese
Investor makes the investment in such third region company, even if the Taiwanese Investor
does not (a) acts as director, supervisor, manager or holds an equivalent position; or (b) holds
a shareholding or capital contribution of more than 10% in such third region company.
However, there are exemptions for listed companies on overseas or Hong Kong/Macau
securities markets. According to the FAQs ( ੬Ԉਪഈණ) published on the DIR’s website, direct
or indirect securities investments made by Taiwanese Investors in companies listed on overseas
or Hong Kong/Macau securities markets require prior approval from, or post reporting to, the
DIR only if the Taiwanese Investor (a) acts as director, supervisor, manager or holds an
equivalent position or (b) holds a shareholding or capital contribution of more than 10% in
such third region company. As advised by our Taiwan legal advisor, if our Company makes any
equity capital increase into our subsidiary(ies) in mainland China after the completion of the
Listing, our Taiwanese Investors who (a) acts as director, supervisor, manager or holds an
equivalent position or (b) holds a shareholding of more than 10% in our Company will also
need to apply for prior approval from, or make post reporting to, the DIR for such equity
REGULATORY OVERVIEW
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capital increase, while our Taiwanese Investors who hold less than 10% of shares in our
Company and do not serve any position as directors, supervisors, or managers or any
equivalent positions in our Company are exempted from such approval or post reporting
requirements under the Mainland China Investment Approval Regulations for such equity
capital increase in our subsidiary(ies) in mainland China after the completion of the Listing.
 Investment Quota
According to Article 7 of the Permission Rules for Investment or Technical Cooperation
in Mainland China and Article 4 of the Review Principles for Investments or Technical
Cooperation in Mainland China, for investments in neither prohibited nor conditionally
permitted categories (like the Group’s business), if the total cumulative investment amount of
a Taiwanese Investor in a single mainland China entity does not exceed US$1 million on an
all-time accumulated basis, such Taiwanese Investor can report to the DIR within six months
after the investment was made (i.e., the date of the settlement of the investment consideration).
If the Taiwanese Investor’s cumulative investment in a single mainland China entity exceeds
US$1 million on an all-time accumulated basis, such Taiwanese Investor is required to obtain
the DIR’s prior approval before making such investment. Any transfer or termination of an
approved investment in mainland China shall be reported to the DIR for its records within two
months of the occurrence.
As to the maximum aggregate investment quota, Article 3 of the Review Principles for
Investments or Technical Cooperation in Mainland China provides the following:
(i) The maximum aggregate investment quota in mainland China by any Taiwanese
individual: US$5 million per year;
(ii) By a small and medium-sized enterprise: either (a) 60% of its net value or
consolidated net value or (b) NTD80 million, whichever is higher;
(iii) By other enterprises: 60% of its net value or consolidated net value, whichever is
higher.
Nevertheless, in determining the investment quota, the DIR would not take into account
the reinvestment of profits generated from the original mainland China investment (e.g., capital
distribution directly or indirectly from earnings of the invested mainland China entities).
The abovementioned maximum aggregate investment quota does not apply to (a) a
Taiwanese enterprise having obtained the operation headquarters confirmation from the
Ministry of Economic Affairs (e.g. Qisda Corporation and BenQ Corp.); or (b) a Taiwanese
subsidiary of an overseas multinational enterprise achieving global operating revenue over
US$100 million in the preceding year and having subsidiaries or branch offices in two or more
countries, which are controlled by the overseas multinational enterprise or its offshore parent
company (i.e. not in Taiwan or mainland China).
REGULATORY OVERVIEW
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As advised by our Taiwan legal advisor, Qisda Corporation and BenQ Corp. have
obtained the operation headquarters confirmation and are not subject to the investment quota.
Furthermore, as of March 31, 2025, Darly2 V enture and Darly V enture’s cumulative investment
amounts in mainland China amount to approximately 49.94% and 14.08% of their net worth,
respectively. As advised by our Taiwan legal advisor, the DIR assesses the investment quota on
an entity-by-entity basis. Therefore, one Taiwanese Controlling Shareholder reaching its
investment limit does not affect the ability of other Taiwanese Controlling Shareholders to
make further investments in mainland China. Based on the above, upon consulting our Taiwan
legal advisor, our Company believes that, in the event that further investment(s) by the
Taiwanese Controlling Shareholders in the Company are necessary, there are no material
adverse impact on the ability of Taiwanese Controlling Shareholders (i.e. Qisda Corporation
and its wholly-owned subsidiaries, taken as a whole) to make such further investment(s) in the
Company, as Qisda Corporation and BenQ Corp. are not subject to any investment quota in
mainland China. Our Company or our Taiwan legal advisor cannot guarantee that the current
practice and policy of the DIR will remain the same in the future.
 Penalty
If a Taiwanese Investor of our Company violates the Mainland China Investment
Approval Regulations when investing without obtaining prior approval from or making a post
reporting with the DIR, as the investment is categorized under the general items, such
Taiwanese Investor would be subject to an administrative fine ranging from NT$50,000 to
NT$25,000,000, and may, in addition, be ordered by the DIR to rectify the investment by
making a voluntary report to DIR and apply to DIR for approval of such investment, and/or
withdraw the investment within a specified period. Such penalties will not be directed at our
Company or our subsidiary(ies) in mainland China which our Taiwanese Investors invest in.
Nevertheless, any violation of the applicable investment quota of our Taiwanese Investors or
the failure of our Taiwanese Investors to obtain the requisite approval from the DIR for their
investment in the Group may delay our expansion plan as we will be required to seek
alternative routes to implement our expansion plan, which may involve additional time and
hence will affect our business operations.
 Compliance of our Company’ s Taiwanese Shareholders
As advised by our Taiwan legal advisor, Qisda Corporation, Darly2 V enture, Darly
V enture and BenQ Corp. (each a “ Taiwanese Controlling Shareholder ”) had obtained
approvals from the DIR for their respective indirect investments in enterprises in mainland
China through investment in the Company. As advised by our Taiwan legal advisor, Taiwanese
directors who are shareholders of the Company are similarly required to comply with obtaining
prior approval or making post-reporting requirements (depending on the amount of the
investment) in their own personal capacity as shareholders of the Company. Each of them has
already completed their respective regulatory reporting/approval processes.
REGULATORY OVERVIEW
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As our Taiwanese Controlling Shareholders had already obtained the approvals from the
DIR for their respective indirect investment in enterprises in mainland China through
investment in our Company, our Taiwan legal advisor advised that their respective Taiwanese
Investors would not be subject to the Mainland China Investment Approval Regulations.
Based on our Taiwan legal advisor’s consultation with the DIR, they believe that the DIR
would likely take the position that as long as the Company’s Taiwanese Controlling
Shareholder are interested in the Shares, certain equity capital increase by the Company into
its subsidiary(ies) in mainland China will be considered as additional indirect investment by
the Taiwanese Controlling Shareholders. The amount of investment made by each Taiwanese
Controlling Shareholder will be determined with reference to their shareholding in the
Company. If the DIR takes that position, each of the Taiwanese Controlling Shareholders will
be required to obtain an approval from the DIR for their equity capital increase. Based on the
current practice and policy of the DIR, the Taiwanese Controlling Shareholder are not expected
to have any legal impediment in obtaining approval from the DIR for equity capital increase
into the Company’s mainland China subsidiaries in the future so long as each of the Taiwanese
Controlling Shareholder complies with the Mainland China Investment Approval Regulations
and the equity capital increase does not exceed the applicable investment quota.
Furthermore, as advised by our Taiwan legal advisor, the Listing of our Company does not
constitute a spin-off from Qisda Corporation under Taiwan laws and regulations.
REGULATORY OVERVIEW
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Upon Listing, transactions between us and our connected persons will constitute our
connected transactions under Chapter 14A of the Listing Rules.
OUR CONNECTED PERSONS
Qisda Corporation is our ultimate Controlling Shareholder interested directly and
indirectly in 232,736,837 Shares in aggregate, representing approximately 95.02% equity
interests in our Company as of the Latest Practicable Date and approximately 74.61% of the
equity interests in our Company upon completion of the Global Offering (assuming the options
granted under the Pre-IPO Share Option Plan are not exercised). For further details, see
“Relationship With Our Controlling Shareholders” in this prospectus.
Accordingly, the Qisda Group and other associates of Qisda Corporation (together with
the Qisda Group, “ Qisda Connected Persons ”) will be our connected persons pursuant to
Chapter 14A of the Listing Rules and transactions between the Group and Qisda Connected
Persons will be our connected transactions upon the Listing.
PARTIALLY EXEMPT CONTINUING CONNECTED TRANSACTIONS
The following transactions with Qisda Connected Persons are made in the ordinary and
usual course of business and on normal commercial terms or better, where, as our Directors
currently expect, the highest applicable percentage ratio for the purpose of Chapter 14A of the
Listing Rules for each of such transactions will be more than 0.1% but less than 5% on an
annual basis. Under Rule 14A.76(2)(a) of the Listing Rules, the following continuing
connected transactions will be subject to the announcement, reporting and annual review
requirements under Chapter 14A of the Listing Rules but will be exempted from the circular
(including independent financial advice) and independent Shareholders’ approval requirements
under Chapter 14A of the Listing Rules.
CONNECTED TRANSACTIONS
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The following table sets forth a summary of our partially exempt continuing connected
transactions:
Transactions
Applicable
Listing Rules Waiver Sought
Proposed annual caps
for the year ending
December 31,
2025 2026 2027
(RMB’000)
1. Healthcare Services
Framework Agreement /H1118/H1118/H1118
Rules 14A.76(2)(a)
and 14A.105
Waiver from strict
compliance with
the announcement
requirements
under Rule
14A.35 of the
Listing Rules
3,558 3,637 3,724
Provision of healthcare
services to Qisda
Connected Persons
2. Property Leasing
Framework Agreement /H1118/H1118/H1118
Leasing of property to
Qisda Connected Persons
4,366 4,817 4,843
Leasing of property from
Qisda Connected Persons
4,899 5,389 5,927
3. Medical Product and
Equipment Procurement
Framework Agreement /H1118/H1118/H1118
9,504 10,454 11,499
Medical product and
equipment procurement
from Qisda
Connected Persons
1. Healthcare Services Framework Agreement
Principal terms
On December 3, 2025, our Company (for itself and on behalf of its subsidiaries)
entered into a healthcare services framework agreement (the “ Healthcare Services
Framework Agreement ”) with Qisda Corporation (for itself and on behalf of other Qisda
Connected Persons), pursuant to which our Group will provide healthcare services (such
as physical examination services) to employees of Qisda Connected Persons located in the
PRC (the “ Healthcare Services ”). The Healthcare Services Framework Agreement has a
term commencing from the Listing Date to December 31, 2027, which may be renewed
as the parties may mutually agree, subject to compliance with the requirements under
Chapter 14A of the Listing Rules and other applicable laws and regulations. The
definitive healthcare services agreements to be entered into between members of our
Group and Qisda Connected Persons shall only contain provisions which are, in all
material aspects, consistent with the binding principles, guidelines, terms and conditions
set out in the Healthcare Services Framework Agreement.
CONNECTED TRANSACTIONS
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Historical amounts
The following table sets out the total amount of fees incurred by Qisda Connected
Persons payable to our Group in respect of the Healthcare Services and as a percentage
of our total revenue during the Track Record Period:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2025
(RMB’000) % (RMB’000) % (RMB’000) % (RMB’000) %
3,641 0.16 2,147 0.08 3,486 0.13 1,288 0.10
Pricing terms
The fees to be charged for the Healthcare Services will be determined after arm’s
length negotiations with reference to, where applicable, (i) the prevailing market price of
similar healthcare services; (ii) the prices charged by us for providing similar healthcare
services to the Independent Third Parties with comparable terms; and (iii) number of
employees of Qisda Connected Persons who are entitled to such healthcare services.
Proposed annual caps and basis for determination
The following table sets forth the expected maximum fees payable by Qisda
Connected Persons to our Group annually in respect of the Healthcare Services for each
of the three years ending December 31, 2027:
For the year ended December 31,
2025 2026 2027
(RMB’000) (RMB’000) (RMB’000)
3,558 3,637 3,724
In arriving at the above proposed annual caps, our Directors have considered, among
others, the following factors:
 the historical transaction amounts during the Track Record Period;
 the estimated fees to be received by us in relation to the Healthcare Services
based on the existing contracts;
 the scope of the Healthcare Services is expected to remain substantially the
same during the term of the Healthcare Services Framework Agreement;
 the prevailing market price of the Healthcare Services is expected to increase
slightly during the term of the Healthcare Services Framework Agreement;
CONNECTED TRANSACTIONS
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 the number of employees of Qisda Connected Persons who are entitled to enjoy
the Healthcare Services for the year ending December 31, 2025, 2026 and 2027
respectively is expected to remain relatively stable;
 the Healthcare Services provided to Qisda Connected Persons consist
predominantly of employee physical examinations, which are customarily
scheduled by Qisda in the second half of each year following annual benefit
renewals and centralized corporate scheduling; and
 the expected inflation during the term of the Healthcare Services Framework
Agreement.
Reasons and benefits of the transactions
Since the provision of healthcare services is the core business of the Group, the
Group provides the Healthcare Services to the employees of corporate customers
including Qisda Connected Persons and other independent third parties in our ordinary
course of business. The provision of the Healthcare Services to employees of Qisda
Connected Persons is in line with our ordinary and usual course of business. Furthermore,
we can further increase our customer base through the provision of the Healthcare
Services to Qisda Connected Persons’ employees, who may further refer our services to
other potential customers. Our Directors believe that entering into the Healthcare Services
Framework Agreement and the terms thereof are fair and reasonable, and are in the
interests of our Shareholders as a whole.
2. Property Leasing Framework Agreement
Principal terms
On December 3, 2025, our Company (for itself and on behalf of its subsidiaries)
entered into a property leasing framework agreement (the “ Property Leasing
Framework Agreement ”) with Qisda Corporation (for itself and on behalf of other Qisda
Connected Persons), pursuant to which (i) our Group will lease certain properties to Qisda
Connected Persons for office use and (ii) Qisda Connected Persons will lease certain
properties to our Group for employee dormitory and registration office use (together, the
“Property Lease ”). The Property Leasing Framework Agreement has a term commencing
from the Listing Date to December 31, 2027, which may be renewed as the parties may
mutually agree, subject to compliance with the requirements under Chapter 14A of the
Listing Rules and other applicable laws and regulations. The definitive property lease
agreements to be entered into between members of our Group and Qisda Connected
Persons shall only contain provisions which are, in all material aspects, consistent with
the binding principles, guidelines, terms and conditions set out in the Property Leasing
Framework Agreement.
Accounting treatment
In accordance with the accounting standards applicable to our Group, the rents paid
by our Group under the Property Leasing Framework Agreement are recognized as our
expenses (instead of acquisition of right-of-use assets under IFRS 16).
CONNECTED TRANSACTIONS
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Historical amounts
The following table sets out the total amount of rents incurred by Qisda Connected
Persons payable to our Group and as a percentage of our total revenue during the Track
Record Period:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2025
(RMB’000) % (RMB’000) % (RMB’000) % (RMB’000) %
4,648 0.20 4,679 0.17 4,486 0.17 2,167 0.17
The following table sets out the total amount of rents incurred by our Group payable
to Qisda Connected Persons and as a percentage of our administrative expenses during the
Track Record Period:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2025
(RMB’000) % (RMB’000) % (RMB’000) % (RMB’000) %
3,242 1.49 3,423 1.42 4,455 1.57 1,572 0.12
Pricing terms
The rents in respect of the Property Lease will be determined after arm’s length
negotiations with reference to, where applicable, (i) the historical rents during the Track
Record Period; and (ii) the prevailing market rents of similar properties located in similar
areas offered by the Independent Third Parties.
Proposed annual caps and basis for determination
The following table sets forth the expected maximum rents payable by Qisda
Connected Persons to our Group annually in respect of the Property Lease for each of the
three years ending December 31, 2027:
For the year ended December 31,
2025 2026 2027
(RMB’000) (RMB’000) (RMB’000)
4,366 4,817 4,843
CONNECTED TRANSACTIONS
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The following table sets forth the expected maximum rents payable by our Group to
Qisda Connected Persons annually in respect of the Property Lease for each of the three
years ending December 31, 2027:
For the year ended December 31,
2025 2026 2027
(RMB’000) (RMB’000) (RMB’000)
4,899 5,389 5,927
In arriving at the above proposed annual caps, our Directors have considered, among
others, the following factors:
 the historical rental amounts in respect of the Property Lease during the Track
Record Period and in particular, the slight decrease of the rent payable by a
Qisda Connected Person in 2024 as it moved from the previous properties to
new properties in bare shell condition and would bear the decoration costs as
well as the water and electricity costs;
 the terms and conditions, such as the size of leasing area and the rents, under
the existing lease agreements;
 the prevailing market rents of similar properties located in similar areas offered
by the Independent Third Parties;
 the expansion of our healthcare services which would lead to an increased
demand of the Group for employee dormitory leases;
 some employees of Suzhou BenQ Hospital are accommodated in the on-site
R&D duty building, and therefore do not require additional dormitory units
rentals from Qisda Connected Persons, however, as the R&D duty building (޼
೯ᅽ) has been renovated and converted into a long-term care ward in the
second half of 2025, the number of dormitory units rentals from Qisda
Connected Persons is expected to increase accordingly; and
 the expected inflation during the term of the Property Leasing Framework
Agreement.
Reasons and benefits of the transactions
Leveraging our long-term cooperation relationship with Qisda Connected Persons,
they had well performed the relevant contractual obligations at fair and reasonable terms
in previous transactions. We believe (i) continuing to lease properties to Qisda Connected
Persons would enable us to secure long-term and stable tenants, increase the utilization
rate of our properties and generating stable income for our Group; and (ii) continuing to
lease properties from Qisda Connected Persons would be convenient, spare us from
incurring costs in sourcing new locations and avoid any incidental expenses for renting
new employee dormitories and registration offices, as well as enhancing the stability of
business operations of our Group. Our Directors believe that entering into the Property
Leasing Framework Agreement and the terms thereof are fair and reasonable, and are in
the interests of our Shareholders as a whole.
CONNECTED TRANSACTIONS
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3. Medical Product and Equipment Procurement Framework Agreement
Principal terms
On December 3, 2025, our Company (for itself and on behalf of its subsidiaries)
entered into a medical product and equipment procurement framework agreement (the
“Medical Product and Equipment Procurement Framework Agreement ”) with Qisda
Corporation (for itself and on behalf of other Qisda Connected Persons), pursuant to
which our Group will procure medical products and equipment from Qisda Connected
Persons (the “ Medical Product and Equipment Procurement ”) on an non-exclusive
basis. The Medical Product and Equipment Procurement Framework Agreement has a
term commencing from the Listing Date to December 31, 2027, which may be renewed
as the parties may mutually agree, subject to compliance with the requirements under
Chapter 14A of the Listing Rules and other applicable laws and regulations. The
definitive medical product and equipment procurement agreements to be entered into
between members of our Group and Qisda Connected Persons shall only contain
provisions which are, in all material aspects, consistent with the binding principles,
guidelines, terms and conditions set out in the Medical Product and Equipment
Procurement Framework Agreement.
Historical amounts
The following table sets out the total amounts incurred by our Group payable to
Qisda Connected Persons in respect of the Medical Product and Equipment Procurement
and as a percentage of our total cost of revenue during the Track Record Period:
For the year ended December 31,
For the six months
ended June 30,
2022 2023 2024 2025
(RMB’000) % (RMB’000) % (RMB’000) % (RMB’000) %
11,093 0.57 11,811 0.54 8,640 0.40 5,725 0.44
Pricing terms
The prices to be charged for the Medical Product and Equipment Procurement will
be determined after arm’s length negotiations with reference to, where applicable, (i) the
prevailing market price of similar medical products and equipment; and (ii) terms and
prices quoted by other independent suppliers for medical products and equipment
procurement during bidding procedures.
CONNECTED TRANSACTIONS
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Proposed annual caps and basis for determination
The following table sets forth the expected maximum amounts payable by our Group
to Qisda Connected Persons annually in respect of the Medical Product and Equipment
Procurement for each of the three years ending December 31, 2027:
For the year ended December 31,
2025 2026 2027
(RMB’000) (RMB’000) (RMB’000)
9,504 10,454 11,499
In arriving at the above proposed annual caps, our Directors have considered, among
others, the following factors:
 the historical transaction amounts during the Track Record Period and in
particular, the decrease in Medical Product and Equipment Procurement from
Qisda Connected Persons in 2024 which was primarily due to the fact that we
procured certain amount of hemodialysis consumables from an Independent
Third Party supplier who offered a lower price via centralized procurement for
that year;
 the estimated cost to be incurred in relation to the Medical Product and
Equipment Procurement based on the existing contracts;
 the expansion of our certain businesses in 2024 (including the expansion of the
operating rooms at Nanjing BenQ Hospital and the hemodialysis center at
Suzhou BenQ Hospital in 2024) and the expected expansion in other areas of
our hospitals in the near future, which are expected to result in increased
procurement needs in the subsequent years, including but not limited to the
procurement of surgical medical equipment, hemodialysis machines and
relevant medical products; and
 the expected inflation during the term of the Medical Product and Equipment
Procurement Framework Agreement.
Reasons and benefits of the transactions
Leveraging our long-term cooperation relationship with Qisda Connected Persons,
they had well performed the relevant contractual obligations at fair and reasonable terms
in previous transactions. The relevant Qisda Connected Persons have good reputation in
providing various medical products and equipment with good quality and logistics
capabilities. In addition, they are also leading suppliers of certain medical products and
equipment that we need in the industry. Considering the relevant large quantities of
medical products and equipment they purchase through centralized procurement, they are
able to supply relevant medical products and equipment to the Group at relatively lower
CONNECTED TRANSACTIONS
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prices. Where other terms of transactions are similar or comparable, Qisda Connected
Persons generally are able to offer a longer warranty period and favorable terms on
payment, warranties and maintenance as compared to those offered by other independent
suppliers. We believe continuing to procure medical products and equipment from Qisda
Connected Persons is more efficient and can effectively fulfill our Group’s demands in
terms of volume and quality in a timely and reliable manner.
In addition, in our ordinary and usual course of business, we generally procure
medical products and equipment from both the Qisda Connected Persons and Independent
Third Party suppliers. For procurements exceeding certain monetary value, we select
suppliers through tender and bidding process. Therefore if a Qisda Connected Person wins
during the bidding process, the relevant connected transaction with it would be a nature
result of such bidding process.
Our Directors believe that entering into the Medical Product and Equipment
Procurement Framework Agreement and the terms thereof are fair and reasonable, and are
in the interests of our Shareholders as a whole.
Listing Rules Implications
As the highest applicable percentage ratio under the Listing Rules in respect of the
proposed annual caps under each of the Healthcare Services Framework Agreement, Property
Lease Framework Agreement and Medical Product and Equipment Procurement Framework
Agreement is expected to be more than 0.1% but less than 5%, the transactions under the
Healthcare Services Framework Agreement, Property Lease Framework Agreement and
Medical Product and Equipment Procurement Framework Agreement are subject to the
reporting, annual review and announcement requirements but exempted from the circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
W AIVERS GRANTED BY THE STOCK EXCHANGE
As the material terms of each of the partially exempt continuing connected transactions
are disclosed in this prospectus and potential investors will participate in the Global Offering
on the basis of the disclosures, our Directors consider that strict compliance with the
announcement requirement under Chapter 14A of the Listing Rules, would be impracticable
and unduly burdensome and, in particular, would induce unnecessary administrative costs to
our Company.
As a result, our Company has applied to the Stock Exchange for, and has been granted,
subject to the condition that the value of the annual transactions shall not exceed their
respective estimated annual caps as stated above, a waiver under Rule 14A.105 of the Listing
Rules to exempt the transactions set out in the sub-section headed “Partially Exempt
Continuing Connected Transactions” in this section from strict compliance with the
announcement requirement under Rule 14A.35 of the Listing Rules for the term starting from
the Listing Date and ending December 31, 2027.
CONNECTED TRANSACTIONS
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In addition, we confirm that, apart from the announcement requirement for which waiver
is sought, we will comply with the applicable requirements under Chapter 14A of the Listing
Rules and will immediately inform the Stock Exchange if any of the proposed annual caps set
out above is exceeded, or when there is a material change in the terms of these transactions.
CONFIRMATION FROM OUR DIRECTORS
Our Directors (including independent non-executive Directors) are of the view that:
(a) the partially exempt continuing connected transactions described above for which a
waiver is sought have been entered into and will be carried out in the ordinary and
usual course of business of our Group and all such transactions will be conducted
on normal commercial terms or better which are fair and reasonable and in the
interests of our Company and the Shareholders as a whole; and
(b) the proposed annual caps of such partially exempt continuing connected transactions
set out above are fair and reasonable and in the interests of our Company and the
Shareholders as a whole.
CONFIRMATION FROM THE JOINT SPONSORS
The Joint Sponsors have reviewed the relevant information and documents provided by
the Company and participated in the due diligence and discussion with the management of the
Company relating to the partially exempt continuing connected transactions described above.
Based on the Joint Sponsors’ due diligence, the Joint Sponsors are of the view that:
(a) the partially exempt continuing connected transactions described above for which a
waiver is sought have been entered into in the ordinary and usual course of business
of the Group on normal commercial terms or better which are fair and reasonable
and in the interests of the Company and the Shareholders as a whole; and
(b) the proposed annual caps of such partially exempt continuing connected transactions
set out above are fair and reasonable and in the interests of the Company and the
Shareholders as a whole.
CONNECTED TRANSACTIONS
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BOARD OF DIRECTORS
The following table sets forth general information regarding our Directors (including
proposed Directors):
Name Position Age
Date of appointment
as Director
Time of joining
our Group Role and responsibilities
Relationship with
other Directors and
senior management
Mr. HSIAO Tze-Jung
(ጽዣ࿲) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Executive Director
and chief executive
officer
66 April 30, 2015 February 5, 2009 Overall strategic planning,
business direction and
operational management
of our Group
None
Mr. CHEN Chi-Hong
(௓Չ҃) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chairperson of the
Board and non-
executive Director
64 May 27, 2013 February 1, 2013 Reviewing and providing
advice on the overall
corporate and business
development and
strategic planning of our
Group
None
Ms. HUNG Chiu-Chin
(ږ߇ݳ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
Non-executive
Director
58 September 11, 2019 September 1, 2015 Reviewing and providing
advice on the overall
corporate and business
development and
strategic planning of our
Group
None
Dr. W ANG Liming
(׼)H1118/H1118/H1118/H1118/H1118/H1118/H1118
Non-executive
Director
57 April 30, 2015 February 8, 2012 Reviewing and providing
advice on the overall
corporate and business
development and
strategic planning of our
Group
None
Dr. CHOW Hsing-Yi
(մБɓ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent non-
executive Director
66 March 22, 2024
(effective upon
Listing)
Listing Date Providing independent
judgment to our Board
None
Mr. W ANG Wen-Tsung
(ˮ˖ᑋ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent non-
executive Director
61 March 22, 2024
(effective upon
Listing)
Listing Date Providing independent
judgment to our Board
None
Mr. CHEN Ray-Jade
(؏)H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent non-
executive Director
69 March 22, 2024
(effective upon
Listing)
Listing Date Providing independent
judgment to our Board
None
Upon Listing, our Board will consist of seven Directors, comprising one executive
Director, three non-executive Directors and three independent non-executive Directors.
Pursuant to the Articles of Association, our Directors are elected and appointed by our
Shareholders at a Shareholders’ meeting for a term of three years, which is renewable upon
re-election and re-appointment.
DIRECTORS AND SENIOR MANAGEMENT
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The following sets forth the biographies of our Directors:
Executive Director
Mr. HSIAO Tze-Jung (ጽዣ࿲) is our executive Director and chief executive officer. He
was appointed as a Director on April 30, 2015 and was re-designated as an executive Director
of our Company on March 22, 2024. He joined our Group in February 2009 when he was
appointed as a director of BenQ Healthcare Consulting. Since November 2018, he was
appointed as the chief executive officer of our Group, taking the responsibility of overall
management of the hospital sector. He holds the following positions in the major subsidiaries
of our Group:
Name of subsidiary Position Period
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118Director February 2012 to present
Chairperson of the board April 2015 to present
General manager September 2018 to present
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118Director February 2012 to present
General manager September 2018 to present
Beside, Mr. Hsiao also holds the position of director, chairperson of the board and/or
general manager at other four subsidiaries of us.
Mr. Hsiao has accumulated extensive experience in corporate management and led our
business operations for years. He had worked for Eyloon Industrial Co., Ltd. (΅Ϟ
ʮ̡), a company primarily engaging in manufacturing and sales of polystyrene box, since
July 1981. Mr. Hsiao joined AUO Corporation (ʮ̡), a thin film transistor
liquid crystal displays and other flat panel displays and display solutions of smart fields
provider listed on the Taiwan Stock Exchange (stock code: 2409.TW) in July 2000 and served
as an assistant vice president, where he was responsible for production and operation of
factories of AUO Corporation, until August 2007.
In August 2007, Mr. Hsiao joined Qisda Corporation and he has served (i) as senior vice
president of Qisda Corporation and the president of the Global Manufacturing Headquarters in
charge of relevant business; and (ii) as the chairperson of each of Qisda (Suzhou) Co., Ltd ( ᘽ
ʮ̡), Qisda Optronics (Suzhou) Co., Ltd (ʮ̡),
Qisda Electronics (Suzhou) Co., Ltd (ʮ̡), Qisda Precision Industry
(Suzhou) Co., Ltd (ʮ̡) and Qisda (Shanghai) Co., Ltd ( Գ˰༺ཥஷ
(ɪऎ)ʮ̡) until March 2024. He also served as the chairperson at BenQ Biotech
(Shanghai) Co., Ltd (Ҧஔ(ɪऎ)ʮ̡) from August 2019 to March 2024,
Shanghai Filter Technology Co., Ltd (ʮ̡) from December 2020 to
March 2024 and Qisda Vietnam Co., Ltd from October 2019 to March 2024.
Mr. Hsiao graduated from Tamkang University ( ૱Ϫɽኪ) in Taiwan with a bachelor’s
degree in engineering in June 1983.
DIRECTORS AND SENIOR MANAGEMENT
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Non-executive Directors
Mr. CHEN Chi-Hong ( ௓Չ҃) is our chairperson of the Board and a non-executive
Director of our Company. He joined our Group in February 2013 when he was appointed as a
director of BenQ BM. He was appointed as a Director on May 27, 2013 and was re-designated
as a non-executive Director and chairperson of the Board of our Company on March 22, 2024.
Mr. Chen is currently the chairman and chief executive officer of Qisda Corporation, our
Controlling Shareholder. He joined Qisda Corporation in 1991 and successively served as (i)
the head of Display Product Group from 1991 to 1992, (ii) the manager of Display Product
Group from 1992 to 1997, (iii) an associate vice president of Display Product Group from 1998
to 2003, (iv) a vice general manager of Display Product Group from 2003 to 2013, and (v) the
general manager of Qisda Corporation from 2014 to 2023. He was appointed as the chairman
and chief executive officer of Qisda Corporation in 2022 and guided its development and
growth since then. As a chief helmsman of Qisda Group, he takes the lead of the transformation
strategy, operation planning and the alliance investment strategy of Qisda Corporation.
Mr. Chen has also served as (i) a director at Darfron Electronics Corp. (΅Ϟ
ʮ̡), a company listed on the Taiwan Stock Exchange (stock code: 8163.TW) since March
2001, (ii) the chairperson at BenQ Medical Technology Ltd. (ʮ
̡), a company listed on the Taipei Exchange (stock code: 4116.TPEx), since April 2010, (iii)
a director at Partner Tech Corp. (ʮ̡), a company listed on the Taipei
Exchange (stock code: 3097.TPEx), since October 2014, (iv) a director at BenQ Materials
Corp. (ʮ̡), a company listed on the Taiwan Stock Exchange (stock code:
8215.TW), since July 1998, (v) the chairperson of DFI Inc. (ʮ̡)a
company listed on the Taiwan Stock Exchange (stock code: 2397.TW), since December 2017,
(vi) a director at Alpha Networks Inc. (ʮ̡), a company listed on the
Taiwan Stock Exchange (stock code: 3380.TW), since June 2018, and (vii) a director at Hitron
Technologies (ʮ̡), a company listed on the Taiwan Stock Exchange (stock
code: 2419.TW), since February 2020.
He currently holds the following positions in the major subsidiaries of our Group and is
also a director of three other subsidiaries of our Group:
Name of subsidiary Position Period
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director August 2015 to present
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director September 2015 to present
Mr. Chen was awarded a number of reputed honors including, among other things, (i)
Entrepreneur of The Y ear Award of Asia Pacific Enterprise Awards (APEA) by Enterprise Asia
in September 2023, (ii) Taiwan Smart City Excellence Contribution Award-Smart Health Award
in August 2023 and (iii) Ernst & Y oung Entrepreneur of the Y ear Award in November 2019. He
serves a fellow of Industrial Technology Research Institute since October 2023.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Chen obtained his bachelor’s degree in engineering from National Cheng Kung
University ( ϓ̌ɽኪ) in June 1985 in Taiwan and his master’s degree in business
administration in international management from Thunderbird School of Global Management
in December 2001 in Phoenix, Arizona.
Ms. HUNG Chiu-Chin (ږ߇ݳ)is a non-executive Director of our Company. She was
appointed as a Director on September 11, 2019 and was re-designated as a non-executive
Director of our Company on March 22, 2024. She joined our Group as the supervisor of Suzhou
BenQ Hospital on September 1, 2015. She is the vice president, the chief financial officer and
the spokesperson of Qisda Corporation. She also holds the following positions in the major
subsidiaries of our Group and is also a director or a supervisor of several other subsidiaries of
our Group:
Name of subsidiary Position Period
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director October 2019 to present
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director October 2019 to present
Ms. Hung has extensive experience in financial management, mergers and acquisitions
and communications. She joined Qisda Corporation in October 1997 and eventually served as
a financial manager until December 2002. From 2003 to 2005, she was the chief financial
officer at the predecessor company of BenQ Materials Corp. (ʮ̡), a
company listed on the Taiwan Stock Exchange (stock code: 8215.TW). She served successively
as the controller and A VP of Finance Management Department of Qisda Corporation from
September 2005 to August 2019 and group chief financial officer from September 2019 to
March 2021. Since March 2021, she has been the vice president, the chief financial officer and
the spokesperson of Qisda Corporation, where she is responsible for the financial management
and merger and acquisition planning of the group and administration for corporate governance.
Ms. Hung is also serving as a director at several public companies, including (i) Data
Image Corporation (ʮ̡), a company listed on the Taiwan Stock Exchange
(stock code: 3168.TW), since January 2019, (ii) Darfron Electronics Corp. (ࠢ
ʮ̡), a company listed on the Taiwan Stock Exchange (stock code: 8163.TW), since August
2019, (iii) Metaage Corporation (ʮ̡), a company listed on the Taiwan
Stock Exchange (stock code: 6112.TW), since September 2019, (iv) Alpha Networks Inc. (׼
ʮ̡), a company listed on the Taiwan Stock Exchange (stock code:
3380.TW), since January 2021, (v) Topview Optronics Corp. (ʮ̡), a
company listed on the Taipei Exchange (stock code: 6556.TPEx), since June 2023.
Ms. Hung obtained her MBA degree from California State University, Fullerton in
January 1995 in Fullerton, California. She completed the EMBA course and obtained her MBA
degree from National Taiwan University in April 2023 in Taiwan.
DIRECTORS AND SENIOR MANAGEMENT
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Dr. W ANG Liming (׼)is a non-executive Director of our Company. She joined our
Group as a director of Nanjing BenQ Hospital in February 2012. She was appointed as a
Director on April 30, 2015 and was re-designated as a non-executive Director of our Company
on March 22, 2024. She holds the following positions in the major subsidiaries of our Group
and is also a director of three other subsidiaries of our Group:
Name of subsidiary Position Period
Nanjing BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director February 2012 to present
Suzhou BenQ Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Director October 2012 to present
Chairperson of the board April 2017 to present
She served as a lawyer at Jiangsu Centennial Yinghao Law Firm (ԫਕ
הfrom July 1996 to July 1998, professionalizing in company’s laws and intellectual property
laws. She joined the Qisda Group in August 1998 and served as the general counsel of the
China office of the Qisda Group since then.
Dr. Wang obtained her bachelor’s degree in economic law in July 1991 from East China
Institution of Political Science and Law (ኪ৫) (now known as East China University
of Political Science and Law (ɽኪ)) in Shanghai. She graduated from East China
Institution of Political Science and Law, majoring in juris master, in July 2001. She completed
a doctoral program in Chinese modern and contemporary history from Soochow University ( 䕤
ψɽ䕎) in June 2008 in Jiangsu Province. She received her legal professional qualification
certificate from the Ministry of Justice of the PRC in December 1994 and a Level 2 Certificate
of Secondary Psychological Consultant by Shanghai Municipal Bureau of Human Resources
and Social Security in March 2015.
Independent Non-executive Directors
Dr. CHOW Hsing-Yi ( մБɓ) was appointed as an independent non-executive Director
of our Company on March 22, 2024 (effective upon Listing).
Dr. Chow is an emeritus professor and a distinguished adjunct professor of National
Chengchi University (ɽኪ). He served as an associate professor from August 1995 to
August 1996 and a professor from August 1996 to October 1998 at the faculty of finance at
National Chengchi University. Before his retirement in February 2022, Dr. Chow served as a
professor at the faculty of finance of National Chengchi University. During his tenure at
National Chengchi University, he also served on campus as (i) the chairman of the department
of finance from August 2000 to July 2002, (ii) a vice dean of the college of commerce from
September 2004 to July 2005, (iii) the dean of the college of commerce from August 2005 to
July 2008, (iv) the director of the Innovation and Creativity Research Center from February
2006 to July 2006, (v) the principal of National Chengchi University and the chair of the
Gender Equality Education Committee from November 2014 to November 2018, (vi) the chair
of Bridge Committee of the Chinese Taipei University Sports Federation from January 2017 to
January 2019, and (vii) the chairman of the board of The Phi Tau Phi Scholastic Honor Society
DIRECTORS AND SENIOR MANAGEMENT
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--- page 337 ---
from January 2018 to October 2019. In addition, he also served as a director from October 2003
to October 2006 and the supervisor ( ္࿀ɛ) from October 2006 to September 2018 at Taipei
Exchange, a member of the Administration Committee for the Financial Restructuring Fund (ږ
ึ) from July 2008 to December 2011, and a director of International
Cooperation and Development Fund (ึ) from August 2008 to July
2015.
Dr. Chow has served as an independent director of (i) Coretronic Corporation ( ʕ੶Έཥ
ʮ̡), a company listed on the Taipei Exchange (stock code: 5371.TPEx) since June
2019, (ii) Y uanta Financial Holding Co., Ltd. (ʮ̡), a company listed on the
Taiwan Stock Exchange (stock code: 2885.TW) since June 2019 and (iii) a member of
remuneration committee of Lien Hwa Industrial Holdings Corp. (ࠢ
ʮ̡), a company listed on the Taiwan Stock Exchange (stock code: 1229.TW) since August
2023.
Dr. Chow graduated from National Chengchi University with a bachelor’s degree in
business administration in May 1981 in Taiwan and obtained doctoral degree in business in
February 1991 from Indiana University in Bloomington, Indiana.
Mr. W ANG Wen-Tsung ( ˮ˖ᑋ) was appointed as an independent non-executive
Director of our Company on March 22, 2024 (effective upon Listing).
Mr. Wang has served as an auditor at Biing-Cherng CPAS (הsince
July 1995. He also served as an independent director at Metaage Corporation (ٰ
ʮ̡), a company listed on the Taiwan Stock Exchange (stock code: 6112.TW) and a
subsidiary of Qisda Corporation, since June 2016.
Mr. Wang obtained his bachelor’s degree in business from Department of Accounting
Feng Chia University ( ு͠ɽኪ) in Taiwan in June 1988 and his MBA degree from National
Tsing Hua University ( ૶ശɽኪ) in Taiwan in June 2021. He has been a certified public
accountant of Taiwan since June 1993.
Mr. CHEN Ray-Jade (؏was appointed as an independent non-executive Director
of our Company on March 22, 2024 (effective upon Listing).
From February 2004 to March 2010, he served successively as an associate professor and
a professor at Faculty of Medicine at China Medical University ( ʕ਷ᔼᖹɽኪ). From April
2010 to January 2021, he taught at Faculty of Medicine at Taipei Medical University ( ၽ̏ᔼ
ኪɽኪ) as a professor and had also held several other administrative positions including the
director of Center for Management and Development, the head of the Department of Surgery
and the director of Preparatory Office of the Telehealth Center within such period. From
January 2015 to December 2020, he served as the superintendent of Taipei Medical University
Hospital (ணᔼ৫). Since 2022, he took over as the Chairman of Board of
Trustees of Taipei Medical University.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Chen obtained his bachelor’s degree in medicine in June 1981 and his master’s degree
in science in June 2003 from Graduate Institute of Biomedical Informatics (ה)
of Taipei Medical University in Taiwan. He received his professor qualification from Taiwan
Ministry of Education in January 2010 and his medical practitioner qualification from Taiwan
Department of Health in January 1982.
Confirmations
Save as disclosed in this prospectus, each of our Directors confirms with respect to
himself or herself, to the best of his or her knowledge, information and belief, that (a) he or
she had no other relationship with any Directors, senior management or substantial
shareholders of our Company as at the Latest Practicable Date; (b) he or she did not hold any
other directorships in the three years prior to the Latest Practicable Date in any public
companies of which the securities are listed on any securities market in Hong Kong and/or
overseas; and (c) there are no other matters concerning his or her appointment that need to be
brought to the attention of our Shareholders and the Stock Exchange or shall be disclosed
pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules as of the Latest Practicable Date.
Each of our Director confirms that, as of the Latest Practicable Date, he or she did not
have any interest in a business, apart from the business of our Group, which competes or is
likely to compete, directly or indirectly, with our business, and requires disclosure under Rule
8.10 of the Listing Rules.
Each of our Directors confirms that he or she (i) has obtained legal advice from
O’Melveny & Myers as regards the requirements under Rule 3.09D of the Listing Rules on
March 22, 2024 and (ii) understands his or her obligations as a Director of a listed issuer under
the Listing Rules.
Each of the independent non-executive Directors confirms (i) his independence as regards
each of the factors referred to in Rule 3.13(1) to (8) of the Listing Rules, (ii) that he has no
past or present financial or other interest in the business of the Company or its subsidiaries or
any connection with any core connected person of the Company under the Listing Rules as of
the Latest Practicable Date, and (iii) that there are no other factors that may affect his
independence at the time of his appointment.
DIRECTORS AND SENIOR MANAGEMENT
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SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The table below sets out certain information in respect of the senior management of our Group.
Name Position Age
Date of appointment
as senior
management
Date of joining our
Group Role and responsibilities
Relationship with
other Directors
senior management
Mr. HSIAO Tze-Jung
(ጽዣ࿲) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chief executive
officer
66 November 2, 2018 February 5, 2009 Overall strategic planning,
business direction and
operational management
of our Group
None
YU Zhenkun
(տ), M.D. /H1118/H1118/H1118/H1118
President of Nanjing
BenQ Hospital
60 February 14, 2020 June 1, 2019 Overseeing the operation
and management of
Nanjing BenQ Hospital
None
Ms. LO Tsui-Ling
(ࡗ)H1118/H1118/H1118/H1118/H1118/H1118/H1118
President of Suzhou
BenQ Hospital,
deputy chief
executive officer
and deputy
president of Nanjing
BenQ Hospital
58 April 1, 2025 April 16, 2009 Overseeing the operation
and management of
Suzhou BenQ Hospital
and participating in
management of medical
affairs and operation of
the Group and Nanjing
BenQ Hospital
None
Mr. CHIANG Che-Min
(ᦩ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Chief financial officer 51 July 7, 2014 July 7, 2014 Managing accounting,
treasury, tax, investment
matters of the Group
and serving as the
secretary to the Board
None
For the biographies of Mr. Hsiao , see “— Executive Director” in this section.
YU Zhenkun (տ), M.D. was appointed as the president of Nanjing BenQ Hospital
on February 14, 2020. He joined our Group in June 1, 2019 and serves as the director of
department and a chief physician at the Otorhinolaryngology-Head and Neck Department of
Surgery and an academic leader in Nanjing BenQ Hospital. He is also a director of Nanjing
BenQ Hospital. Dr. Y u also serves as vice president at The Fourth School of Clinical Medicine
of Nanjing Medical University (ɽኪୋ̬ᑗґᔼኪ৫) since March 2020. He is also
a professor and doctoral supervisor at Nanjing Medical University (ɽኪ) and
Southeast University (ɽኪ).
DIRECTORS AND SENIOR MANAGEMENT
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Prior to joining our Group, Dr. Y u had been involved in the hospital management and the
field of otorhinolaryngology-head and neck surgery clinical work for more than 30 years. In the
1990s, Dr. Y u practiced as a doctor at Otorhinolaryngology Department of Shandong Medical
University Hospital (᙮ᔼ৫). From September 1998, Dr. Y u served
successively as deputy chief physician, chief physician, deputy director of the department and
director of the department at Otorhinolaryngology-Head and Neck Department of Surgery in
Beijing Tongren Hospital ( ̏ԯΝʠᔼ৫), a Grade A Class III general Hospital for more than
a decade. In October 2007, Dr. Y u began his services at Nanjing Tongren Hospital (ԯΝʠ
ᔼ৫), a Class III general hospital, where he had held several roles including the president of
the hospital, director of the department and chief physician at the Otorhinolaryngology-Head
and Neck Department of Surgery for more than a decade. In addition, he had taught at the
Capital University of Medical Sciences (ɽኪ) as an associate professor and then a
professor since September 2000 and had served as a doctoral supervisor.
Dr. Y u served as a postdoctoral research fellow simultaneously at Otorhinolaryngology-
Head and Neck Department of Surgery of Capital Medical University from September 1996 to
July 1998. He was a visiting scholar and a postdoctoral research fellow at Memorial
Sloan-Kettering Cancer Center from September 2002 to September 2006.
Dr. Y u has served as, among other things, (i) a member of the fourth standing committee
of the Otorhinolaryngology-Head and Neck of Surgery Branch of Chinese Medical Doctor
Association (ʱึ) since September 2023, (ii) a member
of the third standing committee of the Otorhinolaryngology-Head and Neck of Surgery Branch
of China International Exchange and Promotive Association for Medical and Healthcare ( ʕ਷
ኪʱึ) since November 2022, (iii) a vice
president of the Otorhinolaryngology-Head and Neck of Surgery Branch of Jiangsu Medical
Doctor Association (ʱึ) since June 2022 and (iv) a member
of Laryngeal Cancer Quality Control Committee of National Cancer Center (ᐖसʕːఓ
ึ). He was awarded multiple honors and titles including “The Fourth School
of Clinical Medicine of Nanjing Medical University Special Contributions and Achievement
Award” (্ᘠၾϓఱᆤ), “Y oung and Middle-aged Experts
with Outstanding Contributions in Jiangsu Province” (࢕,)
leading talent of “Innovative Team Program’ Introduced Team” (޲“ྌ”ˏආྠ
ɛʑ), etc.
Dr. Y u graduated with a major in medicine in July 1987 and obtained a master’s degree
in medicine in December 1993 and a doctoral degree in medicine in July 1996 from Shandong
Medical University (ɽኪ) (now known as Shandong University School of Medicine
(ɽኪᔼኪ৫)) in Shandong Province. He was qualified as a practicing physician with a
certificate issued by Beijing Municipal Health Bureau ( ̏ԯ̹ሊ͛҅).
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Ms. LO Tsui-Ling (ࡗ)joined our Group in April 2009. She was appointed as the
president of Suzhou BenQ Hospital on April 1, 2025. She is also the deputy chief executive
officer of the Group and vice president of Nanjing BenQ Hospital.
Ms. Lo has been working in our Group for more than 15 years and has a commendable
history of commitment and contribution to our Group. Before joining our Group, from
September 1994 to December 1999, she served successively as an import and export manager
and customs deputy director at several subsidiaries of Qisda Corporation, a Controlling
Shareholder, where she was responsible for import and export management. From January 2000
to April 2009, she served successively as deputy manager and manager of material management
at the predecessor of BenQ Materials Corp. (ʮ̡), a company listed on the
Taiwan Stock Exchange (stock code: 8215.TW).
After joining our Group in April 2009, Ms. Lo served successively as the division chief
and the director of material management, until November 2018. She was subsequently
promoted to the executive assistant to the chief executive officer from November 2018 to
March 2020. Since March 2020, she has held the role of vice president of Nanjing BenQ
Hospital, and additionally assumed the position of the deputy chief executive officer of the
Group in August 2024.
Ms. Lo obtained her bachelor’s degree in law from TamKang University ( ૱Ϫɽኪ)i n
Taiwan in June 1992.
Mr. CHIANG Che-Min (ᦩ) joined our Group and was appointed as the chief
financial officer in July 2014. He is also a director of Suzhou BenQ Investment and BenQ
Healthcare Consulting.
From November 2009 to July 2014, Mr. Chiang served as a treasury manager at Qisda
Corporation, where he was responsible for managing collection and customer credit and
leading financial projects of the group. Before joining Qisda Corporation, from February 2008
to June 2009, he served as a senior associate at PricewaterhouseCoopers Management
Consulting Company Ltd. (ʮ̡). From August 2006 to November
2007, he served as a senior credit & collection analyst at ViewSonic Corp. (΅Ϟ
ʮ̡), an electronic manufacturer and distributor, where he was responsible for customer
credit and collection management. From July 2005 to August 2006, Mr. Chiang worked at
Taiwan Economic Journal (ʮ̡), an economic and data
consulting services provider, where he was responsible for conducting credit ratings on the
listed or over-the-counter technology companies. From November 2001 to July 2005, he
worked for PricewaterhouseCoopers, Taiwan (ה.)
Mr. Chiang obtained his bachelor’s degree in commerce from Ming Chuan College ( ӷͭ
თෂ၍ଣኪ৫) (now known as Ming Chuan University ( თෂɽኪ)) in June 1997 in Taiwan and
his master’s degree in commerce from National Chung Cheng University ( ʕ͍ɽኪ) in June
1999 in Taiwan.
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COMPANY SECRETARY
Ms. LAI Ying Tung (ҕ)( “ Ms. Lai ”) has been appointed as the company secretary
of our Company with effect from March 22, 2024. Ms. Lai is currently a manager of corporate
services of Vistra Corporate Services (HK) Limited. She has approximately nine years of
experience in the corporate secretarial field and has been providing a full range of corporate
and compliance services. She is currently the company secretary of Star Plus Legend Holdings
Limited (ʮ̡), a company listed on the Stock Exchange (stock code:
6683.HK).
Ms. Lai obtained her master’s degree in corporate governance from Hong Kong
Metropolitan University in October 2016 in Hong Kong. She has been an associate member of
The Hong Kong Chartered Governance Institute and an associate member of The Chartered
Governance Institute in the United Kingdom since 2021.
BOARD COMMITTEES
Our Board delegates certain responsibilities to various Board committees. In accordance
with the relevant PRC laws and regulations, the Articles and the Listing Rules, we have
established our audit committee, remuneration committee and nomination committee.
Audit Committee
We have established an audit committee with terms of reference in compliance with Rule
3.21 of the Listing Rules, paragraph C.4 and paragraph D.3 of Part 2 of the Corporate
Governance Code as set out in Appendix C1 to the Listing Rules. The audit committee consists
of Mr. W ANG Wen-Tsung ( ˮ˖ᑋ), Dr. CHOW Hsing-Yi ( մБɓ) and Ms. HUNG Chiu-Chin
(ږ߇ݳwith Mr. W ANG Wen-Tsung ( ˮ˖ᑋ) being the chairman of the committee.
The primary function of the audit committee is to assist our Board in providing an
independent view of our financial reporting process, internal control and risk management
system, overseeing the audit process and performing other duties and responsibilities as
assigned by our Board which includes, amongst other things:
 proposing to the Board the appointment and replacement of external audit firms;
 supervising the implementation of our internal audit system;
 liaising between our internal audit department and external auditors;
 reviewing our financial information and related disclosures; and
 other duties conferred by the Board.
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Remuneration Committee
We have established a remuneration committee with terms of reference in compliance
with Rule 3.25 of the Listing Rules and paragraph E.1 of Part 2 of the Corporate Governance
Code as set out in Appendix C1 to the Listing Rules. The remuneration committee consists of
Mr. CHEN Ray-Jade (؏Mr. W ANG Wen-Tsung ( ˮ˖ᑋ), Mr. HSIAO Tze-Jung ( ጽዣ
࿲), with Mr. CHEN Ray-Jade (؏being the chairman of the committee.
The primary function of the remuneration committee is to develop remuneration policies
of our Directors, evaluate the performance, make recommendations on the remuneration
packages of our Directors and senior management and evaluate and make recommendations on
employee benefit arrangements which includes, amongst other things:
 establishing, reviewing and making recommendations to our Directors on our policy
and structure concerning remuneration of our Directors and senior management;
 determining the terms of the specific remuneration package of each Director and
members of senior management;
 reviewing and approving performance-based remuneration by reference to corporate
goals and objectives resolved by our Directors from time to time;
 monitoring potential conflicts of interest; and
 other duties conferred by the Board.
Nomination Committee
We have established a nomination committee with terms of reference in compliance with
Rule 3.27A of the Listing Rules, paragraph B.3 of Part 2 of the Corporate Governance Code
as set out in Appendix C1 to the Listing Rules. The nomination committee consists of Mr.
CHEN Chi-Hong ( ௓Չ҃), Mr. CHEN Ray-Jade (؏and Dr. CHOW Hsing-Yi ( մБɓ),
with Mr. CHEN Chi-Hong ( ௓Չ҃) being the chairman of the committee.
The primary function of the nomination committee is to make recommendations to our
Board in relation to the appointment and removal of Directors which includes, amongst other
things:
 reviewing the structure, size and composition of our Board on a regular basis and
making recommendations to the Board regarding any proposed changes;
 identifying, selecting or making recommendations to our Board on the selection of
individuals nominated for directorships;
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 assessing the independence of our independent non-executive Directors;
 making recommendations to the Board on relevant matters relating to the
appointment, re-appointment and removal of our Directors;
 identifying potential conflicts of interest; and
 other duties conferred by the Board.
CORPORATE GOVERNANCE
Board Diversity
We have adopted a board diversity policy (the “ Board Diversity Policy ”) to enhance the
effectiveness of our Board and to maintain a high standard of corporate governance. Pursuant
to the Board Diversity Policy, in reviewing and assessing suitable candidates to serve as a
Director, the Nomination Committee will consider a range of diversity perspectives with
reference to our Company’s business model and specific needs, including but not limited to
gender, age, language, cultural and educational background, professional qualifications, skills,
knowledge, industry and regional experience and/or length of service.
Our Directors have a balanced mix of knowledge and skills, including but not limited to
overall business management, hospital management, law, financial management, audits and
project management. They obtained degrees in various majors including engineering,
management, business administration, laws, accounting and medicine. In addition, we have
taken steps to promote and enhance gender diversity at all levels of our Company, and our
Board currently comprises two female Directors and five male Directors. Our Board is of the
view that our Board satisfies the Board Diversity Policy.
The Nomination Committee is responsible for reviewing the diversity of our Board,
reviewing the Board Diversity Policy from time to time, developing and reviewing measurable
objectives for implementing the Board Diversity Policy, and monitoring the progress on
achieving these measurable objectives in order to ensure that the policy remains effective. Our
Company will (i) disclose the biographical details of each Director and (ii) report on the
implementation of the Board Diversity Policy (including whether we have achieved board
diversity) in its annual corporate governance report. Our Company also intends to continuously
promote gender diversity when recruiting staff at the mid to senior level so that our Company
will have a pipeline of female senior management and potential successors to our Board. We
believe that such merit-based selection process with reference to our diversity policy and the
nature of our business will be in the best interests of our Company and our Shareholders as a
whole.
DIRECTORS AND SENIOR MANAGEMENT
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EMOLUMENT OF DIRECTORS AND SENIOR MANAGEMENT
We offer our executive Director and senior management members, who are also
employees of our Company, emolument in the form of salaries, allowances and benefits in
kind, performance related bonuses, equity-settled share option expense and pension scheme
contributions. Our independent non-executive Directors receive emolument based on their
responsibilities (including being members or chairman of Board committees).
For the three years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025, the aggregate amount of emolument paid by our Company to our Directors were
RMB1.5 million, RMB1.5 million, RMB2.1 million and RMB1.6 million, respectively. It is
estimated that under the arrangements currently in force, the aggregate emolument (excluding
any possible payment of discretionary bonus and equity-settled share option expense) payable
to the Directors for the year ended December 31, 2025 will be RMB3.2 million.
For the three years ended December 31, 2022, 2023 and 2024 and the six months ended
June 30, 2025, the aggregate amount of emolument paid by our Company to the five highest
paid individuals were RMB13.9 million, RMB15.8 million, RMB18.2 million and RMB10.0
million, respectively, none of whom are directors. During the Track Record Period, no
remuneration was paid by our Company to, or receivable by, our Directors or the five highest
paid individuals as an inducement to join or upon joining our Company or as a compensation
for loss of office in connection with the management of the affairs of our Company or any
subsidiary during the Track Record Period.
During the Track Record Period, none of our Directors waived or agreed to waive any
emolument. Except as disclosed above, no other payments have been paid, or are payable, by
our Company or any of our subsidiaries to our Directors or the five highest paid individuals
during the Track Record Period.
PRE-IPO SHARE OPTION PLAN
We have adopted the Pre-IPO Share Option Plan, the principal terms of which are
summarized in “Statutory and General Information — D. Pre-IPO Share Option Plan” in
Appendix V to this prospectus.
COMPLIANCE ADVISER
We have appointed UOB Kay Hian (Hong Kong) Limited as our compliance adviser
pursuant to Rule 3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the
compliance adviser will advise us on the following circumstances:
(a) before the publication of any announcements, circulars or financial reports required
by regulatory authorities or applicable laws;
DIRECTORS AND SENIOR MANAGEMENT
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(b) where a transaction, which might constitute a notifiable or connected transaction
under the Listing Rules, is contemplated, including share issues and securities
repurchases;
(c) where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
(d) where the Stock Exchange makes an inquiry of us regarding unusual price
movement and trading volume or other issues under Rule 13.10 of the Listing Rules.
The term of the appointment will commence on the Listing Date and end on the date on
which we distribute the annual report of the first full financial year commencing after the
Listing pursuant to the Rule 13.46 of the Listing Rules.
DIRECTORS AND SENIOR MANAGEMENT
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So far as our Directors are aware, immediately following the completion of the Global
Offering and without taking into account any Shares which may be issued pursuant to the
exercise of the options granted under the Pre-IPO Share Option Plan, the following persons
will have an interest or short position in the Shares or the underlying Shares which would fall
to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part
XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting
Shares of our Company:
Name
Capacity/nature
of interest (1)
Number of
Shares held as
of the Latest
Practicable Date
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company as
of the Latest
Practicable Date
Approximate
percentage of
shareholding in
the total issued
share capital of
our Company
immediately
following
completion of the
Global Offering
Qisda Corporation (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner;
Interest in controlled
corporation
232,736,837 95.02% 74.61%
BenQ Corp.
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner;
Interest in controlled
corporation
85,023,956 34.72% 27.26%
Darly2 V enture, Ltd.
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 65,023,956 26.55% 20.84%
Darly V enture Inc. (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 25,000,000 10.21% 8.01%
Darly V enture (L) Ltd (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner 14,157,800 5.78% 4.54%
Notes:
(1) All interests stated are long positions.
(2) Darly2 V enture is a wholly-owned subsidiary of BenQ Corp., and each of BenQ Corp., Darly V enture and Darly
V enture (L) is a wholly-owned subsidiary of Qisda Corporation. By virtue of the SFO, BenQ Corp. is deemed
to be interested in the Shares held by Darly2 V enture, and Qisda Corporation is deemed to be interested in the
Shares held by BenQ Corp., Darly V enture, Darly V enture (L) and Darly2 V enture.
Except as disclosed above, our Directors are not aware of any other person who will,
immediately following the completion of the Global Offering (assuming the options granted
under the Pre-IPO Share Option Plan are not exercised), have any interest and/or short
positions in the Shares or underlying Shares of our Company which would fall to be disclosed
to us pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who are,
directly or indirectly, interested in 10% or more of the nominal value of any class of our share
capital carrying rights to vote in all circumstances at general meetings of our Company or any
other member of our Group.
SUBSTANTIAL SHAREHOLDERS
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AUTHORIZED AND ISSUED SHARE CAPITAL
The following is a description of the authorized and issued share capital of our Company
in issue and to be issued as fully paid or credited as fully paid immediately following the
completion of the Global Offering.
Authorized Share Capital
Description of Shares Number Aggregate par value
As of the Latest Practicable Date
Shares of US$1.00 each /H1118/H1118/H1118/H1118 300,000,000 US$300,000,000.00
Immediately following the completion of the Global Offering
Shares of US$1.00 each /H1118/H1118/H1118/H1118 500,000,000 US$500,000,000.00
Issued Share Capital
Issued and to be issued, fully paid or credited as fully paid upon completion of the Global
Offering (assuming the options granted under the Pre-IPO Share Option Plan are not
exercised)
Description of Shares Number Aggregate par value
Approximate
percentage to total
issued share capital
Ordinary Shares in issue as of
the Latest Practicable Date /H1118/H1118
244,945,001 US$244,945,001.00 78.52%
Ordinary Shares to be issued
pursuant to the Global
Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
67,000,000 US$67,000,000.00 21.48%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,945,001 US$311,945,001.00 100%
ASSUMPTION
The above table assumes that the Global Offering has become unconditional and the
Shares are issued pursuant to the Global Offering (assuming the options granted under the
Pre-IPO Share Option Plan are not exercised). It takes no account of any Shares which may be
issued or repurchased by us pursuant to the general mandates granted to our Directors to issue
or repurchase Shares as described below or otherwise.
RANKING
Upon completion of the Global Offering, the Shares are ordinary Shares in the share
capital of our Company and rank pari passu in all respects with all Ordinary Shares currently
in issue or to be issued and, in particular, will rank in full for all dividends or other
distributions declared, made or paid after the date of this prospectus.
SHARE CAPITAL
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CIRCUMSTANCES UNDER WHICH GENERAL MEETINGS ARE REQUIRED
Upon completion of the Global Offering, our Company will have only one class of Shares,
namely ordinary Shares, and each ranks pari passu with the other Shares.
Pursuant to the Cayman Companies Act and the terms of the Articles of Association, our
Company may from time to time by ordinary resolution of Shareholders to (i) increase its
capital; (ii) consolidate and divide its capital into shares of larger amount; (iii) divide its shares
into several classes; (iv) sub-divide its shares into shares of smaller amount; (v) cancel any
shares which have not been taken (vi) make provision for the allotment and issue of shares
which do not carry any voting rights; (vii) change the currency of denomination of its share
capital; and/or (viii) reduce its share premium account in any manner authorized, and subject
to any conditions prescribed by law. In addition, our Company may reduce or redeem its share
capital by special resolution. For more details, see “Summary of the Constitution of the
Company and the Company Laws of the Cayman Islands” in Appendix IV to this prospectus.
GENERAL MANDATE TO ISSUE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate to, inter alia, allot, issue and deal with Shares, securities
convertible into Shares (the “ Convertible Securities ”) or options, warrants or similar rights to
subscribe for any Shares or such convertible securities (the “ Options and Warrants ”) and to
make or grant offers, agreements or options which might require such Shares, the Convertible
Securities or the Options and Warrants to be allotted and issued or dealt with at any time
subject to the requirement that the aggregate nominal value of the Shares so allotted and issued
or agreed conditionally or unconditionally to be allotted and issued, shall not exceed the sum
of:
(i) 20% of the aggregate nominal value of the share capital of our Company in issue
immediately following the completion of the Global Offering but not the Shares
which may be issued upon the exercise of the options granted under the Pre-IPO
Share Option Plan; and
(ii) the nominal amount of our share capital repurchased by our Company (if any)
pursuant to the repurchase mandate (as mentioned below).
This mandate does not cover Shares to be allotted, issued, or dealt with under a rights
issue or scrip dividend scheme or similar arrangements or a specific authority granted by our
Shareholders. Such mandate will remain in effect until:
(i) the conclusion of our next annual general meeting; or
(ii) the expiration of the period within which the next annual general meeting of our
Company is required to be held under any applicable laws or the Memorandum and
the Articles of Association; or
SHARE CAPITAL
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--- page 350 ---
(iii) it is varied or revoked by an ordinary resolution of our Shareholders at a general
meeting,
whichever is the earliest.
For further details of this general mandate, see “Statutory and General Information — A.
Further Information About Our Group — 4. Resolutions of our Shareholders dated December
3, 2025” in Appendix V to this prospectus.
GENERAL MANDATE TO REPURCHASE SHARES
Subject to the Global Offering becoming unconditional, our Directors have been granted
a general unconditional mandate to exercise all the powers of our Company to repurchase
Shares with an aggregate nominal value of not more than 10% of the aggregate nominal value
of our share capital in issue immediately following the Global Offering (excluding any Shares
which may be allotted and issued pursuant to the exercise of the options granted under the
Pre-IPO Share Option Plan).
This mandate relates to repurchases made on the Stock Exchange, or on any other stock
exchange which the Shares may be listed (and which is recognized by the SFC and the Stock
Exchange for this purpose), and made in accordance with all applicable laws and regulations
and the requirements of the Listing Rules. A summary of the relevant Listing Rules is set out
in the paragraph headed “A. Further Information About Our Group — 5. Explanatory statement
on repurchase of our own securities” in Appendix V to this prospectus.
This general mandate to repurchase Shares will remain in effect until:
(i) at the conclusion of our next annual general meeting; or
(ii) the expiration of the period within which the next annual general meeting of our
Company is required to be held under any applicable laws or the Articles of
Association; or
(iii) it is varied or revoked by an ordinary resolution of our Shareholders at a general
meeting,
whichever is the earliest.
For further details of this general mandate, see “Statutory and General Information — A.
Further Information About Our Group — 4. Resolutions of our Shareholders dated December
3, 2025” in Appendix V in this prospectus.
SHARE CAPITAL
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--- page 351 ---
OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, Qisda Corporation was interested in 232,736,837
Shares, representing approximately 95.02% equity interests in our Company through: (i)
108,555,081 Shares directly held by it, representing approximately 44.32% equity interests in
our Company; (ii) 65,023,956 Shares held by Darly2 V enture which was indirectly wholly-
owned by Qisda Corporation, representing approximately 26.55% equity interest in our
Company; (iii) 25,000,000 Shares held by Darly V enture which was wholly-owned by Qisda
Corporation, representing approximately 10.21% equity interest in our Company; (iv)
20,000,000 Shares held by BenQ Corp. which was wholly-owned by Qisda Corporation,
representing approximately 8.17% equity interest in our Company; and (v) 14,157,800 Shares
held by Darly V enture (L) which was wholly-owned by Qisda Corporation, representing
approximately 5.78% equity interest in our Company.
Upon completion of the Global Offering (assuming the options granted under the Pre-IPO
Share Option Plan are not exercised), Qisda Corporation will be interested directly and
indirectly in 232,736,837 Shares, representing approximately 74.61% of the equity interests in
our Company.
Qisda Corporation is a joint stock limited company listed on the Taiwan Stock Exchange
(stock code: 2352.TW). According to Qisda Corporation’s public disclosures, as of March 31,
2024, being the latest publicly available information, among its top 10 shareholders, AUO
Corporation (ʮ̡), a company listed on the Taiwan Stock Exchange (stock
code: 2409.TW), together with its wholly-owend subsidiary Konly V enture Corp. (ٰ
ʮ̡), collectively held 14.51% of its issued share capital. Save as disclosed above, to
the best knowledge of the Directors, as of March 31, 2024, none of the other shareholders of
Qisda Corporation are interested in more than 5% of its issued share capital.
Pursuant to the Listing Rules and the Guide for New Listing Applicants, Qisda
Corporation, Darly2 V enture, Darly V enture, BenQ Corp. and Darly V enture (L) will be
considered as a group of Controlling Shareholders of our Company.
NO INTEREST IN COMPETING BUSINESS
Our Group is the only member of Qisda Corporation that is engaged in healthcare services
business. Each of the Controlling Shareholders confirms that as of the Latest Practicable Date,
it did not have any interest in a business, apart from the business of our Group, which competes
or is likely to compete, directly or indirectly, with our business, and requires disclosure under
Rule 8.10 of the Listing Rules.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying out our business independently of our Controlling Shareholders and their close
associates after the Listing.
Management Independence
Our Directors
Our Board comprises one executive Director, three non-executive Directors and three
independent non-executive Directors. Only three non-executive Directors out of the seven
Directors will have overlapping roles in the Group and the Qisda Entities (other than an
independent non-executive director role) following the completion of the Global Offering,
none of whom hold executive roles in our Group.
Name of Director
Position in the
Company upon Listing
Major position(s) in the
Qisda Entities upon Listing
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H1118/H1118Chairperson and
non-executive Director
Chairman and chief
executive officer of
Qisda Corporation
Ms. HUNG Chiu-Chin /H1118/H1118/H1118/H1118Non-executive Director The vice general manager,
the chief financial
officer and the
spokesperson of Qisda
Corporation
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H1118/H1118/H1118Non-executive Director The general counsel to the
China office of Qisda
Group
Senior Management
None of our senior management responsible for our daily operations will have any roles
within the Qisda Group upon Listing.
Each of our Directors is aware of his or her fiduciary duties as a Director which require,
among other things, that he or she must act for the benefit of and in the best interests of our
Company and not allow any conflict between his or her duties as a Director and his or her
personal interests. Further, the decision-making mechanism of the Board is set out in the
Articles and four out of seven Directors who are independent from the Qisda Group will bring
appropriate judgment our Board. Our independent non-executive Directors with extensive
corporate governance and financial experience will bring independent judgment to the
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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decision-making process of our Board and will take the responsibility to review, enhance and
implement measures to management any conflict of interests between the Qisda Group and our
Group. In the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and our Directors or their respective associates, the
interested Director(s) shall not vote and shall not be counted in the quorum in respect of such
transactions. For further details, see “— Corporate Governance Measures” in this section.
Taking into account the composition of our Board and senior management, our Directors
believe that the Company and the Controlling Shareholders have management teams that will
function independently of each other. Based on the above, our Directors are satisfied that our
Board as a whole together with our senior management team is able to perform the managerial
role in our Group independently.
Operational Independence
We are able to make all decisions on, and to carry out, our own business operations
independently. Our Company, through our subsidiaries, holds the licenses and qualifications
necessary to carry out our current business, and has sufficient capital, facilities, technology and
employees to operate our business independently from our Controlling Shareholders. Certain
trademarks we used were granted by our Controlling Shareholder. We obtained a trademark
authorization letter from BenQ Corp., pursuant to which our Group was granted a licence to
use certain trademarks registered in PRC on a royalty free basis for a period commencing from
March 1, 2024 and up to February 28, 2027. We also entered into a trademark licensing
agreement with BenQ Corp., pursuant to which our Company was granted a licence to use
certain trademarks registered in Hong Kong for a nominal licence fee of HK$1 commencing
from December 18, 2023 and up to December 17, 2026. The transactions under the trademark
authorization letter and trademark licensing agreement constitute de minimis transactions and
are fully exempt from the reporting, announcement, independent Shareholders’ approval and
annual review requirements under Chapter 14A of the Listing Rules. For details of the licensed
trademarks, see “Statutory and General Information — B. Further Information About Our
Business — 2. Intellectual property rights” in Appendix V to this prospectus. We do not rely
on the Qisda Group for any material amount of revenue, technology, procurement,
administration, staffing or marketing. We have the ownership of, or the legal right to use, all
of the material assets that we use to conduct our business. For more details related to our
leasing of property from or to Qisda Connect Persons (as defined in the “Connected
Transactions” section of this prospectus) pursuant to the Property Leasing Framework
Agreement, see “Connected Transactions — 2. Property Leasing Framework Agreement” in
this prospectus.
Our senior management team are responsible for the conduct of our business and we have
a separate organizational structure with each function department taking specific professional
areas of responsibility according to our internal policies.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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We have adequate access to third parties independently from our Controlling
Shareholders for sources of suppliers and customers. Transactions with the Qisda Group will
be governed by agreements entered into in the ordinary and usual course of our business and
will be on normal commercial terms. We believe that we are able to procure products or
services from/services to the Qisda Group from/to independent third parties on comparable
terms. For more details, see “Connected Transactions” in this prospectus.
Based on the above, our Directors are satisfied that we are able to function and operate
independently from our Controlling Shareholders and their close associates.
Financial Independence
We have established our own finance department with a team of financial staff, who are
responsible for financial control, accounting, reporting, group credit and internal control
functions of our Company, independent from our Controlling Shareholders. We are able to
make financial decisions independently and our Controlling Shareholders do not intervene with
our financial matters. We have also established an independent audit system, a standardized
financial and accounting system and a complete financial management system. In addition, we
are capable of obtaining financing from third parties without relying on any guarantee or
security provided by our Controlling Shareholders or their close associates. As of the Latest
Practicable Date, there were no loans, advances and balances due to and from, or guarantee or
security provided by our Controlling Shareholders.
Based on the above, our Directors are of the view that they and our senior management
are capable of carrying on our business independently of, and do not place undue reliance on
our Controlling Shareholders or their close associates.
CORPORATE GOVERNANCE MEASURES
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following measures to promote good corporate
governance and to avoid potential conflict of interests between our Group and our Controlling
Shareholders upon Listing:
(a) under the Articles of Association, where a Shareholders’ meeting is to be held for
considering proposed transactions in which any of our Controlling Shareholders or
any of their close associates has a material interest, the Controlling Shareholders or
their close associates will not vote on the relevant resolutions;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon the Listing, if our Company enters into connected transactions
with our Controlling Shareholders or any of their associates, our Company will
comply with the applicable Listing Rules;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(c) our independent non-executive Directors will review, on an annual basis, whether
there are any conflict of interests between our Group and our Controlling
Shareholders (the “ Annual Review ”) and provide advice to protect the interests of
our minority Shareholders;
(d) Our Company has established an audit committee, a nomination committee and a
remuneration committee to assess, control and ensure the Board is appropriately
advised as to matters relating to, among other things, our relationship with our
external auditors and our internal audit function, the remuneration of our Directors
and our senior management, the composition of the Board and the identification of
the potential conflicts of interest. For more details, see “Directors and Senior
Management” in this prospectus;
(e) our Controlling Shareholders will undertake to provide all information necessary,
including all relevant financial, operational and market information and any other
necessary information as required by our independent non-executive Directors for
the Annual Review;
(f) our Company will disclose decisions on matters reviewed by the independent
non-executive Directors either in our annual reports or by way of announcements as
required by the Listing Rules;
(g) where our Directors reasonably request the advice of independent professionals such
as financial advisors, the appointment of such independent professionals will be
made at our Company’s expenses; and
(h) we have appointed UOB Kay Hian (Hong Kong) Limited as our compliance adviser
to provide advice and guidance to us in respect of compliance with the applicable
laws and regulations in Hong Kong as well as the Listing Rules, including various
requirements relating to corporate governance during its term of appointment.
We also have a sound corporate governance structure and implement strict measures to
ensure that our corporate governance practices are ultimately driven towards the protection of
our shareholders’ interests in a whole. In addition, we expect to review our corporate
governance performance from time to time and adopt additional corporate governance
measures with a view to implementing guidance provided by our regulators and best practices
as they evolve.
Based on the above, our Directors are satisfied that sufficient corporate governance
measures have been put in place to manage conflict of interest that may arise between our
Group and our Controlling Shareholders, and to protect our minority Shareholders’ interests
after the Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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THE CORNERSTONE PLACING
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ,” and collectively, the “ Cornerstone Investment Agreements ”) with
the cornerstone investors set out below (each a “ Cornerstone Investor ,” and collectively, the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe, or cause their designated entities to subscribe, at the
Offer Price for such number of Offer Shares (rounded down to the nearest whole board lot of
500 Shares) which may be purchased for an aggregate amount of US$39.9 million (or
approximately HK$310.58 million, calculated based on the exchange rate set out in
“Information about This Prospectus and the Global Offering — Exchange Rate Conversion”)
(exclusive of brokerage, AFRC transaction levy, SFC transaction levy, and Stock Exchange
trading fee) (the “ Cornerstone Placing ”). The number of Offer Shares to be subscribed for by
the Cornerstone Investors is subject to the determination of the final Offer Price.
Assuming an Offer Price of HK$9.34 (being the low end of the indicative Offer Price
range set out in this prospectus), the total number of Offer Shares to be subscribed by the
Cornerstone Investors would be 33,252,500 Offer Shares, representing approximately 49.63%
of the Offer Shares pursuant to the Global Offering and 10.66% of the Shares in issue
immediately following the completion of the Global Offering.
Assuming an Offer Price of HK$10.51 (being the mid-point of the indicative Offer Price
range set out in this prospectus), the total number of Offer Shares to be subscribed by the
Cornerstone Investors would be 29,550,000 Offer Shares, representing approximately 44.10%
of the Offer Shares pursuant to the Global Offering and 9.47% of the Shares in issue
immediately following the completion of the Global Offering.
Assuming an Offer Price of HK$11.68 (being the high end of the indicative Offer Price
range set out in this prospectus), the total number of Offer Shares to be subscribed by the
Cornerstone Investors would be 26,590,500 Offer Shares, representing approximately 39.69%
of the Offer Shares pursuant to the Global Offering and 8.52% of the Shares in issue
immediately following the completion of the Global Offering.
Our Company is of the view that, (i) the Cornerstone Placing will ensure a reasonable size
of solid commitment at the beginning of the marketing period of the Global Offering and will
provide confidence to the market; and (ii) by leveraging on the Cornerstone Investors’ industry
reputation and investment experience, the Cornerstone Placing will help raise the profile of our
Company and to signify that such investors have confidence in our business and prospect. Our
Company became acquainted with Heron Neutron Medical through mutual acquaintances in the
healthcare service sector, and with Cowealth (China) and Suzhou Zhanxingtou through the
Capital Markets Intermediaries.
CORNERSTONE INVESTORS
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--- page 357 ---
The Cornerstone Placing will form part of the International Offering, and, unless prior
consent is obtained from the Stock Exchange, the Cornerstone Investors will not subscribe for
any Offer Shares under the Global Offering other than pursuant to the Cornerstone Investment
Agreements. The Offer Shares to be subscribed for by the Cornerstone Investors will rank pari
passu in all respects with the fully paid Shares in issue following the completion of the Global
Offering and will be counted towards the public float of our Company under Rule 8.08 of the
Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the Cornerstone
Investors or their close associates will become a substantial Shareholder of our Company; (ii)
none of the Cornerstone Investors or their close associates will have any Board representation
in our Company; and (iii) equity interests in our Company being beneficially owned by the
three largest public Shareholders will be less than 50% for the purpose of Rule 8.08(3) of the
Listing Rules.
To the best knowledge of our Company, (i) each of the Cornerstone Investors and its
ultimate beneficial owners is an independent third party; (ii) none of the Cornerstone Investors
is accustomed to take instructions from our Company, the Directors, chief executive,
controlling Shareholders, substantial Shareholders, existing Shareholders or any of its
subsidiaries or their respective close associates in relation to the acquisition, disposal, voting,
or other disposition of Shares registered in its name or otherwise held by it; (iii) none of the
subscription of the relevant Offer Shares by the Cornerstone Investors is directly or indirectly
financed by our Company, the Directors, chief executive, controlling Shareholders, substantial
Shareholders, existing Shareholders or any of its subsidiaries or their respective close
associates; and (iv) each of the Cornerstone Investors is independent from each other and
makes independent investment decisions.
As confirmed by each of the Cornerstone Investors, (i) their subscription under the
Cornerstone Placing would be financed by their own internal resources or the assets managed
for its investors (in the case of Cornerstone Investors which are funds or investment managers);
(ii) all necessary approvals have been obtained with respect to the Cornerstone Placing and that
no specific approval from any stock exchange (if relevant) or its shareholders is required for
the relevant cornerstone investment; (iii) other than a guaranteed allocation of the relevant
Offer Shares at the final Offer Price, the Cornerstone Investors do not have any preferential
rights in the Cornerstone Investment Agreements compared with other public Shareholders;
and (iv) there are no side agreements or arrangements between our Company and the
Cornerstone Investors or any benefit, direct or indirect, conferred on the Cornerstone Investors
by virtue of or in relation to the Listing other than a guaranteed allocation of the relevant Offer
Shares at the final Offer Price.
The total number of Offer Shares to be subscribed by the Cornerstone Investors pursuant
to the Cornerstone Placing may be affected by reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering as described in “Structure of the Global Offering — The
Hong Kong Public Offering — Reallocation.” The number of Offer Shares to be subscribed for
CORNERSTONE INVESTORS
– 348 –


--- page 358 ---
by each Cornerstone Investor may be deducted on a pro rata basis in accordance with the terms
of the Cornerstone Investment Agreements to satisfy the public demands under the Hong Kong
Public Offering, after taking into account the requirements under Appendix F1 to the Listing
Rules. Details of the actual number of Offer Shares to be allocated to each Cornerstone
Investor will be disclosed in the allotment results announcement to be issued by our Company
on or around December 19, 2025.
Pursuant to the Cornerstone Investment Agreements, the Overall Coordinators (for
themselves and on behalf of the Underwriters) has the discretion to effect a delayed delivery
of the Offer Shares to be subscribed for by all of the Cornerstone Investors on a date later than
the Listing Date, subject to the conditions contained therein. All Cornerstone Investors have
agreed to pay for the relevant Offer Shares that they have subscribed for in full before the
Listing. As such, there will be no deferred settlement of the investment amount for the Offer
Shares to be subscribed for by the Cornerstone Investors pursuant to the Cornerstone
Investment Agreement.
THE CORNERSTONE INVESTORS
The information about the Cornerstone Investors set out below was provided by the
Cornerstone Investors in connection with the Cornerstone Placing.
Heron Neutron Medical
Heron Neutron Medical Corp. (ʮ̡)( “Heron Neutron Medical ”) is a
company incorporated in Taiwan and is listed on the Taiwan Stock Exchange (stock code:
7799). It is mainly engaged in the provision of comprehensive solutions for accelerator-based
boron neutron capture therapy (AB-BNCT). None of the shareholders of Heron Neutron
Medical owned more than 30% of its equity interest.
Cowealth (China)
Cowealth Medical China Co., Ltd.* ( Υబ(ʕ਷)ʮ̡)( “ Cowealth
(China) ”) is a joint stock company established in the PRC and is listed on the Shanghai Stock
Exchange (stock code: 603122). It is mainly engaged in the provision of in-vitro diagnostic
product centralized procurement services, medical product distribution, and other value-added
services in the PRC. Its revenue for the year ended December 31, 2024 was approximately
RMB939 million. Cowealth (China) is owned as to 55% by Cowealth Holding Co., Limited ( Υ
బ(ಥ)ʮ̡), a company incorporated in Hong Kong, which is a wholly-owned
subsidiary of Cowealth Medical Holding Co., Ltd. (ʮ̡)( “ Cowealth
Holding ”), a company listed on the Taipei Exchange (stock code: 4745). Cowealth Holding is
mainly engaged in the provision of in-vitro diagnostic product centralized procurement
services, medical product distribution and other value-added services via Cowealth (China).
None of the shareholders of Cowealth Holding owned more than 30% of its equity interest.
CORNERSTONE INVESTORS
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Suzhou Zhanxingtou
Suzhou Zhanxingtou Industrial Fund Partnership (Limited Partnership)* ( ᘽψ̹኷ጳҳ
ΥྫΆุ(Υྫ)) (“ Suzhou Zhanxingtou ”) is a limited partnership established in
the PRC and is mainly focused on equity investment. The general partner of Suzhou
Zhanxingtou is Suzhou Zhuopu Investment Fund Management Co., Ltd.* (ږ
ʮ̡)( “ Suzhou Zhuopu ”). Suzhou Zhuopu is wholly owned by Suzhou Asset
Management Co., Ltd.* (ʮ̡)( “ Suzhou AM ”), which is a subsidiary of
Suzhou Asset Investment Management Group Co., Ltd.* (ʮ̡)
(“Suzhou Asset Investment Management ”), which is ultimately controlled by Suzhou
Municipal Bureau of Finance (҅). Suzhou Zhanxingtou have 5 limited partners,
none of whom owned more than 30% of partnership interest. As of the Latest Practicable Date,
Suzhou Zhanxingtou had paid-in capital of RMB424 million. To the best knowledge of our
Directors, each of Suzhou Zhanxingtou, Suzhou Zhuopu, Suzhou AM and Suzhou Asset
Investment Management is an Independent Third Party.
The table below sets out details of the Cornerstone Placing:
Based on the Offer Price of HK$9.34 (being the low end of the indicative Offer Price
range)
Cornerstone Investor
Investment
amount (1)
(US$ in
million)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
Shares in issue
immediately
following the
completion of
the Global
Offering
Heron Neutron Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.0 25,002,000 37.32% 8.01%
Cowealth (China) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.92 6,600,500 9.85% 2.12%
Suzhou Zhanxingtou /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.98 1,650,000 2.46% 0.53%
Notes:
1. Exclusive of brokerage, AFRC transaction levy, SFC transaction levy, and Stock Exchange trading fee, and to
be converted from/to Hong Kong dollars based on the exchange rate set out in “Information about This
Prospectus and the Global Offering — Exchange Rate Conversion.”
2. Rounded down to the nearest whole board lot of 500 Shares and calculated based on the exchange rate set out
in “Information about This Prospectus and the Global Offering — Exchange Rate Conversion.”
CORNERSTONE INVESTORS
– 350 –


--- page 360 ---
Based on the Offer Price of HK$10.51 (being the mid-point of the indicative Offer Price
range)
Cornerstone Investor
Investment
amount (1)
(US$ in
million)
Number of
Offer
Shares (2)
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
Shares in issue
immediately
following the
completion of
the Global
Offering
Heron Neutron Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.0 22,218,500 33.16% 7.12%
Cowealth (China) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.92 5,865,500 8.75% 1.88%
Suzhou Zhanxingtou /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.98 1,466,000 2.19% 0.47%
Notes:
1. Exclusive of brokerage, AFRC transaction levy, SFC transaction levy, and Stock Exchange trading fee, and to
be converted from/to Hong Kong dollars based on the exchange rate set out in “Information about This
Prospectus and the Global Offering — Exchange Rate Conversion.”
2. Rounded down to the nearest whole board lot of 500 Shares and calculated based on the exchange rate set out
in “Information about This Prospectus and the Global Offering — Exchange Rate Conversion.”
Based on the Offer Price of HK$11.68 (being the high end of the indicative Offer Price
range)
Cornerstone Investor
Investment
amount (1)
(US$ in million)
Number of
Offer Shares (2)
Approximate %
of the Offer
Shares
Approximate %
of the Shares in
issue immediately
following the
completion of the
Global Offering
Heron Neutron Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830.0 19,993,000 29.84% 6.41%
Cowealth (China) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.92 5,278,000 7.88% 1.69%
Suzhou Zhanxingtou /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.98 1,319,500 1.97% 0.42%
Notes:
1. Exclusive of brokerage, AFRC transaction levy, SFC transaction levy, and Stock Exchange trading fee, and to
be converted from/to Hong Kong dollars based on the exchange rate set out in “Information about This
Prospectus and the Global Offering — Exchange Rate Conversion.”
2. Rounded down to the nearest whole board lot of 500 Shares and calculated based on the exchange rate set out
in “Information about This Prospectus and the Global Offering — Exchange Rate Conversion.”
CORNERSTONE INVESTORS
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--- page 361 ---
CONDITIONS PRECEDENT
The obligations of each Cornerstone Investor to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreements are subject to, among others, the following
closing conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in these underwriting agreements, and neither of the aforesaid
underwriting agreements having been terminated;
(b) the Offer Price having been agreed upon between our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(c) the Listing Committee of the Stock Exchange having granted the listing of, and
permission to deal in, the Shares (including the Shares under the Cornerstone
Placing as well as other applicable waivers and approvals) and such approval,
permission or waiver having not been revoked prior to the commencement of
dealings in the Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or the Cornerstone Investment Agreements and there shall be no orders or
injunctions from a court of competent jurisdiction in effect precluding or prohibiting
consummation of such transactions; and
(e) the representations, warranties, undertakings, acknowledgements and confirmations
of the Cornerstone Investors under the respective Cornerstone Investment
Agreements are (as of the date of the Cornerstone Investment Agreements) and will
be (as of the Listing Date) accurate, true and complete in all respects and not
misleading or deceptive and that there is no breach of any of the Cornerstone
Investment Agreements on the part of the respective Cornerstone Investors.
RESTRICTIONS ON THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that without the prior written consent of
each of our Company, the Overall Coordinators and the Joint Sponsors, it will not, whether
directly or indirectly, at any time during the period of six months from and including the
Listing Date (the “ Lock-up Period ”), dispose of, in any way, any of the Offer Shares or any
interest in any company or entity holding such Offer Shares, save for certain limited
circumstances, such as transfers to any of its wholly-owned subsidiaries who will be bound by
the same obligations of such Cornerstone Investors, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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--- page 362 ---
You should read the following discussion and analysis in conjunction with our
audited consolidated financial information, included in the Accountants’ Report in
Appendix I to this prospectus, together with the respective accompanying notes. Our
consolidated financial information has been prepared in accordance with all applicable
IFRS Accounting Standards.
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance that
involve risks and uncertainties. These statements are based on assumptions and analysis
made by us in light of our experience and perception of historical events, current
conditions and expected future developments, as well as other factors we believe are
appropriate under the circumstances. In evaluating our business, you should carefully
consider the information provided in the section headed “Risk Factors” in this
prospectus.
OVERVIEW
We are a private for-profit general hospital group in mainland China, and have adopted
the advanced hospital operation and management experiences from Taiwan. We currently own
and operate two general hospitals. As measured by total revenue in 2024, we are the largest
private for-profit general hospital group in the East China region, with our market share being
1.0% in the East China region, according to Frost & Sullivan. By the same measure, we are the
seventh largest private for-profit general hospital group nationwide, with our market share
being 0.4% in the PRC, according to the same source. As measured by average revenue per
registered bed in 2024, we rank the first among all private for-profit general hospital groups
in mainland China, according to the same source.
Our revenue increased from RMB2,336.4 million in 2022 to RMB2,687.6 million in 2023,
and slightly decreased to RMB2,659.0 million in 2024. Our revenue slightly decreased from
RMB1,330.1 million for the six months ended June 30, 2024 to RMB1,312.3 million for the
corresponding period in 2025. Our gross profit margin increased from 16.4% in 2022 to 18.9%
in 2023. In 2024, our gross profit margin decreased to 18.1%. In addition, our profit for the
year was RMB89.6 million, RMB167.5 million and RMB108.9 million in 2022, 2023 and 2024,
respectively, with net profit margin amounting to 3.8%, 6.2% and 4.1% in 2022, 2023 and
2024, respectively. Our gross profit margin decreased from 19.3% for the six months ended
June 30, 2024 to 15.9% for the corresponding period in 2025, primarily attributable to (i) the
increase of RMB7.0 million in depreciation and amortization and of RMB3.9 million in
utilities, arising from the commencement of operations of the second phase of Nanjing BenQ
Hospital; and (ii) the increase of RMB30.9 million in employee benefit expenses due to the
growth in the number of doctors and other healthcare professionals during the same period. We
had 914 doctors and 1,809 other healthcare professionals as of June 30, 2024, which increased
to 1,015 doctors and 1,878 other healthcare professionals as of June 30, 2025. In addition, the
gross profit margin of Suzhou BenQ Hospital was more significantly affected, decreasing from
FINANCIAL INFORMATION
– 353 –


--- page 363 ---
20.3% to 14.9%, primarily due to (i) the downward adjustment of DRG reimbursement rates
in Suzhou starting from the second half of 2024 in accordance with the national healthcare
insurance policy. Under the DRG system, hospitals receive fixed payments based on diagnosis
groups, and a lower DRG reimbursement rate directly leads to lower reimbursement per case.
As the reimbursement amount is fixed regardless of the actual cost incurred, such adjustments
reduce revenue without a corresponding decrease in cost, thereby compressing gross profit
margins; (ii) the decrease in revenue due to the more severe prevalence of influenza in early
2024 compared to the same period in 2025; and (iii) the decrease in revenue from
Ophthalmology in discipline due to the reduced patient demand for high-end services in the
Ophthalmology department. As such, our net profit margin decreased from 4.8% in the six
months ended June 30, 2024 to 3.7% in the six months ended June 30, 2025.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been and will continue to be affected by a number of
factors, including those set out below:
Healthcare Market Conditions of the PRC
We derive substantially all of our revenue from the healthcare services provided through
our hospitals in the PRC. In 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, revenue generated from our provision of healthcare services accounted for 98.7%,
98.9%, 98.8%, 98.8% and 99.0% of our total revenue, respectively. As a result, our results of
operations and financial conditions are significantly affected by healthcare market conditions
in the PRC.
In recent years, private hospitals have become the fastest growing segment in the overall
hospital market in the PRC. The private hospital market in the PRC, as measured by revenue,
increased from RMB437.9 billion in 2019 to RMB944.7 billion in 2024, with a CAGR of
16.6% from 2019 to 2024, and is estimated to reach RMB1,882.7 billion by 2030, representing
a CAGR of 12.2% from 2024 to 2030. Fueled by the high population density, elevated
disposable income, and heightened health awareness among local residents, the private hospital
market in Jiangsu Province, where we are based, also demonstrated robust growth. Revenue of
private hospitals in the Jiangsu Province grew from RMB55.2 billion in 2019 to RMB92.6
billion in 2024, representing a CAGR of 10.9% from 2019 to 2024, and is forecasted to reach
RMB182.2 billion by 2030, representing a CAGR of 11.9% from 2024 to 2030.
Driven by increasing demand and favorable government policies, the private hospital
market is expected to continue to grow rapidly in the future, and the leading private hospital
groups who have established strong brand recognition and accumulated extensive experience
in operation and management will be well positioned to capture the growth potential. If this
market trend continues, we are well positioned to experience a positive effect on our revenue
growth and results of operations.
FINANCIAL INFORMATION
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--- page 364 ---
However, due to the fast growing number of private hospitals in the PRC, we may face
enhanced competition. The number of private hospitals in the PRC increased from 22,424 in
2019 to 27,652 in 2024, representing a CAGR of 4.3% from 2019 to 2024, and is estimated to
reach 30,590 in 2027, representing a CAGR of 3.6% from 2023 to 2027. If we are not able to
maintain our competitive edge, attract seasoned medical professionals and continue to offer
quality services to differentiate ourselves from our competitors, we may not be able to sustain
a stable growth in our business and our results of operations may be adversely affected.
Healthcare Reform in the PRC
The success of our business largely depends on the progress of the healthcare reform in
the PRC. In particular, the rising demand for, and governmental policies relating to: (i) private
capital investments in hospitals; and (ii) private healthcare services, have driven our growth.
The acceleration of healthcare reform in recent years presents us with growth opportunities,
while also subjecting us to significant uncertainties and challenges if healthcare reform policies
change dramatically in the future.
In recent years, the PRC government has adopted various policies to deepen the
healthcare reform in the PRC. Since 2019, the PRC government has initiated the diagnosis
related groups (DRG) mechanism, which divides patients into different diagnosis-related
groups and makes medical reimbursement payments according to a standard set for each group
instead of actual expenses incurred by treating the patients. It encourages hospitals to treat
patients efficiently, thereby reducing unnecessary costs to be reimbursed by the national
medical insurance program. We began to adopt DRG payment system in 2022. With our
precision management system, including the Firesoon System ( ˦ዓӻ୕) we are able to
effectively control costs and improve operational efficiency.
Private hospitals like us are generally entitled to set the prices of healthcare services and
the retail prices of pharmaceuticals at their discretion. However, as a Medical Insurance
Designated Medical Institution (ᓃᔼᐕዚ࿴), for products and services that are covered
by public medical insurance programs, we are subject to pricing guidelines set by the relevant
local healthcare administrative authorities. In 2022, 2023 and 2024 and the six months ended
June 30, 2024 and 2025, revenue derived from settlement through public medical insurance
programs amounted to RMB968.9 million, RMB1,373.6 million, RMB1,410.4 million,
RMB704.8 million and RMB700.9 million, accounting for 41.5%, 51.1%, 53.0%, 53.0% and
53.4% of our total revenue in the same years/periods, respectively. We expect to continue to
be a member of the Medical Insurance Designed Medical Institutions and subject to relevant
pricing guidelines. On the other hand, being a member of the Medical Insurance Designated
Medical Institutions could bring more patient traffic. Whether our hospitals can remain to be
a Medical Insurance Designated Medical Institution could affect our results of operations.
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Expansion of Our Operational Capacity and Our Hospital Network
Our revenue is largely affected by the number, scale of operations, development stage and
efficiency of each hospital in operation. We currently own and operate two hospitals, both of
which have entered into a profit-generating period, and we anticipate a continuous and
sustained growth in revenue for these two hospitals. Nanjing BenQ Hospital, our first private
for-profit general hospital, commenced operations in 2008. Our revenue generated from
Nanjing BenQ Hospital amounted to RMB1,454.3 million, RMB1,707.9 million, RMB1,693.8
million, RMB844.8 million and RMB864.6 million in 2022, 2023 and 2024 and the six months
ended June 30, 2024 and 2025, representing 62.2%, 63.5%, 63.7%, 63.5% and 65.9% of our
total revenue, respectively. We recorded gross profit of RMB218.0 million, RMB301.5 million,
RMB296.6 million, RMB158.2 million and RMB141.8 million from Nanjing BenQ Hospital,
accounting for 56.9%, 59.4%, 61.5%, 61.6% and 68.0% of our total gross profit in 2022, 2023
and 2024 and the six months ended June 30, 2024 and 2025, respectively. We further expanded
our hospital network by commencing the operations of Suzhou BenQ Hospital in 2013. Our
revenue generated from Suzhou BenQ Hospital amounted to RMB882.2 million, RMB979.7
million, RMB965.2 million, RMB485.3 million and RMB447.7 million in 2022, 2023 and 2024
and the six months ended June 30, 2024 and 2025, representing 37.8%, 36.5%, 36.3%, 36.5%
and 34.1% of our total revenue, respectively. We recorded gross profit of RMB165.1 million,
RMB206.2 million, RMB185.5 million, RMB98.5 million and RMB66.9 million from Suzhou
BenQ Hospital, accounting for 43.1%, 40.6%, 38.5%, 38.4% and 32.0% of our total gross profit
in 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively.
Our future growth depends upon our ability to expand the capacity of our hospitals,
among other things. We aim to expand the operations of Nanjing BenQ Hospital and Suzhou
BenQ Hospital and enhance their comprehensive operating capacities in the near future. For
details of our expansion plans, see “Business — Our Hospitals” and “Future Plans and Use of
Proceeds — Use of Proceeds” in this prospectus. A ramp-up period is generally observed
during the construction projects. During the ramp-up period, operating efficiency of newly-
established facilities may be lower than that of our established ones and hence it may take some
time before those new facilities begin to generate profit. In the long term, these construction
projects will enlarge our operational capacity and bring us new growth opportunities.
Our future growth also depends upon our ability to expand our hospital network through
acquisition or other investments. Our ability to expand our hospital network will depend on a
number of factors, including (i) changes to the PRC healthcare policies and regulations, (ii) our
ability to improve the financial and operational performance of hospitals under our
management, (iii) the reputation of our existing hospitals and doctors, and (iv) our financial
resources. Our expansion will require us to make upfront investments, which could impact our
liquidity. Expansion of our hospital network will continue to increase our revenue base and
create additional network effects and synergies, which could further enhance the operating
efficiencies of our hospitals. However, our ability to establish and operate these additional
hospitals in a cost-efficient manner determines whether and how quickly we can recover our
investment, and may materially affect our revenue and profitability.
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Patient Flow and Efficiency of Our Hospitals
Our results of operations are primarily affected by the patient flow and efficiency of our
hospitals.
The revenue generated from our inpatient healthcare services is highly dependent upon
the number of inpatient visits, bed turnover days and average inpatient spending per visit. Due
to the increasing inpatient enrollment and decreasing bed turnover days, we are able to achieve
greater utilization of our service capacity and increased operational scale. In 2022, 2023 and
2024, our inpatient visits increased from 67.1 thousand to 81.9 thousand and further to 86.2
thousand while the average bed turnover days decreased from 9.2 to 8.2 and further to 7.9,
respectively. For the six months ended June 30, 2024 and 2025, our inpatient visits remained
stable at 42.4 thousand and the average bed turnover days remained stable at 8.0 days and 7.8
days, respectively. The average spending per inpatient visit of our hospitals was RMB17,909,
RMB17,042, RMB15,998, RMB15,341 and RMB15,642, respectively, in 2022, 2023 and 2024
and the six months ended June 30, 2024 and 2025.
The revenue generated from our outpatient healthcare services is highly dependent upon
the number of outpatient visits and average outpatient spending per visit. The number of
outpatient visits is primarily driven by, among other things, our reputation, specialization of
doctors, practicing hours of doctors, our service offerings, economic and social conditions of
local and regional community, and the competitive landscape of healthcare market in the PRC,
especially in Jiangsu Province. The number of outpatient visits of our hospitals was 1,680.6
thousand, 2,002.3 thousand, 2,146.5 thousand, 1,096.3 thousand and 1,057.4 thousand in 2022,
2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively. The average
spending per outpatient visit of our hospitals was RMB599, RMB584, RMB542, RMB545 and
RMB537 in 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
respectively.
Going forward, we expect to record an increasing trend in our revenue as we are
committed to improving the quality of our healthcare service offerings through our multi-
disciplinary private general hospitals and developing our specialized departments, as well as
continuing to expand and scale up our hospital network.
Ability to Control Our Costs and Improve Profitability
Our profitability and results of operation are affected by our ability to effectively control
costs and improve operational efficiency. Our gross profit margin increased from 16.4% in
2022 to 18.9% in 2023. In 2024, our gross profit margin decreased to 18.1%. Our gross profit
margin decreased from 19.3% in the six months ended June 30, 2024 to 15.9% in the six
months ended June 30, 2025.
During the Track Record Period, our cost of revenue primarily consisted of cost of
pharmaceuticals and medical consumables and employee benefit expenses. Our cost of
pharmaceuticals and cost of medical consumables represented the largest component of our
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cost of revenue. The use of pharmaceuticals and consumables is regarded as a key aspect of
many of our medical treatment procedures. During the Track Record Period, the historical
prices of the pharmaceuticals and medical consumables we purchased, which are our major raw
materials, did not experience any material fluctuations. Meanwhile, employee benefit expenses
represented the second largest component of our cost of revenue. Our employee benefit
expenses are primarily contingent upon our capacity to offer competitive wages and other
benefits to recruit and retain high-caliber medical professionals.
Going forward, we expect that costs relating to pharmaceuticals and medical consumables
and our employees will continue to be our most significant costs, particularly in light of the
expansion plans of our hospitals. In addition, we will keep monitoring and optimizing our cost
structure to adapt to changing market dynamics and evolving business needs. Leveraging our
efficient and precision management systems, we believe our ability to effectively control costs
will continue to enhance in the future, which in turn will positively affect our profitability and
drive sustainable financial performance.
BASIS OF PREPARATION
Our Company was incorporated in Cayman Islands on January 5, 2009 as an exempted
company with limited liability under the Companies Act of the Cayman Islands. During the
Track Record Period, we were principally engaged in provision of healthcare services through
the multi-disciplinary private for-profit general hospitals in the PRC. For details of our
principal subsidiaries, see Note 14 to the Accountants’ Report in Appendix I to this prospectus.
The historical financial information has been prepared in accordance with all applicable
IFRS Accounting Standards as issued by the International Accounting Standards Board (the
“IASB ”). The IASB has issued a number of new and revised IFRS Accounting Standards. For
the purpose of preparing this historical financial information, we have adopted all applicable
new and revised IFRS Accounting Standards that are effective during the Track Record Period,
except for any new standards or interpretations that are not yet effective for the Track Record
Period.
MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND
ESTIMATES
We have identified certain accounting policies that are material to the preparation of our
Group’s financial information. Some of our accounting policies involve subjective assumptions
and estimates, as well as complex judgments relating to accounting items. In each case, the
determination of these items requires management judgments based on information and
financial data that may change in future periods. When reviewing our financial information,
you should consider: (i) our selection of accounting policies; and (ii) the results to changes in
conditions and assumptions. We set forth below those accounting policies that we believe are
of critical importance to us or involve the material estimates and judgments used in the
preparation of our Group’s financial information. Our material accounting policies, and
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significant judgments and estimates, which are important for an understanding of our financial
condition and results of operations, are set forth in detail in Notes 2 and 3 to the Accountants’
Report in Appendix I to this prospectus.
Material Accounting Policies
Revenue and Other Income
Healthcare Services
Revenue generated from provision of healthcare services, including inpatient services and
outpatient services, is recognized when the related services have been rendered to customers.
The majority of our customers have enrolled in public medical insurance program which are
run by government organizations. Our Group claims the consideration in relation to healthcare
services provided by us with the relevant government organizations and treats the subsequent
government approvals on the annual quota for medical fees to be recovered from the relevant
government’s public medical insurance program as changes in variable considerations. For
details, see “Business — Pricing — Pricing for Healthcare Services” in this prospectus. In
estimating the variable considerations, our Group determines variable considerations using
expected value approach, which is based on historical practice and all reasonably available
information and adjusts to the actual amount for the satisfied healthcare service in the period
when the annual quota is agreed.
(a) Inpatient Services
For inpatient services, the customers normally receive inpatient treatment which
contains various treatment. Inpatient service contains more than one performance
obligations, including (i) provision of consultation services, (ii) provision of inpatient
healthcare services and (iii) sale of pharmaceutical products. Our Group allocates the
transaction price to each performance obligation on a relative stand-alone selling price
basis.
For revenue from (i) provision of consultation services and (iii) sale of
pharmaceutical products for which control of services or pharmaceutical products is
transferred at a point in time, revenue is recognized when the customer obtains the control
of the completed services or pharmaceutical products and our Group has satisfied its
performance obligations with present right to payment. For revenue from (ii) provision of
inpatient healthcare services, the corresponding revenue is recognized over the service
period when customers receive the services and simultaneously consume the benefits
provided by our Group when we perform.
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(b) Outpatient Services
For outpatient services, the patient normally receives outpatient treatment which
contains various treatment components. Outpatient services contain more than one
performance obligations, including (i) provision of outpatient healthcare services and (ii)
sale of pharmaceutical products. Our Group allocates the transaction price to each
performance obligation on relative standalone selling price basis. Both (i) provision of
outpatient healthcare services and (ii) sale of pharmaceutical products for which the
control of services or pharmaceutical products is transferred at a point in time, revenue
is recognized when the customer obtains the control of the completed services or
pharmaceutical products and our Group has satisfied its performance obligations with
present right to payment.
Other Income
(a) Rental Income From Operating Leases
Rental income from operating leases is recognized in profit or loss on a straight-line
basis over the term of the lease. Lease incentives granted are recognized as an integral
part of the total rental income, over the term of the lease. V ariable lease payments that do
not depend on an index or a rate are recognized as income in the accounting period in
which they are earned.
(b) Interest Income
Interest income is recognized using the effective interest method. The “effective
interest rate” is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the gross carrying amount of the financial asset.
(c) Government grants
Government grants are recognized in the statement of financial position initially
when there is reasonable assurance that they will be received and that our Group will
comply with the conditions attaching to them.
Grants that compensate our Group for expenses incurred are recognized as income
in profit or loss on a systematic basis in the same periods in which the expenses are
incurred.
Grants that compensate our Group for the cost of an asset are deducted from the
carrying amount of the asset and consequently are effectively recognized in profit or loss
over the useful life of the asset by way of reduced depreciation expense.
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Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the
form of materials or supplies to be consumed in the rendering of services.
Inventories are measured at the lower of cost and net realizable value.
Cost of inventories is determined on first-in-first-out method. Net realizable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Property, Plant and Equipment and Right-of-Use Assets
Property, plant and equipment and right-of-use assets are stated at cost, which includes
capitalized borrowing costs, less accumulated depreciation and any accumulated impairment
losses. The cost of self-constructed items of property, plant and equipment includes the cost of
materials, direct labor, the initial estimate, where relevant, of the costs of dismantling and
removing the items and restoring the site on which they are located, and an appropriate
proportion of overheads and borrowing costs.
Any gain or loss on disposal of an item of property, plant and equipment is recognized
in profit or loss.
Depreciation is calculated to write off the cost of property, plant and equipment, less their
estimated residual value, if any, using the straight line method over their estimated useful lives.
The estimated useful lives of property, plant and equipment and right-of-use assets are as
follows:
Estimated useful life
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 – 50 years
Machinery and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 – 8 years
Furniture, fixtures and office equipment /H1118/H11183 – 5 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 – 10 years
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over the term of lease
If significant parts of an item of property, plant and equipment have different useful lives,
then they are accounted for as separate items (major components). Both the useful life of an
asset and its residual value, if any, are reviewed annually.
Construction in progress is stated at cost less impairment losses. Cost comprises the
purchase costs of the asset and the related construction and installation costs.
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Construction in progress is transferred to other property, plant and equipment when the
asset is substantially ready for its intended use and depreciation will be provided at the
appropriate rates in accordance with the depreciation polices specified above.
No depreciation is provided in respect of construction in progress.
Credit Losses and Impairment Assets
(a) Credit Losses From Financial Instruments
Our Group recognizes a loss allowance for Expected Credit Losses (“ ECLs ”) on financial
assets measured at amortized cost (including cash and cash equivalents, time deposits, trade
and other receivables).
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses
are measured as the present value of all expected cash shortfalls between the contractual
and expected amounts. The expected cash shortfalls are discounted using the following
rates if the effect is material:
– fixed-rate financial assets and trade and other receivables : effective interest
rate determined at initial recognition or an approximation thereof; and
– variable-rate financial assets : current effective interest rate.
The maximum period considered when estimating ECLs is the maximum contractual
period over which the Group is exposed to credit risk. In measuring ECLs, our Group
takes into account reasonable and supportable information that is available without undue
cost or effort. This includes information about past events, current conditions and
forecasts of future economic conditions. ECLs are measured on either of the following
bases:
– 12-month ECLs : these are losses that are expected to result from possible
default events within the 12 months after the reporting date; and
– lifetime ECLs : these are losses that are expected to result from all possible
default events over the expected lives of the items to which the ECL model
applies.
Our Group measures loss allowances at an amount equal to lifetime ECLs, except for
the following, which are measured at 12-months ECLs:
– financial instruments that are determined to have low credit risk at the
reporting date; and
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– other financial instruments for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has not increased
significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to
lifetime ECL.
Significant Increases in Credit Risk
When determining whether the credit risk of a financial instrument has increased
significantly since initial recognition and when measuring ECLs, our Group considers
reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based
on our historical experience and informed credit assessment, that includes forward-
looking information.
Our Group assumes that the credit risk on a financial asset has increased
significantly if it is more than 30 days past due.
Our Group considers a financial asset to be in default when the debtor is unlikely
to pay its credit obligations to our Group in full, without recourse by our Group to actions
such as realizing security (if any is held).
ECLs are remeasured at each reporting date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is
recognized as an impairment gain or loss in profit or loss. Our Group recognizes an
impairment gain or loss for all financial instruments with a corresponding adjustment to
their carrying amount through a loss allowance account.
Credit-Impaired Financial Assets
At each reporting date, our Group assesses whether a financial asset is credit-
impaired. A financial asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable
events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default;
– it is probable that the debtor will enter bankruptcy or other financial
reorganization; or
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– the disappearance of an active market for a security because of financial
difficulties of the issuer.
Write-Off Policy
The gross carrying amount of a financial asset is written off to the extent that there
is no realistic prospect of recovery. This is generally the case when our Group otherwise
determines that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off.
Subsequent recoveries of an asset that was previously written off are recognized as
a reversal of impairment in profit or loss in the period in which the recovery occurs.
(b) Impairment of Other Non-Current Assets
At each reporting date, our Group reviews the carrying amounts of its non-financial assets
(other than inventories and deferred tax assets) to determine whether there is any indication of
impairment.
If any such indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of
other assets or cash-generating units (“CGU”s).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs of disposal. V alue in use is based on the estimated future cash flows,
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its
recoverable amount. Impairment losses are recognized in profit or loss. They are allocated to
reduce the carrying amounts of the assets in the CGU on a pro rata basis.
An impairment loss is reversed only to the extent that the resulting carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
Associates
An associate is an entity in which our Group or Company has significant influence, but
not control or joint control, over the financial and operating policies.
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An interest in an associate is accounted for in the historical financial information using
the equity method, unless it is classified as held for sale (or included in a disposal group
classified as held for sale). They are initially recognized at cost, which includes transaction
costs. Subsequently, the consolidated financial statements include our Group’s share of the
profit or loss and other comprehensive income (“ OCI”) of those investees, until the date on
which significant influence ceases.
When our Group’s share of losses exceeds its interest in the associate, our Group’s
interest is reduced to nil and recognition of further losses is discontinued except to the extent
that our Group has incurred legal or constructive obligations or made payments on behalf of
the investee. For this purpose, our Group’s interest is the carrying amount of the investment
under the equity method, together with any other long-term interests that in substance form part
of our Group’s net investment in the associate, after applying the ECLs model to such other
long-term interests where applicable.
Unrealized gains arising from transactions with equity-accounted investees are eliminated
against the investment to the extent of our Group’s interest in the investee. Unrealized losses
are eliminated in the same way as unrealized gains, but only to the extent there is no evidence
of impairment.
When our Group ceases to have significant influence over an associate, it is accounted for
as a disposal of the entire interest in that investee, with a resulting gain or loss be recognized
in profit or loss. Any interest retained in that former investee at the date when significant
influence is lost recognized at fair value and this amount is regarded as the fair value on initial
recognition of a financial asset.
Income Tax
Income tax expense comprises current tax and deferred tax. It is recognized in profit or
loss.
Current tax comprises the estimated tax payable or receivable on the taxable income or
loss for the year and any adjustments to the tax payable or receivable in respect of previous
years. The amount of current tax payable or receivable is the best estimate of the tax amount
expected to be paid or received that reflects any uncertainty related to income taxes. It is
measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
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Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognized for:
– temporary differences on the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting nor
taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences;
– temporary differences related to investment in subsidiaries and associates to the
extent that our Group is able to control the timing of the reversal of the temporary
differences and it is probable that they will not reverse in the foreseeable future; and
– those related to the income taxes arising from tax laws enacted or substantively
enacted to implement the Pillar Two model rules published by the Organization for
Economic Co-operation and Development.
Deferred tax assets are recognized for unused tax losses, unused tax credits and
deductible temporary differences to the extent that it is probable that future taxable profits will
be available against which they can be used. Future taxable profits are determined based on the
reversal of relevant taxable temporary differences. If the amount of taxable temporary
differences is insufficient to recognize a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business
plans for individual subsidiaries in our Group. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized. Such reductions are reversed when the probability of future taxable
profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the
manner in which our Group expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Exchange Differences on Translation of Financial Statements of our Company With
Functional Currency Other Than RMB That Will not be Reclassified to Profit or Loss
The accounting treatment for the “Exchange differences on translation of financial
statements of the Company with functional currency other than RMB that will not be
reclassified to profit or loss” primarily involves a situation where a reporting entity’s
functional currency is different from its presentation currency in its financial statements. Our
Company’s functional currency has been USD while the historical financial information is
presented in RMB. According to paragraph 39(c) of IAS 21, the results and financial position
of the Company whose functional currency is not the currency of a hyperinflationary economy
shall be translated into a different presentation currency and all resulting exchange differences
shall be recognized in other comprehensive income and accumulated in a separate component
of equity — “exchange reserve”.
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The above requirement regarding translation also applies to the situation when a group
consists of individual entities having functional currencies that are different from the
presentation currency in the consolidated financial statements. Paragraphs 48-48D of IAS 21
addresses the accounting treatments for disposal or partial disposal of foreign operations under
which the cumulative exchange differences arising from the translation of a foreign operation
previously recognized in other comprehensive income in accordance with paragraph 39(c) of
IAS 21 may be reclassified from equity to profit or loss (as a reclassification adjustment) upon
disposal. However, our Company is not a “foreign operation” as defined in IAS 21 as it is the
parent company rather than a subsidiary, associate, joint arrangement or branch of a reporting
entity. As such, the exchange difference resulting from the translation of financial statements
of our Company from functional currency to a different presentation currency is not the one
navigated in IAS 21.48, and therefore, such exchange difference recognized in other
comprehensive income will not be reclassified from equity to profit or loss. As required by
paragraph 82A(a)(i) of IAS 1, the item is presented separately in the statement of profit or loss
and other comprehensive income as that will not be reclassified to profit or loss.
Significant Accounting Judgments and Estimates
In the process of applying our Group’s accounting policies, management has made the
following judgments and estimations, which have the most significant effect on the amounts
recognized in the historical financial information.
Estimation of Variable Consideration for Revenue From Customers
We estimate variable considerations to be included in the transaction price for the revenue
from customers in respect of subsequent agreement on the government approved annual quota
for the medical fees in healthcare services. Our Group has estimated the variable
considerations which is based on our past experience with customers. Any significant changes
in experience as compared to historical patterns will impact the expected refund estimated by
us. Our Group updates its assessment of expected agreement on a regular basis and the relevant
revenue are adjusted accordingly.
Loss Allowance for Expected Credit Losses
Our Group estimates the amount of loss allowance for ECLs on trade and other
receivables that are measured at amortized cost based on the credit risk of the respective
financial instruments. The loss allowance amount is measured as the asset’s carrying amount
and the present value of estimated future cash flows with the consideration of expected future
credit loss of the respective financial instrument. The assessment of the credit risk of the
respective financial instrument involves high degree of estimation and uncertainty. When the
actual future cash flows are less than expected or more than expected, a material impairment
loss or a material reversal of impairment loss may arise, accordingly.
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Impairment of Interests in Associates
Our Group reviews the carrying amounts of the interests in associates as at the end of each
reporting period to determine whether there is objective evidence of impairment. When
indication of impairment is identified, management assesses the difference between the
carrying amounts and recoverable amounts and make provision for impairment loss. Any
changes in the assumptions adopted in calculating the recoverable amount would increase or
decrease the provision for impairment loss and affect our Group’s financial position.
Useful Life of Property, Plant and Equipment
Management determines the estimated useful lives of and related depreciation charges for
our property, plant and equipment. This estimate is based on the actual useful lives of assets
of similar nature and functions. It could change significantly as a result of significant technical
innovations and competitor actions in response to industry cycles. Management will increase
the depreciation charges where useful lives are less than previously estimated, or will write-off
or write-down technically obsolete or non-strategic assets that have been abandoned or sold.
RESULT OF OPERATIONS
The following table sets forth selected consolidated statement of profit or loss for the
years/periods indicated:
Y ear Ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
Cost of revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,953,335) (83.6) (2,179,957) (81.1) (2,176,931) (81.9) (1,073,408) (80.7) (1,103,683) (84.1)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,100 16.4 507,656 18.9 482,042 18.1 256,723 19.3 208,633 15.9
Other net gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,981 0.5 1,476 0.1 743 0.0 69 0.0 1,887 0.1
Selling and distribution expenses /H1118 (6,783) (0.3) (5,661) (0.2) (5,264) (0.2) (3,224) (0.2) (3,072) (0.2)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118(217,625) (9.3) (241,006) (9.0) (283,589) (10.7) (140,548) (10.6) (132,413) (10.1)
(Provision)/reversal of impairment
losses on trade receivables /H1118/H1118/H1118(5,428) (0.2) (292) (0.0) 605 0.0 (1,547) (0.1) (39) 0.0
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118165,245 7.1 262,173 9.8 194,537 7.3 111,473 8.4 74,996 5.7
Net finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,491) (0.7) (4,228) (0.2) (3,089) (0.1) (1,068) (0.1) (4,259) (0.3)
Share of losses of associates /H1118/H1118/H1118/H1118(22,143) (0.9) (23,849) (0.9) (23,414) (0.9) (13,952) (1.0) (309) 0.1
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118127,611 5.5 234,096 8.7 168,034 6.3 96,453 7.3 70,428 5.4
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,061) (1.6) (66,646) (2.5) (59,112) (2.2) (33,052) (2.5) (21,724) (1.7)
Profit for the year/period /H1118/H1118/H1118/H111889,550 3.8 167,450 6.2 108,922 4.1 63,401 4.8 48,704 3.7
Profit for the year/period
attributable to equity
shareholders of our Company /H1118 89,550 3.8 167,450 6.2 108,922 4.1 63,401 4.8 48,704 3.7
FINANCIAL INFORMATION
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DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS
Revenue
During the Track Record Period, we generated revenue primarily from providing
healthcare services through our two hospitals, namely Nanjing BenQ Hospital and Suzhou
BenQ Hospital. In terms of treatment processes, our services can be primarily categorized into
inpatient healthcare services and outpatient healthcare services. Our revenue amounted to
RMB2,336.4 million, RMB2,687.6 million and RMB2,659.0 million, RMB1,330.1 million and
RMB1,312.3 million in 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025,
respectively.
Revenue by Segment
The following table sets forth a breakdown of our revenue by segment, in absolute amount
and as a percentage of our total revenue, for the years/periods indicated:
Y ear Ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Inpatient healthcare services /H1118/H1118/H1118/H11181,201,678 51.4 1,395,719 51.9 1,379,046 51.8 685,841 51.6 695,653 53.0
Outpatient healthcare services (1) /H1118/H11181,103,907 47.3 1,262,905 47.0 1,249,004 47.0 628,122 47.2 603,134 46.0
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,850 1.3 28,989 1.1 30,923 1.2 16,168 1.2 13,529 1.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
Notes:
(1) Apart from revenue generated from our offline outpatient healthcare services, also comprise (i) revenue
generated from our provision of physical examination service, which amounted to RMB97.3 million,
RMB94.0 million, RMB84.7 million, RMB30.8 million and RMB34.8 million, accounting for 4.2%,
3.5%, 3.2%, 2.3% and 2.7% of our total revenue in 2022, 2023 and 2024 and the six months ended June
30, 2024 and 2025, respectively; and (ii) revenue generated from our provision of online consultation
services under the internet hospital business, which amounted to RMB0.4 million, RMB0.3 million, and
RMB0.6 million, RMB0.2 million and RMB0.4 million, accounting for 0.02%, 0.01%, 0.02%, 0.02%
and 0.03% of our total revenue in 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively.
(2) Comprise revenue generated from our provision of rental services and car parking services.
FINANCIAL INFORMATION
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Inpatient healthcare services refer to the treatment of patients who are hospitalized
overnight or for an indeterminate period of time, usually several days or weeks, subject to the
patients’ conditions and recovery. Outpatient healthcare services refer to the treatment of
patients who are hospitalized for less than 24 hours. Within the scope of our outpatient
healthcare services, we also provide physical examination services where we will examine
signs of diseases and provide medical advices on healthcare issues. For more details, see
“Business — Our Healthcare Services” in this prospectus.
The following table sets forth a breakdown of key operating data by segment for the
years/periods indicated:
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
Inpatient healthcare
services
Inpatient visits
(in thousand) (1) /H1118 67.1 81.9 86.2 42.4 42.4
Average spending
per inpatient visit
(RMB)
(2) /H1118/H1118/H1118/H1118/H1118/H111817,909 17,042 15,998 15,341 15,642
Outpatient
healthcare services
Outpatient visits
(in thousand) (3) /H1118 1,680.6 2,002.3 2,146.5 1,096.3 1,057.4
Average spending
per outpatient
visit (RMB)
(4) /H1118/H1118 599 584 542 545 537
Notes:
(1) Represents the total number of inpatients (with hospital stay) in our hospitals during the given period.
(2) Represents the average spending per inpatient visit calculated as the revenue from inpatient healthcare
services divided by the number of inpatient visits in our hospitals during the given period. During the
Track Record Period, the average spending per inpatient visit experienced a general decreasing trend as
a result of the implementation of the DRG payment system and aperiodic adjustment of the DRG
reimbursement standards.
(3) Represents the total number of outpatients (without hospital stay, and excluding number of patients
receiving physical examination services) in our hospitals during the given period. Except for inpatients
who are readmitted to our inpatient department and/or are transferred to our inpatient department from
another hospital, most inpatients need to check in at the outpatient counter first before they are admitted
to the inpatient department and receive relevant inpatient healthcare services. As such, a substantial
number of inpatients in each year/period comprising the Track Record Period is also counted in the
number of outpatients in the corresponding year/period. As confirmed by Frost & Sullivan, given that
hospitals commonly require patients to check in at the outpatient counter before being admitted to
inpatient care, such method of dual counting is in line with the industry norm.
(4) Represents the average spending per outpatient visit calculated as the revenue from outpatient
healthcare services (excluding the revenue from physical examination services) divided by the number
of outpatient visits of our hospitals during the given period.
FINANCIAL INFORMATION
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Revenue by Hospital
The following table sets forth a breakdown of revenue by hospital, in absolute amount and
as a percentage of our total revenue, for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Nanjing BenQ Hospital
– Inpatient healthcare services /H1118/H1118742,647 31.8 909,251 33.8 902,120 33.9 447,796 33.7 471,967 36.0
– Outpatient healthcare services /H1118/H1118691,859 29.6 777,099 28.9 770,625 29.0 386,535 29.1 383,587 29.2
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,753 0.8 21,545 0.8 21,046 0.8 10,462 0.8 9,031 0.7
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,454,259 62.2 1,707,895 63.5 1,693,791 63.7 844,792 63.5 864,585 65.9
Suzhou BenQ Hospital
– Inpatient healthcare services /H1118/H1118459,031 19.6 486,468 18.1 476,926 17.9 238,046 17.9 223,686 17.1
– Outpatient healthcare services /H1118/H1118412,048 17.6 485,806 18.1 478,379 18.0 241,587 18.2 219,547 16.7
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,097 0.5 7,444 0.3 9,877 0.4 5,706 0.4 4,498 0.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118882,176 37.8 979,718 36.5 965,182 36.3 485,339 36.5 447,731 34.1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,336,435 100.0 2,687,613 100.0 2,658,973 100.0 1,330,131 100.0 1,312,316 100.0
The following table sets forth a breakdown of key operating data by hospital for the
years/periods indicated:
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
Nanjing BenQ
Hospital
Inpatient services
Inpatient visits
(in thousand) /H1118 40.1 50.6 53.3 26.0 27.2
Average spending
per inpatient
visit (RMB) /H1118/H111818,520 17,969 16,925 16,236 16,424
Outpatient services
Outpatient visits
(in thousand) */H1118 1,114.6 1,327.6 1,435.7 727.5 724.7
Average spending
per outpatient
visit (RMB) /H1118/H1118 573 548 508 510 504
FINANCIAL INFORMATION
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Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
Suzhou BenQ
Hospital
Inpatient services
Inpatient visits
(in thousand) /H1118 26.9 31.3 33.0 16.3 15.2
Average spending
per inpatient
visit (RMB) /H1118/H111817,064 15,542 14,452 13,923 14,244
Outpatient services
Outpatient visits
(in thousand) */H1118 566.0 674.7 710.8 368.9 332.7
Average spending
per outpatient
visit (RMB) /H1118/H1118 650 655 613 613 611
Note:
* Except for inpatients who are readmitted to our inpatient department and/or are transferred to our
inpatient department from another hospital, most inpatients need to check in at the outpatient counter
first before they are admitted to the inpatient department and receive relevant inpatient healthcare
services. As such, a substantial number of inpatients in each year/period comprising the Track Record
Period is also counted in the number of outpatients in the corresponding year/period. As confirmed by
Frost & Sullivan, given that hospitals commonly require patients to check in at the outpatient counter
before being admitted to inpatient care, such method of dual counting is in line with the industry norm.
Inpatient Visits and Average Spending per Inpatient Visit
During the Track Record Period, we had increased inpatient visits for both our Nanjing
BenQ Hospital and Suzhou BenQ Hospital. The inpatient visits recorded by our Nanjing BenQ
Hospital increased from approximately 40.1 thousand in 2022 to 50.6 thousand in 2023, and
further to 53.3 thousand in 2024 and from 26.0 thousand in the six months ended June 30, 2024
increased to 27.2 thousand in the same period of 2025, which was primarily due to the
combined effect of (i) the organic growth of our business; (ii) our continuous optimization of
healthcare service offerings through continuous development of our clinical specialties; (iii)
strong brand recognition; and (iv) our enhanced operational efficiency. Due to similar reasons,
the inpatient visits recorded by our Suzhou BenQ Hospital increased from 26.9 thousand in
2022 to 31.3 thousand in 2023, and further to 33.0 thousand in 2024. The inpatient visits
recorded by our Suzhou BenQ Hospital decreased from 16.3 thousand in the six months ended
June 30, 2024 to 15.2 thousand in the same period of 2025, primarily due to the prevalence of
influenza in the beginning of 2024 was more severe as compared to that in the same period of
2025, which directly resulted in fluctuations inpatient visits in the Pediatrics and Respiratory
FINANCIAL INFORMATION
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--- page 382 ---
disciplines. The inpatient visits in the Pediatrics and Respiratory disciplines of Suzhou BenQ
Hospital decreased from 2,861 and 1,094 in the six months ended June 30, 2024, to 2,155 and
732 in the corresponding period of 2025, respectively.
The average spending per inpatient visit experienced a general decreasing trend during
the Track Record Period. Due to the implementation of the DRG payment system and aperiodic
adjustment of the DRG reimbursement standards, the average spending per inpatient visit in
our Nanjing BenQ Hospital decreased from RMB18,520 in 2022 to RMB17,969 in 2023 and
further to RMB16,925 in 2024, and remained stable at RMB16,236 and RMB16,424 in the six
months ended June 30, 2024 and 2025, and the average spending per inpatient visit in our
Suzhou BenQ Hospital decreased from RMB17,064 in 2022 to RMB15,542 in 2023 and further
to RMB14,452 in 2024, and remained relative stable at RMB13,923 and RMB14,244 in the six
months ended June 30, 2024 and 2025.
The implementation of DRG payment system at the same time further enabled us to
improve the service delivery efficiency of our hospitals, as evidenced by our average bed
turnover days that decreased from 9.2 days in 2022 to 8.2 days in 2023, further to 7.9 days in
2024, and remained stable at 7.8 days in the six months ended June 30, 2025, which in turn
allowed us to serve an increasing number of patients during the Track Record Period.
During the Track Record Period, our Nanjing BenQ Hospital generally recorded higher
average spending per inpatient visit compared to our Suzhou BenQ Hospital, which was
primarily attributable to our Nanjing BenQ Hospital’s offering of the well-recognized
disciplines and medical specialties such as pancreatology, orthopedics, and neurology, where
patients often present with more advanced or complicated medical conditions that require
intensive medical care, advanced diagnostics, and specialized and complex treatments. In
contrast, our Suzhou BenQ Hospital served a higher proportion of patients seeking care from
the Departments of Obstetrics and Gynecology as well as Pediatrics, where the medical
treatment progress is generally less complex, resulting in lower average spending per inpatient
visit in our Suzhou BenQ Hospital.
FINANCIAL INFORMATION
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Outpatient Visits and Average Spending per Outpatient Visit
During the Track Record Period, we had increased outpatient visits for both our Nanjing
BenQ Hospital and Suzhou BenQ Hospital. The outpatient visits recorded by our Nanjing BenQ
Hospital increased from approximately 1,114.6 thousand in 2022 and to 1,327.6 thousand in
2023 and further to 1,435.7 thousand in 2024 and remained stable at 727.5 thousand and 724.7
thousand in the six months ended June 30, 2024 and 2025, which was primarily due to the
combined effect of (i) the organic growth of our business; (ii) our continuous optimization of
healthcare service offerings through continuous development of our clinical specialties; (iii)
strong brand recognition; and (iv) our enhanced operational efficiency. Due to similar reasons,
the outpatient visits recorded by our Suzhou BenQ Hospital increased 566.0 thousand in 2022
and to 674.7 thousand in 2023, and further to 710.8 thousand in 2024. The outpatient visits
recorded by our Suzhou BenQ Hospital decreased from 368.9 thousand in the six months ended
June 30, 2024 to RMB332.7 thousand in the same period of 2025, primarily due to the
prevalence of influenza in the beginning of 2024 was more severe as compared to that in the
same period of 2025.
The average spending per outpatient visit experienced a general decreasing trend during
the Track Record Period, primarily due to the evolving patient demand and the corresponding
changes in the outpatient service portfolio we provided. To be specific, during the Track
Record Period, the overall decreasing trend in average spending per outpatient visit was
attributable to two factors: (i) the general increasing trend in number of outpatient visit for
disciplines such as emergency room, obstetrics and gynecology, pediatrics and cardiology,
which incurred a relatively lower amount (generally less than RMB500) of medical expenditure
per outpatient visit; and (ii) the decreases in average spending per outpatient visit for
disciplines, such as dentistry, and high-end physical examination services, where high-quality
healthcare services were typically delivered according to the tailored needs of each individual
and incurred a relatively higher amount (generally more than RMB600) of medical expenditure
per visit.
During the Track Record Period, our Suzhou BenQ Hospital generally recorded higher
average spending per outpatient visit compared to our Nanjing BenQ Hospital, which was
primarily attributable to our Suzhou BenQ Hospital’s focus on disciplines and medical
specialties such as obstetrics and gynecology, as well as pediatrics, where patients often sought
more routine, preventive, and regular care and tend to demand more outpatient treatments such
as medical consultations, diagnostic tests, and prescribed medications rather than complex
inpatient treatments, and thus higher average spending per outpatient visit was witnessed in our
Suzhou BenQ Hospital.
FINANCIAL INFORMATION
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Cost of Revenue
Our cost of revenue primarily consisted of (i) cost of pharmaceuticals and medical
consumables, primarily representing the cost of procuring pharmaceuticals and medical
consumables by our hospitals for provision of healthcare services; (ii) employee benefit
expenses, primarily consist of the salaries, bonuses and other employee benefits for our
medical professionals; (iii) department consulting service fees that we paid to our collaborative
healthcare service providers, who are Independent Third Parties, to further enhance our service
quality; (iv) depreciation and amortization in relation to our hospital premises and medical
equipment; (v) utilities; (vi) repair and maintenance fees for our medical equipment; and (vii)
others, primarily consists of taxes and surcharges, and other miscellaneous fees. The following
table sets forth a breakdown of our cost of revenue by nature, in absolute amounts and as a
percentage of total cost of revenue, for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Cost of pharmaceuticals and
medical consumables /H1118/H1118/H1118/H1118/H1118/H1118896,011 45.9 1,056,412 48.5 1,034,361 47.5 516,835 48.1 508,730 46.1
Employee benefit expenses /H1118/H1118/H1118/H1118717,065 36.7 774,433 35.5 824,297 37.9 402,434 37.5 433,291 39.3
Department consulting service fees /H1118 141,424 7.2 136,542 6.3 111,056 5.1 51,355 4.8 48,427 4.4
Depreciation and amortization /H1118/H1118/H111874,151 3.8 82,195 3.8 88,280 4.1 43,514 4.1 50,508 4.6
Utilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,272 3.5 70,362 3.2 63,122 2.9 31,632 2.9 35,547 3.2
Repair and maintenance fees /H1118/H1118/H1118/H111828,126 1.4 27,699 1.3 32,099 1.5 17,344 1.6 16,848 1.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,286 1.4 32,314 1.5 23,716 1.1 10,294 1.0 10,332 0.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,953,335 100.0 2,179,957 100.0 2,176,931 100.0 1,073,408 100.0 1,103,683 100.0
In terms of the department consulting service fees we paid to our collaborative healthcare
service providers, we typically enter into agreements with them for a fixed term ranging from
five years to twelve years. Under such agreements, our collaborative healthcare service
providers will advise on various aspects of the development of certain of our departments,
including the hiring and management of healthcare professional, the update of internal policies
regarding department operation, the upgrade and addition of medical instrument and
equipment, and the procurement of pharmaceuticals and medical consumables. We will in turn
pay them a consulting service fee as a percentage of the monthly profit of the relevant
departments. We typically settle with them on a monthly basis. Under such collaborations, we
still retain management and ownership of our departments, and the collaborations do not
constitute outsourced management of any department to an Independent Third Party. As
advised by Frost & Sullivan, such collaborations are not uncommon in the hospital industry in
China. For more details, see “Business — Our Suppliers” in this prospectus.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin
Our gross profit represents our revenue less our cost of revenue, and our gross profit
margin represents our gross profit as a percentage of our revenue. Our gross profit increased
from RMB383.1 million in 2022 to RMB507.7 million in 2023. In 2024, our gross profit
amounted to RMB482.0 million, decreasing from RMB507.7 million in 2023. Due to revenue
growth outpacing the increase in cost of revenue and the greater economies of scale we enjoyed
along with the increased number of patient visits, we also witnessed a rising trend in gross
profit margin, which increased from 16.4% in 2022 to 18.9% in 2023. In 2024, our gross profit
margin decreased to 18.1%, primarily resulting from the increased employee benefit expenses,
as we recruited more healthcare professionals, especially chief doctors and associate chief
doctors to support the development of our hospitals. The number of chief doctors and associate
chief doctors in our Nanjing BenQ Hospital increased by 10.5% from 191 as of December 31,
2023 to 211 as of December 31, 2024, and the number of chief doctors and associate chief
doctors in our Suzhou BenQ Hospital increased by 21.5% from 107 as of December 31, 2023
to 130 as of December 31, 2024. For details, see “Business — Our Staff — Our Doctors and
Other Healthcare Professionals” in this prospectus. Our gross profit decreased from RMB256.7
million in the six months ended June 30, 2024 to RMB208.6 million in the corresponding
period of 2025 and our gross profit margin decreased from 19.3% in the six months ended June
30, 2024 to 15.9% in the corresponding period of 2025, primarily attributable to (i) the increase
of RMB7.0 million in depreciation and amortization and of RMB3.9 million in utilities, arising
from the commencement of operations of the second phase of Nanjing BenQ Hospital; and (ii)
the increase of RMB30.9 million in employee benefit expenses due to the growth in the number
of doctors and other healthcare professionals during the same period. We had 914 doctors and
1,809 other healthcare professionals as of June 30, 2024, which increased to 1,015 doctors and
1,878 other healthcare professionals as of June 30, 2025. In addition, the gross profit margin
of Suzhou BenQ Hospital was more significantly affected, decreasing from 20.3% to 14.9%,
primarily due to (i) the downward adjustment of DRG reimbursement standards by Suzhou
Healthcare Security Administration in Suzhou, in accordance with the national healthcare
insurance policy, starting from the second half of 2024. Under the DRG system, hospitals
receive fixed payments based on diagnosis groups, and a lower DRG reimbursement standards
directly leads to lower reimbursement per case. As the reimbursement amount is fixed
regardless of the actual cost incurred, such adjustments reduce revenue without a
corresponding decrease in cost, thereby compressing gross profit margins; (ii) the decline in
revenue due to the more severe prevalence of influenza in early 2024 compared to the same
period in 2025; and (iii) the decrease in revenue from Ophthalmology in discipline due to the
reduced patient demand for high-end services.
FINANCIAL INFORMATION
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Moreover, as part of our precision management system, we installed the Firesoon system
(˦ዓӻ୕) at both hospitals since 2021. By automatically predicting the DRG grouping and
reimbursement standards, the Firesoon system helped us make cost control during the process
of treating patients, thus partially alleviating the impact on our cost of revenue and gross profit
margin brought by the implementation of the DRG payment system and aperiodic adjustment
of the DRG reimbursement standards. For more details, see “Business — Our Operation and
Management — Our Precision Management” and “Business — Pricing — Pricing for
Healthcare Services” in this prospectus.
Breakdown by Hospital
The following table sets forth a breakdown of our gross profit and gross profit margin by
hospital for the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
Gross
profit
Gross
profit
margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Nanjing BenQ Hospital /H1118/H1118217,967 15.0 301,463 17.7 296,580 17.5 158,193 18.7 141,775 16.4
Suzhou BenQ Hospital /H1118/H1118165,133 18.7 206,193 21.0 185,462 19.2 98,530 20.3 66,858 14.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,100 16.4 507,656 18.9 482,042 18.1 256,723 19.3 208,633 15.9
During the Track Record Period, Suzhou BenQ Hospital generally achieved higher gross
profit compared to Nanjing BenQ Hospital. This was primarily attributed to the lower
proportion of costs in relation to pharmaceuticals and medical consumables in Suzhou BenQ
Hospital due to the revenue mix of different departments.
FINANCIAL INFORMATION
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Other Net Gain
Our other net gain primarily consisted of (i) government grants, mainly representing
one-off and unconditional subsidies that we received from government authorities to support
our discipline development. During the Track Record Period, we received an award of
RMB10.0 million in 2022 for attaining a Grade A Class III hospital rating; (ii) net foreign
exchange loss mainly arising from our intra-group transactions in relation to loans that are
denominated in USD; (iii) net realized and unrealized losses or gains on derivative financial
instruments we utilized to offset our exposure to currency risk. See “— Risk Disclosure —
Currency Risk” below in this section; (iv) net losses on disposal of properties, plants and
equipment; and (v) others. The following table sets forth a breakdown of our other net gain for
the years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H111813,923 116.2 1,663 112.7 1,554 209.2 1,109 1,607.2 1,180 62.5
Net foreign exchange loss /H1118/H1118/H1118(9,865) (82.3) (1,576) (106.8) (412) (55.5) (672) (973.9) (807) (42.8)
Net realized and unrealized
gain on derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,549 79.7 3,155 213.8 1,397 188.0 1,397 2,024.6 – –
Net losses on disposal of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(224) (1.9) (345) (23.4) (1,263) (170.0) (619) (897.1) (13) (0.7)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,402) (11.7) (1,421) (96.3) (533) (71.7) (1,146) (1,660.9) 1,527 80.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,981 100.0 1,476 100.0 743 100.0 69 100.0 1,887 100.0
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses primarily consisted of (i) employee benefit expenses,
primarily consisting of salaries, bonuses and other employee benefits for our administration
staff; (ii) depreciation and amortization in relation to our renovation of buildings and purchase
of office equipment, which is in line with our business expansion; (iii) utilities; (iv) taxes and
surcharges, such as property tax and land use taxes; (v) repair and maintenance fees; (vi) office
expenses incurred for our daily operations; (vii) listing expenses incurred for the preparation
of the proposed Listing; and (viii) others, including bank charges, communication and network
expenses, insurance fee, research and development expenses and others. The following table
sets forth a breakdown of our general and administrative expenses for the years/periods
indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee benefit expenses /H1118/H1118/H111861,563 28.3 70,846 29.4 79,636 28.1 38,728 27.6 36,597 27.6
Depreciation and amortization /H1118 72,296 33.2 73,231 30.4 80,410 28.4 38,983 27.7 40,983 31.0
Utilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,928 14.2 32,778 13.6 30,387 10.7 14,416 10.3 18,212 13.8
Tax and surcharges /H1118/H1118/H1118/H1118/H1118/H111820,536 9.4 21,250 8.8 21,994 7.8 11,010 7.8 12,203 9.2
Repair and maintenance /H1118/H1118/H1118/H111814,843 6.8 16,868 7.0 17,451 6.2 9,782 7 9,544 7.2
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,856 5.9 15,204 6.3 13,206 4.7 7,341 5.2 6,786 5.1
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,595 0.7 28,887 10.2 14,954 10.6 4,488 3.4
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,603 2.1 9,234 3.8 11,618 4.1 5,334 3.8 3,600 2.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118217,625 100.0 241,006 100.0 283,589 100.0 140,548 100.0 132,413 100.0
FINANCIAL INFORMATION
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Net Finance Costs
Our finance income primarily consisted of interest incomes from bank deposits, while our
finance costs mainly consisted of interest on bank loans and other borrowings, which we
incurred in order to finance the construction of buildings to enhance our service capacity. Our
bank loans and other borrowings mainly included unsecured and low-interest-bearing
borrowings. The following table sets forth a breakdown of our net finance costs for the
years/periods indicated:
Y ear Ended December 31, Six months Ended June 30,
2022 2023 2024 2024 2025
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Finance income
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,193) (7.7) (4,390) (103.8) (5,838) (189.0) (4,025) (376.9) (1,433) (33.6)
Finance costs
Interest on bank loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,352 118.5 16,707 395.2 18,972 614.2 9,914 928.3 9,767 229.3
Less: Interest expense
capitalized into construction
in progress
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,668) (10.8) (8,089) (191.3) (10,045) (325.2) (4,821) (451.4) (4,075) (95.7)
16,684 107.7 8,618 203.8 8,927 289.0 5,093 476.9 5,692 133.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,491 100.0 4,228 100.0 3,089 100.0 1,068 100.0 4,259 100.0
Note:
(1) The borrowing costs have been capitalized at a rate range of 3.50%, 2.60%~2.70%, 2.35%~2.70% and
2.29%~2.36% per annum in 2022, 2023 and 2024 and the six months ended June 30, 2025, respectively.
Share of Losses of Associates
Our associated companies consisted of Donghui Medical, which primarily engaged in
provision of healthcare services and Nanjing Yinxia Healthcare, which primarily engaged in
provision of elderly care services. Our share of losses of associates primarily represented
losses attributable to us from our associates pursuant to our equity interests in such associates.
An associate is an entity over which we have “significant influence” to participate in financial
and operating policy decisions, but not control or joint control.
Our share of losses of associates increased from RMB22.1 million in 2022 to RMB23.8
million in 2023, primarily due to the losses recorded by Donghui Medical and our acquisition
of addition equity interest in Donghui Medical in December 2023. Our share of losses of
associates decreased to RMB23.4 million in 2024. In March 2024, we acquired addition equity
interest in Donghui Medical to support its development as our Directors believe that the
investment in Donghui Medical aligns with our business expansion strategies to strengthen our
FINANCIAL INFORMATION
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nationwide presence. In 2024, Donghui Medical experienced a revenue growth as compared to
2023, which contributed to a decline in its net losses. As a result, our share of losses from
Donghui Medical decreased. Our share of losses of associates decreased from RMB14.0
million in the six months ended June 30, 2024 to RMB0.3 million in the six months ended June
30, 2025, primarily due to (i) the decrease in the net losses of Donghui Medical, and (ii) a
reduced fluctuation in the equity of Nanjing Yinxia Healthcare.
Donghui Medical commenced operations in 2021, and during the Track Record Period, it
was experiencing a ramp-up period. During the ramp-up period, Donghui Medical made
substantial upfront investments in its development and establishment, while simultaneously
generating a relatively modest revenue stream with steady growth. According to Frost &
Sullivan, as large initial investments are mandatory for hospitals due to its heavy-asset nature,
it is common in the healthcare industry for a newly-established hospital to take time to reach
a net profit status, generating sufficient revenue to cover the costs and expenses incurred for
their upfront investments, such as construction in progress, cost of medical equipment, cost of
pharmaceuticals and medical consumables, employee benefit expenses, and etc. The following
table sets forth a breakdown of our share of losses of associates for the years/periods indicated:
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Donghui Medical /H1118/H1118/H1118/H111820,099 22,054 21,760 13,133 (4)
Nanjing Yinxia
Healthcare /H1118/H1118/H1118/H1118/H1118/H1118/H11182,044 1,795 1,654 819 313
Income Tax Expense
We are subject to income tax on an entity basis on profits arising in or derived from the
jurisdictions in which members of our Group are domiciled and operate.
PRC Corporate Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC and the respective regulations (the
“CIT Law ”), our Company and subsidiaries which operate in mainland China are subject to
CIT at a rate of 25% on the taxable income during each of the Track Record Period.
The Malaysia Labuan
Pursuant to the income tax rules and regulations of the Malaysia Labuan (“ LBU”), our
Group’s subsidiary in the LBU was an Labuan Trading Company, which was liable to the
Malaysia corporation tax at a rate of 3% or a flat rate of MYR20,000 per annum. No provision
for Labuan profits tax was made for the subsidiary as it did not have assessable profits subject
to Labuan Profits Tax during each of the Track Record Period.
FINANCIAL INFORMATION
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Taiwan
Our subsidiary incorporated in Taiwan is liable to Taiwan Profits Tax at a rate of 20%. No
provision for Taiwan Profits Tax was made for the subsidiary as it did not have any assessable
profits subject to Taiwan Profits Tax during each of the Track Record Period.
During the Track Record Period and up to the Latest Practicable Date, our Directors
confirmed that we had fulfilled all our tax obligations and had no disputes or unresolved tax
issues with relevant tax authorities.
REVIEW OF HISTORICAL RESULTS OF OPERATIONS
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Revenue
Our revenue slightly decreased from RMB1,330.1 million in the six months ended June
30, 2024 to RMB1,312.3 million in the six months ended June 30, 2025.
Revenue by Segment
Revenue generated from our inpatient healthcare services increased from RMB685.8
million in the six months ended June 30, 2024 to RMB695.7 million in the six months ended
June 30, 2025. The increase was mainly due to the increase in the inpatient visits and average
spending per inpatient visit over the same period.
Revenue generated from our outpatient healthcare services decreased from RMB628.1
million in the six months ended June 30, 2024 to RMB603.1 million in the six months ended
June 30, 2025. The decrease was mainly due to the decrease in the outpatient visits attributable
to the prevalence of influenza in the beginning of 2024 was more severe as compared to that
in the same period of 2025, led to the fluctuation in patient visits.
Revenue generated from others stayed relatively stable at RMB16.1 million in the six
months ended June 30, 2024 and RMB13.5 million in the six months ended June 30, 2025.
Revenue by Hospital
Our Nanjing BenQ Hospital and Suzhou BenQ Hospital both recorded relatively steady
revenue streams in the six months ended June 30, 2024 and 2025.
Revenue recorded by Nanjing BenQ Hospital increased from RMB844.8 million in the six
months ended June 30, 2024 to RMB864.6 million in the six months ended June 30, 2025,
primarily due to the commencement of operations of the second phase of Nanjing BenQ
Hospital, which has enhanced our healthcare service offering capacity.
FINANCIAL INFORMATION
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Revenue recorded by Suzhou BenQ Hospital decreased from RMB485.3 million in the six
months ended June 30, 2024 to RMB447.7 million in the six months ended June 30, 2025,
primarily due to the decrease of outpatient visits and the downward adjustment of the DRG
reimbursement rates by Suzhou Healthcare Security Administration, in accordance with the
national healthcare insurance policy, starting from the second half of 2024.
Inpatient Visits and Average Spending per Inpatient Visit
The total inpatient visits at our two hospitals remained stable at 42.4 thousand in the six
months ended June 30, 2024 and 2025, primarily due to the combined effect of (i) the organic
growth of our business, in particular, we further enhanced our healthcare service offering
capacity following the commencement of operation of the second phase of Nanjing BenQ
Hospital in February 2025; (ii) our continuous optimization of healthcare service offerings
through continuous development of our clinical specialties; (iii) strong brand recognition; and
(iv) our enhanced operational and hospital service delivery efficiency at both Nanjing BenQ
Hospital and Suzhou BenQ Hospital.
The average spending per inpatient visit increased from RMB15,341 in the six months
ended June 30, 2024 to RMB15,643 in the six months ended June 30, 2025, demonstrating the
effective operation of our precision management system.
Outpatient Visits and Average Spending per Outpatient Visit
The total outpatient visits at our two hospitals decreased from 1,096.3 thousand in the six
months ended June 30, 2024 to 1,057.4 thousand in the six months ended June 30, 2025,
primarily attributable to the prevalence of influenza in the beginning of 2024 was more severe
as compared to that in the same period of 2025.
The average spending per outpatient visit remained relatively stable at RMB545 in the six
months ended June 30, 2024 and RMB537 in the six months ended June 30, 2025.
Cost of Revenue
Our cost of revenue slightly increased from RMB1,073.4 million in the six months ended
June 30, 2024 to RMB1,103.7 million in the six months ended June 30, 2025, mainly due to
(i) the increase in employee benefit expenses primarily due to the growth in the number of
doctors and other healthcare professionals during the same period. We had 914 doctors and
1,809 other healthcare professionals as of June 30, 2024, which increased to 1,015 doctors and
1,878 other healthcare professionals as of June 30, 2025; and (ii) depreciation and amortization
and utilities expenses resulted from the commencement of operation of the second phase of
Nanjing BenQ Hospital, partially offset by the decrease in cost of pharmaceuticals and medical
consumables, primarily due to the decrease in revenue over the same periods.
FINANCIAL INFORMATION
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Gross Profit and Gross Profit Margin
As a result of the changes in our revenue and cost of revenue described above, our gross
profit decreased from RMB256.7 million in the six months ended June 30, 2024 to RMB208.6
million in the six months ended June 30, 2025.
Our overall gross profit margin decreased from 19.3% in the six months ended June 30,
2024 to 15.9% in the six months ended June 30, 2025. Specifically, the gross profit margin of
our Nanjing BenQ Hospital decreased from 18.7% in the six months ended June 30, 2024 to
16.4% in the six months ended June 30, 2025. This decrease was primarily due to the growth
in cost of revenue growing at a faster pace than revenue of Nanjing BenQ Hospital, driven by
the commencement of operations of the second phase, which led to higher employee benefit
expenses, depreciation and amortization and utilities expenses. The gross profit margin of our
Suzhou BenQ Hospital decreased from 20.3% in the six months ended June 30, 2024 to
RMB14.9% in the six months ended June 30, 2025, primarily due to (i) the increase of RMB7.0
million in depreciation and amortization and of RMB3.9 million in utilities, arising from the
commencement of operations of the second phase of Nanjing BenQ Hospital; and (ii) the
increase of RMB30.9 million in employee benefit expenses due to the growth in the number
of doctors and other healthcare professionals during the same period. We had 914 doctors and
1,809 other healthcare professionals as of June 30, 2024, which increased to 1,015 doctors and
1,878 other healthcare professionals as of June 30, 2025. In addition, the gross profit margin
of Suzhou BenQ Hospital was more significantly affected, decreasing from 20.3% to 14.9%,
primarily due to (i) the downward adjustment of DRG reimbursement rates in Suzhou starting
from the second half of 2024 in accordance with the national healthcare insurance policy.
Under the DRG system, hospitals receive fixed payments based on diagnosis groups, and a
lower DRG reimbursement rate directly leads to lower reimbursement per case. As the
reimbursement amount is fixed regardless of the actual cost incurred, such adjustments reduce
revenue without a corresponding decrease in cost, thereby compressing gross profit margins.
(ii) the decline in revenue due to the more severe prevalence of influenza diseases in early 2024
compared to the same period in 2025; and (iii) the decrease in revenue from Ophthalmology
discipline due to the reduced patient demand for high-end services. As such, our net profit
margin decreased from 4.8% in the six months ended June 30, 2024 to 3.7% in the six months
ended June 30, 2025.
Administrative Expenses
Our administrative expenses decreased from RMB140.5 million in the six months ended
June 30, 2024 to RMB132.4 million in the six months ended June 30, 2025, primarily due to
a decrease in Listing expenses.
Other Net Gain
Our other net gain increased from RMB0.1 million in the six months ended June 30, 2024
to RMB1.9 million in the six months ended June 30, 2025, mainly due to the change in others
from a loss of RMB1.1 million in the six months ended June 30, 2024 to a gain of RMB1.5
FINANCIAL INFORMATION
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million in the six months ended June 30, 2025, resulted from an increase in research fee
income. The increase was partially offset by an increase in our net realized and unrealized gain
on derivative financial instruments that we utilized to offset our exposure to currency risk
decreased from RMB1.4 million in the six months ended June 30, 2024 to nil in the six months
ended June 30, 2025.
Net Finance Costs
Our net finance costs increased from RMB1.1 million in the six months ended June 30,
2024 to RMB4.3 million in the six months ended June 30, 2025, mainly due to a decrease in
interest income from RMB4.0 million in the six months ended June 30, 2024 to RMB1.4
million in the six months ended June 30, 2025, stemmed from the decrease in average balance
of cash and cash equivalents over the period.
Share of Losses of Associates
Our share of losses of associates decreased from RMB14.0 million in the six months
ended June 30, 2024 to RMB0.3 million in the six months ended June 30, 2025, primarily as
a result of (i) the decrease in the net losses of Donghui Medical, and (ii) a reduced fluctuation
in the equity of Nanjing Yinxia Healthcare.
Income Tax Expense
Our income tax expense decreased from RMB33.1 million in the six months ended June
30, 2024 to RMB21.7 million in the six months ended June 30, 2025, mainly as our profit
before tax decreased from the six months ended June 30, 2024 to the corresponding period of
2025.
Profit for the Period and Net Profit Margin
As a result of the foregoing, our profit for the period decreased from RMB63.4 million
in the six months ended June 30, 2024 to RMB48.7 million in the six months ended June 30,
2025. Our net profit margin decreased from 4.8% in the six months ended June 30, 2024 to
3.7% in the six months ended June 30, 2025.
Y ear Ended December 31, 2024 Compared to Y ear Ended December 31, 2023
Revenue
Our revenue slightly decreased from RMB2,687.6 million in 2023 to RMB2,659.0 million
in 2024.
FINANCIAL INFORMATION
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Revenue by Segment
Revenue generated from our inpatient healthcare services decreased from RMB1,395.7
million in 2023 to RMB1,379.0 million in 2024. The decrease was mainly due to the decrease
in average spending per inpatient visit, which was primarily attributable to the continuous
influence of the DRG payment system at both Nanjing BenQ Hospital and Suzhou BenQ
Hospital, particularly the adjustment of the DRG reimbursement standards. In addition, as we
continued to optimize and streamline treatment process and improve hospital service delivery
efficiency, we were able to provide inpatient healthcare services to more patients, resulting in
an increased number of our inpatient visits, which partially offset the negative impact of the
reduced average spending per inpatient visit on revenue generated from inpatient healthcare
services.
Revenue generated from our outpatient healthcare services decreased from RMB1,262.9
million in 2023 to RMB1,249.0 million in 2024. The decrease was mainly due to the decrease
in average spending per outpatient visit, which was primarily attributable to the evolving
patient demand and the corresponding changes in the outpatient service portfolio we provided.
Revenue generated from others stayed relatively stable at RMB29.0 million in 2023 and
RMB30.9 million in 2024.
Revenue by Hospital
In terms of hospital, due to our strong reputation, the high-quality and competitive
healthcare offerings, and efficient management of the hospitals, our Nanjing BenQ Hospital
and Suzhou BenQ Hospital both recorded relatively steady revenue streams in 2023 and 2024.
Revenue recorded by Nanjing BenQ Hospital slightly decreased from RMB1,707.9
million in 2023 to RMB1,693.8 million in 2024, and revenue recorded by Suzhou BenQ
Hospital slightly decreased from RMB979.7 million in 2023 to RMB965.2 million in 2024. The
slight decreases were primarily attributable to the reduced average spending per inpatient visit
due to the continuous influence of the DRG payment system, particularly the adjustment of the
DRG reimbursement standards. Additionally, the reduced average spending per outpatient visit
also contributed to the revenue decline. This was affected by the evolving patient demand and
the corresponding changes in the outpatient service portfolio we provided in both hospitals.
Inpatient Visits and Average Spending per Inpatient Visit
The total inpatient visits at our two hospitals increased from 81.9 thousand in 2023 to
86.2 thousand in 2024, primarily due to the combined effect of (i) the organic growth of our
business; (ii) our continuous optimization of healthcare service offerings through continuous
development of our clinical specialties; (iii) strong brand recognition; and (iv) our enhanced
operational and hospital service delivery efficiency at both Nanjing BenQ Hospital and Suzhou
BenQ Hospital.
FINANCIAL INFORMATION
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The average spending per inpatient visit decreased from RMB17,042 in 2023 to
RMB15,998 in 2024, primarily as a result of the continuous influence of DRG payment system
at both Nanjing BenQ Hospital and Suzhou BenQ Hospital, particularly the adjustment of the
DRG reimbursement standards. In particular, Suzhou Healthcare Security Administration
reduced the DRG reimbursement rates of our Suzhou BenQ Hospital in accordance with the
national healthcare insurance policy, starting from the second half of 2024.
Outpatient Visits and Average Spending per Outpatient Visit
The total outpatient visits at our two hospitals in aggregate increased from 2,002.3
thousand in 2023 to 2,146.5 thousand in 2024, primarily due to the combined effect of (i) the
organic growth of our business; (ii) our continuous optimization of healthcare service offerings
through continuous development of our clinical specialties; (iii) strong brand recognition; and
(iv) our enhanced operational efficiency at both Nanjing BenQ Hospital and Suzhou BenQ
Hospital.
The average spending per outpatient visit decreased from RMB584 in 2023 to RMB542
in 2024, which was mainly affected by the evolving patient demand and the corresponding
changes in the outpatient service portfolio we provide.
Cost of Revenue
Our cost of revenue decreased from RMB2,180.0 million in 2023 to RMB2,176.9 million
in 2024, mainly due to the (i) the decrease in cost of pharmaceuticals and medical consumables,
which was in line with the consumption of pharmaceuticals and medical consumables; (ii) the
decrease in department consulting service fees, resulting from the decrease in profit of the
relevant departments, such as the dentistry department in Nanjing BenQ Hospital. The decrease
in profit during the year was in line with the decrease in revenue generated from such
department. For details, see “Business — Our Hospitals — Nanjing BenQ Hospital — Top Five
Medical Disciplines” in this prospectus; and (iii) the decrease in utilities, partially offset by the
increase in employee benefit expenses, as we recruited more healthcare professionals.
Gross Profit and Gross Profit Margin
As the decrease in our revenue outpaced the decrease in cost of revenue, our gross profit
decreased from RMB507.7 million in 2023 to RMB482.0 million in 2024.
Our overall gross profit margin decreased from 18.9% in 2023 to 18.1% in 2024.
Specifically, the gross profit margin of our Nanjing BenQ Hospital slightly decreased from
17.7% in 2023 to 17.5% in 2024, primarily due to the increase in employee benefit expenses
of Nanjing BenQ Hospital, which increased by 5.6% from RMB482.7 million in 2023 to
RMB509.6 million in 2024. The number of chief doctors and associate chief doctors in our
Nanjing BenQ Hospital increased by 10.5% from 191 as of December 31, 2023 to 211 as of
December 31, 2024. The gross profit margin of our Suzhou BenQ Hospital decreased from
21.0% in 2023 to 19.2% in 2024, primarily resulting from the increased employee benefit
FINANCIAL INFORMATION
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expenses of Suzhou BenQ Hospital, which increased by 7.9% from RMB291.7 million in 2023
to RMB314.7 million in 2024. The number of chief doctors and associate chief doctors in our
Suzhou BenQ Hospital increased by 21.5% from 107 as of December 31, 2023 to 130 as of
December 31, 2024. For details, see “Business — Our Staff — Our Doctors and Other
Healthcare Professionals” in this prospectus.
Administrative Expenses
Our administrative expenses increased from RMB241.0 million in 2023 to RMB283.6
million in 2024, primarily due to (i) an increase in listing expenses for the preparation of the
Global Offering; (ii) an increase in employee benefit expenses, due to the expansion of our
administrative team with additional 38 administrative personnel to support the development of
our two hospitals, and the increased compensation levels for our employees; and (iii) an
increase in depreciation and amortization, which was primarily associated with the second-
phase construction of our Suzhou BenQ Hospital.
Other Net Gain
Our other net gain decreased from RMB1.5 million in 2023 to RMB0.7 million in 2024,
mainly as our net realized and unrealized gain on derivative financial instruments that we
utilized to offset our exposure to currency risk decreased from RMB3.2 million in 2023 to
RMB1.4 million in 2024, partially offset by a decrease in net foreign exchange loss from
RMB1.6 million in 2023 to RMB0.4 million in 2024, mainly as we repaid intra-group loans that
were denominated in USD in 2024.
Net Finance Costs
Our net finance costs decreased from RMB4.2 million in 2023 to RMB3.1 million in
2024, mainly due to an increase in interest expense capitalized into construction in progress,
resulting from the second-phase construction of Nanjing BenQ Hospital and Suzhou BenQ
Hospital, partially offset by an increase in interest expenses on bank loans and other
borrowings, mainly due to the additional bank loans we borrowed to support our operation and
business development.
Share of Losses of Associates
Our share of losses of associates decreased from RMB23.8 million in 2023 to RMB23.4
million in 2024, primarily as a result of the combined effect of (i) our acquisition of additional
equity interest in Donghui Medical in March 2024; and (ii) the decline in net losses of Donghui
Medical in 2024.
Income Tax Expense
Our income tax expense decreased from RMB66.6 million in 2023 to RMB59.1 million
in 2024, mainly as our profit before tax decreased from 2023 to 2024.
FINANCIAL INFORMATION
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Profit for the Y ear and Net Profit Margin
As a result of the foregoing, our profit for the year decreased from RMB167.5 million in
2023 to RMB108.9 million in 2024. Our net profit margin decreased from 6.2% in 2023 to
4.1% in 2024, primarily due to the increase in our listing expenses.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue increased from RMB2,336.4 million in 2022 to RMB2,687.6 million in 2023,
primarily attributable to the increase of revenue generated from our provision of healthcare
services.
Revenue by Segment
Revenue generated from our inpatient healthcare services increased from RMB1,201.7
million in 2022 to RMB1,395.7 million in 2023, primarily due to the increase in inpatient visits
from 2022 to 2023, as a result of (i) our continuous offering of high-quality medical services;
and (ii) our increased efficiency in delivery of inpatient healthcare services. Our average bed
turnover days amounted to 9.2 in 2022 and it decreased to 8.2 in 2023. However, a slight
decrease was recorded in average spending per inpatient visit from 2022 to 2023, which was
primarily due to our enhanced operation efficiency and the implementation of DRG payment
system in Suzhou BenQ Hospital in 2023.
Revenue generated from our outpatient healthcare services increased from RMB1,103.9
million in 2022 to RMB1,262.9 million in 2023. The rise in revenue can be largely attributed
to an increase in the number of outpatient visits from 2022 to 2023 as a result of the organic
growth of our business, enhanced brand recognition and continuous development of our
clinical specialties.
Revenue generated from others stayed relatively stable at RMB30.9 million in 2022 and
RMB29.0 million in 2023.
Revenue by Hospital
In terms of hospital, due to our strong reputation, the high-quality and competitive
healthcare offerings, and efficient management of the hospitals, our Nanjing BenQ Hospital
and Suzhou BenQ Hospital both demonstrated strong financial performance in 2022 and 2023.
Revenue recorded by Nanjing BenQ Hospital increased from RMB1,454.3 million in
2022 to RMB1,707.9 million in 2023, primarily due to (i) an increase in number of patient
visits from 2022 to 2023; (ii) our continuous investments in development of our clinical
FINANCIAL INFORMATION
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specialties in Nanjing BenQ Hospital. For example, we hired several renowned medical
professionals in 2023 and introduced advanced medical equipment to our Nanjing BenQ
Hospital; and (iii) the positive impact of the announcement for attaining a Grade A Class III
hospital rating in January 2023.
We recorded a steady increase in revenue of Suzhou BenQ Hospital from RMB882.2
million in 2022 to RMB979.7 million in 2023, which was primarily driven by the increase in
number of patient visits from 2022 to 2023 because of our aforementioned strong reputation,
high-quality and competitive healthcare offerings and efficient management, notably including
the announcement for attaining a Class III hospital rating in August 2023. In addition, our
extensive experience accumulated from the our Nanjing BenQ Hospital in relation to the
implementation of DRG payment system since 2022 made its impact on our Suzhou BenQ
Hospital more manageable in 2023.
Inpatient Visits and Average Spending per Inpatient Visit
The total inpatient visits at our two hospitals increased from 67.1 thousand in 2022 to
81.9 thousand in 2023, primarily due to the combined effect of (i) the organic growth of our
business; (ii) our continuous optimization of healthcare service offerings through continuous
development of our clinical specialties; (iii) strong brand recognition; and (iv) our enhanced
operational efficiency at both Nanjing BenQ Hospital and Suzhou BenQ Hospital.
The average spending per inpatient visit decreased from RMB17,909 in 2022 to
RMB17,042 in 2023, primarily as a result of the implementation of DRG payment system in
Suzhou BenQ Hospital in 2023, where the average spending per inpatient visit decreased from
RMB17,064 in 2022 to RMB15,542 in 2023. The decrease was also in line with the decrease
of average spending per inpatient visit in Nanjing BenQ Hospital, where we have effectively
improved operational efficiency and maximized hospital services delivery potential in the most
cost-effective manner.
Outpatient Visits and Average Spending per Outpatient Visit
The total outpatient visits at our two hospitals in aggregate increased from 1,680.6
thousand in 2022 to 2,002.3 thousand in 2023, primarily due to the combined effect of (i) the
organic growth of our business; (ii) our continuous optimization of healthcare service offerings
through continuous development of our clinical specialties; (iii) strong brand recognition; and
(iv) our enhanced operational efficiency at both Nanjing BenQ Hospital and Suzhou BenQ
Hospital.
The average spending per outpatient visit decreased from RMB599 in 2022 to RMB584
in 2023, which was mainly affected by the evolving patient demand and the corresponding
changes in the outpatient service portfolio we provide.
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Cost of Revenue
Our cost of revenue increased from RMB1,953.3 million in 2022 to RMB2,180.0 million
in 2023, which was primarily attributable to (i) an increase in cost of pharmaceuticals and
medical consumables, which was generally in line with the consumption of pharmaceuticals
and medical consumables and our business growth; and (ii) an increase in employee benefit
expenses, mainly due to the increased compensation levels for our employees.
Gross Profit and Gross Profit Margin
As a result of the changes in our revenue and cost of revenue described above, our gross
profit increased from RMB383.1 million in 2022 to RMB507.7 million in 2023.
Due to revenue growth outpacing the increase in cost of revenue and the greater
economies of scale we enjoyed along with the increased number of patient visits, our overall
gross profit margin experienced an increase from 16.4% in 2022 to 18.9% in 2023. Specifically,
the gross profit margin of our Nanjing BenQ Hospital increased from 15.0% in 2022 to 17.7%
in 2023, and the gross profit margin of our Suzhou BenQ Hospital increased from 18.7% in
2022 to 21.0% in 2023, primarily resulting from our effective cost control efforts, improved
operational capacities and the organic growth of Nanjing BenQ Hospital and Suzhou BenQ
Hospital.
Administrative Expenses
Our administrative expenses increased from RMB217.6 million in 2022 to RMB241.0
million in 2023, primarily due to (i) an increase in employee benefit expenses due to the
increased compensation levels; (ii) an increase in depreciation and amortization as we
purchased new equipment in line with our business expansion; (iii) an increase in utilities,
which is in line with our business expansion; and (iv) an increase in repair and maintenance
fees for the equipment in support of our daily operations.
Other Net Gain
Our other net gain decreased significantly from RMB12.0 million in 2022 to RMB1.5
million in 2023, mainly as (i) we received a one-off award of RMB10.0 million in 2022 for our
Nanjing BenQ Hospital attaining a Grade A Class III hospital rating; and (ii) our net realized
and unrealized gain on derivative financial instruments that we utilized to offset our exposure
to currency risk decreased from RMB9.5 million in 2022 to RMB3.2 million in 2023, partially
offset by a decrease in net foreign exchange loss from RMB9.9 million in 2022 to RMB1.6
million in 2023, attributable to fluctuation in the exchange rate between U.S. dollars and
Renminbi in 2023.
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Net Finance Costs
Our net finance costs decreased from RMB15.5 million in 2022 to RMB4.2 million in
2023, mainly due to an increase in interest expense capitalized into construction in progress,
resulting from the second phase construction of Nanjing BenQ Hospital and Suzhou BenQ
Hospital.
Share of Losses of Associates
We recorded share of losses of associates of RMB22.1 million and RMB23.8 million in
2022 and 2023, respectively.
Income Tax Expense
Our income tax expense increased from RMB38.1 million in 2022 to RMB66.6 million
in 2023, mainly as profit before tax increased from 2022 to 2023.
Profit for the Y ear and Net Profit Margin
As a result of our continuous revenue growth, effective cost and expense management,
improved operational efficiency and the greater economies of scale we enjoyed, our profit for
the year increased from RMB89.6 million in 2022 to RMB167.5 million in 2023 and our net
profit margin increased from 3.8% in 2022 to 6.2% in 2023.
FINANCIAL INFORMATION
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DISCUSSION OF SELECTED ITEMS FROM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
The table below sets forth selected information from our consolidated statements of
financial position as of the dates indicated, which have been extracted from our audited
consolidated financial statements included in Appendix I to this prospectus:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS
Non-current assets
Property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,667,739 1,864,118 2,029,840 2,160,706
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,763 157,616 152,468 149,894
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,246 19,039 19,392 16,376
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118204,558 223,625 300,211 301,122
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,284 31,276 33,961 44,079
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,154 56,557 60,831 62,115
Total non-current assets /H1118/H1118/H11182,143,744 2,352,231 2,596,703 2,734,292
Current assets
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 8–––
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,082 68,690 71,581 56,678
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,067 17,586 29,610 49,706
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118698 708 719 716
Cash and cash equivalents /H1118/H1118/H1118135,704 226,246 116,884 117,157
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118412,053 560,154 504,606 520,549
LIABILITIES
Current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 419,992 509,199 564,331
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,216 1,364 – –
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,796 376,865 397,151 356,115
Other payables and accruals /H1118 314,468 351,015 326,432 363,754
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886
Current taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,769 38,971 38,366 36,708
Total current liabilities /H1118/H1118/H1118/H11181,125,288 1,219,813 1,299,848 1,358,794
FINANCIAL INFORMATION
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--- page 403 ---
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118(713,235) (659,659) (795,242) (838,245)
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,509 1,692,572 1,801,461 1,896,047
Non-current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,000 174,392 169,578 230,016
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,000 16,000 16,000 –
Total non-current liabilities /H1118 101,000 190,392 185,578 230,016
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,600,520 1,600,520 1,600,520 1,600,520
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(271,011) (98,340) 15,363 65,511
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031
Property, Plant and Equipment
Our property, plant and equipment primarily consisted of buildings, machinery and
equipment, furniture, fixtures and office equipment, motor vehicles, as well as construction in
progress. The following table sets forth the breakdown of our property, plant and equipment as
of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,276,397 1,223,305 1,286,997 1,865,558
Machinery and equipment /H1118/H1118/H1118191,986 211,522 233,513 238,384
Furniture, fixtures and office
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,670 17,356 19,141 15,338
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,396 1,237 1,188 981
Construction in progress /H1118/H1118/H1118/H1118182,290 410,698 489,001 40,445
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,667,739 1,864,118 2,029,840 2,160,706
FINANCIAL INFORMATION
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--- page 404 ---
Our property, plant and equipment increased from RMB1,667.7 million as of December
31, 2022, to RMB1,864.1 million as of December 31, 2023, mainly due to (i) an increase in
machinery and equipment as a result of our investments in advanced medical equipment to
deliver higher-quality patient care and maintain competitive technological edge; and (ii) an
increase in construction in progress related to the construction projects of Nanjing BenQ
Hospital and Suzhou BenQ Hospital. As of December 31, 2024, our property, plant and
equipment further increased to RMB2,029.8 million, primarily due to (i) an increase in
buildings, as the second phase of Suzhou BenQ Hospital, comprised of office buildings (with
no registered beds), had been put into operation since January 2024; and (ii) an increase in
construction in progress related to the construction projects of Nanjing BenQ Hospital. As of
June 30, 2025, our property, plant and equipment further increased to RMB2,160.7 million,
primarily due to an increase in buildings, and partially offset by a decrease in construction in
progress as a result of, both changes being associated with the commencement of operations
of the second phase of Nanjing BenQ Hospital.
Right-of-Use Assets
Our right-of-use assets primarily represented our leasehold land. Our right-of-use assets
decreased from RMB162.8 million as of December 31, 2022, to RMB157.6 million as of
December 31, 2023, further to RMB152.5 million as of December 31, 2024 and subsequently
to RMB149.9 million as of June 30, 2025, mainly as a result of the depreciation of right-of-use
assets.
Interests in associates
Our interests in associates primarily represented our share of net assets in our associates
companies, primarily including Donghui Medical and Nanjing Yinxia Healthcare. Our interests
in associates increased from RMB204.6 million as of December 31, 2022 to RMB223.6 million
as of December 31, 2023, primarily because we increased our investment in equity interest of
Donghui Medical in December 2023, which was partially offset by the loss recorded by
Donghui Medical in 2023. Our interest in associates increased from RMB223.6 million as of
December 31, 2023 to RMB300.2 million as of December 31, 2024, primarily due to our
increased investment in equity interest of Donghui Medical in March 2024. Our interests in
associates remained relatively stable and amounted to RMB301.1 million as of 30 June 2025.
The following table sets forth a breakdown of interests in associates as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Donghui Medical (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,449 116,311 194,550 194,555
Nanjing Yinxia
Healthcare (2)(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,109 107,314 105,661 106,567
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204,558 223,625 300,211 301,122
Notes:
(1) Donghui Medical is an investment holding company which has 100% equity interest in Guigang
Donghui Hospital Co., Ltd., which is a limited liability company established in the PRC on November
30, 2017, with a registered capital of RMB771,029,000. Donghui Medical primarily engaged in the
provision of hospital healthcare service and its principal operating region covers Guigang, Guangxi. In
December 2023, our Group acquired an additional 3.65% equity interest in Donghui Medical by
purchasing shares from a third party with a consideration of RMB36,330,000. Upon the completion of
FINANCIAL INFORMATION
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--- page 405 ---
the transaction in December 2023, the proportion of our Group’s interest in Donghui Medical increased
to 17.78% and the consideration was paid in January 2024. In March 2024, our Group further acquired
an additional 7.49% equity interest in Donghui Medical by capital injection with a consideration of
RMB100,000,000. Upon the completion of the transaction in March 2024, the proportion of our Group’s
interest in Donghui Medical increased to 25.27% and the consideration was paid in March 2024. Our
Directors are of the view that our Group can cast “significant influence” on Donghui Medical and
consider it is an associate of our Group. We are entitled the right to appoint one out of five directors
to the board of Donghui Medical in accordance with the investment agreement. Through the board
representation, we are able to participate in the business operations and decision-making of Donghui
Medical. We have exercised our right to appoint director to the board of Donghui Medical.
(2) Nanjing Yinxia Healthcare was established by BenQ BM Holding Corp through a spin-off from Nanjing
BenQ Hospital as a limited liability company in 2018, with a registered capital of RMB30,000,000 for
the purpose of specialization of different business segments of our Group. Nanjing Yinxia Healthcare
primarily engaged in industrial park operations and elderly care services provision in Nanjing, Jiangsu
Province. By separating Nanjing Yinxia Healthcare from Nanjing BenQ Hospital, our Group was able
to concentrate the resources on the development of our core business, i.e. hospital operation. In March
2019, considering that our hospital business required considerable capital resources to expand, and that
the introduction of external investment can help alleviate our capital pressure and also secure necessary
financial support for the continued growth of Nanjing Yinxia Healthcare’s business, our Group
introduced independent third parties to subscribe to RMB70,000,000 of the registered capital of Nanjing
Yinxia Healthcare. As a result, the proportion of our Group’s interest in Nanjing Yinxia Healthcare has
been diluted to 30.00% and Nanjing Yinxia Healthcare ceased to be a subsidiary of our Group but
became an associate of our Group. In 2020, our Group entered into an agreement with the independent
third parties, pursuant to which, our Group agreed to dispose its 15.00% equity interest in Nanjing
Yinxia Healthcare at a cash consideration of RMB300,000,000. Upon the completion of our Group’s
disposal, the proportion of our Group’s interest in Nanjing Yinxia Healthcare has been reduced to
15.00%. Our Directors are of the view that our Group can cast “significant influence” on Nanjing Yinxia
Healthcare and consider it is an associate of our Group. We are entitled the right to appoint one out of
five directors to the board of Nanjing Yinxia Healthcare in accordance with the agreement. Through the
board representation, we are able to participate in the business operations and decision-making of
Nanjing Yinxia Healthcare. We exercised our right to appoint directors to the board of Nanjing Yinxia
Healthcare.
(3) The receivable from Nanjing Yinxia Healthcare was unsecured, interest free and repayable on demand.
Inventories
Our inventories primarily consisted of pharmaceuticals, medical consumables and others.
We actively monitor our business performance and inventory level, and make our purchase
plans accordingly on a regular basis, to minimize the risk of inventory shortage or
accumulation. The following table sets forth the breakdown of our inventories as of the date
indicted:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Pharmaceuticals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,319 46,798 50,319 40,662
Medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H111832,824 20,520 19,762 14,578
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,939 1,372 1,500 1,438
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,082 68,690 71,581 56,678
FINANCIAL INFORMATION
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The following table sets forth a summary of our inventories turnover days for the
years/periods indicated:
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Inventories turnover days* /H1118/H1118/H1118 14 12 12 10
Note:
* Inventories turnover days were calculated based on the average of opening and closing balance of
inventories for the relevant year/period, divided by the cost of revenue for the same year/period and
multiplied by 365 days for 2022, 2023 and 2024 or multiplied by 180 days for the six months ended June
30, 2025.
Our inventories turnover days decreased from 14 days in 2022, to 12 days in 2023, and
stayed stable at 12 days in 2024, and further decreased to 10 days for the six months ended June
30, 2025. We maintained a relatively stable and low average inventories turnover days in order
to more efficiently control our cash requirements. The relatively stable and low average
inventories turnover days over the Track Record Period primarily reflects the effectiveness in
our inventory management, and our seamless cooperation with the suppliers in response to the
evolving demands to pharmaceuticals and medical consumables in the ordinary course of
business. Going forward, we expect our inventory procurement to increase in line with the
expansion of our business, while maintaining low average inventories days to optimize our
procurement efficiency. We regularly assess our inventories for impairment and during the
Track Record Period, we did not record any write-downs in consolidated statements of profit
or loss and other comprehensive income.
As of October 31, 2025, RMB51.8 million or 91.5% of our inventories as of June 30,
2025, was subsequently utilized/sold.
The following table sets forth an aging analysis of our inventories, as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,654 67,295 70,936 55,765
Over 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,428 1,395 645 913
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,082 68,690 71,581 56,678
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--- page 407 ---
Our inventories are primarily aged one year or less. Inventories aged over one year mainly
include medical consumables, which are less frequently used. We strictly follow a first-in,
first-out for the utilization of the pharmaceuticals and medical consumables and conduct
inspections on our inventories on a quarterly basis.
Trade Receivables
Our trade receivables primarily represented balances due from (i) our related parties. For
details, see “— Related Party Transactions” in this section; (ii) public medical insurance
programs. Patients who are covered by the public medical insurance programs generally choose
to rely on public medical insurance programs to pay for some of our healthcare services. For
the portion of the medical fees covered by the public medical insurance programs and payable
by the local medical insurance bureaus, our hospitals typically receive reimbursement of a
majority of such portion around two months, with the remaining portion to be settled in the
next year. Our historical receivables recovery rates from governments are generally high; and
(iii) other third parties, primarily including individuals and corporate clients. For individual
patients, they typically make payments at the time of discharge, and for corporate clients, they
normally settle their payments with us between two to three months after the date when we
fully discharged our service obligation within the calendar year. The following table sets forth
the breakdown of our trade receivables as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
– due from related parties /H1118/H1118/H11181,704 1,428 2,052 650
– due from public medical
insurance programs /H1118/H1118/H1118/H1118/H1118/H1118115,163 177,438 216,265 207,473
– due from other third
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,661 80,969 79,534 100,227
201,528 259,835 297,851 308,350
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,054) (12,911) (12,039) (12,058)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292
Our trade receivables increased from RMB188.5 million as of December 31, 2022 to
RMB246.9 million as of December 31, 2023, further to RMB285.8 million as of December 31,
2024, primarily in line with the changes in receivables due from public medical insurance
programs. Our trade receivables increased to RMB296.3 million as of June 30, 2025, primarily
due to an increase in trade receivables due from other third parties. Our trade receivables from
related parties increased from RMB1.4 million as of December 31, 2023 to RMB2.1 million as
of December 31, 2024, primarily due to our increased provision of physical examination
services to Qisda Group. During the Track Record Period and up to the Latest Practicable Date,
we did not adopt a formal bad debt collection policy. For trade receivables due from public
medical insurance programs, any surpluses or deficits in DRG settlement amounts are adjusted
in the revenue for the year and trade receivables as of the end of the year. For trade receivables
due from related parties and trade receivables due from other third parties, provisions are made
based on aging analysis and the expected credit loss model. We recorded loss allowance of
FINANCIAL INFORMATION
– 398 –


--- page 408 ---
trade receivables of RMB13.1 million, RMB12.9 million, RMB12.0 million and RMB12.1
million as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively. We maintain
strict control over our outstanding receivables, and our management regularly reviews
overdue balances. We generally perform an impairment analysis at each year end date using a
provision matrix to measure expected credit losses. In 2022 and 2023 and the six months ended
June 30, 2025, we recorded provision of impairment losses on trade receivables of RMB5.4
million, RMB0.3 million and RMB39,000, respectively, and in 2024, we recorded reversal of
impairment losses on trade receivables of RMB0.6 million in the consolidated statements of
profit or loss. Our management considers that based on past payment history from such
sources, these amounts can be recovered in a reasonable period of time. For more details on
the credit risks of trade receivables, see Note 30(a) to the Accountants’ Report in Appendix I
to this prospectus.
The following table sets forth an aging analysis of the trade receivables, based on the date
of revenue recognition and net of loss allowance for impairment, as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,547 219,275 262,006 285,723
Over 6 months but within 12
months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,839 28,724 27,910 16,104
Over 12 months but within
18 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,406 8,220 2,621 2,060
Over 18 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,736 3,616 5,314 4,463
201,528 259,835 297,851 308,350
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,054) (12,911) (12,039) (12,058)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292
The following table sets forth a summary of our trade receivables turnover days for the
years/periods indicated:
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Trade receivables turnover
days * /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834 30 37 40
Note:
* Trade receivables turnover days were calculated based on the average of opening and closing balance
of trade receivables less allowance for impairment for the relevant period, divided by the revenue for
the same period and multiplied by 365 days for 2022, 2023 and 2024 or multiplied by 180 days for the
six months ended June 30, 2025.
FINANCIAL INFORMATION
– 399 –


--- page 409 ---
Our trade receivables turnover days were 34 days, 30 days, 37 days and 40 days in 2022,
2023 and 2024 and the six months ended June 30, 2025, respectively, which was in line with
our credit policy and within the trade receivable turnover days of the industry. Our trade
receivables turnover days decreased from 34 days in 2022 to 30 days in 2023, primarily due
to the increased revenue during the respective years. In 2024, our trade receivables turnover
days increased to 37 days, primarily due to the increase in trade receivables due from public
medical insurance programs, where our hospitals typically receive a majority of reimbursement
in around two months, with the remaining portion to be settled in the next year. Our trade
receivables turnover days further increased to 40 days for the six months ended June 30, 2025,
primarily due to the increase in trade receivables due from other third parties. Our trade
receivables turnover days for amounts due from public medical insurance programs decreased
from 58 days in 2022 to 39 days in 2023, primarily due to the increase in revenue from public
medical insurance programs. Turnover days increased to 51 days in 2024, mainly due to the
deferral of public medical insurance payments at the end of 2024, which were still within the
reimbursement pattern and subsequently received in 2025. Our trade receivables turnover days
for amounts due from public medical insurance programs further increased to 54 days for the
six months ended June 30, 2025, primarily because the annual medical insurance settlement
payments for Suzhou BenQ Hospital for 2024 were received in July 2025.
As of October 31, 2025, RMB277.2 million or 89.9% of our trade receivables outstanding
as of June 30, 2025, was subsequently settled.
Prepayments, Deposits and Other Receivables
The following table sets forth the breakdown of our prepayments, deposits and other
receivables as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Prepayments
– Prepayments for purchase
of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,291 28,740 25,423 37,017
– Other prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H11183,993 2,536 4,115 3,177
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,423 3,885
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,284 31,276 33,961 44,079
Current
Amounts due from related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118948 37 2,142 21,486
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,202 9,478 8,934 8,464
Prepayments in connection
with the proposed initial
listing of the Company’s
shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 532 9,076 10,521
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,288 1,311 1,266 1,257
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,629 6,228 8,192 7,978
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,067 17,586 29,610 49,706
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,351 48,862 63,571 93,785
FINANCIAL INFORMATION
– 400 –


--- page 410 ---
Our current prepayments, deposits and other receivables primarily represented (i)
amounts due from related parties. For more details, see “— Related Party Transactions” below
in this section; (ii) prepayments for maintenance and repair, quality inspection, and quality
assessment services; (iii) prepayments in connection with the proposed listing; (iv) deposits;
(v) receivables from the disposal of equity interest in an associate; and (vi) other receivables.
Our current prepayments, deposits and other receivables increased from RMB14.1 million as
of December 31, 2022 to RMB17.6 million as of December 31, 2023, mainly due to our
prepayments in connection with daily operations. Our current prepayments, deposits and other
receivables increased from RMB17.6 million as of December 31, 2023 to RMB29.6 million as
of December 31, 2024, mainly due to (i) an increase prepayments in connection with the
proposed listing; and (ii) an increase in other receivables in relation to our daily operations.
Our current prepayments, deposits and other receivables further increased to RMB49.7 million,
mainly due to an increase in amounts due from related parties.
Our non-current prepayments, deposits and other receivables primarily represented (i)
prepayments for purchase of properties, plants and equipment; and (ii) other prepayments. Our
non-current prepayments, deposits and other receivables stayed relatively stable at RMB30.3
million as of December 31, 2022 and RMB31.3 million as of December 31, 2023. Our
non-current prepayments, deposits and other receivables increased from RMB31.3 million as
of December 31, 2023 to RMB34.0 million as of December 31, 2024, mainly due to an increase
in other receivables in relation to our daily operations. Our non-current prepayments, deposits
and other receivables further increased to RMB44.1 million, mainly due to an increase in
prepayments for purchase of property, plant and equipment.
Cash and Cash Equivalents
Our cash and cash equivalents primarily consisted of cash at bank and on hand. As of
December 31, 2022, 2023 and 2024, our cash and cash equivalents were primarily denominated
in RMB and USD. Our cash and cash equivalents increased from RMB135.7 million as of
December 31, 2022 to RMB226.2 million as of December 31, 2023. As of December 31, 2024,
our cash and cash equivalents decreased to RMB116.9 million, primarily as a result of our
additional investment in Donghui Medical. Our cash and cash equivalents remained relatively
stable at RMB117.2 million as of June 30, 2025. For more information, see Note 21 to the
Accountants’ Report in Appendix I to this prospectus.
Bank Loans
Our bank loans primarily consisted of unsecured and low-interest-bearing bank loans to
support the operation of our Nanjing BenQ Hospital and Suzhou BenQ Hospital. Our bank
loans amounted to RMB495.3 million, RMB594.4 million, RMB678.8 million and RMB794.3
million as of December 31, 2022, 2023 and 2024 and June 30, 2025, respectively.
FINANCIAL INFORMATION
– 401 –


--- page 411 ---
Trade and Bills Payables
Our trade payables primarily consisted of (i) trade payables due to related parties in
relation to general consumables and software development for the smart hospital project; (ii)
trade payables due to third parties; and (iii) bills payable. Our trade payables to third parties
are non-interest-bearing, and are normally settled on credit terms from 30 to 120 days from the
invoice dates. The following table sets forth the breakdown of our trade payables as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables
– due to related parties /H1118/H1118/H1118/H1118/H11184,210 2,540 4,170 3,382
– due to third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118321,586 374,325 372,981 352,733
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 20,000 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,796 376,865 397,151 356,115
The following table sets forth an aging analysis of the trade payables based on the invoice
date as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118322,215 373,163 392,571 347,025
After 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,581 3,702 4,580 9,090
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,796 376,865 397,151 356,115
The following table sets forth a summary of our trade payables turnover days for the
years/periods indicated:
Y ear Ended December 31,
Six Months
Ended
June 30,
2022 2023 2024 2025
Trade payables turnover
days * /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864 59 65 61
Note:
* Trade payables turnover days were calculated based on the average of opening and closing balance of
trade payables for the relevant period, divided by the cost of revenue for the same period, and multiplied
by 365 days for 2022, 2023 and 2024 or multiplied by 180 days for the six months ended June 30, 2025.
FINANCIAL INFORMATION
– 402 –


--- page 412 ---
Our trade payables turnover days decreased from 64 days in 2022 to 59 days in 2023,
mainly as we increasingly settled with our suppliers of pharmaceuticals and consumables
through governmental payment platform with payment periods less than 60 days. In 2024, our
trade payables turnover days increased to 65 days, primarily in line with the increase in balance
of trade payables with our suppliers. Our trade payables turnover days further decreased to 61
days, in line with the decrease in balance of trade payables with our suppliers.
As of October 31, 2025, RMB313.9 million or 88.2% of our trade payables outstanding
as of June 30, 2025, was subsequently settled.
Other Payables and Accruals
Our other payables and accruals primarily consisted of accrued payroll and benefits,
payables for acquisition of property, plant and equipment, payables for interest in an associate,
accrued expenses, and others. The following table sets forth the breakdown of our other
payables and accruals as of the dates indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other amounts due to related
parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,630 1,491 1,885 2,742
Payables for acquisition of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,558 39,888 62,710 137,553
Payable for acquisition of
interest in an associate /H1118/H1118/H1118/H1118– 36,330 – –
Accrued payroll and benefits /H1118 170,539 175,600 147,532 121,257
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,389 33,914 41,130 38,684
Deposits received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,018 10,838 12,174 15,501
Other taxes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,007 7,661 6,346 11,820
Payable for department
consulting service fees /H1118/H1118/H111816,694 18,595 25,069 10,695
Payable for medical research 15,105 18,229 19,015 15,331
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,528 8,469 10,571 10,171
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314,468 351,015 326,432 363,754
Our other payables and accruals increased from RMB314.5 million as of December 31,
2022 to RMB351.0 million as of December 31, 2023, mainly due to the increase in payable for
interest in an associate, which was primarily in relation to our acquisition of additional equity
interest in Donghui Medical. For details, see “— Discussion of Selected Items From
Consolidated Statements of Financial Position — Interests in Associates” above in this section.
Our other payables and accruals decreased from RMB351.0 million as of December 31, 2023
to RMB326.4 million as of December 31, 2024, mainly due to (i) the decrease in payable for
acquisition of interest in an associate, as we have paid the consideration of RMB36.3 million
for our equity acquisition of Donghui Medical in January 2024; and (ii) the decrease in accrued
payroll and benefits for our employees, partially offset by the increase in payables for
acquisition of property plant and equipment. Our other payables and accruals then increased to
RMB363.8 million as of June 30, 2025, mainly due to an increase of payables for acquisition
of property plant and equipment, reflecting the outstanding balance of contractual balance
related to the equity conversion of the second phase of Nanjing BenQ Hospital, and partially
offset by the decreases of accrued payroll and benefits and payable for department consulting
service fees.
FINANCIAL INFORMATION
– 403 –


--- page 413 ---
CASH FLOWS
Our use of cash primarily related to operating activities and capital expenditure. We have
historically financed our operations primarily through a consolidation of cash flow generated
from our operations and bank loans.
The following table sets forth a summary of our cash flows information for the
years/periods indicated:
Y ear Ended December 31,
Six Months Ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating profit before
changes in working capital /H1118 318,384 419,376 365,492 198,162 168,506
Changes in working capital /H1118/H1118 38,299 (105) (43,154) 2,406 (63,711)
Cash generated from
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118356,683 419,271 322,338 200,568 104,795
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,503) (60,847) (63,991) (33,457) (24,666)
Net cash generated from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118333,180 358,424 258,347 167,111 80,129
Net cash used in investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(255,311) (349,812) (425,155) (283,546) (184,082)
Net cash (used in)/generated
from financing activities /H1118/H1118/H1118(32,531) 81,893 56,877 53,580 104,358
Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H111845,338 90,505 (109,931) (62,855) 405
Cash and cash equivalents at
the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,950 135,704 226,246 226,246 116,884
Effect of foreign exchange
rate changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416 37 569 137 (132)
Cash and cash equivalents at
end of the year/period /H1118/H1118/H1118/H1118135,704 226,246 116,884 163,528 117,157
Net Cash Generated From Operating Activities
In the six months ended June 30, 2025, our net cash generated from operating activities
was RMB80.1 million. Our profit before taxation in the six months ended June 30, 2025 was
RMB70.4 million. The difference between our profit before taxation and our net cash generated
from operating activities was primarily attributable to (i) certain non-cash or non-operating
expenses or losses, including (a) depreciation of property, plant and equipment of RMB82.7
million, (b) amortization of intangible assets of RMB6.2 million, and (c) finance costs of
RMB5.7 million; and (ii) changes in certain working capital items, including (a) a decrease in
trade and bills payables of RMB41.0 million, (b) a decrease in other payables and accruals of
RMB37.9 million, and (c) an increase in trade receivables of RMB10.5 million, partially offset
by a decrease in inventories of RMB14.9 million.
In 2024, our net cash generated from operating activities was RMB258.3 million. Our
profit before taxation in 2024 was RMB168.0 million. The difference between our profit before
taxation and our net cash generated from operating activities was primarily attributable to (i)
certain non-cash or non-operating expenses or losses, including (a) depreciation of property,
plant and equipment of RMB151.4 million, (b) share of losses of associates of RMB23.4
million, (c) amortization of intangible assets of RMB12.2 million, and (d) finance costs of
RMB8.9 million; and (ii) changes in certain working capital items, including (a) an increase
in trade receivables of RMB38.3 million, (b) a decrease in other payables and accruals of
RMB9.9 million, and (c) an increase in prepayments and other receivables of RMB9.5 million,
partially offset by an increase in trade and bills payables of RMB20.3 million.
FINANCIAL INFORMATION
– 404 –


--- page 414 ---
In 2023, our net cash generated from operating activities was RMB358.4 million. Our
profit before taxation in 2023 was RMB234.1 million. The difference between our profit before
taxation and our net cash generated from operating activities was primarily attributable to (i)
certain non-cash or non-operating expenses or losses, including (a) depreciation of property,
plant and equipment of RMB139.4 million, (b) share of losses of associates of RMB23.8
million and (c) amortization of intangible assets of RMB10.9 million; and (ii) changes in
certain working capital items, including (a) an increase of RMB51.1 million in trade and bills
payables, and (b) an increase of RMB17.8 million in other payables and accruals, partially
offset by an increase of RMB58.7 million in trade receivables.
In 2022, our net cash generated from operating activities was RMB333.2 million. Our
profit before taxation in 2022 was RMB127.6 million. The difference between our profit before
taxation and our net cash generated from operating activities was primarily attributable to (i)
certain non-cash or non-operating expenses or losses, including (a) depreciation of property,
plant and equipment of RMB131.4 million, (b) share of losses of associates of RMB22.1
million and (c) finance costs of RMB16.7 million; and (ii) changes in certain working capital
items, including (a) a decrease of RMB48.7 million in trade receivables, and (b) a decrease of
RMB16.0 million in prepayments and other receivables, partially offset by a decrease of
RMB36.7 million in trade and bills payables.
Net Cash Used in Investing Activities
In the six months ended June 30, 2025, our net cash used in investing activities was
RMB184.1 million, primarily attributable to (i) payment for purchase of property, plant and
equipment and intangible assets of RMB165.5 million; and (ii) new loans to an associate of
RMB80.0 million, partially offset by loans repaid by an associate of RMB60.0 million.
In 2024, our net cash used in investing activities was RMB425.2 million, primarily
attributable to (i) payment for purchase of property, plant and equipment and intangible assets
of RMB294.7 million; and (ii) payment for interest in an associate of RMB136.3 million.
In 2023, our net cash used in investing activities was RMB349.8 million, primarily
attributable to payment for purchase of property, plant and equipment and intangible assets of
RMB350.9 million.
In 2022, our net cash used in investing activities was RMB255.3 million, primarily
attributable to payment for purchase of property, plant and equipment and intangible assets of
RMB269.3 million, partially offset by proceed from disposal of interest in an associate of
RMB15.0 million.
Net Cash Used in/Generated From Financing Activities
In the six months ended June 30, 2025, our net cash generated from financing activities
was RMB104.4 million, primarily attributable to proceeds from bank loans of RMB406.1
million, partially offset repayment of bank loans of RMB290.6 million.
In 2024, our net cash generated from financing activities was RMB56.9 million, primarily
attributable to proceeds from bank loans of RMB721.7 million, partially offset repayment of
bank loans of RMB637.2 million.
In 2023, our net cash generated from financing activities was RMB81.9 million, primarily
attributable to proceeds from bank loans of RMB744.4 million, partially offset by (i)
repayment of bank loans of RMB645.2 million; and (ii) interest paid of RMB16.7 million.
FINANCIAL INFORMATION
– 405 –


--- page 415 ---
In 2022, our net cash used in financing activities was RMB32.5 million, primarily
attributable to (i) repayment of bank loans of RMB603.7 million; (ii) loan repaid to a related
party of RMB290.0 million; and (iii) interest paid of RMB22.7 million, partially offset by (i)
proceeds from bank loans of RMB763.8 million; and (ii) loan from a related party of
RMB120.0 million.
Net Current Liabilities
The following table sets forth details of our current assets and current liabilities as of the
dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current assets
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 8––––
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,082 68,690 71,581 56,678 71,870
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292 282,897
Prepayments, deposits and
other receivables /H1118/H1118/H1118/H1118/H1118/H111814,067 17,586 29,610 49,706 44,578
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118698 708 719 716 709
Cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,704 226,246 116,884 117,157 110,782
Total current assets /H1118/H1118/H1118/H1118412,053 560,154 504,606 520,549 510,836
LIABILITIES
Current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 419,992 509,199 564,331 543,737
Derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,216 1,36 4–––
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118325,796 376,865 397,151 356,115 403,433
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118314,468 351,015 326,432 363,754 336,496
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886 38,995
Current taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,769 38,971 38,366 36,708 21,705
Total current liabilities /H1118/H11181,125,288 1,219,813 1,299,848 1,358,794 1,344,366
Net current liabilities /H1118/H1118/H1118(713,235) (659,659) (795,242) (838,245) (833,530)
FINANCIAL INFORMATION
– 406 –


--- page 416 ---
Our net current liabilities decreased from RMB713.2 million as of December 31, 2022 to
RMB659.7 million as of December 31, 2023. The decrease was primarily due to (i) an increase
in trade receivables; and (ii) an increase in cash and cash equivalents. Our net current liabilities
increased to RMB795.2 million as of December 31, 2024, primarily due to (i) a decrease in
cash and cash equivalents, primarily as a result of our additional investment in Donghui
Medical; and (ii) an increase in bank loans we borrowed to support our operation and business
development, partially offset by an increase in trade receivables due from public medical
insurance programs. Our net current liabilities further increased to RMB838.2 million as of
June 30, 2025, due to an increase in bank loans we borrowed to support our operation and
business development, partially offset by an increase in prepayments, deposits and other
receivables primarily attributable to advance payments made for the procurement of surgical
robot and equipments for digital subtraction angiography (DSA). Our net current liabilities
further slightly decreased to RMB833.5 million as of October 31, 2025, primarily due to an
increase in inventories and a decrease in other payables and accruals and bank loans, partially
offset by an increase in trade payables. We expect to improve our net current liabilities position
by implementing measures such as (i) increasing the utilization of our long-term bank
borrowings to reduce our short-term borrowings; and (ii) utilizing other financial resources
available to us, including the net proceeds from the Global Offering, our current cash and cash
equivalents, our time deposits and our net cash flows from operating activities, to lower our
current liabilities by reducing current borrowings from banks.
We had a net assets position as of December 31, 2022, 2023 and 2024 and June 30, 2025.
Our net assets increased from RMB1,329.5 million as of December 31, 2022 to RMB1,502.2
million as of December 31, 2023 and further to RMB1,615.9 million as of December 31, 2024,
primarily as our total comprehensive income for the year increased from RMB102.6 million in
2022 to RMB170.0 million in 2023, and further to RMB108.9 million in 2024. Our net assets
further increased to RMB1,666.0 million, primarily because we recorded a comprehensive
income for the six months ended June 30, 2025 of RMB49.0 million. For further details on the
equity movement of our Group, see “Consolidated Statements of Changes in Equity” of the
Accountants’ Report set out in Appendix I to this prospectus.
WORKING CAPITAL SUFFICIENCY
During the Track Record Period, we financed our operations primarily through cash
generated from our operating activities as our principal sources of funding, and our primary
uses of cash were to fund our capital expenditures and working capital. Going forward, we
believe that our liquidity requirements will be satisfied with a combination of our internal
resources, cash flows generated from our operating and financing activities and net proceeds
from the Global Offering.
Despite that we had a net current liability position as of December 31, 2022, 2023 and
2024 and June 30, 2025, taking into account the financial resources available to us, including
(i) cash inflow from operating activities, (ii) our current cash and cash equivalents of
RMB117.2 million as of June 30, 2025, (iii) the time deposit of RMB0.7 million as of June 30,
2025, (iv) the unutilized banking facilities of RMB748.7 million as of June 30, 2025, and (v)
the estimated net proceeds from the Global Offering, our Directors are of the view that we have
available sufficient working capital for our present requirements, that is for at least the next 12
months from the date of this prospectus. After making reasonable inquiries of our management
about our working capital, the Joint Sponsors concur with the Directors’ view.
FINANCIAL INFORMATION
– 407 –


--- page 417 ---
CAPITAL EXPENDITURE
During the Track Record Period, our capital expenditures comprised of payment for
purchase of property, plant and equipment and intangible assets. We incurred capital
expenditures of RMB269.3 million, RMB350.9 million, RMB294.7 million, RMB151.3 million
and RMB165.5 million in 2022, 2023 and 2024 and the six months ended June 30, 2024 and
2025, respectively. We funded our capital expenditure requirements during the Track Record
Period mainly from cash generated from our operating activities and bank loans.
COMMITMENTS
As of December 31, 2022, 2023 and 2024 and June 30, 2025, we had commitments of
RMB395.0 million, RMB254.4 million, RMB203.6 million and RMB50.7 million,
respectively, which was primarily in connection with our construction of buildings and
acquisition of machinery and equipment.
INDEBTEDNESS
Our indebtedness mainly included bank loans during the Track Record Period. We did not
record any lease liabilities during the Track Record Period. The following table sets forth the
breakdown of our indebtedness as of the dates indicated:
As of December 31,
As of
June 30,
As of
October 31,
2022 2023 2024 2025 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 419,992 509,199 564,331 543,737
Non-current
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,000 174,392 169,578 230,016 204,981
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118495,252 594,384 678,777 794,347 748,718
As of October 31, 2025, our unutilized banking facilities amounted to RMB756.3 million.
For details of bank loans, see “— Discussion of Selected Items From Consolidated Statements
of Financial Position — Bank Loans” in this section.
Our Directors confirm that as of the Latest Practicable Date, there was no material
covenant on any of our outstanding debt and there was no breach of any covenant during the
Track Record Period and up to the Latest Practicable Date. Our Directors further confirm that
our Group did not experience any difficulty in obtaining bank loans and other borrowings,
default in payment of bank loans and other borrowings or breach of covenants during the Track
Record Period and up to the Latest Practicable Date.
FINANCIAL INFORMATION
– 408 –


--- page 418 ---
Except as disclosed in the table above, we did not have any material mortgages, charges,
debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabilities under acceptances (other than normal
trade bills), acceptance credits, which are either guaranteed, unguaranteed, secured or
unsecured, or guarantees or other contingent liabilities as of October 31, 2025. Since October
31, 2025 and up to the Latest Practicable Date, there had not been any material change to our
indebtedness.
CONTINGENT LIABILITIES
As of December 31, 2022, 2023 and 2024 and June 30, 2025, we did not have any
contingent liabilities.
KEY FINANCIAL RATIOS
The table below sets forth our key financial ratios for the years/periods as of the dates
indicated:
As of/Y ear ended December 31,
As of/
Six months
ended
June 30,
2022 2023 2024 2025
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H111816.4% 18.9% 18.1% 15.9%
Net profit margin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H11183.8% 6.2% 4.1% 3.7%
Return on equity (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187.0% 11.8% 7.0% 6.0% (7)
Return on total assets (4) /H1118/H1118/H1118/H1118/H11183.6% 6.1% 3.6% 3.0% (7)
Current ratio (5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.4 0.5 0.4 0.4
Quick ratio (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.3 0.4 0.3 0.3
Notes:
(1) Gross profit margin was calculated based on gross profit divided by revenue for the respective
year/period.
(2) Net profit margin was calculated based on net profit divided by revenue for the respective year/period.
(3) Return on equity was calculated based on net profit of the respective year/period, divided by the
arithmetic mean of the opening and closing balances of total equity and multiplied by 100%.
(4) Return on total assets was calculated based on net profit of the respective year/period, divided by the
arithmetic mean of the opening and closing balances of total assets and multiplied by 100%.
(5) Current ratio was calculated based on the total current assets divided by the total current liabilities as
of the relevant dates.
(6) Quick ratio was calculated based on the total current assets less inventories and divided by the total
current liabilities as of the relevant dates.
(7) Annualized for the six months ended June 30, 2025 by multiplying profit for the period by two.
FINANCIAL INFORMATION
– 409 –


--- page 419 ---
Gross Profit Margin
For details, see “— Description of Selected Components of Consolidated Statements of
Profit or Loss — Gross Profit and Gross Profit Margin” above in this section.
Return on Equity
Our return on equity increased from 7.0% in 2022 to 11.8% in 2023, and then decreased
to 7.0% in 2024, primarily in line with the changes in our net profit. Our return on equity
decreased to 6.0% in the six months ended June 30, 2025, primarily owing to the decrease in
annualized profit.
Return on Total Assets
Our return on total assets increased from 3.6% in 2022 to 6.1% in 2023, primarily due to
the increase in our net profit, partially offset by the increase in our property, plant and
equipment and cash and cash equivalents. Our return on total assets decreased to 3.6% in 2024,
primarily due to the decrease in our net profit. Our return on total assets decreased to 3.0% in
the six months ended June 30, 2025, primarily due to the decrease in annualized profit.
Current Ratio
Our current ratio increased from 0.4 as of December 31, 2022 to 0.5 as of December 31,
2023, primarily as a result of the increase in our current assets, which was mainly due to (i)
an increase in trade receivables and (ii) an increase in cash and cash equivalents. Our current
ratio decreased to 0.4 as of December 31, 2024, primarily due to a decrease in cash and cash
equivalents, primarily as a result of our additional investment in Donghui Medical. Our current
ratio remained stable at 0.4 as of June 30, 2025.
Quick Ratio
Consistent with the changes in our current ratio, our quick ratio increased from 0.3 as of
December 31, 2022 to 0.4 as of December 31, 2023, decreased to 0.3 as of December 31, 2024,
and remained stable at 0.3 as of June 30, 2025.
Net Profit Margin
For details, see “— Description of Selected Components of Consolidated Statements of
Profit or Loss — Review of Historical Results of Operations” above in this section.
RELATED PARTY TRANSACTIONS
During the Track Record Period, we had entered into certain related party transactions,
details of which are set out in Note 32 to the Accountants’ Report in Appendix I to this
prospectus.
FINANCIAL INFORMATION
– 410 –


--- page 420 ---
Transactions with related parties
The table below sets forth our significant related party transactions during the Track
Record Period:
Y ear Ended December 31,
Six months ended
June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Purchase of goods from
Qisda Corporation and its
subsidiaries (excluding our
Group, together as “ Qisda
Group ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,282 11,811 7,615 2,775 5,336
Purchase of services from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,376 2,372 1,865 1,007 716
Purchase of intangible assets from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2 1––––
Purchase of property, plant and
equipment from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,811 – 1,025 675 389
Short-term lease expense to
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,242 3,423 4,455 2,106 1,572
Rendering of services to
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,641 2,147 3,486 755 1,288
Rental income from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,648 4,679 4,486 2,109 2,167
Loan from
Qisda Optronics (Suzhou) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,00 0––––
Loan repaid to
Qisda Optronics (Suzhou) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(290,000) ––––
Loan to
Donghui Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (80,000)
Loan repaid by
Donghui Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 60,000
Interest paid to
Qisda Optronics (Suzhou) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,526) ––––
Interest expense from
Qisda Optronics (Suzhou) Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,21 9––––
Interest income from
Donghui Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 3 7
Payment on behalf of
Donghui Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1,220
FINANCIAL INFORMATION
–4 1 1–


--- page 421 ---
During the Track Record Period, our related party transactions mainly included: (i) our
purchase of medical consumables and equipment with Qisda Group; (ii) our purchase of
services, including legal and other services from Qisda Group; (iii) our purchase of intangible
assets, primarily including softwares from Qisda Group; (iv) our purchase of property, plant
and equipment from Qisda Corporation; (v) the short-term leases of dormitory from Qisda
(Suzhou) Co., Ltd.; (vi) our provision of physical examination services to Qisda Group; (vii)
the leasing of premises for general office purposes to Qisda Group; (viii) loan that we borrowed
from Qisda Optronics (Suzhou) Co., Ltd. to support of our daily business operations. During
the Track Record Period, such loan was unsecured and bore an interest rate 3.60% per annum,
which was based on one-year loan prime rate (LPR). In 2022, all of the loan principal and
interest due to Qisda Optronics (Suzhou) Co., Ltd. had been fully repaid by us; and (ix) loan
to Donghui Medical. During the six months ended June 30, 2025, we provided certain
short-term loans to Donghui Medical in an aggregate principal amount of RMB80 million, of
which RMB60 million was repaid within the same period. These loans, bearing an interest rate
of 2.50% per annum and a term of one year, were unsecured and made based on Donghui
Medical’s operational funding needs for its infrastructure construction and equipment
procurement. The remaining outstanding loans of RMB20 million will mature in May 2026. We
currently do not have plan to provide any additional loans to Donghui Medical or any other
enterprises.
According to the General Lending Provisions (ۆpromulgated by People’s Bank
of China in June 1996, any financing arrangements or lending transactions between
non-financial institutions is prohibited punishable by fines. Notwithstanding the foregoing, the
Supreme People’s Court has made new interpretations concerning financing arrangements and
lending transactions between non-financial institutions under the Provisions of the Supreme
People’s Court on Several Issues concerning the Application of Law in the Trial of Private
Lending Cases (֛the “Judicial
Interpretations on Private Lending Cases”), which came into effect on September 1, 2015 and
was amended on August 19, 2020 and December 29, 2020, according to which the validity and
legality of financing arrangements and lending transactions between non-financial institutions
are recognized so long as certain requirements, such as the interest rates charged, are satisfied
and there is no violation of mandatory provisions of applicable laws and regulations, and PRC
courts will support a non-financial institution’s claim for interests on loans as long as the
annual interest rate does not exceed four times of the loan prime rate (LPR), as published by
the National Interbank Funding Center, for loans with maturities of one year applicable on the
date of loan agreement, or other interest rate specified in the Judicial Interpretations on Private
Lending Cases applicable on the date of such loan agreement.
Our PRC Legal Advisor is of the view that, based on the above, after reviewing the loan
agreement entered into between Nanjing BenQ Hospital and Donghui Medical regarding the
loans to Donghui Medical in an aggregate principal amount of RMB80 million, and given the
interest rate of such loans is substantially lower than four times of the LPR published by the
National Interbank Funding Center for loans with maturities of one year applicable on the date
FINANCIAL INFORMATION
– 412 –


--- page 422 ---
of such loan, the risk that we become subject to any penalty with respect to such loans pursuant
to the General Lending Provisions is low, and such loans do not violate any applicable PRC
laws and regulations in any material aspect.
Balances with related parties
The following table sets forth our amounts due from/to related parties as of the dates
indicated:
As of December 31,
As of
June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade in nature
Trade payables – Qisda Group /H1118/H1118 4,210 2,540 4,170 650
Trade receivables – Qisda
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,704 1,428 2,052 3,382
Prepayments, deposits and
other receivables – Qisda
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118948 37 2,142 1,427
Other payables and accruals –
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,630 1,491 1,885 2,742
Non-trade in nature
Other receivables – Nanjing
Yinxia Healthcare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,990 66,990 66,990 68,210
Other receivables – Donghui
Medical /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 20,059
As of December 31, 2022, 2023 and 2024 and June 30, 2025, our outstanding trade
payables to Qisda Group amounted to RMB4.2 million, RMB2.5 million, RMB4.2 million and
RMB0.7 million, respectively. Our trade payables to Qisda Group primarily represented
payables for our purchase of medical consumables and equipment. As of December 31, 2022,
2023 and 2024 and June 30, 2025, our outstanding trade receivables from Qisda Group
amounted to RMB1.7 million, RMB1.4 million, RMB2.1 million and RMB3.4 million,
respectively. Our trade receivables from Qisda Group primarily represented receivables in
relation to our provision of physical examination services to Qisda Group. As of December 31,
2022, 2023 and 2024 and June 30, 2025, our outstanding prepayments, deposits and other
receivables from Qisda Group amounted to RMB1.0 million, RMB37.0 thousand, RMB2.1
million and RMB1.4 million, respectively. Our prepayments, deposits and other receivables
from Qisda Group were primarily related to our leases to it. In addition, as of December 31,
2022, 2023 and 2024 and June 30, 2025, our outstanding other payables and accruals to Qisda
Group was RMB1.6 million, RMB1.5 million, RMB1.9 million and RMB2.7 million,
respectively, which were primarily in relation to our leases and purchase of legal and other
services. For more details, see “Connected Transactions” in this prospectus.
FINANCIAL INFORMATION
– 413 –


--- page 423 ---
As of December 31, 2022, 2023 and 2024, we had other receivables from Nanjing Yinxia
Healthcare of RMB67.0 million, respectively, which further increased to RMB68.2 million as
of June 30, 2025. In March 2018, Nanjing Yinxia Healthcare was established through division
of our Group. Upon the completion of the enterprise division, we transferred certain assets,
such as a leasehold and properties under construction, which had a carrying amount of
RMB82.0 million, to Nanjing Yinxia Healthcare, according to the management account of
Nanjing Yinxia Healthcare. Out of the total amount, RMB30.0 million was designated as our
investment in Nanjing Yinxia Healthcare, while the remaining RMB52.0 million was
recognized as other receivables. Additionally, from the inception of Nanjing Yinxia Healthcare
till the start of 2021 and during the six months ended June 30, 2025, our Group had made
payments of RMB15.0 million and RMB1.2 million on behalf of Nanjing Yinxia Healthcare to
support their development, respectively. As of the Latest Practicable Date, our Directors expect
that the receivables due from Nanjing Yinxia Healthcare of RMB68.2 million as of June 30,
2025, will be settled in the second quarter of 2026. Our Directors, taking into account that (i)
Nanjing Yinxia Healthcare has completed its construction and is undergoing acceptance
procedures of relevant authorities prior to its commercialization as of the Latest Practicable
Date and (ii) Nanjing Yinxia Healthcare has positive operational and financial outlook to fulfill
its repayment obligations, as it is expected to commence commercialization and generate
income in the first half of 2026 to have solvency to pay back, believe that there is no
recoverability issue in respect of the amount due from Nanjing Yinxia Healthcare and that it
is not a connected person of the Company under Chapter 14A of the Listing Rules. As of June
30, 2025, we had other receivables of RMB20.1 million from Donghui Medical, which
represented a loan provided by us to Donghui Medical for its daily operational needs. In
addition, we do not rely on those receivables to fulfill our working capital needs.
Our Directors confirm that, all material related party transactions during the Track Record
Period were conducted on an arm’s length basis and on normal commercial terms or such terms
that were no less favorable to our Group than those available to independent third parties and
were fair and reasonable and in the interest of our Shareholders as a whole, and would not
distort our results of operations over the Track Record Period or make our historical results
over the Track Record Period not reflective of our expectations for our future performance.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
RISK DISCLOSURES
We are exposed to a variety of financial risks, including credit risk, liquidity risk, interest
rate risk and currency risk. Our overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on our
Group’s financial performance. For more details, see Note 31 to the Accountants’ Report in
Appendix I to this prospectus.
FINANCIAL INFORMATION
– 414 –


--- page 424 ---
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in a financial loss to our Group. Our Group’s credit risk is primarily attributable to
trade and other receivables. Our Group’s exposure to credit risk arising from cash and cash
equivalents and time deposits is limited because the counterparties are mainly reputable
financial institutions with high credit standing, for which our Group considers to have low
credit risk.
Our Group does not provide any guarantees which would expose our Group to credit risk.
(i) Trade Receivables
Our Group’s trade receivables are mainly from providing hospital service to patients
and has a highly diversified customer base, without any single customer contributing
material revenue. However, our Group has concentrated debtor’s portfolio, as majority
patients will claim their medical bill from public medical insurance program. The
reimbursement from these organizations may take one to twelve months. Our Group has
policy in place to ensure the treatments and medicines prescribed and provided to such
insured patients are in line with respective organizations’ policy, provided fulfilling all
ethics and moral responsibilities as a healthcare provider. Our Group also has controls to
closely monitor the patients’ billings and claim status to minimize the credit risk, for
those fees unsettled by the patients at the time of discharge, our Group will recover from
the patients through regular collections. Some of the service fees such as physical
examination services are also paid by the corporations and government administrations on
behalf of their employees. We adopt different collection monitoring mechanisms for
different payers.
Our Group has performed an impairment analysis at each year end date using a
provision matrix to measure expected credit losses. The provision rates are based on past
due of trade receivables for groupings of various debtor segments with similar loss
patterns. The calculation reflects the historical credit losses experience and reasonable
and supportable information that is available at the year end date about past events,
current conditions and forecasts of future economic conditions.
(ii) Other Receivables
For other receivables, our Group has assessed whether there has been a significant
increase in credit risk since initial recognition. If there has been a significant increase in
credit risk, our Group will measure the loss allowance based on lifetime rather than
12-month ECL.
The management has assessed that during the Track Record Period, other
receivables have not a significant increase in credit risk since initial recognition. Thus, a
12-month ECL approach that results from possible default event within 12 months of each
reporting date is adopted by management. Our management expect the occurrence of
losses from nonperformance by the counterparties of other receivables was remote and
loss allowance provision for other receivables was immaterial.
FINANCIAL INFORMATION
– 415 –


--- page 425 ---
Liquidity Risk
Our Group’s policy is to regularly monitor its liquidity requirements and its compliance
with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate
committed lines of funding from major financial institutions to meet its liquidity requirements
in the short and longer term.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Our Group’s exposure to
interest rate risks arises primarily from interest-bearing loans. Borrowings issued at variable
rates and fixed rates expose our Group to cash flow interest rate risk and fair value interest rate
risk respectively.
Currency Risk
Our Group is exposed to currency risk primarily through intra-group transactions which
give rise to intra-group loans that are denominated in USD. Based on the risk exposure of the
intra-group loans, our Group adopts forward exchange contracts with the notional amounts
equal to the balances of the intercompany loans to offset the currency risk. Therefore, our
directors considered our Group’s exposure to foreign currency risk is not significant during the
Track Record Period.
PROPERTY V ALUATION
Cushman & Wakefield Limited, an independent property valuer, has valued the property
interests of our Group, comprising our operations, as of October 31, 2025. Texts of this letter
summary of valuation and valuation reports issued are contained in Appendix III to this
prospectus.
The following table sets forth the reconciliation of the carrying values of these property
interests as reflected in our consolidated balance sheet as of June 30, 2025 included in
Appendix I to this prospectus with our Independent Property V aluer’s valuation of the same
property interests as of October 31, 2025 as set out in Appendix III to this prospectus.
RMB’000
Net book value as of June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,055,897
Amortization and depreciation for the four months ended
October 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(39,821)
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,579
Unaudited net book value as of October 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,054,655
V aluation surplus /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,110,345
V aluation as of October 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,165,000
FINANCIAL INFORMATION
– 416 –


--- page 426 ---
DIVIDENDS
No dividend has been proposed, paid or declared by our Company since its incorporation,
or by any of the subsidiaries of our Group during the Track Record Period.
Our Company is a holding company incorporated in the Cayman Islands. Although
currently we do not have a formal dividend policy or a fixed dividend distribution ratio, our
Board may recommend a payment of dividend in the future after taking into account our
operations and earnings, capital requirements and surplus, general financial condition,
contractual restrictions, capital expenditure and future development requirements,
Shareholders’ interests and such other conditions and other factors which they may deem
relevant at such time. Any declaration and payment as well as the amount of the dividend shall
be proposed and approved by the Board in accordance with the Articles, the Cayman
Companies Act and any applicable laws and regulations. Any future declarations of dividend
may or may not reflect our historical declarations of dividend and will be at the absolute
discretion of our Directors. There is no assurance that dividends of any amount will be declared
or be distributed in any year.
DISTRIBUTABLE RESERVES
As of June 30, 2025, we did not have any distributable reserves.
LISTING EXPENSE
Listing expenses to be borne by us are estimated to be RMB71.0 million (HK$78.1
million) (including underwriting commission), at the Offer Price of HK$10.51 per Share,
among which (i) underwriting-related expenses, including underwriting commissions are
RMB18.5 million (HK$20.4 million) and (ii) non-underwriting-related expenses are RMB52.5
million (HK$57.7 million), comprising (a) fees and expenses of legal advisors and accountants
of approximately RMB27.5 million (HK$30.3 million) and (b) other fees and expenses of
approximately RMB25.0 million (HK$27.4 million).
As of June 30, 2025, we incurred a total of RMB45.5 million (HK$50.1 million) in listing
expenses, among which RMB35.0 million (HK$38.4 million) were recognized in our statement
of profit or loss, and RMB10.5 million (HK$11.7 million) is directly attributable to the
issuance of Shares and will accordingly be deducted from equity. We estimate that additional
listing expenses of approximately RMB25.5 million (HK$28.0 million) (including
underwriting commissions of approximately RMB18.5 million (HK$20.4 million), based on
the Offer Price of HK$10.51 per Offer Share) will be incurred by our Company, RMB7.1
million (HK$7.9 million) of which is expected to be charged to our statements of profit or loss,
and approximately RMB18.4 million (HK$20.1 million) of which directly attributable to the
issue of Shares will be deducted from equity. Our listing expenses as a percentage of gross
proceeds is 11.1%, assuming an Offer Price of HK$10.51 per Share. The listing expenses above
are the latest practicable estimate for reference only, and the actual amount may differ from this
estimate.
FINANCIAL INFORMATION
– 417 –


--- page 427 ---
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of our Group prepared in accordance with Rule 4.29 of the Listing Rules and with reference
to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants and
is set out below to illustrate the effect of the Global Offering on the consolidated net tangible
assets of our Group attributable to the equity shareholders of our Company as of June 30, 2025
as if the Global Offering had taken place on June 30, 2025.
The unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and because of its hypothetical nature, it may not give
a true picture of the consolidated net tangible assets of our Group attributable to equity
shareholders of our Company had the Global Offering been completed as of June 30, 2025 or
any future date.
Audited
consolidated net
tangible assets
of our Group
attributable to
owners of our
Company as of
June 30, 2025
Estimated net
Proceeds from
the Global
Offering
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
the owners of
our Company as
of June 30, 2025
Unaudited pro forma adjusted
consolidated net tangible assets per
Share as of June 30, 2025
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price
of HK$9.34 per Share /H1118 1,649,655 535,725 2,185,380 7.01 7.71
Based on an Offer Price
of HK$11.68 per
Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,649,655 672,240 2,321,895 7.44 8.19
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of our Company as of June 30, 2025
have been calculated based on the audited total equity attributable to equity shareholders of our Company of
RMB1,666,031,000 as of June 30, 2025, after deduction of the intangible assets of RMB16,376,000 as of June
30, 2025, which is extracted from the Accountant’s Report set out in Appendix I to this prospectus.
(2) The estimated net proceeds from this Global Offering are based on 67,000,000 Shares to be issued pursuant
to the Global Offering and the indicative Offer Prices of HK$9.34 per Share and HK$11.68 per Share, being
the low end and high end of the Offer Price range respectively, after deduction of the estimated underwriting
fees and other related listing expenses paid or payable by our Group (excluding the listing expenses of
RMB34,970,000 that have been charged to profit or loss during the Track Record Period), and does not take
into account of any shares to be issued pursuant to the Pre-IPO Share Option Plan.
FINANCIAL INFORMATION
– 418 –


--- page 428 ---
(3) The unaudited pro forma adjusted net tangible assets attributable to the equity shareholders of our Company
per Share is arrived at after the above adjustment and on the basis that a total of 311,945,001 shares were in
issue immediately following the completion of the Global Offering assuming the Global Offering had been
completed on June 30, 2025 without taking into account of any shares to be issued pursuant to the pre-IPO
Share Option Plan.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering and the unaudited pro forma
adjusted consolidated net tangible assets per Share are converted from the Hong Kong dollar into Renminbi
at the exchange rate of HK$1.00 to RMB0.90897, the exchange rate set by the People’s Bank of China
(“PBOC ”) prevailing on December 3, 2025. No representation is made that the Hong Kong dollar amounts
have been, could have been or may be converted to Renminbi, or vice versa, at the rate or at any other rates
or at all.
(5) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to equity
shareholders of our Company to reflect our trading results or other transactions entered into subsequent to June
30, 2025.
(6) Our property interests including buildings and construction in progress (which is accounted for as property,
plant and equipment) and leasehold land (which is accounted for as right-of-use assets) as of October 31, 2025
have been valued by Cushman & Wakefield Limited, an independent property valuer. The relevant property
valuation report is set out in Appendix III to this prospectus. The above unaudited pro forma statement of
adjusted net tangible assets does not take into account the surplus arising from the revaluation of our Group’s
property interests amounting to approximately RMB2,110 million. Revaluation surplus has not been recorded
in the Historical Financial Information of our Group and will not be recorded in the consolidated financial
statements of our Group in the future periods as our Group’s property, plant and equipment and right-of-use
assets are stated at cost less accumulated depreciation and impairment losses, if any. If the valuation surplus
were recorded in our Group’s financial statements, additional annual depreciation of approximately RMB55
million would be charged against the profit in the future periods.
NO MATERIAL ADVERSE CHANGE
Our Directors confirmed that, up to the date of this prospectus, there had been no material
adverse change in our financial, operational or trading position since June 30, 2025, being the
end of the periods reported in the Accountants’ Report in Appendix I to this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
– 419 –


--- page 429 ---
FUTURE PLANS AND PROSPECTS
For a detailed description of our future plans, see “Business — Our Strategies” in this
prospectus.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$626.0 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, and assuming an Offer Price of
HK$10.51 per Share, which is the mid-point of the indicative Offer Price range stated in this
prospectus. If the Offer Price is set at HK$11.68 per Share, which is the high end of the
indicative Offer Price range, the net proceeds from the Global Offering will increase by
approximately HK$75.1 million. If the Offer Price is set at HK$9.34 per Share, which is the
low end of the indicative Offer Price range, the net proceeds from the Global Offering will
decrease by approximately HK$75.1 million.
Assuming an Offer Price at the mid-point of the indicative Offer Price range, we currently
intend to apply these net proceeds for the following purposes:
(1) 74.3%, or approximately HK$465.0 million, will be allocated to fund the expansion
and upgrade of our existing hospitals. Specifically,
(a) 26.4%, or approximately HK$165.0 million, will be used to fund the
second-phase construction plan and the procurement of advanced medical
equipment for our Nanjing BenQ Hospital to further increase operational
capacity and quality.
(i) 7.2%, or approximately HK$45.0 million, will be used to pay the
retainage for the construction of specialty disciplines buildings (ᅽ)
in our Nanjing BenQ Hospital. The construction of the specialty
disciplines buildings had been completed by the end of 2024. We have
completed all material procedures required for building occupancy in
accordance with relevant PRC laws and regulations and put these
buildings into operation in February 2025. Upon operation of the
specialty disciplines buildings, we expect that these buildings will serve
for several specialty disciplines, such as gastroenterology, neurology,
oncology, orthopedics, otorhinolaryngology and head & neck surgery and
etc. The buildings are expected to cover a total GFA of approximately
107,000 sq.m., with additional 600 to 800 beds to be deployed, and
undertake functions, encompassing surgeries, hospitalization, medical
tests and etc., which will significantly enhance our service capacity. See
“Business — Our Hospitals — Nanjing BenQ Hospital — Construction
and Expansion Plan” in this prospectus; and
FUTURE PLANS AND USE OF PROCEEDS
– 420 –


--- page 430 ---
(ii) 19.2%, or approximately HK$120.0 million, will be used to finance the
procurement of advanced medical equipment for our Nanjing BenQ
Hospital. We plan to purchase and install advanced equipment used in
operating rooms, including (a) one surgical robots ( ˓ஔዚኜɛ), and (b)
two sets of equipment for digital subtraction angiography (DSA) ( ᅰοಯ
ᅂА၍ிᅂ). We plan to purchase and install advanced equipment used in
the tumor center, including (a) one linear accelerator (ᇞ̋஺ኜ) and
(b) one set of radiotherapy equipment for tumor treatment to further
enhance our service capacity and quality. We may be required to obtain
deployment licenses for certain large-scale medical equipment that we
plan to procure, such as the linear accelerator, which is currently a
Category B Large-Scale Medical Equipment according to the Large-scale
Medical Equipment Allocation and Management Catalog (ᔼ͜ண
௪ৣໄ஢̙၍ଣͦ፽). We may also be required to complete relevant
assessment procedures on occupational disease hazard and protection
against radiation, relevant environmental protection procedures and other
relevant registrational procedures for the deployment of relevant
radioactive ray devices that we plan to procure.
(b) 48.0%, or approximately HK$300.0 million, will be used to fund the
third-phase and fourth-phase construction plans and the procurement of
advanced medical equipment for Suzhou BenQ Hospital to further increase
operational capacity and quality.
(i) 30.4%, or approximately HK$190.0 million, will be used to finance the
construction and establishment of a maternity and child center ( ੉̼ʕː)
in our Suzhou BenQ Hospital, to meet the unmet medical needs for the
local market where we provide healthcare services and to enhance our
advantage in gynecology and pediatrics departments. The maternity and
child center is expected to cover a total GFA of approximately 90,000
sq.m., with additional 500 beds to be deployed. Prior to the
commencement of the construction, in accordance with current PRC laws
and regulations, we shall obtain the Permit for Planned Construction
Project, Permit for Commencement of Construction with the competent
urban-rural planning and development authorities, and shall complete the
approval/filing procedures of Enterprise Investment Project for the
proposed construction of the maternity and child center with the
competent development and reform authorities. The construction of the
maternity and child center commenced by the end of 2024 and was
expected to be completed by October 2027. For more information, see
“Business — Our Hospitals — Suzhou BenQ Hospital — Construction
and Expansion Plan” in this prospectus; and
FUTURE PLANS AND USE OF PROCEEDS
– 421 –


--- page 431 ---
(ii) 17.6%, or approximately HK$110.0 million, will be used to finance the
procurement of advanced medical equipment for our Suzhou BenQ
Hospital, including (a) 100 units of hemodialysis machines used in the
hemodialysis center (ʕː), (b) five sets of laparoscopic systems
used in operating rooms, and (c) one orthopedic O-arm machine set, to
further enhance its service capacity and quality. We may be required to
obtain deployment licenses if any of the medical equipments that we plan
to procure shall be categorized as large-scale medical equipment
according to the Large-scale Medical Equipment Allocation and
Management Catalog (ᔼ͜ண௪ৣໄ஢̙၍ଣͦ፽). We may
also be required to complete relevant assessment procedures on
occupational disease hazard and protection against radiation, relevant
environmental protection procedures and other relevant registrational
procedures for the deployment of relevant radioactive ray devices that we
plan to procure.
(2) 16.0%, or approximately HK$100.0 million, will be allocated to fund potential
investment and mergers and acquisitions opportunities. We plan to continue
searching for suitable merger and acquisition targets, especially general hospitals
with (i) 200 to 500 beds being registered and deployed, (ii) 100 to 200 healthcare
professionals, and (iii) at least two types of key disciplines, especially Surgery and
Oncology related disciplines, both in the PRC, such as Guigang, Guangxi and in
Southeast Asian regions like Vietnam and Malaysia to expand business scale. As
advised by Frost & Sullivan, there are currently at least 100 hospitals satisfying the
above criteria in the potential markets. In addition, targets with steady annual
revenue stream of over RMB0.1 billion but less than RMB0.4 billion will be
preferred. We currently have not identified any specific target, but expect to guide
our decision-making process based on factors including but not limited to the
following: (i) the geographical location of the target, (ii) population trends and
healthcare needs in the region, (iii) historical financial and operational performance
of the target, (iv) the acquisition price and the potential return on investment, (v)
compliance records and licensing status of the target, (vi) the expertise,
qualifications, and experience of healthcare professionals, and (vii) growth potential
and prospects post-acquisition and the synergic effect with our existing hospitals.
Investments made by us within the PRC shall be subject to relevant PRC laws on
foreign investment, including but not limited to the Foreign Investment Law and the
Company Law. We currently do not expect that there will be any threshold for the
shareholding ratio of the potential targets after the mergers and acquisitions.
By adopting our operational model which centers on an efficient management
structure and precision management system, and could be globally applied in our
future operation of the potential target hospital in Southeast Asia.
FUTURE PLANS AND USE OF PROCEEDS
– 422 –


--- page 432 ---
The Southeast Asian healthcare market has witnessed substantial growth in recent
years, fueled by the region’s evolving demographics and economic advancements.
Driven by the increasingly population and rising healthcare expenditures, there is a
growing demand for healthcare services in Southeast Asian region, particularly in
nations like Malaysia and Vietnam. According to Frost & Sullivan, the healthcare
expenditure in Malaysia increased from USD14,022 million in 2019 to USD19,954
million in 2024, representing a CAGR of 7.3% from 2019 to 2024. According to the
same source, the healthcare expenditure in Vietnam increased from USD16,632
million in 2019 to USD20,562 million in 2024, representing a CAGR of 4.34% from
2019 to 2024. Recognizing this trend, governments in the Southeast Asian region
have acknowledged the necessity for substantial investment in hospital
infrastructure and are seeking to increase the workforce of healthcare professionals.
To address the increasing demand for healthcare, they are actively encouraging
private healthcare providers, especially foreign investors, to engage in the
healthcare sector. The governments has offered incentives such as tax holidays and
an increase in the caps for foreign equity ownership in hospitals to stimulate the
participation of private entities and ensure that the region’s healthcare needs are
adequately met. With regard to the investments made by us in the relevant Southeast
Asia regions, we shall be subject to relevant laws and regulations in respective
jurisdictions, including but not limited to the foreign investment laws and company
laws promulgated by countries in Southeast Asian regions. In addition, we may be
required to obtain certain licenses according to relevant regulations. For example, in
Malaysia, we may be required to obtain License for Healthcare Service according to
The Private Healthcare Facilities and Services Act 1998; and in Vietnam, we may be
required to obtain Hospital Operating License according to Decree No.
155/2018/ND-CP .
(3) 8.0%, or approximately HK$50.0 million, will be allocated to fund the upgrade of
our “Smart Hospital”. For details of our “Smart Hospital” system, see “Business —
Our Healthcare Services — Our Treatment Processes And Patient-Centered Care —
Smart Hospital” in this prospectus. We expect to (i) enhance the technological
infrastructures. Specifically, we plan to establish both local and cloud data storage
servers to enhance our data backup and recovery capabilities, deploy 5G network
technology and improve the speed of our internal medical data transmission; (ii)
invest in the development of technologies, such as the advanced data safety and
privacy protection technologies and artificial intelligence technologies; and (iii)
establish medical database and develop our clinical decision support system
(CDSS), which will enable rapid information retrieval, optimize case discussions
especially for multidisciplinary team (MDT) meetings, support clinical teaching and
research by providing literature and guideline recommendations, and facilitate us in
early disease screening and health management for patients, such as early detection
of tumors, monitor and management of chronic diseases, and early prevention of
stroke and acute heart diseases.
FUTURE PLANS AND USE OF PROCEEDS
– 423 –


--- page 433 ---
The table below sets forth the expected implementation timetable of our planned use of
our proceeds for the purposes listed above, which is subject to changes based on our actual
needs and market conditions at the relevant time:
2025 2026 2027 2028 Total
(HK$ in millions)
Expansion and upgrade of our existing
hospitals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200.0 135.0 105.0 25.0 465.0
Second-phase construction plan and the
procurement of advanced medical
equipment for our Nanjing BenQ
Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870.0 55.0 40.0 – 165.0
– retainage for the construction of
specialty disciplines buildings (ᅽ) /H1118 30.0 15.0 – – 45.0
– procurement of advanced medical
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840.0 40.0 40.0 – 120.0
Third-phase and fourth-phase construction
plans and the procurement of advanced
medical equipment for Suzhou BenQ
Hospital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130.0 80.0 65.0 25.0 300.0
– construction and establishment of a
maternity and child center ( ੉̼ʕː) /H1118/H1118 80.0 50.0 40.0 20.0 190.0
– procurement of advanced medical
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.0 30.0 25.0 5.0 110.0
Potential investment and mergers and
acquisitions opportunities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 100.0 – – 100.0
Upgrade of our “Smart Hospital” /H1118/H1118/H1118/H1118/H1118/H111825.0 25.0 – – 50.0
(4) 1.8%, or approximately HK$11.0 million, will be used for our working capital and
general corporate purposes.
The above allocation of the net proceeds from the Global Offering will be adjusted in the
event that the Offer Price is fixed at a higher or lower level compared to the mid-point of the
indicative Offer Price range stated in this prospectus. If the Offer Price is fixed at HK$11.68
per Share, being the high end of the stated Offer Price range, our net proceeds will be increased
by approximately HK$75.1 million. In such circumstances, we currently intend to use such
additional proceeds to increase the net proceeds applied for the same purposes as set out above
on a pro rata basis. If the Offer Price is fixed at HK$9.34 per Share being the low end of the
stated Offer Price range, our net proceeds will be decreased by approximately HK$75.1
million. In such circumstances, we currently intend to reduce the net proceeds applied for the
same purposes as set out above on a pro rata basis.
FUTURE PLANS AND USE OF PROCEEDS
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For proceeds that are not immediately used in accordance with the above specified plans,
we will only deposit such proceeds into short-term interest-bearing accounts at licensed
commercial banks and/or other authorized financial institutions (as defined under the SFO or
applicable laws and regulations in other jurisdictions). We will issue an appropriate
announcement if there is any material change to the above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
Citigroup Global Markets Asia Limited
CTBC Bank Co., Ltd.
Futu Securities International (Hong Kong) Limited
Livermore Holdings Limited
TradeGo Markets Limited
UOB Kay Hian (Hong Kong) Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters subject to the terms and conditions of the International
Underwriting Agreement. If, for any reason, the Offer Price is not agreed between the Overall
Coordinators (for themselves and on behalf of the Underwriters) and our Company by 12:00
noon on Thursday, December 18, 2025, the Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 6,700,000
Hong Kong Offer Shares and the International Offering of initially 60,300,000 International
Offer Shares, subject, in each case, to reallocation on the basis as described in “Structure of
the Global Offering”.
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering the Hong Kong
Offer Shares (subject to reallocation) for subscription by the public in Hong Kong in
accordance with the terms and conditions of this prospectus and the Hong Kong Underwriting
Agreement at the Offer Price.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to
deal in, the Shares in issue and to be issued as mentioned in this prospectus on the Main Board
of the Stock Exchange and such approval not having been withdrawn and (b) certain other
conditions set forth in the Hong Kong Underwriting Agreement (including the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) and our Company
agreeing upon the Offer Price) being satisfied (or, as the case may be, waived), the Hong Kong
Underwriters have agreed severally but not jointly to procure subscribers for, or themselves to
subscribe for, their respective applicable portions of the Hong Kong Offer Shares in aggregate,
now being offered which are not taken up under the Hong Kong Public Offering on the terms
and conditions of this prospectus and the Hong Kong Underwriting Agreement.
UNDERWRITING
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The Hong Kong Underwriting Agreement is conditional on and subject to, among other
things, the International Underwriting Agreement having been executed and becoming
unconditional and not having been terminated in accordance with its terms.
Grounds for termination
The Overall Coordinators, for themselves and on behalf of the Hong Kong Underwriters,
may in their absolute discretion and upon giving notice in writing to our Company, terminate
the Hong Kong Underwriting Agreement with immediate effect if at any time prior to 8:00 a.m.
on the Listing Date:
(a) there develops, occurs, exists or comes into force:
(i) any new law or regulation or any change or development involving a
prospective change or any event or series of events or circumstances likely to
result in a change or a development involving a prospective change in existing
laws or regulations, or the interpretation or application thereof by any court or
any competent Authority in or affecting Hong Kong, the Cayman Islands, the
PRC, Taiwan, Malaysia, the United States, the United Kingdom, the European
Union (or any member thereof), Japan, Singapore, or other jurisdictions
relevant to our Group or the Global Offering (each a “ Relevant Jurisdiction ”
and collectively, the “ Relevant Jurisdictions ”); or
(ii) any change or development involving a prospective change, or any event or
series of events or circumstances likely to result in a change or prospective
change, in any local, national, regional or international financial, political,
military, industrial, economic, fiscal, legal, regulatory, currency, credit or
market conditions or sentiments, taxation, equity securities or currency
exchange rate or controls or any monetary or trading settlement system, or
foreign investment regulations (including, without limitation, a devaluation of
the Hong Kong dollar, United States dollar or Renminbi against any foreign
currencies, a change in the system under which the value of the Hong Kong
dollar is linked to that of the United States dollar or the Renminbi is linked to
any foreign currency or currencies) or other financial markets (including,
without limitation, conditions and sentiments in stock and bond markets,
money and foreign exchange markets, the inter-bank markets and credit
markets) in or affecting any Relevant Jurisdictions, or affecting an investment
in the Offer Shares; or
(iii) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire,
explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion,
riots, rebellion, public disorder, paralysis in government operations, acts of
UNDERWRITING
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war, epidemic, pandemic, outbreak or escalation, mutation or aggravation of
diseases, accident or interruption or delay in transportation, local, national,
regional or international outbreak or escalation of hostilities (whether or not
war is or has been declared), act of God or act of terrorism (whether or not
responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
(iv) the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on (i) the trading in shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange,
the Shenzhen Stock Exchange, the New Y ork Stock Exchange, the NASDAQ
Global Market or the London Stock Exchange; or (ii) the trading in any
securities of our Company listed or quoted on a stock exchange or an
over-the-counter market; or
(v) the imposition or declaration of any general moratorium on banking activities
in or affecting any of the Relevant Jurisdictions or any disruption in
commercial banking or foreign exchange trading or securities settlement or
clearing services, procedures or matters in or affecting any of the Relevant
Jurisdictions; or
(vi) other than with the prior written consent of the Overall Coordinators, the issue
or requirement to issue by our Company of a supplementory amendment to this
prospectus or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC; or
(vii) the commencement by any authority or other regulatory or political body or
organization of any public action or investigation against a member of our
Group or a director or a senior management member of any member of our
Group or announcing an intention to take any such action; or
(viii) the imposition of sanctions or export controls in whatever form, directly or
indirectly, on any member of our Group or any of the Controlling Shareholders
or by or on any Relevant Jurisdiction, or the withdrawal of trading privileges
which existed on the date of the Hong Kong Underwriting Agreement, in
whatever form, directly or indirectly, by, or for, any Relevant Jurisdiction; or
(ix) any valid demand by creditors for payment or repayment of indebtedness of
any member of our Group or in respect of which any member of our Group is
liable prior to its stated maturity; or
UNDERWRITING
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(x) any non-compliance of this prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of any of the Offer Shares), the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) (“ CSRC Filings ”) or any aspect of the Global
Offering with any applicable Laws (including, without limitation, the Listing
Rules, the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, and the CSRC Rules (as defined in the
Hong Kong Underwriting Agreement) (“ CSRC Rules ”)) or
(xi) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of our Group or any Controlling Shareholder or any Director or senior
management member as named in this prospectus; or
(xii) any contravention by any member of our Group or any Director of the Listing
Rules or applicable Laws; or
(xiii) any change or prospective change, or a materialization of, any of the risks set
out in the section headed “Risk Factors” in this prospectus;
which, in any such case individually or in the aggregate, in the sole and absolute opinion
of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters):
(1) has or will or may have a material adverse effect, whether directly or indirectly,
on the assets, liabilities, business, general affairs, management, prospects,
shareholders’ equity, profits, losses, results of operations, position or
condition, financial or otherwise, or performance of our Company or our
Group as a whole; or
(2) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or
the level of indications of interest under the International Offering; or
(3) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or
implemented as envisaged, or for the Hong Kong Public Offering and/or the
Global Offering to proceed, or to market the Global Offering or the delivery or
distribution of the Offer Shares on the terms and in the manner contemplated
by the Offering Documents (as defined in the Hong Kong Underwriting
Agreement) (“ Offering Documents ”); or
UNDERWRITING
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(4) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or preventing the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting
thereof; or
(b) there has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(i) any statement contained in any of the Offering Documents, the CSRC Filings
and/or any notices, announcements, advertisements, communications or other
documents issued or used by or on behalf of our Company in connection with
the Hong Kong Public Offering (including any supplement or amendment
thereto) (the “ Global Offering Documents ”) was, when it was issued, or has
become untrue, incorrect, inaccurate in any material respect or misleading, or
that any estimate, forecast, expression of opinion, intention or expectation
contained in any such documents, was, when it was issued, or has become
unfair or misleading in any respect or based on untrue, dishonest or
unreasonable assumptions or given in bad faith; or
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
(iii) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and
undertakings given by our Company or the Controlling Shareholders in the
Hong Kong Underwriting Agreement or the International Underwriting
Agreement; or
(iv) any event, act or omission which gives rise or is likely to give rise to any
liability of any of the indemnifying parties pursuant to the indemnities in the
Hong Kong Underwriting Agreement; or
(v) any breach of any of the obligations or undertakings imposed upon our
Company or any member of the Controlling Shareholders or any cornerstone
investor (as applicable) to the Hong Kong Underwriting Agreement, the
International Underwriting Agreement or the Cornerstone Investment
Agreements; or
(vi) there is any change or development involving a prospective change,
constituting or having a material adverse effect; or
UNDERWRITING
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(vii) the chairman of the Board, any Director or any member of senior management
of our Company named in this prospectus seeks to retire, or is removed from
office or vacating his/her office; or
(viii) any Director or any member of senior management of our Company named in
this prospectus is being charged with an indictable offence or prohibited by
operation of law or otherwise disqualified from taking part in the management
or taking directorship of a company; or
(ix) our Company withdraws this prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to
the Global Offering) or the Global Offering; or
(x) that the approval by the Listing Committee of the listing of, and permission to
deal in, the Shares in issue and to be issued pursuant to the Global Offering is
refused or not granted, other than subject to customary conditions, on or before
the Listing Date, or if granted, the approval is subsequently withdrawn,
cancelled, qualified (other than by customary conditions), revoked or withheld;
or
(xi) any of the experts named in this prospectus (other than the Joint Sponsors) has
withdrawn or sought to withdraw its consent to the issue of this prospectus
with the inclusion of its reports, letters and/or legal opinions (as the case may
be) and references to its name included in the form and context in which it
respectively appears; or
(xii) any prohibition on our Company for whatever reason from offering, allotting,
issuing or selling any of the Offer Shares pursuant to the terms of the Global
Offering; or
(xiii) an order or petition is presented for the winding-up or liquidation of any
member of our Group, or any member of our Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement or any
resolution is passed for the winding-up of any member of our Group or a
provisional liquidator, receiver or manager is appointed over all or part of the
assets or undertaking of any member of our Group or anything analogous
thereto occurs in respect of any member of our Group; or
(xiv) (A) the notice of acceptance of the CSRC Filings issued by the CSRC and/or
the results of the CSRC Filings published on the website of the CSRC is
rejected, withdrawn, revoked or invalidated; or (B) other than with the prior
written consent of the Overall Coordinators, the issue or requirement to issue
UNDERWRITING
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--- page 441 ---
by our Company of a supplement or amendment to the CSRC Filings pursuant
to the CSRC Rules or upon any requirement or request of the CSRC; or (C) any
non-compliance of the CSRC Filings with the CSRC Rules or any other
applicable Laws; or
(xv) that (A) a material portion of the orders placed or confirmed in the
bookbuilding process or (B) any investment commitment made by any
cornerstone investors under the Cornerstone Investment Agreements signed
with such cornerstone investors, have been withdrawn, terminated or
cancelled, as a result of the payment of the relevant investment amount not
being received or settled in the stipulated time and manner or otherwise.
Undertakings to the Stock Exchange pursuant to the Listing Rules
Undertakings by Controlling Shareholders
Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders has
undertaken to the Stock Exchange that, except pursuant to the Global Offering, it will not and
will procure that the relevant registered holder(s) will not, without the prior written consent of
the Stock Exchange or unless otherwise in compliance with the applicable requirements of the
Listing Rules,
(a) in the period commencing on the date by reference to which disclosure of its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date, dispose of, nor enter into any agreement to dispose of or
otherwise create any options, rights, interests or encumbrances in respect of, any of
those securities of our Company in respect of which it is shown by this prospectus
to be the beneficial owner; and
(b) in the period of six months commencing on the date on which the period referred to
in the preceding paragraph expires, dispose of, nor enter into any agreement to
dispose of or otherwise create any options, rights, interests or encumbrances in
respect of, any of the securities referred to in the preceding paragraph if,
immediately following such disposal or upon the exercise or enforcement of such
options, rights, interests or encumbrances, it would cease to be a Controlling
Shareholder of our Company or a member of the group of Controlling Shareholders
of our Company, or would together with the other Controlling Shareholders cease to
be a group of Controlling Shareholders of our Company.
Note 2 to Rule 10.07(2) of the Listing Rules provides that Rule 10.07 does not prevent
the Controlling Shareholders from using securities of our Company beneficially owned by it
as security (including a charge or pledge) in favor of an authorized institution (as defined in
the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) for a bona fide commercial
loan.
UNDERWRITING
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Pursuant to Note 3 to Rule 10.07(2) of the Listing Rules, the Controlling Shareholders
have further undertaken to the Stock Exchange and to our Company that within the period
commencing on the date by reference to which disclosure of its shareholding is made in this
prospectus and ending on the date which is 12 months from the Listing Date, it shall:
(a) when it pledges or charges any Shares beneficially owned by it in favor of an
authorized institution (as defined in the Banking Ordinance (Chapter 155 of the
Laws of Hong Kong)) for a bona fide commercial loan pursuant to Note 2 to Rule
10.07(2) of the Listing Rules, immediately inform our Company of such pledge or
charge together with the number of Shares so pledged or charged; and
(b) when it receives indications, either verbal or written, from the pledgee or chargee of
any Shares that any of the pledged or charged Shares will be disposed of,
immediately inform our Company in writing of such indications.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Our Company, has undertaken to each of the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters
that, except pursuant to the Global Offering, at any time after the date of the Hong Kong
Underwriting Agreement and up to and including the date falling six months after the Listing
Date (the “ First Six-Month Period ”), our Company will not, without the prior written consent
of the Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong
Kong Underwriters) and unless in compliance with the requirements of the Listing Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create an encumbrance over, or agree to transfer or dispose
of or create an encumbrance over, either directly or indirectly, conditionally or
unconditionally, or repurchase, any legal or beneficial interest in the share capital or
any other securities of our Company or any interest in any of the foregoing
(including, without limitation, any securities convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights
to purchase any share capital or other securities of our Company, as applicable), or
deposit any share capital or other securities of our Company, as applicable, with a
depositary in connection with the issue of depositary receipts; or
UNDERWRITING
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(b) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of the
Shares or any other securities of our Company, or any interest in any of the
foregoing (including, without limitation, any securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any Shares); or
(c) enter into any transaction with the same economic effect as any transaction specified
in sub-paragraph (a) or (b) above; or
(d) offer to, or agree to, or announce any intention to effect any transaction specified in
sub-paragraph (a), (b) or (c) above,
in each case, whether any of the transactions specified in sub-paragraph (a), (b) or (c) above
is to be settled by the delivery of share capital or such other securities of our Company or in
cash or otherwise (whether or not the issue of such share capital or other securities will be
completed within the First Six-Month Period).
In the event that, at any time during the period of six months immediately following the
expiry of the First Six-Month Period (the “ Second Six-Month Period ”), our Company enters
into any of the transactions specified in sub-paragraph (a), (b) or (c) above or offers to or
agrees to or announces any intention to effect any such transaction, our Company shall take all
reasonable steps to ensure that such an issue or disposal will not, and no other act of the
Company will, create a disorderly or false market for any Shares or other securities of our
Company.
Undertakings by the Controlling Shareholders
Each of the Controlling Shareholders has undertaken, to each of our Company, the Joint
Sponsors, the Sponsor-Overall Coordinators, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries and the Hong Kong Underwriters that, without the prior written consent of the
Joint Sponsors and the Overall Coordinators (for themselves and on behalf of the Hong Kong
Underwriters) and unless in compliance with the requirements of the Listing Rules:
(a) it will not, and will procure that the relevant registered holder(s), any nominee or
trustee holding on trust for it and the companies controlled by it will not, at any time
during the First Six-Month Period, (i) sell, offer to sell, accept subscription for,
contract or agree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend,
grant or sell any option, warrant, contract or right to purchase, grant or purchase any
option, warrant, contract or right to sell, or otherwise transfer or dispose of or create
an encumbrance over, or agree to transfer or dispose of or create an encumbrance
over, either directly or indirectly, conditionally or unconditionally, any Shares or
other securities of our Company or any interest therein (including, without
limitation, any securities convertible into or exchangeable or exercisable for or that
UNDERWRITING
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represent the right to receive, or any warrants or other rights to purchase, any Shares
or any such other securities, as applicable or any interest in any of the foregoing),
or deposit any Shares or other securities of our Company with a depositary in
connection with the issue of depositary receipts, or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership (legal or beneficial) of any Shares or other securities of
our Company or any interest therein (including, without limitation, any securities
convertible into or exchangeable or exercisable for or that represent the right to
receive, or any warrants or other rights to purchase, any Shares or any such other
securities, as applicable or any interest in any of the foregoing), or (iii) enter into
any transaction with the same economic effect as any transaction specified in (i) or
(ii) above, or (iv) offer to or agree to or announce any intention to effect any
transaction specified in (i), (ii) or (iii) above, in each case, whether any of the
transactions specified in (i), (ii) or (iii) above is to be settled by delivery of Shares
or other securities of our Company or in cash or otherwise (whether or not the
transactions will be completed within the First Six-Month Period);
(b) it will not, during the Second Six-Month Period, enter into any of the transactions
specified in (a)(i), (a)(ii) or (a)(iii) above or offer to or agree to or announce any
intention to effect any such transaction if, immediately following any sale, transfer
or disposal or upon the exercise or enforcement of any option, right, interest or
encumbrance pursuant to such transaction, it will cease to be a controlling
shareholder (as defined in the Listing Rules) of our Company or a member of a
group of the controlling shareholders of our Company or would, together with the
other controlling shareholders, cease to be controlling shareholders of our Company;
and
(c) until the expiry of the Second Six-Month Period, in the event that it enters into any
of the transactions specified in (a)(i), (a)(ii) or (a)(iii) above or offers to or agrees
to or announces any intention to effect any such transaction, it will take all
reasonable steps to ensure that it will not create a disorderly or false market in the
securities of our Company.
Indemnity
Our Company and the Controlling Shareholders have agreed to indemnify the Hong Kong
Underwriters for certain losses which they may suffer, including, amongst others, losses arising
from their performance of their obligations under the Hong Kong Underwriting Agreement and
any breach by our Company of the Hong Kong Underwriting Agreement.
UNDERWRITING
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Hong Kong Underwriters’ Interests in our Company
Save for their obligations under the Hong Kong Underwriting Agreement or as otherwise
disclosed in this prospectus, the Hong Kong Underwriters do not have any shareholding
interest in our Company or any right or option (whether legally enforceable or not) to subscribe
for or nominate persons to subscribe for securities in our Company or any member of our
Group.
Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
International Offering
International Underwriting Agreement
In connection with the International Offering, it is expected that we will enter into the
International Underwriting Agreement with, among others, the Controlling Shareholders, the
Overall Coordinators and the International Underwriters. Under the International Underwriting
Agreement, subject to the conditions set forth therein, the International Underwriters would
agree to purchase, or procure subscribers to purchase, the Offer Shares being offered pursuant
to the International Offering (subject to, amongst others, any reallocation between the
International Offering and the Hong Kong Public Offering). It is expected that the International
Underwriting Agreement may be terminated on similar grounds as the Hong Kong
Underwriting Agreement. Potential investors are reminded that in the event that the
International Underwriting Agreement is not entered into, the Global Offering will not proceed.
Commissions and Expenses
Our Company will pay the Underwriters an underwriting commission of 3% of the
aggregate Offer Price of all the Offer Shares (the “ Fixed Fees ”). In addition, our Company
may, at our sole and absolute discretion, pay to any one or more of Underwriters an incentive
fee of up to 1% of the Offer Price of all the Offer Shares (the “ Discretionary Fees ”). Assuming
the Discretionary Fees are paid in full, the ratio of Fixed Fees and Discretionary Fees payable
is therefore 75:25. For any unsubscribed Hong Kong Offer Shares reallocated to the
International Offering, we will pay an underwriting commission at the rate applicable to the
International Offering and such commission will be paid to the relevant International
Underwriters and not the Hong Kong Underwriters.
The aggregate underwriting commissions, incentive fee (if any), documentation fee,
listing fees, Stock Exchange trading fee and transaction levy, legal and other professional fees,
and printing and other expenses in relation to the Global Offering are estimated to amount to
approximately HK$78.1 million in total (based on the Offer Price of HK$10.51 per Offer
Share, being the mid-point of the indicative Offer Price range and assuming the options granted
under the Pre-IPO Share Option Plan are not exercised), and are payable by our Company.
UNDERWRITING
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ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting
process.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In the
ordinary course of their various business activities, the Syndicate Members and their respective
affiliates may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their customers. Such investment and
trading activities may involve or relate to assets, securities and/or instruments of our Company
and/or persons and entities with relationships with our Company and may also include swaps
and other financial instruments entered into for hedging purposes in connection with the
Group’s loans and other debt.
In relation to the Shares, the activities of the Syndicate Members and their affiliates could
include acting as agent for buyers and sellers of the Shares, entering into transactions with
those buyers and sellers in a principal capacity, including as a lender to initial purchasers of
the Shares (which financing may be secured by the Shares) in the Global Offering, proprietary
trading in the Shares, and entering into over the counter or listed derivative transactions or
listed or unlisted securities transactions (including issuing securities such as derivative
warrants listed on a stock exchange) which have as their underlying assets, assets including the
Shares. Such transactions may be carried out as bilateral agreements or trades with selected
counterparties. Those activities may require hedging activity by those entities involving,
directly or indirectly, the buying and selling of the Shares, which may have a negative impact
on the trading price of the Shares. All such activities could occur in Hong Kong and elsewhere
in the world and may result in the Syndicate Members and their affiliates holding long and/or
short positions in the Shares, in baskets of securities or indices including the Shares, in units
of funds that may purchase the Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the exchange may require the issuer of those securities (or
one of its affiliates or agents) to act as a market maker or liquidity provider in the security, and
this will also result in hedging activity in the Shares in most cases.
No stabilizing manager will be appointed, and it is anticipated that no stabilization
activities will be carried out in relation to the Global Offering.
UNDERWRITING
– 437 –


--- page 447 ---
It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
 the Syndicate Members and their affiliates must not, in connection with the
distribution of the Offer Shares, effect any transactions (including issuing or
entering into any option or other derivative transactions relating to the Offer
Shares), whether in the open market or otherwise, with a view to stabilizing or
maintaining the market price of any of the Offer Shares at levels other than those
which might otherwise prevail in the open market; and
 the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking and other services to our
Company and its affiliates for which such Syndicate Members or their respective affiliates have
received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
JOINT SPONSORS’ INDEPENDENCE
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules.
UNDERWRITING
– 438 –


--- page 448 ---
THE GLOBAL OFFERING
This Prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
 the Hong Kong Public Offering of 6,700,000 Shares (subject to reallocation as
mentioned below) for subscription by the public in Hong Kong as described in the
paragraph headed “— The Hong Kong Public Offering” below; and
 the International Offering of 60,300,000 Shares (subject to reallocation as
mentioned below) outside the United States (including professional and institutional
investors within Hong Kong) in offshore transactions in reliance on Regulation S, as
described in the paragraph headed “— the International Offering” below.
The listing of the Shares on the Main Board of the Stock Exchange is sponsored by the
Joint Sponsors. The Joint Sponsors have made an application on behalf of our Company to the
Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to be issued
as mentioned in this Prospectus.
Investors may apply for the Hong Kong Offer Shares under the Hong Kong Public
Offering or indicate an interest, if qualified to do so, for the International Offer Shares under
the International Offering, but may not do both.
The Offer Shares will represent approximately 21.48% of the enlarged issued share
capital of our Company immediately after completion of the Global Offering.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
The number of Offer Shares to be offered under the Hong Kong Public Offering and the
International Offering, respectively, may be subject to reallocation as described in “— The
Hong Kong Public Offering — Reallocation” below.
THE HONG KONG PUBLIC OFFERING
Number of Hong Kong Offer Shares Initially Offered
We are initially offering 6,700,000 Shares for subscription by the public in Hong Kong
at the Offer Price, representing 10% of the total number of the Offer Shares initially available
under the Global Offering, with no mandatory clawback mechanism. Subject to the reallocation
of the Offer Shares between the International Offering and the Hong Kong Public Offering, the
Hong Kong Offer Shares will represent 2.15% of the enlarged issued share capital of our
Company immediately following the completion of the Global Offering (assuming that the
options granted under the Pre-IPO Share Option Plan are not exercised).
STRUCTURE OF THE GLOBAL OFFERING
– 439 –


--- page 449 ---
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers, and companies (including fund managers) whose ordinary business involves dealing in
shares and other securities, and corporate entities which regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set forth in
“— Conditions of the Global Offering” below.
Allocation
Allocation of the Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
would mean that some applicants may receive a higher allocation than the others who have
applied for the same number of the Hong Kong Offer Shares, and those applicants who are not
successful in the ballot may not receive any Hong Kong Offer Shares.
For allocation purposes only, the total number of the Offer Shares initially available under
the Hong Kong Public Offering (after taking into account any allocation) is to be divided into
two pools (subject to adjustment of odd lot size): Pool A and Pool B. Accordingly, the
maximum number of Hong Kong Offer Shares initially in Pool A and Pool B will be 3,350,000
and 3,350,000, respectively. All valid applications that have been received for Hong Kong
Offer Shares with a total amount (excluding brokerage of 1%, SFC transaction levy of
0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015%)
of HK$5 million or below will fall into pool A. All valid applications that have been received
for Hong Kong Offer Shares with a total amount (excluding brokerage of 1%, SFC transaction
levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of
0.00015%) of over HK$5 million and up to the total value of pool B will fall into pool B.
Applicants should be aware that applications in Pool A and applications in Pool B may
receive different allocation ratios. If the Hong Kong Offer Shares in one (but not both) of the
pools are under-subscribed, the unsubscribed Hong Kong Offer Shares will be transferred to
the other pool to satisfy demand in that other pool and be allocated accordingly. For the
purpose of this subsection only, the “price” for the Hong Kong Offer Shares means the price
payable on application therein (without regard to the Offer Price as finally determined).
Applicants can only receive an allocation of the Offer Shares from either Pool A or Pool B but
not from both pools.
Multiple or suspected multiple applications and any application for more than 3,350,000
Hong Kong Offer Shares (being 50% of the 6,700,000 Hong Kong Offer Shares initially
available under the Hong Kong Public Offering) are liable to be rejected.
STRUCTURE OF THE GLOBAL OFFERING
– 440 –


--- page 450 ---
Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the allocation cap described in the
subsequent paragraph, the Overall Coordinators may in their discretion reallocate Offer Shares
from the International Offering to the Hong Kong Public Offering to satisfy valid applications
under the Hong Kong Public Offering. In addition, if the Hong Kong Public Offering is not
fully subscribed, the Overall Coordinators will have the discretion (but shall not be under any
obligation) to reallocate to the International Offering all or any unsubscribed Hong Kong Offer
Shares in such amounts as they deem appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Overall
Coordinators deem appropriate. In the event of reallocation of Offer Shares between the
International Offering and the Hong Kong Public Offering in the circumstances where (a) the
International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer
Shares are fully subscribed or oversubscribed irrespective of the number of times; or (b) the
International Offer Shares are undersubscribed and the Hong Kong Offer Shares are fully
subscribed or oversubscribed irrespective of the number of times, then up to 3,350,000 Offer
Shares may be reallocated from the International Offering to the Hong Kong Public Offering,
so that the total number of Offer Shares available for subscription under the Hong Kong Public
Offering will increase up to 10,050,000 Offer Shares, representing approximately 15% of the
number of Offer Shares initially available under the Global Offering and the final Offer Price
should be fixed at the low end of the indicative Offer Price range (that is, HK$9.34 per Offer
Share) stated in this prospectus in accordance with Chapter 4.14 of the Guide for New Listing
Applicants.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide for New Listing Applicants and the provision of Paragraph 4.2(b) of Practice Note 18
of the Listing Rules, no mandatory clawback or reallocation mechanism is required to increase
the number of Offer Shares under the Hong Kong Public Offering to a certain percentage of the
total number of Offer Shares offered under the Global Offering.
In the event that both the Hong Kong Public Offering and International Offering are
undersubscribed, the Global Offering will not proceed unless the Underwriters would subscribe
or procure subscribers for their respective applicable proportions of the Offer Shares being
offered which are not taken up under the Global Offering on the terms and conditions of this
prospectus and the Underwriting Agreements.
Details of any reallocation of Offer Shares between the Hong Kong Public Offering and
the International Offering will be disclosed in the results announcement of the Global Offering
expected to be published on Friday, December 19, 2025.
STRUCTURE OF THE GLOBAL OFFERING
– 441 –


--- page 451 ---
Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him/her that he/she and any
person(s) for whose benefit he/she is making the application have not applied for or taken up,
or indicated an interest for, and will not apply for or take up, or indicate an interest for, any
Offer Shares under the International Offering, and such applicant’s application under the
International Offering is liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum price of HK$11.68 per Offer Share in addition
to the brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy
payable on each Offer Share. If the Offer Price, as finally determined in the manner described
in the paragraph headed “— Pricing and Allocation” below, is less than the maximum price of
HK$11.68 per Offer Share, appropriate refund payments (including the brokerage, SFC
transaction levy, Stock Exchange trading fee and AFRC transaction levy attributable to the
surplus application monies) will be made to successful applicants, without interest. Further
details are set out in the section headed “How to Apply for Hong Kong Offer Shares” in this
prospectus.
THE INTERNATIONAL OFFERING
Number of International Offer Shares Initially Offered
The International Offering will consist of an initial offering of 60,300,000 Offer Shares,
representing 90% of the total number of Offer Shares initially available under the Global
Offering and approximately 19.33% of the enlarged issued share capital of our Company
immediately following the completion of the Global Offering subject to the reallocation of
Offer Shares between the International Offering and the Hong Kong Public Offering. The
International Offering will be offered by us outside of the United States in reliance on
Regulation S.
Allocation
The International Offering will include selective marketing of Offer Shares to
institutional and professional investors and other investors anticipated to have a sizeable
demand for such Offer Shares in Hong Kong and other jurisdictions outside the United States
in reliance on Regulation S. Professional investors generally include brokers, dealers,
companies (including fund managers) whose ordinary business involves dealing in shares and
other securities and corporate entities which regularly invest in shares and other securities.
Allocation of Offer Shares pursuant to the International Offering will be effected in accordance
with the “book-building” process described in the paragraph headed “— Pricing and
Allocation” below and based on a number of factors, including the level and timing of demand,
the total size of the relevant investor’s invested assets or equity assets in the relevant sector and
STRUCTURE OF THE GLOBAL OFFERING
– 442 –


--- page 452 ---
whether or not it is expected that the relevant investor is likely to buy further Shares, and/or
hold or sell its Shares, after the listing of the Shares on the Stock Exchange. Such allocation
is intended to result in a distribution of the Shares on a basis which would lead to the
establishment of a solid professional and institutional shareholder base to the benefit of our
Company and the Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) may require
any investor who has been offered Offer Shares under the International Offering, and who has
made an application under the Hong Kong Public Offering, to provide sufficient information
to the Overall Coordinators so as to allow them to identify the relevant applications under the
Hong Kong Public Offering and to ensure that they are excluded from any application of Offer
Shares under the Hong Kong Public Offering.
Reallocation
The total number of the Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the reallocation arrangement described in “— The Hong
Kong Public Offering — Reallocation” above and/or any reallocation of unsubscribed Offer
Shares originally included in the Hong Kong Public Offering to the International Offering.
PRICING AND ALLOCATION
The International Underwriters will be soliciting from prospective investors indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or about, the last day for lodging applications under the Hong Kong Public Offering.
The Offer Price is expected to be fixed by agreement between our Company and the
Overall Coordinators on the Price Determination Date, which is expected to be on or before
Thursday, December 18, 2025 and in any event no later than 12:00 noon on Thursday,
December 18, 2025. The number of Offer Shares to be allocated under the various offerings
will be determined shortly thereafter.
The Offer Price will not be more than HK$11.68 per Offer Share and is expected to be
not less than HK$9.34 per Offer Share unless otherwise announced, as further explained below,
not later than the morning of the last day for lodging applications under the International
Offering. Prospective investors should be aware that the Offer Price to be determined on
the Price Determination Date may be, but is not expected to be, lower than the indicative
Offer Price range stated in this prospectus.
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
may, where considered appropriate, based on the level of interest expressed by prospective
professional and institutional investors during the book-building process, and with our consent,
STRUCTURE OF THE GLOBAL OFFERING
– 443 –


--- page 453 ---
reduce the number of Offer Shares and/or the indicative Offer Price range below as stated in
this prospectus at any time on or prior to the morning of the last day for lodging applications
under the Hong Kong Public Offering. In such a case, our Company will, as soon as practicable
following the decision to make such reduction, and in any event not later than the morning of
the last day for lodging applications under the Hong Kong Public Offering, cause there to be
published on the website of our Company ( www.benqmedicalcenter.com ) and the website of
the Stock Exchange ( www.hkexnews.hk ) an announcement to cancel the Global Offering. Our
Company will also, as soon as practicable following the decision to make such change, issue
a supplemental prospectus updating investors of the change in the number of Offer Shares
being offered under the Global Offering and/or the Offer Price. The Global Offering must first
be canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any notice of a reduction in the number of Offer Shares and/or the
Offer Price may not be made until the last day for lodging applications under the Hong Kong
Public Offering. In the absence of any such notice so published, the number of Offer Shares
will not be reduced and/or the Offer Price, if agreed upon with our Company and the Overall
Coordinators (for themselves and on behalf of the Hong Kong Underwriters) will under no
circumstances be set outside the Offer Price range stated in this prospectus. However, if the
number of Offer Shares and/or the Offer Price is reduced, the Company will issue a
supplemental prospectus updating investors of the change in the number of Offer Shares being
offered under the Global Offering and/or the Offer Price. The Global Offering must first be
canceled and subsequently relaunched on FINI pursuant to the supplemental prospectus.
The final Offer Price, the level of indications of interest in the International Offering,
the level of applications in the Hong Kong Public Offering and the basis of and
results of allocations of Offer Shares under the Hong Kong Public Offering are expected to
be announced on Friday, December 19, 2025 on the website of our Company
(www.benqmedicalcenter.com ) and the website of the Stock Exchange ( www.hkexnews.hk ).
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms and conditions of the Hong Kong Underwriting Agreement and is conditional
upon the International Underwriting Agreement being signed and becoming unconditional.
We expect that we will enter into the International Underwriting Agreement relating to the
International Offering on or around the Price Determination Date.
The underwriting arrangements under the Hong Kong Underwriting Agreement and the
International Underwriting Agreement are summarized in the section headed “Underwriting” in
this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
– 444 –


--- page 454 ---
CONDITIONS OF THE GLOBAL OFFERING
Acceptances of all applications for Offer Shares will be conditional on:
(a) the Stock Exchange granting the approval for the listing of, and permission to deal
in, the Shares in issue and to be issued pursuant to the Global Offering on the Main
Board of the Stock Exchange and such approval not subsequently having been
withdrawn or revoked prior to the Listing Date;
(b) the Offer Price having been duly determined between our Company and the Overall
Coordinators (for themselves and on behalf of the Underwriters);
(c) the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
(d) the obligations of the Underwriters under each of the respective Underwriting
Agreements becoming and remaining unconditional and not having been terminated
in accordance with the terms of the respective Underwriting Agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times) and, in any event, not later than the date which is 30 days after the date of
this prospectus.
If, for any reason, the Offer Price is not agreed between our Company and the
Overall Coordinators by 12:00 noon on Thursday, December 18, 2025, the Global
Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. We will
as soon as possible publish or cause to be published a notice of the lapse of the Hong Kong
Public Offering on the website of our Company ( www.benqmedicalcenter.com ) and the
website of the Stock Exchange ( www.hkexnews.hk ). In such eventuality, all application
monies will be returned, without interest, on the terms set forth in the section headed “How to
Apply for Hong Kong Offer Shares — D. Dispatch/Collection of Share Certificates and Refund
of Application Monies” in this prospectus. In the meantime, all application monies will be held
in separate bank account(s) with the receiving banks or other bank(s) in Hong Kong licensed
under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), as amended.
STRUCTURE OF THE GLOBAL OFFERING
– 445 –


--- page 455 ---
Share certificates issued in respect of the Offer Shares will only become valid evidence
of title at 8:00 a.m. on the Listing Date provided that the Global Offering has become
unconditional in all respects (including the Underwriting Agreements not having been
terminated in accordance with their terms) at any time prior to 8:00 a.m. on the Listing Date.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee for the granting of the listing of, and
permission to deal in, the Shares in issue and to be issued pursuant to the Global Offering and
the Pre-IPO Share Option Plan.
No part of our Company’s share or loan capital is listed on or dealt in on any other stock
exchange and no such listing or permission to deal is being or proposed to be sought in the near
future.
DEALING IN THE SHARES
Assuming that the Hong Kong Public Offering becomes unconditional at or before 8:00
a.m. in Hong Kong on Monday, December 22, 2025, it is expected that dealings in the Shares
on the Stock Exchange will commence at 9:00 a.m. on Monday, December 22, 2025.
The Shares will be traded on the Main Board of the Stock Exchange in board lots of 500
Shares each. The stock code of the Shares will be 2581.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 456 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This Prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.benqmedicalcenter.com .
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older;
 have a Hong Kong address (for the White Form eIPO service only) ; and
 are outside the United States, and are not a United States Person (as defined in
Regulation S under the U.S. Securities Act).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing beneficial owner of any shares in our Company and/or any of its
subsidiaries;
 are a director or chief executive officer of our Company and/or any of its
subsidiaries;
 are a close associate (as defined in the Listing Rules) of any of the above; and
 have been allocated or have applied for any International Offer Shares or otherwise
participate in the International Offering.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 457 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Friday, December
12, 2025 and end at 12:00 noon on Wednesday, December 17, 2025 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form
eIPO Service /H1118/H1118
Website:
www.eipo.com.hk
Applicants who
would like to
receive a physical
Share certificate.
Hong Kong Offer
Shares successfully
applied for will be
allotted and issued
in your own name.
From 9:00 am on
Friday, December
12, 2025 to 11:30
a.m. on
Wednesday,
December 17,
2025, Hong Kong
time.
The latest time for
completing full
payment of
application monies
will be 12:00 noon
on Wednesday,
December 17,
2025, Hong Kong
time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or
custodian who is a
HKSCC Participant
will submit
electronic
application
instruction(s) on
your behalf
through HKSCC’s
FINI system in
accordance with
your instruction.
Applicants who
would not like to
receive a physical
Share certificate.
Hong Kong Offer
Shares successfully
applied for will be
allotted and issued
in the name of
HKSCC Nominees,
deposited directly
into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your broker
or custodian for
the earliest and
latest time for
giving such
instructions, as this
may vary by
broker or
custodian .
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 448 –


--- page 458 ---
The White Form eIPO service and the HKSCC EIPO channel are facilities subject to
capacity limitations and potential service interruptions and you are advised not to wait until the
last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under White Form eIPO
service more than once and obtaining different application reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO Service Provider to apply on the terms and conditions in this
prospectus, as supplemented and amended by the terms and conditions of White Form eIPO
service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of
you jointly and severally) are deemed to have instructed and authorized HKSCC to cause
HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong
Kong Offer Shares on your behalf and to do on your behalf all the things stated in this
prospectus and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 459 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual/Joint Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
 Full name(s)
2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority:
i. Legal entity identifier (“ LEI”)
registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the White Form eIPO service, you are required to provide a valid e-mail
address, a contact telephone number and a Hong Kong address. Y ou are also required to declare that the
identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
Hong Kong Offer Shares. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
4. The maximum number of joint applicants on FINI is capped at four
(Note) in accordance with market
practice.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 460 ---
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
Note: Subject to change, if our Company’s Articles of Association and applicable company law prescribe a
lower cap.
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Overall Coordinators, as our agent, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 500 Shares
Permitted number of
Hong Kong Offer
Shares for
application and
amount payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the amount
payable associated with each specified board lot size in
the table below.
The maximum Offer Price is HK$11.68 per Offer Share.
If you are applying through the HKSCC EIPO channel,
your broker or custodian may require you to pre-fund
your application in such amount as determined by the
broker or custodian, based on the applicable laws and
regulations in Hong Kong Y ou are responsible for
complying with any such pre-funding requirement
imposed by your broker or custodian with respect to the
Hong Kong Offer Shares you applied for.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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By instructing your broker or custodian to apply for
the Hong Kong Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of the
final Offer Price, brokerage, SFC transaction levy, the
Stock Exchange trading fee and the AFRC transaction
levy by debiting the relevant nominee bank account at
the Designated Bank for your broker or custodian .
If you are applying through the White Form eIPO
service, you may refer to the table below for the amount
payable for the number of Shares you have selected.
Y ou must pay the respective maximum amount payable
on application in full upon application for Hong Kong
Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2) on
application
HK$ HK$ HK$ HK$
500 5,898.90 7,000 82,584.55 50,000 589,889.65 700,000 8,258,454.95
1,000 11,797.80 8,000 94,382.34 60,000 707,867.57 800,000 9,438,234.25
1,500 17,696.69 9,000 106,180.14 70,000 825,845.50 900,000 10,618,013.52
2,000 23,595.59 10,000 117,977.93 80,000 943,823.42 1,000,000 11,797,792.80
2,500 29,494.48 15,000 176,966.89 90,000 1,061,801.35 1,500,000 17,696,689.20
3,000 35,393.38 20,000 235,955.86 100,000 1,179,779.28 2,000,000 23,595,585.60
3,500 41,292.27 25,000 294,944.82 200,000 2,359,558.55 2,500,000 29,494,482.00
4,000 47,191.17 30,000 353,933.79 300,000 3,539,337.85 3,350,000
(1) 39,522,605.88
4,500 53,090.07 35,000 412,922.75 400,000 4,719,117.12
5,000 58,988.97 40,000 471,911.71 500,000 5,898,896.40
6,000 70,786.76 45,000 530,900.68 600,000 7,078,675.68
Notes:
(1) Maximum number of Hong Kong Offer Shares you may apply for.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) and the SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy are paid to the Stock Exchange (in the case of the SFC transaction levy, collected by the Stock
Exchange on behalf of the SFC; and in the case of the AFRC transaction levy, collected by the Stock Exchange
on behalf of the AFRC).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Applications for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the White Form eIPO service, (ii) HKSCC
EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected. If you
have made an application through the White Form eIPO service or HKSCC EIPO channel,
you or the person(s) for whose benefit you have made the application shall not apply for any
Offer Shares.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the White Form eIPO service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(a) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(b) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian ), and agree to be bound by them;
(c) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker
or custodian and HKSCC and observe the General Rules of HKSCC and the
HKSCC Operational Procedures for giving application instructions to apply for
Hong Kong Offer Shares;
(d) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 463 ---
(e) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
(f) agree that the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
their respective directors, officers, employees, partners, agents, advisors and any
other parties involved in the Global Offering (the “ Relevant Persons ”), the Hong
Kong Share Registrar and HKSCC will not be liable for any information and
representations not in this prospectus and any supplement to it;
(g) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the Hong Kong Share
Registrar, HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other
statutory regulatory or governmental bodies or otherwise as required by laws, rules
or regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes and 4. Transfer of personal data” in this section;
(h) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(i) agree that subject to section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the Hong Kong Share
Registrar by way of publication of the results at the time and in the manner as
specified in the paragraph headed “— B. Publication of Results” in this section;
(j) confirm that you are aware of the situations specified in the paragraph headed
“— C. Circumstances In Which Y ou Will Not Be Allocated Hong Kong Offer
Shares” in this section;
(k) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(l) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 464 ---
(m) confirm that (i) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by our Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of our Company or
any of its subsidiaries or any of their respective close associates; and (ii) you are not
accustomed or will not be accustomed to taking instructions from our Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of our Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the Shares registered in your name or otherwise held by you;
(n) warrant that the information you have provided is true and accurate;
(o) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(p) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(q) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(r) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the White Form eIPO Service Provider or by any one as your agent or by any other
person; and
(s) (if you are making the application as an agent for the benefit of another person)
warrant that (i) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and the
White Form eIPO Service Provider and (ii) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 465 ---
B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118/H1118From the designated results of allocation at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ) with a
“search by ID” function
The full list of (i) wholly or partially
successful applicants using the White
Form eIPO service and HKSCC EIPO
channel, and (ii) the number of Hong
Kong Offer Shares conditionally allotted to
them, among other things, will be
displayed on the “Allotment Results”
page of the White Form eIPO service at
www.iporesults.com.hk (alternatively:
www.eipo.com.hk/eIPOAllotment ).
24 hours, from
11:00 p.m.
on Friday,
December 19,
2025 to 12:00
midnight on
Thursday,
December 25,
2025 (Hong Kong
time)
The Stock Exchange’s website at
www.hkexnews.hk and our website at
www.benqmedicalcenter.com which will
provide links to the above mentioned
websites of the Hong Kong Share Registrar.
No later than
11:00 p.m.
on Friday,
December 19,
2025 (Hong Kong
time)
Telephone /H1118/H1118/H1118/H1118+852 2862 8555 – the allocation results
telephone enquiry line provided by the
Hong Kong Share Registrar
between 9:00 a.m.
and 6:00 p.m.,
on Monday,
December 22,
2025, Tuesday,
December 23,
2025, Wednesday,
December 24,
2025 and
Thursday,
December 25,
2025
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Thursday, December 18, 2025 (Hong Kong time)
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 466 ---
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Thursday, December 18, 2025 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the International Offering, the level of applications in the Hong Kong Public
Offering and the basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s
website at www.hkexnews.hk and our website at www.benqmedicalcenter.com by no later
than 11:00 p.m. on Friday, December 19, 2025 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the Hong Kong Share Registrar and their respective agents
and nominees have full discretion to reject or accept any application, or to accept only part of
any application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 467 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated; or
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Shares allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of
the settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer
Shares due to the money settlement failure by such HKSCC Participant. None of us, the
Relevant Persons, the Hong Kong Share Registrar and HKSCC is or will be liable if Hong
Kong Offer Shares are not allocated to you due to the money settlement failure.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 468 ---
D. DISPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the Share certificates will be deposited into CCASS as described
below).
No temporary document of title will be issued in respect of the Shares. No receipt will
be issued for sums paid on application.
Share certificates will only become valid evidence of title at 8:00 a.m. on Monday,
December 22, 2025 (Hong Kong time), provided that the Global Offering has become
unconditional and the right of termination described in the section headed “Underwriting” in
this prospectus has not been exercised. Investors who trade Shares prior to the receipt of Share
certificates or the Share certificates becoming valid do so entirely at their own risk.
The right is reserved to retain any Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
The following sets out the relevant procedures and time:
White Form eIPO service HKSCC EIPO channel
Dispatch/collection of Share certificate 1
For physical share
certificates of 1,000,000
Offer Shares or more
Hong Kong Offer Shares
issued under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person from
the Hong Kong Share
Registrar, Computershare
Hong Kong Investor
Services Limited, at Shops
1712-1716, 17th Floor,
Hopewell Centre, 183
Queen’s Road East, Wan
Chai, Hong Kong
Time : from 9:00 a.m. to
1:00 p.m. on Monday,
December 22, 2025 (Hong
Kong time)
If you are an individual, you
must not authorize any
other person to collect for
you. If you are a
corporate applicant, your
authorized representative
must bear a letter of
authorization from your
corporation stamped with
your corporation’s chop.
Share certificate(s) will be
issued in the name of
HKSCC Nominees,
deposited into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
No action by you is required
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 469 ---
White Form eIPO service HKSCC EIPO channel
Both individuals and
authorized representatives
must produce, at the time
of collection, evidence of
identity acceptable to the
Hong Kong Share
Registrar.
Note : If you do not collect
you Share certificate(s)
personally within the time
above, it/they will be sent
to the address specified in
your application
instructions by ordinary
post at your own risk.
For physical share
certificates of less than
1,000,000 Offer Shares
issued under your own
name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Y our Share certificate(s) will
be sent to the address
specified in your
application instructions by
ordinary post at your
own risk
Date : Friday,
December 19, 2025
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Monday, December 22, 2025 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hong Kong Share Registrar Y our broker or custodian
Application monies paid
through single bank
account /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
White Form e-Refund
payment instructions to
your designated bank
account
Y our broker or custodian
will arrange refund to
your designated bank
account subject to the
arrangement between you
and it
Application monies paid
through multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund check(s) will be
dispatched to the address
as specified in your
application instructions by
ordinary post at your
own risk
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--- page 470 ---
1. Except in the event of any of the Severe Weather Signals (as defined below) in force in Hong Kong in the
morning on Friday, December 19, 2025 rendering it impossible for the relevant Share certificates to be
dispatched to HKSCC in a timely manner, our Company shall procure the Hong Kong Share Registrar to
arrange for delivery of the supporting documents and Share certificates in accordance with the contingency
arrangements as agreed between them. Y ou may refer to “— E. Severe Weather Arrangements” in this section.
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Wednesday, December 17, 2025 if, there
is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions,
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Wednesday, December
17, 2025.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.benqmedicalcenter.com of the revised timetable.
If a Severe Weather Signal is hoisted on Friday, December 19, 2025, the Hong Kong
Share Registrar will make appropriate arrangements for the delivery of the Share certificates
to the CCASS Depository’s service counter so that they would be available for trading on
Monday, December 22, 2025.
If a Severe Weather Signal is hoisted on Friday, December 19, 2025, the dispatch of
physical Share certificates of less than 1,000,000 Offer Shares issued under your own name
will be made by ordinary post when the post office re-opens after the Severe Weather Signal
is lowered or canceled (e.g. in the afternoon of Friday, December 19, 2025 or on Monday,
December 22, 2025).
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--- page 471 ---
If a Severe Weather Signal is hoisted on Monday, December 22, 2025, physical Share
certificates of 1,000,000 Offer Shares or more issued under your own name are available for
collection in person at the Hong Kong Share Registrar’s office after the Severe Weather Signal
is lowered or canceled (e.g. in the afternoon of Monday, December 22, 2025 or on Tuesday,
December 23, 2025.
Prospective investors should be aware that if they choose to receive physical Share
certificates issued in their own name, there may be a delay in receiving the Share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the Shares
will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in
CCASS with effect from the date of commencement of dealings in the Shares or any other date
HKSCC chooses. Settlement of transactions between Exchange Participants is required to take
place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and the HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by our Company, the Hong Kong Share Registrar, the receiving bank and
the Relevant Persons about you in the same way as it applies to personal data about applicants
other than HKSCC Nominees. This personal data may include client identifier(s) and your
identification information. By giving application instructions to HKSCC, you acknowledge
that you have read, understood and agree to all of the terms of the Personal Information
Collection Statement below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of our Company and the Hong Kong
Share Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter
486 of the Laws of Hong Kong).
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--- page 472 ---
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to our Company or its agents and the Hong Kong Share Registrar
is accurate and up-to-date when applying for Hong Kong Offer Shares or transferring Hong
Kong Offer Shares into or out of their names or in procuring the services of the Hong Kong
Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of our
Company or the Hong Kong Share Registrar to effect transfers or otherwise render their
services. It may also prevent or delay registration or transfers of Hong Kong Offer Shares
which you have successfully applied for and/or the dispatch of Share certificate(s) to which
you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform our
Company and the Hong Kong Share Registrar immediately of any inaccuracies in the personal
data supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund check and White Form e-Refund payment
instruction(s), where applicable, verification of compliance with the terms and
application procedures set out in this prospectus and announcing results of
allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of our Company;
 verifying identities of applicants for and holders of the Shares and identifying any
duplicate applications for the Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the Shares, such as dividends, rights
issues, bonus issues, etc.;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 463 –


--- page 473 ---
 distributing communications from our Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the Shares;
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable our
Company and the Hong Kong Share Registrar to discharge their obligations to
applicants and holders of the Shares and/or regulators and/or any other purposes to
which applicants and holders of the Shares may from time to time agree.
4. Transfer of personal data
Personal data held by our Company and the Hong Kong Share Registrar relating to the
applicants for and holders of Hong Kong Offer Shares will be kept confidential but our
Company and the Hong Kong Share Registrar may, to the extent necessary for achieving any
of the above purposes, disclose, obtain or transfer (whether within or outside Hong Kong) the
personal data to, from or with any of the following:
 our Company’s appointed agents such as financial advisors, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the Hong Kong Share Registrar, in each case for the purposes of
providing its services or facilities or performing its functions in accordance with its
rules or procedures and operating FINI and CCASS (including where applicants for
the Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to our Company or the
Hong Kong Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers
etc.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 464 –


--- page 474 ---
5. Retention of personal data
Our Company and the Hong Kong Share Registrar will keep the personal data of the
applicants and holders of Hong Kong Offer Shares for as long as necessary to fulfill the
purposes for which the personal data were collected. Personal data which is no longer required
will be destroyed or dealt with in accordance with the Personal Data (Privacy) Ordinance
(Chapter 486 of the Laws of Hong Kong).
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
our Company or the Hong Kong Share Registrar hold their personal data, to obtain a copy of
that data, and to correct any data that is inaccurate. Our Company and the Hong Kong Share
Registrar have the right to charge a reasonable fee for the processing of such requests. All
requests for access to data or correction of data should be addressed to our Company and the
Hong Kong Share Registrar, at their registered address disclosed in the section headed
“Corporate information” in this prospectus or as notified from time to time, for the attention
of the company secretary, or the Hong Kong Share Registrar for the attention of the privacy
compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 475 ---
The following is the text of a report set out on pages I-1 to I-59, received from the
Company’ s reporting accountants, KPMG, Certified Public Accountants, Hong Kong, for the
purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF BENQ BM HOLDING CAYMAN CORP. AND CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
AND CITIGROUP GLOBAL MARKETS ASIA LIMITED
Introduction
We report on the historical financial information of BenQ BM Holding Cayman Corp. (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-4 to I-59, which
comprises the consolidated statements of financial position of the Group and the statements of
financial position of the Company as at December 31, 2022, 2023, and 2024 and June 30, 2025
and the consolidated statements of profit or loss, the consolidated statements of profit or loss
and other comprehensive income, the consolidated statements of changes in equity and the
consolidated cash flow statements for each of the years ended December 31, 2022, 2023 and
2024 and the six months ended June 30, 2025 (the “Track Record Period”), and material
accounting policy information and other explanatory information (together, the “Historical
Financial Information”). The Historical Financial Information set out on pages I-4 to I-59
forms an integral part of this report, which has been prepared for inclusion in the prospectus
of the Company dated December 12, 2025 (the “Prospectus”) in connection with the initial
listing of shares of the Company on the Main Board of The Stock Exchange of Hong Kong
Limited.
Directors’ responsibility for Historical Financial Information
The directors of the Company are responsible for the preparation of Historical Financial
Information that gives a true and fair view in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 476 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation and presentation set out in Note 1 to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also included evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Company’s and the Group’s financial position
as at December 31, 2022, 2023 and 2024 and June 30, 2025 and of the Group’s financial
performance and cash flows for the Track Record Period in accordance with the basis of
preparation and presentation set out in Note 1 to the Historical Financial Information.
Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated statement of profit or loss, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated cash flow statements for the six months ended June 30, 2024 and other
explanatory information (the “Stub Period Corresponding Financial Information”). The
directors of the Company are responsible for the preparation and presentation of the Stub
Period Corresponding Financial Information in accordance with the basis of preparation and
presentation set out in Note 1 to the Historical Financial Information. Our responsibility is to
express a conclusion on the Stub Period Corresponding Financial Information based on our
review. We conducted our review in accordance with Hong Kong Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” issued by the HKICPA. A review consists of making enquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Hong Kong Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has
come to our attention that causes us to believe that the Stub Period Corresponding Financial
Information, for the purpose of the accountants’ report, is not prepared, in all material respects,
in accordance with the basis of preparation and presentation set out in Note 1 to the Historical
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 477 ---
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note 29(b) to the Historical Financial Information which states that no
dividends have been paid by the Company in respect of the Track Record Period.
No statutory financial statements for the Company
No statutory financial statements have been prepared for the Company since its
incorporation.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
December 12, 2025
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 478 ---
HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited byה(ࣿ
౷ஷΥྫ)הKPMG Huazhen LLP Nanjing Branch in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 479 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(Expressed in Renminbi (“RMB”))
Y ears ended December 31,
Six months ended
June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2,336,435 2,687,613 2,658,973 1,330,131 1,312,316
Cost of revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,953,335) (2,179,957) (2,176,931) (1,073,408) (1,103,683)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,100 507,656 482,042 256,723 208,633
Other net gain /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 11,981 1,476 743 69 1,887
Selling and distribution expenses /H1118 (6,783) (5,661) (5,264) (3,224) (3,072)
Administrative expenses /H1118/H1118/H1118/H1118/H1118/H1118(217,625) (241,006) (283,589) (140,548) (132,413)
(Provision)/reversal of impairment
losses on trade receivables /H1118/H1118/H1118/H111830(a) (5,428) (292) 605 (1,547) (39)
Profit from operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118165,245 262,173 194,537 111,473 74,996
Net finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) (15,491) (4,228) (3,089) (1,068) (4,259)
Share of losses of associates /H1118/H1118/H1118/H111815 (22,143) (23,849) (23,414) (13,952) (309)
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H11186 127,611 234,096 168,034 96,453 70,428
Income tax expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187 (38,061) (66,646) (59,112) (33,052) (21,724)
Profit for the year/period
attributable to equity
shareholders of the Company /H1118 89,550 167,450 108,922 63,401 48,704
Earnings per share (RMB) 10
Basic (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.37 0.68 0.44 0.26 0.20
Diluted (RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.36 0.68 0.44 0.26 0.20
The accompanying notes form part of the Historical Financial Information
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 480 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
(Expressed in RMB)
Y ears ended December 31,
Six months ended
June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit for the year/period /H1118/H1118/H1118/H1118/H1118 89,550 167,450 108,922 63,401 48,704----- -- ---- ------ ----- -----
Other comprehensive income for
the year/period (after tax and
reclassification adjustments)
Items that will not be reclassified
to profit or loss:
Exchange differences on
translation of
– financial statements of the
Company with functional
currency other than RMB /H1118/H1118/H1118 1,071 169 91 11 8
Item that may be reclassified
subsequently to profit or loss:
Exchange differences on
translation of
– financial statements of
subsidiaries with functional
currencies other than RMB /H1118/H1118 11,950 2,333 2,098 1,743 276
Other comprehensive income for
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,021 2,502 2,189 1,754 284-----
------ ------ ----- -----
Total comprehensive income for
the year/period attributable to
equity shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,571 169,952 111,111 65,155 48,988
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 481 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in RMB)
As at December 31,
As at
June 30,
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Property, plant and equipment /H1118/H1118/H111811 1,667,739 1,864,118 2,029,840 2,160,706
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812 162,763 157,616 152,468 149,894
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 21,246 19,039 19,392 16,376
Interests in associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 204,558 223,625 300,211 301,122
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 30,284 31,276 33,961 44,079
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827(b) 57,154 56,557 60,831 62,115
2,143,744 2,352,231 2,596,703 2,734,292--------- --------- --------- -- -------
Current assets
Derivative financial instruments /H111816 2 8–––
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817 73,082 68,690 71,581 56,678
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818 188,474 246,924 285,812 296,292
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 14,067 17,586 29,610 49,706
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 698 708 719 716
Cash and cash equivalents /H1118/H1118/H1118/H1118/H111821 135,704 226,246 116,884 117,157
412,053 560,154 504,606 520,549--------- --------- --------- -- -------
Current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 410,252 419,992 509,199 564,331
Derivative financial instruments /H111816 1,216 1,364 – –
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H111823 325,796 376,865 397,151 356,115
Other payables and accruals /H1118/H1118/H1118/H111824 314,468 351,015 326,432 363,754
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 39,787 31,606 28,700 37,886
Current taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827(a) 33,769 38,971 38,366 36,708
1,125,288 1,219,813 1,299,848 1,358,794--------- --------- --------- ---------
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(713,235) (659,659) (795,242) (838,245)--------- --------- --------- ---------
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,509 1,692,572 1,801,461 1,896,047--------- --------- --------- -- -------
Non-current liabilities
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 85,000 174,392 169,578 230,016
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826 16,000 16,000 16,000 –
101,000 190,392 185,578 230,016--------- --------- --------- ---------
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829(c) 1,600,520 1,600,520 1,600,520 1,600,520
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(271,011) (98,340) 15,363 65,511
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 482 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
(Expressed in RMB)
As at December 31,
As at
June 30,
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current assets
Investments in subsidiaries /H1118/H1118/H1118/H1118/H111814 1,896,225 1,896,225 1,896,225 1,896,225
1,896,225 1,896,225 1,896,225 1,896,225--------- --------- --------- ---------
Current assets
Derivative financial instruments /H1118 2 8–––
Prepayments, deposits and other
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819 42 638 9,940 10,903
Cash and cash equivalents /H1118/H1118/H1118/H1118/H111821(a) 15,868 7,397 3,507 2,505
15,938 8,035 13,447 13,408--------- --------- --------- ---------
Current liabilities
Derivative financial instruments /H1118 1,21 6–––
Other payables and accruals /H1118/H1118/H1118/H111824 24 680 8,035 9,641
1,240 680 8,035 9,641--------- --------- --------- ---------
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,698 7,355 5,412 3,767--------- --------- --------- ---------
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,910,923 1,903,580 1,901,637 1,899,992
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,910,923 1,903,580 1,901,637 1,899,992
CAPITAL AND RESERVES
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829(c) 1,600,520 1,600,520 1,600,520 1,600,520
Reserves /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118310,403 303,060 301,117 299,472
TOTAL EQUITY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,910,923 1,903,580 1,901,637 1,899,992
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 483 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in RMB)
Share
capital
Share
premium
Exchange
reserve
Share-based
payments
reserve
Accumulated
losses
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at January 1, 2022 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (32,440) 7,322 (670,480) 1,226,214------- - ----- ----- ---- - ----- -------
Changes in equity for 2022:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 89,550 89,550
Other comprehensive income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 13,021 – – 13,021
Total comprehensive income /H1118/H1118/H1118/H1118/H1118– – 13,021 – 89,550 102,571
Equity settled share-based
transactions (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 724 – 724------- ------ ----- ---- ------ -------
Balance at December 31, 2022 /H1118/H1118/H11181,600,520 321,292 (19,419) 8,046 (580,930) 1,329,509
Balance at January 1, 2023 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (19,419) 8,046 (580,930) 1,329,509------- - ----- ----- ---- - -----
Changes in equity for 2023:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 167,450 167,450
Other comprehensive income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,502 – – 2,502
Total comprehensive income /H1118/H1118/H1118/H1118/H1118– – 2,502 – 167,450 169,952
Equity settled share-based
transactions (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,719 – 2,719------- ------ ----- ---- ------ -------
Balance at December 31, 2023 /H1118/H1118/H11181,600,520 321,292 (16,917) 10,765 (413,480) 1,502,180
Balance at January 1, 2024 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (16,917) 10,765 (413,480) 1,502,180------- - ----- ----- ---- - ----- -------
Changes in equity for 2024:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 108,922 108,922
Other comprehensive income for the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,189 – – 2,189
Total comprehensive income /H1118/H1118/H1118/H1118/H1118– – 2,189 – 108,922 111,111
Equity settled share-based
transactions (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,592 – 2,592------- ------ ----- ---- ------ -------
Balance at December 31, 2024 /H1118/H1118/H11181,600,520 321,292 (14,728) 13,357 (304,558) 1,615,883
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 484 ---
Share
capital
Share
premium
Exchange
reserve
Share-based
payments
reserve
Accumulated
losses
Total
equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at January 1, 2025 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (14,728) 13,357 (304,558) 1,615,883------- - ----- ----- ---- - ----- -------
Changes in equity for 2025:
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 48,704 48,704
Other comprehensive income for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 284 – – 284
Total comprehensive income /H1118/H1118/H1118/H1118/H1118– – 284 – 48,704 48,988
Equity settled share-based
transactions (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,160 – 1,160------- ------ ----- ---- ------ -------
Balance at June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H11181,600,520 321,292 (14,444) 14,517 (255,854) 1,666,031
Unaudited
Balance at January 1, 2024 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (16,917) 10,765 (413,480) 1,502,180------- - ----- ----- ---- - ----- -------
Changes in equity for 2024:
Profit for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 63,401 63,401
Other comprehensive income for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,754 – – 1,754
Total comprehensive income /H1118/H1118/H1118/H1118/H1118– – 1,754 – 63,401 65,155
Equity settled share-based
transactions (Note 28) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,751 – 2,751------- ------ ----- ---- ------ -------
Balance at June 30, 2024 /H1118/H1118/H1118/H1118/H1118/H11181,600,520 321,292 (15,163) 13,516 (350,079) 1,570,086
The accompanying notes form part of the Historical Financial Information
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 485 ---
CONSOLIDATED CASH FLOW STATEMENTS
(Expressed in RMB)
Y ears ended December 31,
Six months ended
June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating activities
Cash generated from operations /H1118/H1118/H1118/H111821(b) 356,683 419,271 322,338 200,568 104,795
Income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827(a) (23,503) (60,847) (63,991) (33,457) (24,666)
Net cash generated from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,180 358,424 258,347 167,111 80,129------ ------ ------ ------ ------
Investing activities
Payment for purchase of property,
plant and equipment and intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(269,334) (350,928) (294,696) (151,274) (165,456)
New loans to an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (80,000)
Loans repaid by an associate /H1118/H1118/H1118/H1118/H1118/H1118 –––– 60,000
Payment for interest in an associate /H1118/H1118 (11,304) (6,586) (136,330) (136,330) –
Proceed from disposal of interest in
an associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,00 0––––
Net proceeds from the settlement of
derivative financial instruments /H1118/H1118/H1118 9,134 3,312 33 33 –
Interest received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193 4,390 5,838 4,025 1,374
Net cash used in investing activities /H1118 (255,311) (349,812) (425,155) (283,546) (184,082)------ ------ ------ ------ ------
Financing activities
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821(c) 763,838 744,385 721,743 367,629 406,138
Repayments of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H111821(c) (603,704) (645,215) (637,224) (298,833) (290,608)
Loan from a related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821(c) 120,00 0––––
Loan repaid to a related party /H1118/H1118/H1118/H1118/H111821(c) (290,000) ––––
Expenses paid in connection with the
proposed initial listing of the
Company’s shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (532) (8,544) (5,207) (1,445)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821(c) (22,665) (16,745) (19,098) (10,009) (9,727)
Net cash (used in)/generated from
financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(32,531) 81,893 56,877 53,580 104,358------
------ ------ ------ ------
Net increase/(decrease) in cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,338 90,505 (109,931) (62,855) 405
Cash and cash equivalents at the
beginning of the year/period /H1118/H1118/H1118/H1118 89,950 135,704 226,246 226,246 116,884
Effect of foreign exchange rate
changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118416 37 569 137 (132)
Cash and cash equivalents at end of
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821(a) 135,704 226,246 116,884 163,528 117,157
The accompanying notes form part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 486 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in RMB unless otherwise indicated)
1 BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION
BenQ BM Holding Cayman Corp. (the “Company”) was incorporated in Cayman Islands on January 5, 2009
as an exempted company with limited liability under the Companies Act, Cap 22 (Law 3 of 1961, as consolidated and
revised) of the Cayman Islands.
The Company is an investment holding company. The Company and its subsidiaries (together, “the Group”)
are principally engaged in the provision of healthcare services through the multi-disciplinary private for-profit
general hospitals in the People’s Republic of China (the “PRC”). The information of the principal subsidiaries is set
out in Note 14.
The Historical Financial Information has been prepared assuming the Group will continue as a going concern
notwithstanding the net current liabilities of the Group of RMB838,245,000 at June 30, 2025. The directors of the
Company are of the opinion that the Group is able to meet in full its financial obligations as they fall due for at least
the next twelve months from June 30, 2025, having taken into account the factors including: (1) the Group’s cash flow
forecast covering a period of not less than twelve months from June 30, 2025 and (2) the Group’s unused banking
facilities of RMB748,653,000 as at June 30, 2025 (Note 22). Accordingly, the directors of the Company consider it
is appropriate to prepare the Historical Financial Information on a going concern basis.
The Historical Financial Information has been prepared in accordance with all applicable IFRS Accounting
Standards as issued by the International Accounting Standards Board (“IASB”). Further details of the material
accounting policy information are set out in Note 2.
The IASB has issued a number of new and revised IFRS Accounting Standards. For the purpose of preparing
this Historical Financial Information, the Group has adopted all applicable new and revised IFRS Accounting
Standards to the Track Record Period, except for any new standards or interpretations that are not yet effective for
the Track Record Period. The revised and new accounting standards and interpretations issued but not yet effective
for the Track Record Period are set out in Note 34.
The Historical Financial Information also complies with the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same basis of
preparation and presentation adopted in respect of the Historical Financial Information.
2 MATERIAL ACCOUNTING POLICY INFORMATION
(a) Basis of measurement
The Historical Financial Information is presented in RMB, rounded to the nearest thousand, unless otherwise
indicated.
The measurement basis used in the preparation of the Historical Financial Information is the historical cost
basis except that the following assets and liabilities are stated at their fair value as explained in the accounting
policies as set out in Notes 2(e) and 2(f).
(b) Use of estimates and judgements
The preparation of financial statements in conformity with IFRS Accounting Standards requires management
to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of which form the basis
of making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 487 ---
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS Accounting Standards that have significant effect
on the financial statements and major sources of estimation uncertainty are discussed in Note 3.
(c) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the
date on which control commences until the date on which control ceases.
Intra-group balances and transactions, and any unrealized income and expenses (except for foreign currency
transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized losses resulting from
intra-group transactions are eliminated in the same way as unrealized gains, but only to the extent that there is no
evidence of impairment.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as
equity transactions.
When the Group loses control of a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and
other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in that
former subsidiary at the date when control is lost is recognized at fair value and this amount is regarded as the fair
value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an interest in
an associate or joint venture.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment
losses (see Note 2(j)(ii)), unless it is classified as held for sale (or included in a disposal group classified as held for
sale).
(d) Associates
An associate is an entity in which the Group or Company has significant influence, but not control or joint
control, over the financial and operating policies.
An interest in an associate is accounted for in the Historical Financial Information using the equity method,
unless it is classified as held for sale (or included in a disposal group classified as held for sale). They are initially
recognized at cost, which includes transaction costs. Subsequently, the consolidated financial statements include the
Group’s share of the profit or loss and other comprehensive income (“OCI”) of those investees, until the date on
which significant influence ceases.
When the Group’s share of losses exceeds its interest in the associate, the Group’s interest is reduced to nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is the carrying amount
of the investment under the equity method, together with any other long-term interests that in substance form part
of the Group’s net investment in the associate, after applying the expected credit losses (“ECLs”) model to such other
long-term interests where applicable (see Note 2(j)(i)).
Unrealized gains arising from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as
unrealized gains, but only to the extent there is no evidence of impairment.
When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of the
entire interest in that investee, with a resulting gain or loss be recognized in profit or loss. Any interest retained in
that former investee at the date when significant influence is lost recognized at fair value and this amount is regarded
as the fair value on initial recognition of a financial asset (see Note 2(e)).
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 488 ---
(e) Other investments in debt and equity securities
The Group’s policies for investments in securities, other than investments in subsidiaries and associates, are
set out below.
Investments in securities are recognized/derecognized on the date the Group commits to purchase/sell the
investment. The investments are initially stated at fair value plus directly attributable transaction costs, except for
those investments measured at fair value through profit or loss (“FVPL”) for which transaction costs are recognized
directly in profit or loss. For an explanation of how the Group determines fair value of financial instruments, see Note
30(e). These investments are subsequently accounted for as follows, depending on their classification.
Non-equity investments are classified into one of the following measurement categories:
– amortized cost, if the investment is held for the collection of contractual cash flows which represent
solely payments of principal and interest. Expected credit losses, interest income calculated using the
effective interest method (see Note 2(t)(ii)(b)), foreign exchange gains and losses are recognized in
profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
– fair value through other comprehensive income (“FVOCI”) — recycling, if the contractual cash flows
of the investment comprise solely payments of principal and interest and the investment is held within
a business model whose objective is achieved by both the collection of contractual cash flows and sale.
Expected credit losses, interest income (calculated using the effective interest method) and foreign
exchange gains and losses are recognized in profit or loss and computed in the same manner as if the
financial asset was measured at amortized cost. The difference between the fair value and the amortized
cost is recognized in OCI. When the investment is derecognized, the amount accumulated in OCI is
recycled from equity to profit or loss.
– FVPL if the investment does not meet the criteria for being measured at amortized cost or FVOCI
(recycling). Changes in the fair value of the investment (including interest) are recognized in profit or
loss.
(f) Derivative financial instruments
The Group holds derivative financial instruments to manage its foreign currency risk exposures. Embedded
derivatives are separated from the host contract and accounted for separately if the host contract is not a financial
asset and certain criteria are met.
Derivatives are initially measured at fair value. Subsequently, they are measured at fair value with changes
therein recognized in profit or loss, except where the derivatives qualify for cash flow hedge accounting or hedges
of net investment in a foreign operation.
(g) Property, plant and equipment and right-of-use assets
Property, plant and equipment and right-of-use assets are stated at cost, which includes capitalized borrowing
costs, less accumulated depreciation and any accumulated impairment losses (see Note 2(j)(ii)).
The cost of self-constructed items of property, plant and equipment includes the cost of materials, direct labor,
the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which
they are located, and an appropriate proportion of overheads and borrowing costs (see Note 2(v)).
Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.
Depreciation is calculated to write off the cost of property, plant and equipment, less their estimated residual
value, if any, using the straight line method over their estimated useful lives.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 489 ---
The estimated useful lives of property, plant and equipment and right-of-use assets are as follows:
Estimated useful life
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820-50 years
Machinery and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-8 years
Furniture, fixtures and office equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185-10 years
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over the term of lease
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components). Both the useful life of an asset and its residual value, if any,
are reviewed annually.
Construction in progress is stated at cost less impairment losses (see Note 2(j)(ii)). Cost comprises the
purchase costs of the asset and the related construction and installation costs.
Construction in progress is transferred to other property, plant and equipment when the asset is substantially
ready for its intended use and depreciation will be provided at the appropriate rates in accordance with the
depreciation polices specified above.
No depreciation is provided in respect of construction in progress.
(h) Intangible assets
Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less
accumulated amortization and any impairment losses (see Note 2(j)(ii)).
Amortization is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, if any, and is generally recognized in profit or loss.
The following intangible assets with finite useful lives are amortized from the date they are available for use
and their estimated useful lives are as follows:
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-5 years
The useful lives of the software are estimated with reference to current functionalities and the daily operation
needs of the software.
Both the period and method of amortization are reviewed annually.
(i) Leased assets
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. This is the case if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. Control is conveyed where the customer has both the right to direct the use of the identified asset and
to obtain substantially all of the economic benefits from that use.
(i) As a lessee
Where the contract contains lease component(s) and non-lease component(s), the Group has elected not to
separate non-lease components and accounts for each lease component and any associated non-lease components as
a single lease component for all leases.
At the lease commencement date, the Group recognizes a right-of-use asset and a lease liability, except for
leases that have a short lease term of 12 months or less, and leases of low-value items. When the Group enters into
a lease in respect of a low-value item, the Group decides whether to capitalize the lease on a lease-by-lease basis.
If not capitalized, the associated lease payments are recognized in profit or loss on a systematic basis over the lease
term.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 490 ---
Where the lease is capitalized, the lease liability is initially recognized at the present value of the lease
payments payable over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, using a relevant incremental borrowing rate. After initial recognition, the lease liability is
measured at amortized cost and interest expense is recognized using the effective interest method. V ariable lease
payments that do not depend on an index or rate are not included in the measurement of the lease liability, and are
charged to profit or loss as incurred.
The right-of-use asset recognized when a lease is capitalized is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is
subsequently stated at cost less accumulated depreciation and impairment losses (see Notes 2(g) and 2(j)(ii)).
The lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The lease liability is also remeasured when there is a lease modification, which means a change in the scope
of a lease or the consideration for a lease that is not originally provided for in the lease contract, if such modification
is not accounted for as a separate lease. In this case, the lease liability is remeasured based on the revised lease
payments and lease term using a revised discount rate at the effective date of the modification.
In the consolidated statement of financial position, the current portion of long-term lease liabilities is
determined as the present value of contractual payments that are due to be settled within twelve months after the
reporting period.
(ii) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease
is classified as a finance lease if it transfers substantially all the risks and rewards incidental to the ownership of an
underlying assets to the lessee. Otherwise, the lease is classified as an operating lease.
When a contract contains lease and non-lease components, the Group allocates the consideration in the contract
to each component on a relative stand-alone selling price basis. The rental income from operating leases is recognized
in accordance with Note 2(t)(ii)(a).
(j) Credit losses and impairment assets
(i) Credit losses from financial instruments
The Group recognizes a loss allowance for ECLs on financial assets measured at amortized cost (including
cash and cash equivalents, time deposits, trade and other receivables, including those loans to associates that are held
for the collection of contractual cash flows which represent solely payments of principal and interest).
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Generally, credit losses are measured as the
present value of all expected cash shortfalls between the contractual and expected amounts.
The expected cash shortfalls are discounted using the following rates if the effect is material:
– fixed-rate financial assets and trade and other receivables: effective interest rate determined at
initial recognition or an approximation thereof; and
– variable-rate financial assets: current effective interest rate.
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 491 ---
In measuring ECLs, the Group takes into account reasonable and supportable information that is
available without undue cost or effort. This includes information about past events, current conditions and
forecasts of future economic conditions.
ECLs are measured on either of the following bases:
– 12-month ECLs: these are losses that are expected to result from possible default events within
the 12 months after the reporting date; and
– lifetime ECLs: these are losses that are expected to result from all possible default events over
the expected lives of the items to which the ECL model applies.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12-months ECLs:
– financial instruments that are determined to have low credit risk at the reporting date; and
– other financial instruments for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.
Significant increases in credit risk
When determining whether the credit risk of a financial instrument has increased significantly since
initial recognition and when measuring ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment, that
includes forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is
held).
ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk
since initial recognition. Any change in the ECL amount is recognized as an impairment gain or loss in profit
or loss. The Group recognizes an impairment gain or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account.
Credit-impaired financial assets
At each reporting date, the Group assesses whether a financial asset is credit-impaired. A financial asset
is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable events:
– significant financial difficulties of the debtor;
– a breach of contract, such as a default;
– it is probable that the debtor will enter bankruptcy or other financial reorganization; or
– the disappearance of an active market for a security because of financial difficulties of the issuer.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 492 ---
Write-off policy
The gross carrying amount of a financial asset is written off to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group otherwise determines that the debtor does not
have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the
write-off.
Subsequent recoveries of an asset that was previously written off are recognized as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
(ii) Impairment of other non-current assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units
(“CGU”s).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of
disposal. V alue in use is based on the estimated future cash flows, discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognized in profit or loss. They are allocated to reduce the carrying amounts of the
assets in the CGU on a pro rata basis.
An impairment loss is reversed only to the extent that the resulting carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.
(k) Inventories
Inventories are assets which are held for sale in the ordinary course of business, in the form of materials or
supplies to be consumed in the rendering of services.
Inventories are measured at the lower of cost and net realizable value.
Cost of inventories is determined on first-in-first-out method. Net realizable value is the estimated selling price
in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make
the sale.
(l) Contract liabilities
A contract liability is recognized when the customer pays non-refundable consideration before the Group
recognizes the related revenue (see Note 2(t)). A contract liability is also recognized if the Group has an unconditional
right to receive non-refundable consideration before the Group recognizes the related revenue. In such latter cases,
a corresponding receivable is also recognized (see Note 2(m)).
(m) Trade and other receivables
A receivable is recognized when the Group has an unconditional right to receive consideration and only the
passage of time is required before payment of that consideration is due.
Trade receivables are initially measured at their transaction price. Other receivables are initially measured at
fair value plus transaction costs. All receivables are subsequently stated at amortized cost (see Note 2(e)).
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 493 ---
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial
institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value, having been within three months of maturity at
acquisition. Cash and cash equivalents are assessed for ECL (see Note 2(j)(i)).
(o) Interest-bearing borrowings
Interest-bearing borrowings are measured initially at fair value less transaction costs. Subsequently, these
borrowings are stated at amortized cost using the effective interest method. Interest expense is recognized in
accordance with Note 2(v).
(p) Trade and other payables
Trade and other payables are initially recognized at fair value. Subsequent to initial recognition, trade and
other payables are stated at amortized cost unless the effect of discounting would be immaterial, in which case they
are stated at invoice amounts.
(q) Employee benefits
(i) Short-term employee benefits and contributions to defined contribution retirement plans
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
Obligations for contributions to defined contribution retirement plans are expensed as the related service is
provided.
(ii) Share-based payments
The grant-date fair value of share options granted to employees is measured using the binomial options pricing
model. The amount is generally recognized as an expense, with a corresponding increase in equity, over the vesting
period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the
related service conditions are expected to be met, such that the amount ultimately recognized is based on the number
of awards that meet the related service conditions at the vesting date. The equity amount is recognized in the
share-based payments reserve until either the option is exercised (when it is included in the amount recognized in
share capital for the shares issued) or the option expires (when it is released directly to retained profits).
(r) Income tax
Income tax expense comprises current tax and deferred tax. It is recognized in profit or loss.
Current tax comprises the estimated tax payable or receivable on the taxable income or loss for the year and
any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects any uncertainty related
to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized
for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
– temporary differences related to investment in subsidiaries and associates to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will
not reverse in the foreseeable future; and
– those related to the income taxes arising from tax laws enacted or substantively enacted to implement
the Pillar Two model rules published by the Organization for Economic Co-operation and Development.
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 494 ---
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount
of taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability
of future taxable profits improves.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(s) Provisions and contingent liabilities
Generally provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessment of the time value of money and the risks specific to the liability.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, a separate asset is recognized for any expected reimbursement that would be virtually certain. The amount
recognized for the reimbursement is limited to the carrying amount of the provision.
(t) Revenue and other income
Income is classified by the Group as revenue when it arises from the sale of goods, the provision of services
or the use by others of the Group’s assets under leases in the ordinary course of the Group’s business.
Further details of the Group’s revenue and other income recognition policies are as follows.
(i) Hospital healthcare services
Revenue from provision of hospital healthcare services, including out-patient and in-patient services, is
recognized when the related services have been rendered to customers. Majority customers of the Group has entered
into governments’ public medical insurance program which are run by government organizations. The Group claims
the consideration in relation to healthcare services provided by the Group with relevant government organizations.
The subsequent agreement on the government approved annual quota for the medical fees to be recovered from the
relevant public medical insurance program have been treated as changes in variable considerations. The Group
estimates the variable considerations using expected value approach, which is based on historical practice and all
reasonably available information and adjusts to the actual amount for the satisfied healthcare services in the period
when the annual quota is agreed.
Out-patient services
For out-patient services, the patient normally receives out-patient treatment which contains various
treatment components. Out-patient services contain more than one performance obligations, including (i)
provision of out-patient healthcare services and (ii) sale of pharmaceutical products. The Group allocates the
transaction price to each performance obligation on relative stand-alone selling price basis. Both (i) provision
of out-patient healthcare services and (ii) sale of pharmaceutical products for which the control of services or
pharmaceutical products is transferred at a point in time, revenue is recognized when the customer obtains the
control of the completed services or pharmaceutical products and the Group has satisfied its performance
obligations with present right to payment.
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 495 ---
In-patient services
For in-patient service, the customers normally receive inpatient treatment which contains various
treatment. In-patient service contains more than one performance obligations, including (i) provision of
consultation services, (ii) provision of in-patient healthcare services and (iii) sale of pharmaceutical products.
The Group allocates the transaction price to each performance obligation on a relative stand-alone selling price
basis.
For revenue from (i) provision of consultation services and (iii) sale of pharmaceutical products for
which control of services or pharmaceutical products is transferred at a point in time, revenue is recognized
when the customer obtains the control of the completed services or pharmaceutical products and the Group has
satisfied its performance obligations with present right to payment. For revenue from (ii) provision of
in-patient healthcare services, the corresponding revenue is recognized over the service period when customers
simultaneously receive the services and consumes the benefits provided by the Group’s performance as the
Group performs.
(ii) Revenue from other sources
(a) Rental income from operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the term
of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term
of the lease. V ariable lease payments that do not depend on an index or a rate are recognized as income in the
accounting period in which they are earned.
(b) Interest income
Interest income is recognized using the effective interest method. The “effective interest rate” is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of the financial asset.
(c) Government grants
Government grants are recognized in the statement of financial position initially when there is
reasonable assurance that they will be received and that the Group will comply with the conditions attaching
to them.
Grants that compensate the Group for expenses incurred are recognized as income in profit or loss on
a systematic basis in the same periods in which the expenses are incurred.
Grants that compensate the Group for the cost of an asset are deducted from the carrying amount of the
asset and consequently are effectively recognized in profit or loss over the useful life of the asset by way of
reduced depreciation expense.
(u) Translation of foreign currencies
Transactions in foreign currencies are translated into the respective functional currencies of group companies
at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at
the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or
loss.
The assets and liabilities of foreign operations are translated into RMB at the exchange rates at the reporting
date. The income and expenses of foreign operations are translated into RMB at the exchange rates at the dates of
the transactions.
Foreign currency differences are recognized in OCI and accumulated in the exchange reserve.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 496 ---
(v) Borrowing costs
Borrowing costs that directly attributable to the acquisition, construction or production of an asset which
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the
cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.
(w) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or a joint venture of the other entity (or an associate or a joint venture
of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel
services to the Group or to the Group’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity.
(x) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements, are identified
from the financial information provided regularly to the Group’s most senior executive management for the purposes
of allocating resources to, and assessing the performance of, the Group’s various lines of business and geographical
locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and services, the
nature of production processes, the type or class of customers, the methods used to distribute the products or provide
the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria.
3 ACCOUNTING JUDGEMENTS AND ESTIMATES
Judgments and estimations used in preparation of the Historical Financial Information are continually
evaluated and are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 497 ---
Notes 28 and 30 contain information about the assumptions and their risk factors relating to fair value of share
options granted and financial instruments. Other significant sources of estimation uncertainty are follows:
(i) Estimation of variable consideration for revenue from customers
The Group estimates variable considerations to be included in the transaction price for the revenue from
customers in respect of subsequent agreement on the government approved annual quota for the medical fees in
healthcare services. The Group has estimated the variable considerations which is based on the Group’s past
experience with customers. Any significant changes in experience as compared to historical patterns will impact the
expected refund estimated by the Group. The Group updates its assessment of expected agreement on a regular basis
and the relevant revenue are adjusted accordingly.
(ii) Loss allowance for expected credit losses
The Group estimates the amount of loss allowance for ECLs on trade and other receivables that are measured
at amortized cost based on the credit risk of the respective financial instruments. The loss allowance amount is
measured as the asset’s carrying amount and the present value of estimated future cash flows with the consideration
of expected future credit loss of the respective financial instrument. The assessment of the credit risk of the respective
financial instrument involves high degree of estimation and uncertainty. When the actual future cash flows are less
than expected or more than expected, a material impairment loss or a material reversal of impairment loss may arise,
accordingly.
(iii) Impairment of interests in associates
The Group reviews the carrying amounts of the interests in associates as at the end of each reporting period
to determine whether there is objective evidence of impairment. When indication of impairment is identified,
management assesses the difference between the carrying amounts and recoverable amounts and make provision for
impairment loss. Any changes in the assumptions adopted in calculating the recoverable amount would increase or
decrease the provision for impairment loss and affect the Group’s financial position.
(iv) Useful life of property, plant and equipment
Management determines the estimated useful lives of and related depreciation charges for the Group’s
property, plant and equipment. This estimate is based on the actual useful lives of assets of similar nature and
functions. It could change significantly as a result of significant technical innovations and competitor actions in
response to industry cycles. Management will increase the depreciation charges where useful lives are less than
previously estimated, or will write-off or write-down technically obsolete or non-strategic assets that have been
abandoned or sold.
4 REVENUE AND SEGMENT REPORTING
(a) Revenue
The Group is principally engaged in hospital healthcare service.
(i) Disaggregation of revenue
Disaggregation of revenue from contracts with customers by service lines is as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from contracts
with customers within
the scope of IFRS 15
Hospital healthcare
services
– Out-patient services /H1118/H1118/H11181,103,907 1,262,905 1,249,004 628,122 603,134
– In-patient services /H1118/H1118/H1118/H11181,201,678 1,395,719 1,379,046 685,841 695,653
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,679 9,589 9,408 4,379 4,213
2,315,264 2,668,213 2,637,458 1,318,342 1,303,000
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 498 ---
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Revenue from other
sources
Rental income
– Lease payments that are
fixed or depend on an
index or a rate /H1118/H1118/H1118/H1118/H1118/H1118/H111815,783 13,770 16,199 8,970 6,599
– V ariable lease payments
that do not depend on an
index or a rate /H1118/H1118/H1118/H1118/H1118/H1118/H11185,388 5,630 5,316 2,819 2,717
2,336,435 2,687,613 2,658,973 1,330,131 1,312,316
Disaggregation of revenue from contracts with customers by the timing of revenue recognition is as follow:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Disaggregated by timing
of revenue recognition
Point in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,113,586 1,272,494 1,258,412 632,501 607,347
Over time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,201,678 1,395,719 1,379,046 685,841 695,653
2,315,264 2,668,213 2,637,458 1,318,342 1,303,000
The Group’s customer base is diversified and there is no single customer with whom transactions have
exceeded 10% of the Group’s revenue during the Track Record Period.
(ii) Revenue expected to be recognized in the future arising from contracts with customers in existence at the
reporting date
The Group has applied the practical expedient in paragraph 121 of IFRS 15 and therefore the information about
remaining performance obligations is not disclosed for contracts that have an expected duration of one year or less.
(b) Segment reporting
(i) Segment information
The Group manages its businesses as a whole by the Group’s most senior executive management for the
purposes of resource allocation and performance assessment. The Group’s chief operating decision maker is the chief
executive officer of the Group who reviews the Group’s combined results of operations in assessing performance of
and making decisions about allocations to this segment.
Accordingly, the Group has only one reportable segment and no further analysis of this single segment is
presented.
(ii) Geographic information
No geographical information is shown as the revenue and profit from operations of the Group is substantially
all derived from activities in the PRC and substantially all of the Group’s property, plant and equipment are located
physically or operationally in the PRC.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 499 ---
5 OTHER NET GAIN
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Government grants (Note) /H1118/H1118/H1118/H111813,923 1,663 1,554 1,109 1,180
Net foreign exchange loss /H1118/H1118/H1118/H1118(9,865) (1,576) (412) (672) (807)
Net realized and unrealized gain
on derivative financial
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,549 3,155 1,397 1,397 –
Net loss on disposal of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118(224) (345) (1,263) (619) (13)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,402) (1,421) (533) (1,146) 1,527
11,981 1,476 743 69 1,887
Note: The government grants are mainly unconditional government subsidies received by certain subsidiaries
of the Group in consideration of their tax contribution and to support the hospital development.
6 PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging/(crediting):
(a) Net finance costs
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Finance income:
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,193) (4,390) (5,838) (4,025) (1,433)----- ----- ----- ----- -----
Finance costs:
Interest expenses on bank
loans and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,352 16,707 18,972 9,914 9,767
Less: interest expense
capitalized into
construction in
progress* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,668) (8,089) (10,045) (4,821) (4,075)
16,684 8,618 8,927 5,093 5,692-----
----- ----- ----- -----
15,491 4,228 3,089 1,068 4,259
* The borrowing costs have been capitalized at a rate range of 3.50%, 2.60%-2.70%, 2.35%-2.70%, and
2.29%-2.36% per annum, respectively, for the years ended December 31, 2022, 2023 and 2024 and six
months ended June 30, 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 500 ---
(b) Staff costs
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, wages and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118715,546 773,354 817,185 397,708 421,200
Contributions to defined
contribution retirement plan /H1118/H1118 63,082 71,925 86,748 43,454 47,527
Equity settled share-based
payment expenses (Note 28) /H1118 724 2,719 2,592 2,751 1,160
779,352 847,998 906,525 443,913 469,887
Pursuant to the relevant labor rules and regulations in the PRC, the Group’s PRC subsidiaries participate in
defined contribution retirement benefit schemes (the “Schemes”) organized by the local government authorities
whereby the Group’s PRC subsidiaries are required to make contributions to the Schemes based on certain
percentages of the eligible employee’s salaries. The local government authorities are responsible for the entire
pension obligations payable to the retired employees.
The Group has no other material obligation for the payment of retirement benefits beyond the contributions
described above.
(c) Other items
Y ears ended December 31, Six months ended June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation and
amortization
– owned property, plant
and equipment /H1118/H1118/H1118/H1118/H111811 131,406 139,425 151,384 74,051 82,682
– right-of-use assets /H1118/H1118/H111812 5,148 5,147 5,148 2,574 2,574
– intangible assets /H1118/H1118/H1118/H111813 9,893 10,854 12,158 5,872 6,235
146,447 155,426 168,690 82,497 91,491
Listing expenses /H1118/H1118/H1118/H1118/H1118 – 1,595 28,887 14,954 4,488
Cost of inventories
(representing
pharmaceutical
products and
consumables used,
included in cost of
revenue) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817(b) 896,011 1,056,412 1,034,361 516,835 508,730
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 501 ---
7 INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(a) Taxation in the consolidated statement of profit or loss represents:
Y ears ended December 31, Six months ended June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Current tax – PRC
Corporate Income
Tax
Provision for the year /H1118/H1118 45,075 66,049 63,386 36,127 23,008
Deferred tax
Reversal and origination
of temporary
differences /H1118/H1118/H1118/H1118/H1118/H1118/H111827(b) (7,014) 597 (4,274) (3,075) (1,284)
38,061 66,646 59,112 33,052 21,724
Notes:
(i) Pursuant to the rules and regulations of the Cayman Islands, the Company is not subject to any income
tax in the Cayman Islands.
(ii) Pursuant to the income tax rules and regulations of the Malaysia Labuan (“LBU”), the Group’s
subsidiary in the LBU was a Labuan Trading Company, which was liable to the Malaysia corporation
tax at a rate of 3% or a flat rate of MYR20,000 per annum. No provision for Labuan Profits tax was
made for the subsidiary as it did not have any assessable profits subject to Labuan Profits Tax during
the Track Record Period.
(iii) The subsidiary of the Group incorporated in Taiwan, province of the PRC (“Taiwan”) is liable to Taiwan
Profits Tax at a rate of 20%. No provision for Taiwan Profits Tax was made for the subsidiary as it did
not have any assessable profits subject to Taiwan Profits Tax during the Track Record Period.
(iv) The Group’s subsidiaries in Mainland China are subject to Corporate Income Tax (“CIT”) at a statutory
rate of 25% on their respective taxable income during the Track Record Period.
(b) Reconciliation between tax expense and accounting profit at applicable tax rates:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit before taxation /H1118/H1118/H1118/H1118127,611 234,096 168,034 96,453 70,428
Notional tax on profit
before taxation,
calculated at the rates
applicable to profits in
the jurisdictions
concerned /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,943 60,519 50,770 28,408 20,348
Tax effect of non-
deductible expenses /H1118/H1118/H1118 5,162 6,094 8,305 4,628 1,351
Utilization of tax losses
previously not
recognized /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94) (13) – – –
Tax effect of unused tax
losses not recognized /H1118/H1118 50 46 37 16 25
Actual tax expense /H1118/H1118/H1118/H1118/H111838,061 66,646 59,112 33,052 21,724
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 502 ---
8 DIRECTORS’ EMOLUMENTS
Details of the emoluments of the directors as recorded in the Historical Financial Information are set out
below:
Y ear ended December 31, 2022:
Directors’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Share-based
Payments (iv) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 28)
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118233 – – – 52 285
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H11182 3 3–––– 2 3 3
Ms. HUNG Chiu-Chin /H1118/H1118/H11182 3 3–––– 2 3 3
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H1118233 – – – 26 259
Mr. Y ANG Hung-Jen (iii) /H1118 2 3 3–––– 2 3 3
Mr. TSENG Wen-Chi (iii) /H1118 2 3 3–––– 2 3 3
Mr. LEE Kuen-Y ao (i) /H1118/H1118/H1118 ––––––
Mr. W ANG Lin (ii) /H1118/H1118/H1118/H1118/H1118––––––
Mr. GUO Qizhi (ii) /H1118/H1118/H1118/H1118/H1118––––––
1,398 – – – 78 1,476
Y ear ended December 31, 2023:
Directors’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Share-based
Payments (iv) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 28)
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118233 – – – 55 288
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H11182 3 3–––– 2 3 3
Ms. HUNG Chiu-Chin /H1118/H1118/H11182 3 3–––– 2 3 3
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H1118233 – – – 27 260
Mr. Y ANG Hung-Jen (iii) /H1118 2 3 3–––– 2 3 3
Mr. TSENG Wen-Chi (iii) /H1118 2 3 3–––– 2 3 3
Mr. LEE Kuen-Y ao (i) /H1118/H1118/H1118 ––––––
Mr. W ANG Lin (ii) /H1118/H1118/H1118/H1118/H1118––––––
Mr. GUO Qizhi (ii) /H1118/H1118/H1118/H1118/H1118––––––
1,398 – – – 82 1,480
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 503 ---
Y ear ended December 31, 2024:
Directors’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Share-based
Payments (iv) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 28)
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118224 1,036 – 6 49 1,315
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H11182 2 4–––– 2 2 4
Ms. HUNG Chiu-Chin /H1118/H1118/H11182 2 4–––– 2 2 4
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H1118224 – – – 25 249
Mr. Y ANG Hung-Jen (iii) /H1118 5 1–––– 5 1
Mr. TSENG Wen-Chi (iii) /H1118 5 1–––– 5 1
Dr. CHOW Hsing-Yi (v) /H1118/H1118 ––––––
Mr. W ANG
Wen-Tsung (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Mr. CHEN Ray-Jade (v) /H1118/H1118 ––––––
998 1,036 – 6 74 2,114
Six months ended June 30, 2024 (unaudited):
Directors’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Share-based
Payments (iv) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 28)
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118113 341 – 6 28 488
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H11181 1 3–––– 1 1 3
Ms. HUNG Chiu-Chin /H1118/H1118/H11181 1 3–––– 1 1 3
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H1118113 – – – 14 127
Mr. Y ANG Hung-Jen (iii) /H1118 5 1–––– 5 1
Mr. TSENG Wen-Chi (iii) /H1118 5 1–––– 5 1
Dr. CHOW Hsing-Yi (v) /H1118/H1118 ––––––
Mr. W ANG
Wen-Tsung (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Mr. CHEN Ray-Jade (v) /H1118/H1118 ––––––
554 341 – 6 42 943
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 504 ---
Six months ended June 30, 2025:
Directors’ fees
Salaries,
allowances
and benefits
in kind
Discretionary
bonuses
Retirement
scheme
contributions
Share-based
Payments (iv) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note 28)
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118122 1,098 – 13 24 1,257
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H11181 2 2–––– 1 2 2
Ms. HUNG Chiu-Chin /H1118/H1118/H11181 2 2–––– 1 2 2
Dr. W ANG Liming /H1118/H1118/H1118/H1118/H11181 2 2–––– 1 2 2
Dr. CHOW Hsing-Yi (v) /H1118/H1118 ––––––
Mr. W ANG
Wen-Tsung (v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––
Mr. CHEN Ray-Jade (v) /H1118/H1118 ––––––
488 1,098 – 13 24 1,623
(i) Mr. Lee Kuen-Y ao was resigned from the Company’s director on October 27, 2023.
(ii) Mr. Wang Lin and Mr. Guo Qizhi were resigned from the Company’s directors on September 27, 2023.
(iii) Mr. Y ang Hung-Jen and Mr. Tseng Wen-Chi were resigned from the Company’s directors on March 21, 2024.
(iv) These represent the estimated value of share options granted to the directors under the Company’s share option
scheme. The value of these share options is measured according to the Group’s accounting policies for
share-based payment transactions as set out in Note 2(q) and, in accordance with that policy, includes
adjustments to reverse amounts accrued in previous years where grants of equity instruments are forfeited prior
to vesting. The details of share-based payment, including the principal terms and number of options granted,
are disclosed in Note 28.
(v) Dr. Chow Hsing-Yi, Mr. Wang Wen-Tsung and Mr. Chen Ray-Jade were appointed as independent
non-executive directors of the Company on March 22, 2024 and will be effective upon the completion of the
listing of the Company’s shares on the Stock Exchange. No emoluments were paid to independent
non-executive directors during the Track Record Period.
During the Track Record Period, no director or chief executive has waived or agreed to waive any emoluments
and no amounts were paid or payable by the Group to the directors as an inducement to join or upon joining the Group
or as compensation for loss of any office in connection with the management of the affairs of any member of the
Group.
9 INDIVIDUALS WITH THE HIGHEST EMOLUMENTS
Of the five individuals with the highest emoluments, none of them are directors whose emoluments are
disclosed in Note 8 for the years ended December 31, 2022, 2023 and 2024 and for the six months ended June 30,
2024 (unaudited) and 2025, respectively. The aggregate of the emoluments in respect of the paid amount to remaining
individuals are as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Salaries, wages and other
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,819 15,305 17,724 7,967 9,785
Contributions to defined
contribution retirement plan /H1118/H1118 50 88 112 28 29
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H111812 360 340 219 149
13,881 15,753 18,176 8,214 9,963
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 505 ---
The emoluments of the individuals who are not directors and who are amongst the five highest paid individuals
of the Group are within the following bands:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
Number of
individuals
(unaudited)
Hong Kong Dollar (“HKD”)
HKD500,001 — HKD1,000,000 /H1118/H1118/H1118 –––1–
HKD1,000,001 — HKD1,500,000 /H1118/H1118 –––22
HKD1,500,001 — HKD2,000,000 /H1118/H1118 ––––1
HKD2,000,001 — HKD2,500,000 /H1118/H1118 2221–
HKD2,500,001 — HKD3,000,000 /H1118/H1118 221–1
HKD3,000,001 — HKD3,500,000 /H1118/H1118 –––1–
HKD3,500,001 — HKD4,000,000 /H1118/H1118 ––––1
HKD5,000,001 — HKD5,500,000 /H1118/H1118 ––1––
HKD5,500,001 — HKD6,000,000 /H1118/H1118 11–––
HKD6,500,001 — HKD7,000,000 /H1118/H1118 ––1––
55555
During the Track Record Period, no amounts were paid or payable by the Group to the above non-director
highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of any office
in connection with the management of the affairs of any member of the Group.
10 EARNINGS PER SHARE
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company and the weighted average number of ordinary shares in issue during the Track Record Period,
calculated as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
(unaudited)
Profit for the year/period
attributable to equity
shareholders of the
Company, used in the
basic earnings per share
calculation (RMB’000) /H1118 89,550 167,450 108,922 63,401 48,704
Weighted average number
of ordinary shares in
issue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,945,001 244,945,001 244,945,001 244,945,001 244,945,001
Basic earnings per share
(in RMB) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.37 0.68 0.44 0.26 0.20
(b) Diluted earnings per share
The calculation of diluted earnings per share is based on the profit attributable to equity shareholders of the
Company of RMB89,550,000, RMB167,450,000, RMB108,922,000, RMB63,401,000 (unaudited) and
RMB48,704,000 respectively, and the weighted average number of ordinary shares of 246,887,254 shares,
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 506 ---
246,944,466 shares, 246,872,274 shares, 246,928,362 shares (unaudited) and 245,725,957 shares, for the years ended
December 31, 2022, 2023 and 2024 and six months ended June 30, 2024 and 2025, respectively, after adjusting for
the effect of deemed issue of shares under the Company’s Share Option Scheme, calculated as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
(unaudited)
Weighted average number
of ordinary shares /H1118/H1118/H1118/H1118244,945,001 244,945,001 244,945,001 244,945,001 244,945,001
Effect of deemed issue of
shares under the
Company’s Share Option
Scheme (Note 28) /H1118/H1118/H1118/H11181,942,253 1,999,465 1,927,273 1,983,361 780,956
Weighted average number
of ordinary shares
(diluted) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118246,887,254 246,944,466 246,872,274 246,928,362 245,725,957
11 PROPERTY, PLANT AND EQUIPMENT
Buildings
Machinery
and equipment
Furniture,
fixtures and
office
equipment Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H11182,081,560 360,811 44,652 2,993 51,433 2,541,449
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,706 78,595 8,369 366 151,344 266,380
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,48 7––– (20,487) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (7,438) – – – (7,438)
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,129,753 431,968 53,021 3,359 182,290 2,800,391
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,566 58,822 8,731 420 241,610 336,149
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,20 2––– (13,202) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (13,559) (69) – – (13,628)
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,169,521 477,231 61,683 3,779 410,698 3,122,912
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,144 66,890 11,278 460 201,597 318,369
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,29 4––– (123,294) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (27,777) (3,724) – – (31,501)
At December 31, 2024 and
January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,330,959 516,344 69,237 4,239 489,001 3,409,780
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,702 12,627 1,984 – 108,248 213,561
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118540,262 16,542 – – (556,804) –
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (11,520) (5,280) – – (16,800)
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,961,923 533,993 65,941 4,239 40,445 3,606,541
Accumulated depreciation:
------- ------- -- ---- ----- -- ---- --------
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(758,913) (215,285) (32,783) (1,479) – (1,008,460)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(94,443) (31,911) (4,568) (484) – (131,406)
Written back on disposals /H1118/H1118/H1118 – 7,21 4––– 7,214
At December 31, 2022 and
January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(853,356) (239,982) (37,351) (1,963) – (1,132,652)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(92,860) (38,941) (7,045) (579) – (139,425)
Written back on disposals /H1118/H1118/H1118 – 13,214 69 – – 13,283
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 507 ---
Buildings
Machinery
and equipment
Furniture,
fixtures and
office
equipment Motor vehicles
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At December 31, 2023 and
January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(946,216) (265,709) (44,327) (2,542) – (1,258,794)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118(97,746) (43,636) (9,493) (509) – (151,384)
Written back on disposals /H1118/H1118/H1118 – 26,514 3,724 – – 30,238
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118(1,043,962) (282,831) (50,096) (3,051) – (1,379,940)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118(52,403) (24,285) (5,787) (207) – (82,682)
Written back on disposals /H1118/H1118/H1118 – 11,507 5,280 – – 16,787
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,096,365) (295,609) (50,603) (3,258) – (1,445,835)
Net book value: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
--------- --------- --------- --------- --------- ---------
At December 31, 2022 /H1118/H1118/H1118/H1118/H11181,276,397 191,986 15,670 1,396 182,290 1,667,739
At December 31, 2023 /H1118/H1118/H1118/H1118/H11181,223,305 211,522 17,356 1,237 410,698 1,864,118
At December 31, 2024 /H1118/H1118/H1118/H1118/H11181,286,997 233,513 19,141 1,188 489,001 2,029,840
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,865,558 238,384 15,338 981 40,445 2,160,706
12 RIGHT-OF-USE ASSETS
(a) The reconciliation of the carrying amounts of right-of-use assets by class of underlying asset is as
follows:
Leasehold land
RMB’000
Cost:
At January 1, 2022, December 31, 2022, 2023, 2024 and June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265,509
Accumulated depreciation:
------
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(97,598)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,148)
At December 31, 2022 and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(102,746)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,147)
At December 31, 2023 and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(107,893)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,148)
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(113,041)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,574)
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(115,615)------
Net book value:
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118162,763
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118157,616
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118152,468
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,894
Interests in leasehold land held for own use represent payments for land use rights of certain lands located in
the PRC. Lump sum payments were made upfront and there are no ongoing payments to be made under the terms
of the land lease in the PRC. The period for these land use rights is no more than 50 years.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 508 ---
(b) The analysis of expense items in relation to leases recognized in profit or loss is as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H11185,148 5,147 5,148 2,574 2,574
Expense relating to
short-term leases /H1118/H1118/H1118/H1118/H11185,403 5,583 5,245 2,770 2,416
V ariable lease payments
not included in the
measurement of lease
liabilities (Note) /H1118/H1118/H1118/H1118/H1118/H111859,657 51,357 41,771 21,593 16,212
Note: The Group leased a number of medical equipment which contain variable lease payment terms that are based
on revenue generated from the usage of these medical equipment.
13 INTANGIBLE ASSETS
Software
RMB’000
Cost:
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,841
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,521
At December 31, 2022 and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,362
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,647
At December 31, 2023 and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,009
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,511
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,520
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,219
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,739------
Accumulated amortization:
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,223)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,893)
At December 31, 2022 and January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(35,116)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,854)
At December 31, 2023 and January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,970)
Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,158)
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(58,128)
Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,235)
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(64,363)
Net book value:
------
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,246
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,039
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,392
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,376
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 509 ---
14 INVESTMENTS IN SUBSIDIARIES
As at June 30, 2025, the Company has direct or indirect interests in the following principal subsidiaries, all
of which are private companies:
Name of Company
Place and date of
establishment
Particulars of issued
and paid-up capital
Percentage of equity
attributed to the
Company Principal activities
Name of statutory
auditor
Direct Indirect
BenQ BM Holding
Corp. (Note (c)) /H1118/H1118/H1118
Malaysia
October 30,
2003
United States
Dollar (“USD”)
262,463,251
100% – Investment
holding
Not applicable
Nanjing BenQ
Medical Center Co.,
Ltd. (“Nanjing
BenQ Hospital”)ی
ʮ̡
(Notes (a) and (b)) /H1118
The PRC
November 11,
2003
USD192,014,984 – 100% Hospital
healthcare
service
Jiangsu Y onghe
Accounting
Firm Co., Ltd.
(ࠇ
ʮ
̡)
Suzhou BenQ
Investment Co., Ltd.
ʮ
̡ (Notes (a) and
(c)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The PRC
September 16,
2015
USD30,000,000 – 100% Investment
holding
Not applicable
Suzhou BenQ Medical
Center Co., Ltd.
(“Suzhou BenQ
Hospital”)ਿ
ʮ̡
(Notes (a) and (b)) /H1118
The PRC
July 7, 2004
RMB601,975,000 – 100% Hospital
healthcare
service
Jiangsu Y onghe
Accounting
Firm Co., Ltd.
(ࠇ
ʮ
̡)
BenQ Healthcare
Consulting
Corporationਿᔼ
ࠢ
ʮ̡ (Note (c)) /H1118/H1118/H1118
Taiwan,
China
February 5,
2009
New Taiwan
Dollar (“NTD”)
23,474,140
– 100% Management
Services
Not applicable
BenQ Hospital
Management
Consulting
(Nanjing) Co., Ltd.
ਿ(ԯ)ᔼ৫၍ଣ
ʮ̡
(Notes (a) and (b)) /H1118
The PRC
November 14,
2005
USD1,000,000 – 100% Management
Services
Jiangsu Y onghe
Accounting
Firm Co., Ltd.
(ࠇ
ʮ
̡)
Notes:
(a) These entities are limited liability companies established in Mainland China. The official names of these
entities are in Chinese. The English translation of the company names is for identification purpose only.
(b) The statutory financial statements of these entities for the years ended December 31, 2022, 2023 and 2024 were
prepared in accordance with the Accounting Regulations for Business Enterprises issued by the Ministry of
Finance of Mainland China.
(c) No audited statutory financial statements were prepared by these entities during the Track Record Period.
All companies now comprising the Group have adopted December 31 as their financial year end date.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 510 ---
15 INTERESTS IN ASSOCIATES
The following list contains the particulars of the Group’s associates, all of which are unlisted corporate entities
whose quoted market price is not available:
Name of associate
Form of
business
structure
Place of
establishment
and business
Particulars of
issued and
paid-up capital
As at December 31,
As at
June 30,
Principal
activities2022 2023 2024 2025
Indirectly held by the
Company
Guigang Donghui Medical
Investment Co., Ltd.
(“Donghui Medical”)
ฯᔼᐕҳ༟Ϟ
ʮ̡ (Note (i)) /H1118/H1118/H1118
Limited
liability
The PRC RMB743,024,038 14.13% 17.78% 25.27% 25.27% Investment
holding
Nanjing Yinxia
Healthcare Industry
Development Co., Ltd.
(“Nanjing Yinxia
Healthcare”)ԯვข
ʮ̡
(Note (ii)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Limited
liability
The PRC RMB100,000,000 15.00% 15.00% 15.00% 15.00% Provision of
elderly
care
services
Notes:
(i) Donghui Medical is an investment holding company which has 100% equity interest in Guigang Donghui
Hospital Co., Ltd., which is a limited liability company established in the PRC on November 30, 2017, with
a registered capital of RMB771,029,000 and is engaged in the provision of hospital healthcare service.
In January 2022 and February 2023, Donghui Medical increased its registered capital and the Group increased
its investment of RMB11,304,000 and RMB6,586,000, respectively, on a pro rata basis.
In December 2023, the Group acquired an additional 3.65% of the equity interest in Donghui Medical from
a third party with a consideration of RMB36,330,000. Upon the completion of the transaction in December
2023, the proportion of the Group’s interest increased to 17.78% as at December 31, 2023 and the
consideration was paid in January 2024.
In March 2024, the Group paid RMB100,000,000 to subscribe for an additional 7.49% equity interest of
Donghui Medical, and the proportion of the Group’s interest in Donghui Medical was increased to 25.27%
accordingly.
The Group has a right to appoint one director to the board of Donghui Medical in accordance with the
investment agreement, therefore the directors of the Company are in the view that the Group can cast
significant influence on Donghui Medical and consider it is an associate of the Group.
(ii) Nanjing Yinxia Healthcare was established by BenQ BM Holding Corp. (“BenQ BM”) as a limited liability in
2018, with a registered capital of RMB30,000,000. In March 2019, the proportion of the Group’s interest in
Nanjing Yinxia Healthcare has been diluted to 30.00% due to the subscription of registered capital of
RMB70,000,000 to independent third parties and Nanjing Yinxia Healthcare ceased to be a subsidiary of the
Group but became an associate of the Group.
In 2020, the Group entered into an agreement with the independent third parties, pursuant to which, the Group
agreed to dispose its 15.00% equity interest in Nanjing Yinxia Healthcare at a cash consideration of
RMB300,000,000, of which RMB15,000,000 was received in June 2022. Upon the completion of the Group’s
disposal, the proportion of the Group’s interest in Nanjing Yinxia Healthcare has been reduced to 15.00%. The
Group has a right to appoint one director to the board of Nanjing Yinxia Healthcare in accordance with the
agreement, therefore the directors of the Company are in the view that the Group can cast significant influence
on Nanjing Yinxia Healthcare and consider it is an associate of the Group.
The above associates are accounted for using the equity method in the consolidated financial statements during
the Track Record Period.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 511 ---
Summarized financial information of the associates, adjusted for any differences in accounting policies, and
a reconciliation to the carrying amount in the consolidated financial statements are disclosed below:
Donghui Medical Nanjing Yinxia Healthcare
As at December 31,
As at
June 30, As at December 31,
As at
June 30,
2022 2023 2024 2025 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Gross amounts of the
associates’
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H111871,241 69,609 83,307 131,580 101,095 477,313 666,089 703,728
Non-current assets /H1118/H1118/H1118/H11181,081,556 1,049,208 1,004,293 1,049,372 444,341 422,934 410,282 405,960
Current liabilities /H1118/H1118/H1118/H1118/H1118(76,027) (226,019) (196,256) (336,041) (230,713) (231,420) (268,567) (303,976)
Non-current liabilities /H1118/H1118/H1118(401,293) (326,777) (322,875) (276,424) (33,930) (400,000) (550,000) (550,000)
Equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118675,477 566,021 568,469 568,487 280,793 268,827 257,804 255,712
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,987 182,314 248,696 141,25 7––––
(Loss)/profit and total
comprehensive income
for the year/period /H1118/H1118/H1118(142,247) (156,069) (97,552) 18 (13,627) (11,966) (11,023) (2,092)
Reconciled to the
Group’s interests in
the associates
Gross amounts of net
assets of the associates /H1118 675,477 566,021 568,469 568,487 280,793 268,827 257,804 255,712
Group’s effective interest /H1118 14.13% 17.78% 25.27% 25.27% 15.00% 15.00% 15.00% 15.00%
Group’s share of net
assets of the associates /H1118 95,449 100,615 143,672 143,677 42,119 40,324 38,671 38,357
Goodwill /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,696 50,878 50,87 8––––
Receivable from Nanjing
Yinxia Healthcare
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 66,990 66,990 66,990 68,210
Carrying amount of in the
consolidated financial
statements /H1118/H1118/H1118/H1118/H1118/H1118/H111895,449 116,311 194,550 194,555 109,109 107,314 105,661 106,567
Group’s share of the
associates
(Loss)/profit and total
comprehensive income
for the year/period /H1118/H1118/H1118(20,099) (22,054) (21,760) 4 (2,044) (1,795) (1,654) (313)
Note: The receivable from Nanjing Yinxia Healthcare was unsecured, interest free and repayable on demand.
The Group assesses whether this is any objective evidence that its interests in the associates are impaired at the end
of each reporting period by considering the associates’ business development process, any significant financial
difficulty, default or bankruptcy encountered by the associates and adverse change in technological, market,
economic or legal environment. Based on the assessment above, the Group concluded that no impairment indicator
was identified at the end of each reporting period and no impairment loss of interests in associates is considered
necessary to be recognized in the consolidated statements of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 512 ---
16 DERIV ATIVE FINANCIAL INSTRUMENTS
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Assets
– Foreign currency forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182 8–––
Liabilities
– Foreign currency forward
contracts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,216 1,364 – –
The Group entered into several foreign currency forward contracts with certain banks to mitigate the currency
risk arising from intra-group transactions denominated in USD. The fair value changes of above derivative financial
instruments were recognized in other net gain.
The analysis on the fair value measurement of the above financial instruments is disclosed in Note 30(e).
17 INVENTORIES
(a) Inventories in the consolidated statement of financial position comprise:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Pharmaceuticals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,319 46,798 50,319 40,662
Medical consumables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,824 20,520 19,762 14,578
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,939 1,372 1,500 1,438
73,082 68,690 71,581 56,678
(b) The analysis of the amount of inventories recognized as an expense and included in profit or loss is as
follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Carrying amount of inventories
recognized as expenses /H1118/H1118/H1118/H1118896,011 1,056,412 1,034,361 516,835 508,730
18 TRADE RECEIV ABLES
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,704 1,428 2,052 650
Due from public medical insurance
programs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,163 177,438 216,265 207,473
Due from other third parties /H1118/H1118/H1118/H1118/H111884,661 80,969 79,534 100,227
201,528 259,835 297,851 308,350
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,054) (12,911) (12,039) (12,058)
188,474 246,924 285,812 296,292
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 513 ---
All of the trade receivables are expected to be recovered within one year.
Ageing analysis
As of the end of each reporting period, the ageing analysis of trade receivables, based on the date of revenue
recognition and net of loss allowance, is as follows:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118158,547 219,275 262,006 285,723
Over 6 months but within 12 months /H1118/H1118 32,839 28,724 27,910 16,104
Over 12 months but within 18 months /H1118 7,406 8,220 2,621 2,060
Over 18 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,736 3,616 5,314 4,463
201,528 259,835 297,851 308,350
Less: loss allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,054) (12,911) (12,039) (12,058)
Trade receivables, net /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,474 246,924 285,812 296,292
Further details on the Group’s credit policy and credit risk arising from trade receivables are set out in
Note 30(a).
19 PREPAYMENTS AND OTHER RECEIV ABLES
The Group
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Prepayments
– Prepayments for purchase of
property, plant and equipment /H1118/H1118/H1118 26,291 28,740 25,423 37,017
– Other prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,993 2,536 4,115 3,177
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,423 3,885
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,284 31,276 33,961 44,079
Current
Amounts due from related parties /H1118/H1118 948 37 2,142 21,486
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,202 9,478 8,934 8,464
Prepayments in connection with the
proposed initial listing of the
Company’s shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 532 9,076 10,521
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,288 1,311 1,266 1,257
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,629 6,228 8,192 7,978
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,067 17,586 29,610 49,706
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 514 ---
The Company
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due from subsidiaries /H1118/H1118/H1118/H1118 42 106 97 –
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 767 382
Prepayments in connection with the
proposed initial listing of the
Company’s shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 532 9,076 10,521
42 638 9,940 10,903
20 TIME DEPOSITS
As at December 31, 2022, 2023 and 2024 and June 30, 2025, time deposits of RMB698,000, RMB708,000,
RMB719,000 and RMB716,000 respectively, in the consolidated statement of financial position represent bank
deposits that are more than 3 months of maturity at acquisition.
21 CASH AND CASH EQUIV ALENTS AND OTHER CASH FLOW INFORMATION
(a) Cash and cash equivalents comprise:
The Group
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118135,704 226,246 116,884 117,157
The Company
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H111815,868 7,397 3,507 2,505
(b) Reconciliation of profit before taxation to cash generated from operations
Y ears ended December 31, Six months ended June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Profit before taxation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,611 234,096 168,034 96,453 70,428
Adjustments for:
Depreciation of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(c) 131,406 139,425 151,384 74,051 82,682
Depreciation of right-of-use assets /H11186(c) 5,148 5,147 5,148 2,574 2,574
Amortization of intangible assets /H1118/H11186(c) 9,893 10,854 12,158 5,872 6,235
Net realized and unrealized gain
from fair value changes on
derivative financial instruments /H1118/H11185 (9,549) (3,155) (1,397) (1,397) –
Net loss on disposal of property,
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 224 345 1,263 619 13
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 515 ---
Y ears ended December 31, Six months ended June 30,
Note 2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Share of losses of associates /H1118/H1118/H1118/H1118/H111822,143 23,849 23,414 13,952 309
Equity settled share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(b) 724 2,719 2,592 2,751 1,160
Provision/(reversal) of impairment
losses on trade receivables /H1118/H1118/H1118/H1118/H11185,428 292 (605) 1,547 39
Finance costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) 16,684 8,618 8,927 5,093 5,692
Finance income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186(a) (1,193) (4,390) (5,838) (4,025) (1,433)
Net foreign exchange loss /H1118/H1118/H1118/H1118/H1118/H11185 9,865 1,576 412 672 807
Operating profit before changes
in working capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118318,384 419,376 365,492 198,162 168,506
Decrease/(increase) in inventories /H1118/H1118 6,487 4,392 (2,891) 12,374 14,903
Decrease/(increase) in trade
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,671 (58,742) (38,283) (21,018) (10,519)
Decrease/(increase) in prepayments
and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,011 (6,428) (9,482) (7,074) 1,664
(Decrease)/increase in trade and
bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,695) 51,069 20,286 33,952 (41,036)
(Decrease)/increase in other
payables and accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,902) 17,785 (9,878) (19,909) (37,909)
Increase/(decrease) in contract
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,727 (8,181) (2,906) 4,081 9,186
Cash generated from operations /H1118/H1118/H1118 356,683 419,271 322,338 200,568 104,795
(c) Reconciliation of liabilities arising from financing activities:
The table below details changes in the Group’s liabilities from financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash
flows will be, classified in the Group’s consolidated cash flow statements as cash flows from financing activities.
Bank loans
Loan from a
related party Total
RMB’000 RMB’000 RMB’000
(Note 22) (Note 32)
At January 1, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118335,124 174,307 509,431
Changes from financing cash flows:
------- ------- -------
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118763,838 – 763,838
Repayments of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(603,704) – (603,704)
Loan from a related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 120,000 120,000
Loan repaid to a related party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (290,000) (290,000)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,139) (9,526) (22,665)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118146,995 (179,526) (32,531)
Other changes:
------- ------- -------
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,133 5,219 18,352
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,133 5,219 18,352------- ------ ------
At December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118495,252 – 495,252
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 516 ---
Bank loans
RMB’000
(Note 22)
At January 1, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118495,252-------Changes from financing cash flows:
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118744,385
Repayments of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(645,215)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,745)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,425-------Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,707
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,707-------
At December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118594,384
Bank loans
RMB’000
(Note 22)
At January 1, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118594,384-------Changes from financing cash flows:
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118721,743
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(637,224)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19,098)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,421-------Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,972
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,972-------
At December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118678,777
Bank loans
RMB’000
(Note 22)
At January 1, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118678,777-------Changes from financing cash flows:
Proceeds from bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118406,138
Repayment of bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(290,608)
Interest paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(9,727)
Total changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,803-------Other changes:
Finance costs (Note 6(a)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,767
Total other changes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,767-------
At June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118794,347
(d) Total cash outflow for leases
Amounts included in the cash flow statement for leases comprise the following:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Within operating cash
flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,060 56,940 47,016 24,363 18,628
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 517 ---
22 BANK LOANS
The maturity profile for the interest-bearing bank loans of the Group at the end of each reporting period is as
follows:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Short-term bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 410,325 410,199 518,240
Current portion of long-term bank loans /H1118 – 9,667 99,000 46,091
Within 1 year or on demand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118410,252 419,992 509,199 564,331------ ------ ------ ------
After 1 year but within 2 years /H1118/H1118/H1118/H1118/H1118/H1118– 40,392 72,911 11,117
After 2 years but within 5 years /H1118/H1118/H1118/H1118/H1118/H111885,000 134,000 96,667 218,899
85,000 174,392 169,578 230,016------ ------ ------ ------
495,252 594,384 678,777 794,347
At the end of each reporting period, all of the above bank loans were unsecured. As at December 31, 2022,
2023 and 2024 and June 30, 2025, the Group has the banking facilities of the Group totalling RMB1,105,000,000,
RMB1,760,000,000, RMB1,560,000,000 and RMB1,543,000,000, in which RMB495,252,000, RMB594,384,000,
RMB678,777,000 and RMB794,347,000 were utilized, respectively.
Certain of the Group’s banking facilities are subject to the fulfilment of covenants relating to certain of the
Group’s balance sheet ratios, as are commonly found in lending arrangements with financial institutions. If the Group
were to breach the covenants the drawn down facilities would become payable on demand. The Group regularly
monitors its compliance with these covenants. Further details of the Group’s management of liquidity risk are set out
in Note 30(b). As at December 31, 2022, 2023 and 2024 and June 30, 2025, none of the covenants relating to drawn
down facilities had been breached.
23 TRADE AND BILLS PAYABLES
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 20,000 –
Due to related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,210 2,540 4,170 3,382
Due to third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118321,586 374,325 372,981 352,733
325,796 376,865 397,151 356,115
All of the trade and bills payables are expected to be settled within one year or repayable on demand.
As of the end of the reporting period, the ageing analysis of trade and bills payables, based on the invoice date,
is as follows:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118322,215 373,163 392,571 347,025
Over 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,581 3,702 4,580 9,090
325,796 376,865 397,151 356,115
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 518 ---
24 OTHER PAYABLES AND ACCRUALS
The Group
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Amounts due to related parties
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,630 1,491 1,885 2,742
Payables for acquisition of property
plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,558 39,888 62,710 137,553
Payable for acquisition of interest in
an associate (Note 15) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 36,330 – –
Accrued payroll and benefits /H1118/H1118/H1118/H1118/H1118170,539 175,600 147,532 121,257
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,389 33,914 41,130 38,684
Deposits received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,018 10,838 12,174 15,501
Other taxes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,007 7,661 6,346 11,820
Payable for department consulting
service fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,694 18,595 25,069 10,695
Payable for medical research /H1118/H1118/H1118/H1118/H111815,105 18,229 19,015 15,331
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,528 8,469 10,571 10,171
314,468 351,015 326,432 363,754
Note: The amounts due to related parties are unsecured, interest-free and payable on demand.
The Company
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Accrued expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 680 1,082 1,636
Amounts due to subsidiaries /H1118/H1118/H1118/H1118/H1118 – – 6,953 8,005
24 680 8,035 9,641
All of the other payables and accruals are expected to be settled within one year or repayable on demand.
25 CONTRACT LIABILITIES
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Receipts in advance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 519 ---
Movements in contract liabilities
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Balance at the beginning of the year /H1118/H1118 29,060 39,787 31,606 28,700
Decrease in contract liabilities as a
result of recognizing revenue during
the year that was included in the
contract liabilities at the beginning of
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(29,060) (39,787) (31,606) (28,700)
Increase in contract liabilities as a
result of receipts in advance /H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886
Balance at the end of the year /H1118/H1118/H1118/H1118/H1118/H111839,787 31,606 28,700 37,886
All of the contract liabilities are expected to be recognized as revenue within one year.
26 DEFERRED INCOME
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Government subsidy for construction
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,000 16,000 16,000 –
The amount represented subsidy granted by and received from local government authority in the PRC.
Relevant government grant related to assets which is subsidy for building. As at December 31, 2022, 2023 and 2024,
the building was under construction in progress, and the grant is included in non-current liabilities as deferred income
accordingly. As at June 30, 2025, the grant that compensated the Group for the cost of the building was deducted from
the carrying amount of the asset and consequently was effectively recognized in profit or loss over the useful life of
the asset by way of reduced depreciation expense.
27 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(a) Current taxation in the consolidated statements of financial position represents:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
At the beginning of the year/period /H1118 12,197 33,769 38,971 38,366
Charged to profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,075 66,049 63,386 23,008
Payments during the year/period /H1118/H1118/H1118 (23,503) (60,847) (63,991) (24,666)
At the end of the year/period /H1118/H1118/H1118/H1118/H111833,769 38,971 38,366 36,708
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 520 ---
(b) Deferred tax assets recognized:
The components of deferred tax assets recognized in the consolidated statement of financial position and the
movements during the Track Record Period are as follows:
Depreciation
of property,
plant and
equipment Tax losses
Credit loss
allowance
Accrued
expenses
Deferred
income Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Deferred tax arising
from:
At January 1, 2022 /H1118/H1118/H1118/H111838,160 191 1,988 9,801 – 50,140
Credited/(charged) to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H11182,368 (191) 1,275 (438) 4,000 7,014
At December 31, 2022
and January 1, 2023 /H1118/H1118 40,528 – 3,263 9,363 4,000 57,154
Credited/(charged) to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118646 – (36) (1,207) – (597)
At December 31, 2023
and January 1, 2024 /H1118/H1118 41,174 – 3,227 8,156 4,000 56,557
Credited/(charged) to
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H11183,485 – (217) 1,006 – 4,274
At December 31, 2024
and January 1, 2025 /H1118/H1118 44,659 – 3,010 9,162 4,000 60,831
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,00 0––– (4,000) –
Credited to profit or loss /H1118 997 – 4 283 – 1,284
At June 30, 2025 /H1118/H1118/H1118/H1118/H111849,656 – 3,014 9,445 – 62,115
(c) Deferred tax assets not recognized
In accordance with the accounting policy set out in Note 2(r), the Group has not recognized deferred tax assets
in respect of cumulative tax losses of RMB1,710,000, RMB1,828,000, RMB1,902,000 and RMB2,005,000 as at
December 31, 2022, 2023, 2024 and June 30 2025, respectively, as it is not probable that future taxable profits against
which the losses can be utilized will be available in the relevant tax jurisdiction and entity. The tax losses expire
within 5 to 10 years under current tax legislation.
28 EQUITY SETTLED SHARE-BASED TRANSACTIONS
The Company adopted an employee share option scheme (“Share Option Scheme”) in November 2013 (which
was subsequently amended in November 2018), pursuant to which, the maximum number of 46,000,000 ordinary
shares of the Company are authorized for issuance of share options to senior officers, directors and employees of the
Group.
The granted options shall be vested in three tranches, (i) 50% of the options will be vested on the date of the
completion of the listing of the Company’s shares on the Stock Exchange (“listing date”), (ii) 25% of the options will
be vested on the first anniversary date of the listing date, and (iii) the remaining 25% of the options will be vested
on the second anniversary date of the listing date. Each option gives the holder the right to subscribe for one ordinary
share of the Company as at each vesting date with an exercise price of USD1 per share. Unless otherwise approved
by the Board of Directors, all the share options granted are exercisable upon vesting and will expire on the five years
from the vesting date.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 521 ---
A summary of options outstanding for the years ended December 31, 2022, 2023, 2024 and June 30, 2025:
As at December 31, As at June 30,
2022 2023 2024 2025
Outstanding at the beginning of
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,999,000 2,896,000 3,328,000 3,136,000
Granted during the year/period /H1118/H1118/H1118/H1118 – 445,000 – –
Forfeited during the year/period /H1118/H1118/H1118(103,000) (13,000) (192,000) (8,000)
Outstanding at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,896,000 3,328,000 3,136,000 3,128,000
Exercisable at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
The options outstanding at December 31, 2022, 2023 and 2024 and June 30, 2025 had a weighted average
remaining contractual life of 2.5 years, 1.5 years, 1 year and 0.5 year, respectively.
The fair value of services received in return for share options granted is measured by reference to the fair value
of share options granted. The estimate of the fair value of the share options granted is measured based on a binomial
options pricing model. The contractual life of the share option is used as an input into this model.
Key assumptions of share options
Fair value of options granted and assumptions
Risk-free rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.16%
V olatility /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837.00%
Dividend yield /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180%
Expected listing date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118September 2025
The directors of the Company established the risk-free rate based on the yield of the China Government Bonds
with a maturity life close to period from the valuation date to expected liquidation date of the options. V olatility was
estimated based on average historical volatilities of comparable companies in the same industry from valuation date
to expected liquidation date. Dividend yield is based on management estimate at the valuation date. Changes in the
subjective input assumptions could materially affect the fair value estimate.
Share-based payment expense of RMB724,000, RMB2,719,000, RMB2,592,000 and RMB1,160,000 are
recognized as staff costs in the consolidated statements of profit or loss for the years ended December 31, 2022, 2023
and 2024 and June 30, 2025, respectively.
29 CAPITAL, RESERVES AND DIVIDENDS
(a) Movements in components of equity
The reconciliation between the opening and closing balances of each component of the Group’s consolidated
equity is set out in the consolidated statement of changes in equity. Details of the changes in the Company’s
individual components of equity between the beginning and the end of the Track Record Period are set out below:
The Company
Note
Share
capital
Share
premium
Exchange
reserve
Share-based
payments
reserves
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at January 1, 2022 /H1118/H1118 1,600,520 321,292 (6,900) 7,322 (20,215) 1,902,019------ - ---- ---- ---- - ---- ------
Changes in equity for 2022:
Profit for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 7,109 7,109
Other comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,071 – – 1,071
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 522 ---
Note
Share
capital
Share
premium
Exchange
reserve
Share-based
payments
reserves
Accumulated
losses Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Total comprehensive income /H1118/H1118/H1118 – – 1,071 – 7,109 8,180
Equity settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – – 724 – 724
Balance at December 31, 2022
and January 1, 2023 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (5,829) 8,046 (13,106) 1,910,923------ ----- ---- ---- ----- ------
Changes in equity for 2023:
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (10,231) (10,231)
Other comprehensive income
for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 1 6 9–– 1 6 9
Total comprehensive income /H1118/H1118/H1118 – – 169 – (10,231) (10,062)
Equity settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – – 2,719 – 2,719
Balance at December 31, 2023 /H1118 1,600,520 321,292 (5,660) 10,765 (23,337) 1,903,580
Balance at December 31, 2023
and January 1, 2024 /H1118/H1118/H1118/H1118/H11181,600,520 321,292 (5,660) 10,765 (23,337) 1,903,580------ - ---- ---- ---- - ---- ------
Changes in equity for 2024:
Loss for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (4,626) (4,626)
Other comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– 9 1–– 9 1
Total comprehensive income /H1118/H1118/H1118 – – 91 – (4,626) (4,535)
Equity settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – – 2,592 – 2,592
Balance at December 31, 2024 /H1118 1,600,520 321,292 (5,569) 13,357 (27,963) 1,901,637
Loss for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (2,813) (2,813)
Other comprehensive income for
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––8–– 8
Total comprehensive income /H1118/H1118/H1118 ––8– (2,813) (2,805)
Equity settled share-based
transactions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828 – – – 1,160 – 1,160
Balance at June 30, 2025 /H1118/H1118/H1118 1,600,520 321,292 (5,561) 14,517 (30,776) 1,899,992
(b) Dividends
No dividends were paid or declared by the Company or any of its subsidiaries during the Track Record Period.
(c) Share capital
Numbers of
ordinary shares Share capital Share capital
USD RMB’000
Issued and fully paid
At January 1, 2021, December 31, 2022, 2023
and 2024 and June 30, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,945,001 244,945,001 1,600,520
Special rights granted by the Qisda Corporation (“the Controlling Shareholder”)
In connection with the pre-IPO investments, certain pre-IPO investors had been granted certain customary
special rights against the Controlling Shareholder including, among others, the redemption rights.
APPENDIX I ACCOUNTANTS’ REPORT
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The directors of the Company have confirmed that (i) the Company does not have any obligation to fulfil the
abovementioned special rights granted by the Controlling Shareholder, including the redemption rights; and (ii) the
Company has not provided any guarantee for the abovementioned special rights granted by the Controlling
Shareholder in the event of a default by the Controlling Shareholder. Accordingly, no financial liability has been
recorded in the Historical Financial Information with respect to these special rights granted to the Pre-IPO investors
by the Controlling Shareholders.
(d) Nature and purpose of reserves
(i) Share premium
The application of the share premium account is governed by the Companies Act of the Cayman Islands. The
amount of USD49,171,000 (RMB321,292,000 equivalent) of the difference between the consideration received and
the par value of the issued shares of the Company was recognized as share premium.
(ii) Exchange reserve
The exchange reserve comprises all foreign exchange differences arising from the translation of the financial
statements of operations with functional currency other than RMB. The reserve is dealt with in accordance with the
accounting policy as set out in Note 2(u).
(e) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable
cost.
The Group actively and regularly reviews and manages its capital structure to maintain a balance between the
higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic
conditions.
The Group monitors its capital structure on the basis of an adjusted net debt-to-capital ratio. For this purpose,
adjusted net debt is defined as total debt which includes interest-bearing loans and borrowings, less cash and cash
equivalents and time deposits. Adjusted capital comprises all components of equity.
The Group’s adjusted net debt-to-capital ratio as at December 31, 2022, 2023 and 2024 and June 30, 2025 are
as follows:
As at December 31, As at June 30,
Note 2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Current liabilities:
– Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 410,252 419,992 509,199 564,331
410,252 419,992 509,199 564,331------- ------- ------- -------
Non-current liabilities:
– Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 85,000 174,392 169,578 230,016
Total debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118495,252 594,384 678,777 794,347
Less: Cash and cash equivalents /H1118/H1118/H1118/H111821(a) (135,704) (226,246) (116,884) (117,157)
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820 (698) (708) (719) (716)
Adjusted net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118358,850 367,430 561,174 676,474------- ------- ------- -------
Total equity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,329,509 1,502,180 1,615,883 1,666,031
Adjusted net debt-to-capital ratio /H1118/H1118 27.0% 24.5% 34.7% 40.6%
APPENDIX I ACCOUNTANTS’ REPORT
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30 FINANCIAL INSTRUMENTS — FAIR V ALUE AND RISK MANAGEMENT
Exposure to credit, liquidity, interest rate and currency risk arises in the normal course of the Group’s business.
The Group’s exposure to these risks and the financial risk management policies and practices used by the
Group to manage these risks are described below.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a
financial loss to the Group. The Group’s credit risk is primarily attributable to trade and other receivables. The
Group’s exposure to credit risk arising from cash and cash equivalents and time deposits is limited because the
counterparties are mainly reputable financial institutions with high credit standing, for which the Group considers to
have low credit risk.
The Group does not provide any guarantees which would expose the Group to credit risk.
Trade receivables
The Group’s trade receivables are mainly from providing hospital service to patients and has a highly
diversified customer base, without any single customer contributing material revenue. However, the Group has
concentrated debtor’s portfolio, as majority patients will claim their medical bill from public medical insurance
program. The reimbursement from these organizations may take one to twelve months, for which the Group believes
that there is no material credit risk. The Group has policy in place to ensure the treatments and medicines prescribed
and provided to such insured patients are in line with respective organizations’ policy, provided fulfilling all ethics
and moral responsibilities as a healthcare provider. As at December 31, 2022, 2023 and 2024 and June 30, 2025,
57.1%, 68.3%, 72.6% and 67.3% of the total trade receivables was due from public medical insurance programs.
The Group also has controls to closely monitor the patients’ billings and claim status to minimize the credit
risk, for those fees unsettled by the patients at the time of discharge, the Group will recover from the patients through
regular collections. Some of the service fees such as physical examination services are also paid by the corporations
and government administrations on behalf of their employees. The Company adopts different collection monitoring
mechanisms for different payers.
The Group has performed an impairment analysis at each year end date using a provision matrix to measure
expected credit losses. The provision rates are based on past due of trade receivables for groupings of various debtor
segments with similar loss patterns. The calculation reflects the historical credit losses experience and reasonable and
supportable information that is available at the year end date about past events, current conditions and forecasts of
future economic conditions.
The following table provides information about the Group’s exposure to credit risk and ECLs for trade
receivables as at December 31, 2022, 2023 and 2024 and June 30, 2025:
As at December 31, 2022
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Not past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.49% 182,689 2,714
Past du e1–6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.34% 10,306 1,993
Past du e7–1 2 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895.57% 4,198 4,012
Past due over 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.00% 4,335 4,335
201,528 13,054
APPENDIX I ACCOUNTANTS’ REPORT
– I-50 –


--- page 525 ---
As at December 31, 2023
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Not past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.21% 241,422 2,912
Past du e1–6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824.20% 10,233 2,476
Past du e7–1 2 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884.56% 4,256 3,599
Past due over 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.00% 3,924 3,924
259,835 12,911
As at December 31, 2024
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Not past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.90% 286,211 2,590
Past du e1–6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849.17% 4,037 1,985
Past du e7–1 2 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886.03% 995 856
Past due over 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.00% 6,608 6,608
297,851 12,039
As at June 30, 2025
Average expected
loss rate
Gross carrying
amount Loss allowance
% RMB’000 RMB’000
Not past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.92% 297,758 2,728
Past du e1–6 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852.88% 1,806 955
Past du e7–1 2 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111883.03% 2,422 2,011
Past due over 12 months /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.00% 6,364 6,364
308,350 12,058
ECLs are based on actual loss experience over the past 3 years. These rates are adjusted to reflect differences
between economic conditions during the period over which the historic data has been collected, current conditions
and the Group’s view of economic conditions over the expected lives of the receivables.
Movements in the loss allowance in respect of trade receivables during the Track Record Period are as follows:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Balance at the beginning of
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,953 13,054 12,911 12,039
Impairment loss recognized during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,428 292 – 39
Impairment losses reversed during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (605) –
Amounts written off during the year /H1118 (327) (435) (267) (20)
Balance at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,054 12,911 12,039 12,058
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 526 ---
Other receivables
For other receivables, the Group has assessed whether there has been a significant increase in credit risk since
initial recognition. If there has been a significant increase in credit risk, the Group will measure the loss allowance
based on lifetime rather than 12-month ECL.
The management has assessed that during the Track Record Period, other receivables did not have a significant
increase in credit risk since initial recognition. Thus, a 12-month ECL approach that results from possible default
event within 12 months of each reporting date is adopted by management. The management of the Company expects
the occurrence of losses from non-performance by the counterparties of other receivables is remote and loss
allowance provision for other receivables would be immaterial.
(b) Liquidity risk
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with lending
covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major
financial institutions to meet its liquidity requirements in the short and longer term.
The following tables show the remaining contractual maturities at the end of the reporting period of the
Group’s non-derivative financial liabilities and derivative financial instruments, which are based on contractual
undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on rates
current at the end of the reporting period) and the earliest date the Group can be required to pay:
Contractual undiscounted cash outflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 421,134 2,975 87,974 512,083 495,252
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 325,796 – – 325,796 325,796
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 314,468 – – 314,468 314,468
1,061,398 2,975 87,974 1,152,347 1,135,516
Contractual undiscounted cash (outflow)/inflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2022
Derivatives settled gross:
Foreign currency forward contracts /H1118/H1118/H1118/H111816
– outflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,950,372) – – (3,950,372)
– inflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,949,184 – – 3,949,184
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 527 ---
Contractual undiscounted cash outflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 430,763 43,024 141,097 614,884 594,384
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823 376,865 – – 376,865 376,865
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 351,015 – – 351,015 351,015
1,158,643 43,024 141,097 1,342,764 1,322,264
Contractual undiscounted cash (outflow)/inflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2023
Derivatives settled gross:
Foreign currency forward contracts /H1118/H1118/H1118/H111816
– outflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,524,551) – – (1,524,551)
– inflow /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,523,187 – – 1,523,187
Contractual undiscounted cash outflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at December 31, 2024
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 520,111 75,647 98,988 694,746 678,777
Trade and bills payables /H1118/H1118/H111823 397,151 – – 397,151 397,151
Other payables and accruals /H1118 24 326,432 – – 326,432 326,432
1,243,694 75,647 98,988 1,418,329 1,402,360
Contractual undiscounted cash outflow
Note
Within 1 year
or on demand
More than
1 year but less
than 2 years
More than
2 years but less
than 5 years Total
Carrying
amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 30 June 2025
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 576,929 16,287 224,852 818,068 794,347
Trade and bills payables /H1118/H1118/H111823 356,115 – – 356,115 356,115
Other payables and accruals /H1118 24 363,754 – – 363,754 363,754
1,296,798 16,287 224,852 1,537,937 1,514,216
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s exposure to interest rate risks arises primarily from
interest-bearing loans. Borrowings issued at variable rates and fixed rates expose the Group to cash flow interest rate
risk and fair value interest rate risk respectively. The Group’s interest rate risk profile as monitored by management
is set out in (i) below.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 528 ---
(i) Interest rate risk profile
At the reporting date, the interest rate profile of the Group’s interest-bearing financial liabilities, as reported
to management was as follows:
At December 31, 2022 At December 31, 2023 At December 31, 2024 At June 30, 2025
Effective
interest rate Amount
Effective
interest rate Amount
Effective
interest rate Amount
Effective
interest rate Amount
% RMB’000 % RMB’000 % RMB’000 % RMB’000
Fixed rate borrowings:
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H11182.95%-3.50% 495,252 2.50%-2.70% 410,325 2.30%-2.70% 480,199 2.18%-2.50% 564,331
Variable rate
borrowings:
Bank loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 2.60%-2.70% 184,059 2.25%-2.70% 198,578 2.25%-2.50% 230,016
Total interest-bearing
financial liabilities /H1118/H1118 495,252 594,384 678,777 794,347
Fixed rate borrowings as
a percentage of total
borrowings /H1118/H1118/H1118/H1118/H1118/H1118 100.00% 69.03% 70.74% 71.04%
(ii) Sensitivity analysis
At December 31, 2022, 2023 and 2024 and June 30, 2025, it is estimated that a general increase/decrease of
100 basis points in interest rates, with all other variables held constant, would have decreased/increased the Group’s
profit after tax and retained profits by approximately nil, RMB1,380,000, RMB1,489,000 and RMB1,725,000,
respectively.
The sensitivity analysis above indicates the instantaneous change in the Group’s profit after tax (and
accumulated losses) that would arise assuming that the change in interest rates had occurred at the end of the
reporting period and had been applied to re-measure those financial instruments held by the Group which expose the
Group to fair value interest rate risk at the end of the reporting period. In respect of the exposure to cash flow interest
rate risk arising from floating rate non-derivative instruments held by the Group at the end of the reporting period,
the impact on the Group’s profit after tax (and accumulated losses) is estimated as an annualized impact on interest
expense or income of such a change in interest rates. The analysis is performed on the same basis during the Track
Record Period.
(d) Currency risk
The Group is exposed to currency risk primarily through intra-group transactions which give rise to intra-group
loans that are denominated in USD. Based on the risk exposure of the intercompany loans, the Group adopts foreign
currency forward contracts with the notional amounts of RMB146,476,000, RMB49,579,000, nil and nil, respectively,
as at December 31, 2022, 2023 and 2024 and June 30, 2025, which equal to the balances of the intra-group loans to
offset the currency risk. Therefore, the directors of the Company considered the Group’s exposure to foreign currency
risk is not significant during the Track Record Period.
(e) Fair value measurement
(i) Financial assets measured at fair value
Fair value hierarchy
The following table presents the fair value of the Target Group’s financial instruments measured at the end of
the reporting period on a recurring basis, categorized into the three-level fair value hierarchy as defined in IFRS 13,
Fair value measurement. The level into which a fair value measurement is classified is determined with reference to
the observability and significance of the inputs used in the valuation technique as follows:
 Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active
markets for identical assets or liabilities at the measurement date.
APPENDIX I ACCOUNTANTS’ REPORT
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 Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet
Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market
data are not available.
 Level 3 valuations: Fair value measured using significant unobservable inputs.
Analysis on fair value measurement of derivative financial instruments as at December 31, 2022, 2023 and
2024 and June 30, 2025 are as follows:
Fair value at
December 31,
2022
Fair value measurement at December 31, 2022
categorized into
Level 1 Level 2 Level 3
RMB’000
Recurring fair value measurement
Assets:
Derivative financial instruments
– Foreign currency forward contracts /H1118/H1118/H1118/H1118 28 – 28 –
Liabilities:
Derivative financial instruments
– Foreign currency forward contracts /H1118/H1118/H1118/H1118(1,216) – (1,216) –
Fair value at
December 31,
2023
Fair value measurement at December 31, 2023
categorized into
Level 1 Level 2 Level 3
RMB’000
Recurring fair value measurement
Liabilities:
Derivative financial instruments
– Foreign currency forward contracts /H1118/H1118/H1118/H1118/H1118(1,364) – (1,364) –
The balance of derivative financial instruments as at December 31, 2024 and June 30, 2025 is nil.
During the years ended December 31, 2022, 2023 and 2024 and June 30, 2025, there were no transfers between
Lever 1 or Level 2, or transfers into or out of Level 3. The Group’s policy is to recognize transfers between levels
of fair value hierarchy as at the end of the reporting period in which they occur.
V aluation techniques and inputs used in Level 2 fair value measurements
The fair value of foreign currency forward contracts in Level 2 is determined by discounting the
difference between the contractual forward price and the current forward price. The discount rate used is
derived from the relevant government yield curve as at the end of the reporting period plus an adequate
constant credit spread.
(ii) Fair value of financial assets and liabilities carried at other than fair value
All financial instruments carried at cost or amortized cost that were not materially different from their fair
values as at 31 December 2022, 2023 and 2024 and June 30, 2025.
APPENDIX I ACCOUNTANTS’ REPORT
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31 COMMITMENTS
Commitments outstanding at December 31, 2022, 2023 and 2024 and June 30, 2025 not provided for in the
Historical Financial Information were as follows:
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Contracted for but not provided for
property, plant and equipment /H1118/H1118/H1118395,019 254,414 203,582 50,747
32 MATERIAL RELATED PARTY TRANSACTIONS
(a) Key management personnel remuneration
Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors
as disclosed in Note 8 and certain of the highest paid employees as disclosed in Note 9, is as follows:
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Short-term employee benefits /H1118 19,916 22,106 22,110 10,477 13,455
Contributions to defined
contribution retirement plan /H1118 119 163 142 74 84
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118142 497 463 1,086 682
20,177 22,766 22,715 11,637 14,221
Total remuneration is included in “staff costs” (see Note 6(b)).
(b) Name and relationship with related parties
Name of party Relationship with the Group
Qisda Corporation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Immediate parent of the Group
BenQ Medical Devices (Shanghai) Co., Ltd.׼
ਿᔼᐕኜ૛(ɪऎ)ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Intelligent Technology (Shanghai) Co.,
Ltd.Ҧ(ɪऎ)ʮ̡*/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Telecom Technology (Shanghai) Co., Ltd.
Ҧ(ɪऎ)ʮ̡*/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
Dasin Medical Technology (Suzhou) Co., Ltd. ༺
Ҧ(ᘽψ)ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
Qisda (Suzhou) Co., Ltd.ʮ
̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Biotech (Shanghai) Co., Ltd.Ҧ
ஔ (ɪऎ)ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Guru Software (Suzhou) Co., Ltd.ਿ஼
௤ழ΁(ᘽψ)ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Sanfeng Medical Devices (Shanghai) Co.,
Ltd.ਿɧᔮᔼᐕኜҿ(ɪऎ)ʮ̡* /H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
BenQ Materials Co., Ltd.ʮ̡* /H1118/H1118Controlled by the immediate parent of the Group
BenQ Materials Medical Technology (Suzhou)
Co., Ltd.Ҧ(ᘽψ)ʮ̡* /H1118/H1118/H1118
Controlled by the immediate parent of the Group
APPENDIX I ACCOUNTANTS’ REPORT
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Name of party Relationship with the Group
Qisda Optronics (Suzhou) Co., Ltd. ᘽψԳ˰༺
ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
K2 (Shanghai) International Medical Inc. ฺྡ
(ɪऎ)ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
Suzhou Luoyan Automation Equipment Co., Ltd.
ʮ̡* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Controlled by the immediate parent of the Group
Nanjing Yinxia Healthcare Industry Development
Co., Ltd.ʮ̡* /H1118/H1118/H1118
Associate of the Group
Guigang Donghui Medical Investment Co., Ltd.
ʮ̡ * /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
* The official names of these entities are in Chinese. The English translation of the company names is for
identification purpose only.
(c) Significant related party transactions
Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Purchase of goods from
Qisda Corporation and its
subsidiaries (excluding the Group,
together as “Qisda Group”) /H1118/H1118/H1118/H11189,282 11,811 7,615 2,775 5,336
Purchase of services from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,376 2,372 1,865 1,007 716
Purchase of intangible assets from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2 1––––
Purchase of property, plant and
equipment from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,811 – 1,025 675 389
Short-term lease expense to
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,242 3,423 4,455 2,106 1,572
Rendering of services to
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,641 2,147 3,486 755 1,288
Rental income from
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,648 4,679 4,486 2,109 2,167
Loan from
Qisda Optronics (Suzhou) Co., Ltd. /H1118 120,000 ––––
Loan repaid to
Qisda Optronics (Suzhou) Co., Ltd. /H1118 (290,000) ––––
Loan to
Guigang Donghui Medical
Investment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (80,000)
Loan repaid by
Guigang Donghui Medical
Investment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 60,000
APPENDIX I ACCOUNTANTS’ REPORT
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Y ears ended December 31, Six months ended June 30,
2022 2023 2024 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest paid to
Qisda Optronics (Suzhou) Co., Ltd. /H1118 (9,526) ––––
Interest expense from
Qisda Optronics (Suzhou) Co., Ltd. /H1118 5,21 9––––
Interest income from
Guigang Donghui Medical
Investment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 1 3 7
Payment on behalf of
Nanjing Yinxia Healthcare (Note (i)) –––– 1,220
(d) Balances with related parties
Trade in nature
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,704 1,428 2,052 650
Trade payables
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,210 2,540 4,170 3,382
Prepayments, deposits and other
receivables
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118948 37 2,142 1,427
Other payables and accruals
Qisda Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,630 1,491 1,885 2,742
Non-trade in nature
As at December 31, As at June 30,
2022 2023 2024 2025
RMB’000 RMB’000 RMB’000 RMB’000
Other receivable
Nanjing Yinxia Healthcare
(Note (i)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,990 66,990 66,990 68,210
Guigang Donghui Medical
Investment Co., Ltd. (Note (ii)) /H1118/H1118 – – – 20,059
66,990 66,990 66,990 88,269
Notes:
(i) The directors of the Company expect that the receivables due from Nanjing Yinxia Healthcare of
RMB68,210,000 as at June 30, 2025 will be settled in the second quarter of 2026.
(ii) The receivable from Guigang Donghui Medical Investment Co., Ltd. was unsecured, bearing an interest
rate of 2.5% and repayable within one year due in May 2026. The directors of the Company expect that
such receivables would not be received before the completion of the listing.
APPENDIX I ACCOUNTANTS’ REPORT
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33 IMMEDIATE AND ULTIMATE CONTROLLING PARTY
At December 31, 2022, 2023 and 2024 and June 30, 2025, the directors of the Company consider that the
immediate parent and ultimate controlling party of the Group to be Qisda Corporation, a company established in
Taiwan.
34 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE FOR THE TRACK RECORD PERIOD
Up to the date of this report, the IASB has issued a number of amendments, new standards and interpretations,
which are not yet effective for the Track Record Period and which have not been adopted in preparing the Historical
Financial Information. These developments include:
Effective for accounting
periods beginning
on or after
Amendments to IFRS 9 and IFRS 7: Contracts Referencing
Nature-dependent Electricity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2026
Amendments to IFRS 9 and IFRS 7: Amendments to the Classification and
Measurement of Financial Instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2026
Annual Improvements to IFRS Accounting Standards – V olume 11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2026
IFRS 18, Presentation and Disclosure in Financial Statements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2027
IFRS 19, Subsidiaries without Public Accountability: Disclosures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118January 1, 2027
Amendments to IFRS 10 and IAS 28, Sale or contribution of assets between an
investor and its associate or joint venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118To be determined
The Group is in the process of making an assessment of what the impact of these developments is expected
to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a
significant impact on the consolidated financial statements of the Group.
IFRS 18, Presentation and disclosure in financial statements
IFRS 18 will replace IAS 1, Presentation of financial statements and aims to improve the transparency and
comparability of information about an entity’s financial statements. IFRS 18 is effective for annual reporting periods
beginning on or after 1 January 2027 and is to be applied retrospectively.
Among other changes, under IFRS 18, entities are required to classify all income and expenses into five
categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and
income tax categories. Entities are also required to provide specific disclosures about management-defined
performance measures in a single note in the financial statements.
The Group does not plan to early adopt IFRS 18 and is still in the process of assessing the impact of the
adoption.
35 SIGNIFICANT NON-ADJUSTING EVENTS AFTER THE TRACK RECORD PERIOD
In July 2025, the Group established two wholly-owned subsidiaries, Nanjing BenQ Nursing Center Co., Ltd.
(ʮ̡) and Suzhou BenQ Nursing Center Co., Ltd. (ʮ̡), which will
primarily engage in the provision of chronic medical care and rehabilitation services.
The issued capital of Nanjing BenQ Nursing Center Co., Ltd. is RMB3,000,000, of which RMB1,500,000 was
paid on August 22, 2025. The issued capital of Suzhou BenQ Nursing Center Co., Ltd. is RMB3,000,000, of which
RMB1,500,000 was paid on September 25, 2025.
Subsequent Financial Statements
No audited financial statements have been prepared by the Company and its subsidiaries in respect of any
period subsequent to June 30, 2025.
APPENDIX I ACCOUNTANTS’ REPORT
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The information set forth in this appendix does not form part of the Accountants’ Report
from KPMG, Certified Public Accountants, Hong Kong, the reporting accountants of the
Company, as set forth in Appendix I to this Prospectus, and is included herein for illustrative
purposes only. The unaudited pro forma financial information should be read in conjunction
with the section headed “Financial Information” in this Prospectus and the Accountants’
Report set out in Appendix I to this Prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE
ASSETS
The following unaudited pro forma statement of adjusted net tangible assets of BenQ BM
Holding Cayman Corp. (the “Company”) and its subsidiaries (collectively the “Group”) is
prepared in accordance with Rule 4.29 of the Listing Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited and set out below to illustrate the effect of the
Global Offering on the consolidated net tangible assets attributable to equity shareholders of
the Company as at June 30, 2025, as if the Global Offering had taken place on June 30, 2025.
The unaudited pro forma statement of adjusted net tangible assets has been prepared for
illustrative purpose only and because of its hypothetical nature, it may not give a true picture
of the financial position of the Group had the Global Offering been completed as at June 30,
2025 or any future date.
Consolidated net
tangible assets
attributable to the
equity shareholders
of the Company as at
June 30, 2025 (1)
Estimated net
proceeds from
the Global
Offering (2)(4)
Unaudited pro
forma adjusted net
tangible assets
attributable to the
equity shareholders
of the Company
Unaudited pro forma
adjusted net tangible
assets attributable to the
equity shareholders of the
Company per Share
RMB’000 RMB’000 RMB’000 RMB (3) HK$(4)
Based on an Offer Price of
HK$9.34 per Share /H1118/H1118/H1118/H1118/H1118 1,649,655 535,725 2,185,380 7.01 7.71
Based on an Offer Price of
HK$11.68 per Share /H1118/H1118/H1118/H1118 1,649,655 672,240 2,321,895 7.44 8.19
Notes:
(1) The consolidated net tangible assets attributable to equity shareholders of the Company as of June 30, 2025
have been calculated based on the audited total equity attributable to equity shareholders of the Company of
RMB1,666,031,000 as at June 30, 2025, after deduction of the intangible assets of RMB16,376,000 as at June
30, 2025, which is extracted from the Accountant’s Report set out in Appendix I to this Prospectus.
(2) The estimated net proceeds from this Global Offering are based on 67,000,000 Shares to be issued pursuant
to the Global Offering and the indicative Offer Prices of HK$9.34 per Share and HK$11.68 per Share, being
the low end and high end of the Offer Price range respectively, after deduction of the estimated underwriting
fees and other related listing expenses paid or payable by the Group (excluding the listing expenses of
RMB34,970,000 that have been charged to profit or loss during the Track Record Period), and does not take
into account of any shares to be issued pursuant to the Pre-IPO Share Option plan.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


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(3) The unaudited pro forma adjusted net tangible assets attributable to the equity shareholders of the Company
per Share is arrived at after the above adjustment and on the basis that a total of 311,945,001 shares were in
issue immediately following the completion of the Global Offering assuming the Global Offering had been
completed on June 30, 2025 without taking into account of any shares to be issued pursuant to the Pre-IPO
Share Option plan.
(4) For illustrative purpose, the estimated net proceeds from the Global Offering and the unaudited pro forma
adjusted consolidated net tangible assets per Share are converted from the Hong Kong dollar into Renminbi
at the exchange rate of HK$1.00 to RMB0.90897, the exchange rate set by the People’s Bank of China
(“PBOC”) prevailing on December 3, 2025. No representation is made that the Hong Kong dollar amounts have
been, could have been or may be converted to Renminbi, or vice versa, at the rate or at any other rates or at
all.
(5) The Group’s property interests including buildings and construction in progress (which is accounted for as
property, plant and equipment) and leasehold land (which is accounted for as right-of-use assets) as at October
31, 2025 have been valued by Cushman & Wakefield Limited, an independent property valuer. The relevant
property valuation report is set out in Appendix III to this prospectus. The above unaudited pro forma statement
of adjusted net tangible assets does not take into account the surplus arising from the revaluation of the
Group’s property interests amounting to approximately RMB2,110 million. Revaluation surplus has not been
recorded in the Historical Financial Information of the Group and will not be recorded in the consolidated
financial statements of the Group in the future periods as the Group’s property, plant and equipment and
right-of-use assets are stated at cost less accumulated depreciation and impairment losses, if any. If the
valuation surplus were recorded in the Group’s financial statements, additional annual depreciation of
approximately RMB55 million would be charged against the profit in the future periods.
(6) No adjustment has been made to the unaudited pro forma adjusted net tangible assets attributable to equity
shareholders of the Company to reflect our trading results or other transactions entered into subsequent to June
30, 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


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The following is the text of a report received from the reporting accountants, KPMG,
Certified Public Accountants, Hong Kong, in respect of the Group’ s pro forma financial
information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of BenQ BM Holding Cayman Corp.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of BenQ BM Holding Cayman Corp. (the “Company”) and its
subsidiaries (collectively the “Group”) by the directors of the Company (the “Directors”) for
illustrative purposes only. The unaudited pro forma financial information consists of the
unaudited pro forma statement of adjusted net tangible assets as at June 30, 2025 and related
notes as set out in Part A of Appendix II to the prospectus dated December 12, 2025 (the
“Prospectus”) issued by the Company. The applicable criteria on the basis of which the
Directors have compiled the pro forma financial information are described in Part A of
Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the ordinary shares of the Company (the “Global Offering”)
on the Group’s financial position as at June 30, 2025 as if the Global Offering had taken place
at June 30, 2025. As part of this process, information about the Group’s financial position as
at June 30, 2025 has been extracted by the Directors from the Group’s historical financial
information included in the Accountants’ Report as set out in Appendix I to the Prospectus.
Directors’ Responsibilities for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 537 ---
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements”, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of events or transactions as at June 30, 2025 would have been
as presented.
A reasonable assurance engagement to report on whether the pro forma financial
information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial information provide a reasonable basis for presenting
the significant effects directly attributable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 538 ---
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in the Prospectus.
Opinion
In our opinion:
(a) the pro forma financial information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group, and
(c) the adjustments are appropriate for the purposes of the pro forma financial
information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG
Certified Public Accountants
8th Floor, Prince’s Building
10 Chater Road
Central, Hong Kong
December 12, 2025
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 539 ---
The following is the text of a letter , summary of valuations and valuation report prepared
for the purpose of incorporation in this prospectus received from Cushman & Wakefield
Limited, an independent property valuer , in connection with its opinion of market values of the
properties held by the Group in the PRC as at 31 October 2025.
27/F, One Island East
Taikoo Place
18 Westlands Road
Quarry Bay
Hong Kong
The Board of Directors
BenQ BM Holding Cayman Corp.
Room 1901, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
12 December 2025
Dear Sirs,
INSTRUCTIONS, PURPOSE & V ALUATION DATE
In accordance with the instructions of BenQ BM Holding Cayman Corp. (the
“Company ”) for Cushman & Wakefield Limited (“ C&W”) to value certain properties
(individually the “ Property ” or collectively the “ Properties ”) in the People’s Republic of
China (the “ PRC”) (as more particularly described in the attached valuation report) in which
the Company and/or its subsidiaries (together referred to as the “ Group ”) have interests, we
confirm that we have carried out inspections, made relevant enquiries and obtained such further
information as we considered necessary for the purpose of providing you with our opinion of
the values of the Properties as at 31 October 2025 (the “ Valuation Date ”).
V ALUATION BASIS
Our valuation of each of the Properties represents its market value which in accordance
with the HKIS V aluation Standards 2024 published by the Hong Kong Institute of Surveyors
is defined as “the estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm’s length transaction, after
proper marketing and where the parties had each acted knowledgeably, prudently and without
compulsion”.
We confirm that the valuations comply with the requirements outlined in the HKIS
V aluation Standards, the RICS Global V aluation Standards and the International V aluation
Standards, and Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities
on The Stock Exchange of The Hong Kong Limited.
Our valuation of each of the Properties is on an entirety interest basis.
APPENDIX III PROPERTY V ALUATION
– III-1 –


--- page 540 ---
V ALUATION ASSUMPTIONS
Our valuation of each of the Properties excludes an estimated price inflated or deflated
by special terms or circumstances such as atypical financing, sale and leaseback arrangement,
special considerations or concessions granted by anyone associated with the sale, or any
element of value available only to a specific owner or purchaser.
In the course of our valuations of the Properties, we have relied on the information and
advice given by the Company and the Company’s PRC legal adviser, Commerce & Finance
Law Offices* (הthe “ PRC Legal Adviser ”), regarding the titles to the
Properties and the interests of the Group in the Properties. Unless otherwise stated in the legal
opinion provided for the Properties, in valuing the Properties, we have assumed that Company
has enforceable title to the Properties and has free and uninterrupted rights to use, occupy or
assign the Properties for the whole of the respective unexpired terms as granted.
The status of titles and grant of major certificates, approvals and licences, in accordance
with the information provided by the Company are set out in the notes of the valuation report.
No allowance has been made in our valuations for any charges, pledges or amounts owing
on the Properties nor any expenses or taxation which may be incurred in effecting a sale.
Unless otherwise stated, it is valued on the basis that the Properties are free from
encumbrances, restrictions and outgoings of an onerous nature which could affect their values.
V ALUATION METHOD
In respect of the Properties, which are held for owner-occupation, due to the specific
nature of the properties and lack of sales transactions of the properties of the same
characteristics in the vicinity, we have mainly adopted Depreciated Replacement Cost
(“DRC”) Method. DRC Method is based on an estimate of the market value of the land in its
existing use, plus the current cost of replacement of the improvements, less allowance for
physical deterioration and all relevant forms of obsolescence and optimisation. For the land
portion, we have generally made reference to comparable land sales evidence as available in
the relevant market subject to appropriate adjustments including but not limited to location,
time, size etc. For the portion that is under development, we have valued on the basis that it
will be developed and completed in accordance with the latest development proposal provided
to us by the Group. We have assumed that all consents, approvals, and licences from relevant
government authorities for the development proposals have been obtained without onerous
conditions or delays. We have also assumed the design and construction of the development are
in compliance with the local planning and other relevant regulations and have been approved
by the relevant authorities. In arriving at our valuations, we have taken into account the
incurred construction costs as provided to us by the Group. DRC Method is subject to service
potential of the entity from the use of assets as a whole paying due regard to the total assets
employed. The market value arrived using DRC Method applies to the whole of the complex
or development as a unique interest, and no piecemeal transaction of the complex or
development is assumed.
APPENDIX III PROPERTY V ALUATION
– III-2 –


--- page 541 ---
SOURCE OF INFORMATION
In the course of our valuations, we have relied to a very considerable extent on the
information given by the Company and have accepted advice on such matters as planning
approvals or statutory notices, easements, tenure, identification of the Properties, particulars of
occupancy, development scheme, construction cost, completion date, site and floor areas,
interest attributable to the Group and all other relevant matters.
Dimensions, measurements and areas included in the valuation report are based on the
information provided to us and are therefore only approximations. We have had no reason to
doubt the truth and accuracy of the information provided to us by the Company which is
material to the valuations. We were also advised by the Company that no material facts have
been omitted from the information provided to us. We have been provided with sufficient
information to reach an informed view and we have no reason to suspect that any material
information has been withheld.
We would point out that the copies of documents provided to us are mainly compiled in
Chinese characters and the transliteration into English represents our understanding of the
contents. We would therefore advise the Company to make reference to the original Chinese
edition of the documents and consult your legal adviser regarding the legality and
interpretation of these documents.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Sustainability and Environmental, Social, and Governance (“ ESG”) factors are
considerations which some market participants may take into account in their decision-making
and may be reflected in pricing. In the course of our valuations, we have, where applicable,
taken into account, to the extent that current market participants would, of the material
sustainability features of the properties as observed from inspections, information supplied or
notified to us by the Company. For the avoidance of doubt, our valuations do not constitute
ESG risk assessments or ratings, which are outside our expertise and require additional
specialists’ advice beyond the scope of the valuer.
TITLE INVESTIGATION
We have been provided by the Company with copies of documents in relation to the
current titles to the Properties. However, we have not been able to conduct title searches to
verify the ownership of the Properties and we have not inspected the original documents to
ascertain any amendments which may not appear on the copies handed to us. We are also
unable to ascertain the title of the Properties in the PRC and we have therefore relied on the
advice given by the Company or the PRC Legal Adviser regarding the interests of the Company
in the Properties.
APPENDIX III PROPERTY V ALUATION
– III-3 –


--- page 542 ---
SITE INSPECTION
Our valuer, Bowen Huang (Master of Property and Development and Master of
Construction Project Management with 2 years of experience of property valuation) of our
Shanghai Office inspected the exterior and, where possible, the interior of the Properties in
Suzhou and Nanjing on 5 and 4 June 2025, respectively. However, we have not carried out any
investigations on site to determine the suitability of the soil conditions and the services etc. for
any future development. Our valuations are prepared on the assumption that these aspects are
satisfactory and that no extraordinary costs or delays will be incurred during the construction
period. Moreover, no structural survey has been made, but in the course of our inspection, we
did not note any serious defects. We are, however, not able to report that the Properties are free
of rot, infestation or any other structural defects. No tests were carried out to any of the
services.
Unless otherwise stated, we have not carried out on-site measurements to verify the site
and floor areas of the Properties and we have assumed that the areas shown on the copies of
the documents handed to us are correct.
CURRENCY
Unless otherwise stated, all monetary sums stated in our valuations are in Renminbi
(“RMB”), the official currency of the PRC.
INDEPENDENCE
We hereby confirm that C&W and the undersigned have no pecuniary or other interests
that could conflict with the proper valuation of the Properties or could reasonably be regarded
as being capable of affecting our ability to give an unbiased opinion.
We attach herewith summary of valuations and valuation report.
Y ours faithfully,
For and on behalf of
Cushman & Wakefield Limited
Grace Lam
MHKIS, MRICS, R.P .S. (GP)
Senior Director
V aluation & Advisory Services, Greater China
Notes:
(1) Ms. Grace Lam is a Member of the Royal Institution of Chartered Surveyors, a Member of the Hong Kong
Institute of Surveyors and a Registered Professional Surveyor (General Practice). Ms. Lam has over 30 years
of experience in the professional property valuation and advisory services in the Greater China region and
various overseas countries. Ms. Lam has sufficient current national knowledge of the market, and the skills and
understanding to undertake the valuations competently.
(2) * Company name in English translation for identification only.
APPENDIX III PROPERTY V ALUATION
– III-4 –


--- page 543 ---
SUMMARY OF V ALUATIONS
Property
Market value in
existing state as at
31 October 2025
Interest
attributable
to the Group
Market value in
existing state
attributable to
the Group as at
31 October 2025
(RMB) (%) (RMB)
Properties held by the Group for owner-occupation in the PRC
1. Suzhou BenQ Medical Center,
181 Zhuyuan Road, High-tech Zone,
Suzhou, Jiangsu Province, the PRC ( ʕ਷
ᘽψ̹৷อਜ϶෤༩181׼
ਿᔼ৫)
1,164,000,000 100 1,164,000,000
2. Nanjing BenQ Medical Center,
71 Hexi Street, Jianye District, Nanjing,
Jiangsu Province, the PRC (޲
Гɽ൑71ਿᔼ
৫)
3,001,000,000 100 3,001,000,000
Grand Total: 4,165,000,000 4,165,000,000
APPENDIX III PROPERTY V ALUATION
– III-5 –


--- page 544 ---
V ALUATION REPORT
Properties held by the Group for owner-occupation in the PRC
Property Description and tenure
Particulars of
occupancy
Market value in
existing state as at
31 October 2025
1. Suzhou BenQ
Medical Center,
181 Zhuyuan
Road, High-tech
Zone, Suzhou,
Jiangsu Province,
the PRC
(ᘽψ̹
৷อਜ϶෤༩181
ਿᔼ৫)
Suzhou BenQ Medical Center is
a medical development. It is
developed in various phases on a
parcel of land of 125,550.10
sq.m.
Phases I and II of the Property
were completed in about 2012
and 2024, respectively with a
total gross floor area of
172,444.01 sq.m.
As at the V aluation
Date, Phases I and II
of the Property were
occupied by the
owner for various
medical uses. Phase
III of the Property
was under
construction,
estimated to
complete in 2027.
RMB1,164,000,000
(RENMINBI ONE
BILLION ONE
HUNDRED AND
SIXTY -FOUR
MILLION)
(100% interest
attributable to the
Group:
RMB1,164,000,000)
(Please see Note(7) )According to the development
scheme provided by the
Company, Phase III of the
Property, with a construction
scale of 86,537.48 sq.m., is
expected to be delivered by the
end of 2027.
The Property is located at the
south of Zhuyuan Road ( ϶෤༩)
and east of Changjiang Road (ڗ
Ϫ༩), High-tech Zone, Suzhou,
Jiangsu Province, the PRC.
Developments nearby are mainly
residential and commercial in
nature.
According to the Company, the
Property is mainly for medical
use; there are neither
environmental issues and
litigation disputes; nor any plans
to change the use of the
Property.
The land use rights of the
Property have been granted for a
land use term due to expire on
25 August 2054 for medical use.
APPENDIX III PROPERTY V ALUATION
– III-6 –


--- page 545 ---
Notes:
(1) According to Certificate of Real Estate Ownership No. (2024) 5031323 dated 19 December 2024, the land use
rights of the Property with a site area of 125,550.10 sq.m. have been vested in Suzhou BenQ Medical Center
Co., Ltd.* (ʮ̡) for a land use term due to expire on 25 August 2054 for medical use. A
total gross floor area of 172,444.01 sq.m. is designated for medical use.
(2) According to a Contract for Grant of State-owned Land Use Rights dated 26 August 2004, the land use rights
of the Property have been contracted to be granted to Suzhou BenQ Medical Center Co. Ltd (ਿᔼ৫
ʮ̡) by the Nations Land and Resources Bureau of Suzhou Jiangsu Province with salient details
extracted as below:
Site Area: 125,550.10 sq.m.
Land Use: Medical
Land Use Term: 50 years
Land Premium: RMB188,325,150
Plot Ratio: /H113491.5
(3) According to Planning Permit for Construction Works No. 3205052024GG0150413 dated 29 November 2024,
the construction works with a construction scale of 86,537.48 sq.m. comply with the requirements of the urban
rural planning.
(4) According to Business Licence No. 91320505761504799T dated 1 November 2023, Suzhou BenQ Medical
Center Co. Ltd. (ʮ̡) has been established as a limited company with a registered capital
of RMB601,975,000.
(5) According to Permit for Commencement of Construction Works No. 320505202506180201, a development
with construction scale of 86,537.48 sq.m. meets all prerequisites for commencement and is granted with
permission to proceed.
(6) As advised by the Company, the construction cost incurred (excluding the land cost) for the Phase III
development as at the V aluation Date was approximately RMB55,000,000 (excluding value-added tax
(“VAT”)). The estimated outstanding construction cost for the Phase III development to complete was
approximately RMB615,000,000 (excluding V A T). We have taken into account such costs in the course of our
valuation.
(7) Breakdown of the market value of the Property:
Portion Value as at the Valuation Date
Phase sI&I I (completed portion) RMB1,034,000,000
Phase III (under construction) RMB130,000,000
(8) We have been provided with a legal opinion regarding the property interest by the Company’s PRC Legal
Adviser, which contains, inter alia, the following:
(a) Suzhou BenQ Hospital Co., Ltd. (ʮ̡) has legally obtained the real estate ownership
of the Property within the land use term as specified in the relevant Certificate of Real Estate
Ownership.
(b) the Property is free from mortgage; and
(c) Suzhou BenQ Hospital Co., Ltd. (ʮ̡) has obtained necessary approvals for the
block of building under construction in accordance with its construction process.
(9) The status of the title and grant of major approvals and licences in accordance with the information provided
by the Company and the opinion of the PRC Legal Adviser:
Certificate of Real Estate Ownership /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Y es (Part)
Contract for Grant of State-owned Land Use Rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Planning Permit for Construction Works /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Permit for Commencement of Construction Works /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Business Licence /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
(10) The average unit rate of medical land parcels in the locality as at the V aluation Date is in the range of
RMB1,200 per sq.m. to RMB1,900 per sq.m.
(11) Our valuer, Bowen Huang (Master of Property and Development and Master of Construction Project
Management with 2 years of experience of property valuation) of our Shanghai Office, inspected the Property
on 5 June 2025.
APPENDIX III PROPERTY V ALUATION
– III-7 –


--- page 546 ---
V ALUATION REPORT
Property Description and tenure
Particulars of
occupancy
Market value in
existing state as at
31 October 2025
2. Nanjing BenQ
Medical Center, 71
Hexi Street, Jianye
District, Nanjing,
Jiangsu Province,
the PRC
(ԯ̹
Гɽ൑71
ਿᔼ৫)
Nanjing BenQ Medical Center is
a medical development. It is
developed in three phases on a
parcel of land of 257,375.81
sq.m.
Five buildings were completed in
2008 and one building was
completed in 2024 with a total
gross floor area of 327,754.45
sq.m.
As at the V aluation
Date, the completed
portion was occupied
by the owner for
various medical uses.
The remaining land is
vacant and reserved
for further
development.
RMB3,001,000,000
(RENMINBI THREE
BILLION AND ONE
MILLION)
(100% interest
attributable to the
Group:
RMB3,001,000,000)
(Please see Note(6) )
The remaining land is vacant for
further development. According
to the development scheme
provided by the Company, this
portion of the Property has a
total planned gross floor area of
229,684.20 sq.m. as below:
Proposed use
Planned
Gross Floor
Area
(sq.m.)
Medical Dormitory
Building 31,868.07
Special-Needs
Medical Building 117,475.40
Experimental
Center 32,656.42
Activity Center 47,684.31
Grand Total: 229,684.20
The Property is located at the
south of Hexi Street
(Гɽ൑) and east of
Huangshan Road ( රʆ༩),
Jianye District, Nanjing,
Jiangsu Province, the PRC.
Developments nearby are mainly
office and residential in nature.
According to the Company, the
Property is for medical use; there
are neither environmental issues
and litigation disputes; nor any
plans to change the use of the
Property.
The land use rights of the
property have been granted for a
land use term due to expire on
15 September 2054 for medical
use.
APPENDIX III PROPERTY V ALUATION
– III-8 –


--- page 547 ---
Notes:
(1) According to Certificate of Real Estate Ownership No. (2025)0008298 dated 29 April 2025, the land use rights
of the Property with a site area of 257,375.81 sq.m. have been vested in Nanjing BenQ Medical Center Co.,
Ltd.* (ʮ̡) for a land use term due to expire on 15 September 2054 for medical use. A total
gross floor area of 327,754.45 sq.m. is designated for medical use.
(2) According to a Contract for Grant of State-owned Land Use Rights issued by the Nanjing Planning and Natural
Resources and Planning Bureau on 16 September 2004, the land use rights of the Property have been contracted
to be granted to Nanjing BenQ Medical Center Co., Ltd (ʮ̡) by the Nanjing Planning and
Natural Resources and Planning Bureau with salient details extracted below:
Site Area: 260,066.10 sq.m.
Land Use: Medical
Land Use Term: 50 years
Land Premium: RMB70,217,847
Plot Ratio: 2.0
(3) According to Planning Permit for Construction Land No. (2004)0029 dated 2 August 2004, the construction
land of 279,051 sq.m. located at Jianye District for medical land use complies with the requirements of the
urban rural planning.
(4) According to Construction Works Completion Examination Certificate No. 32010120240237 dated 31
December 2024, the filling materials of “Major Central Building (ɽᅽ)” and Footbridge ( ஹ఼) for
Construction Works Completion have been inspected and meet the required standards.
(5) According to Business Licence No. 91320100717869766N dated 19 October 2023, Nanjing BenQ has been
established as a limited company with a registered capital of USD192,014,983.65.
(6) Breakdown of the market value of the Property:
Portion Value as at the Valuation Date
Phase sI&I I (completed portion) RMB2,622,000,000
V acant land for future development RMB379,000,000
(7) We have been provided with a legal opinion regarding the property interest by the Company’s PRC Legal
Adviser, which contains, inter alia, the following:
(a) Nanjing BenQ Medical Center Co., Ltd (ʮ̡) has legally obtained the real estate
ownership of the Property within the land use terms as specified in the relevant Certificate of Real Estate
Ownership; and
(b) the Property is free from mortgage.
(8) The status of the title and grant of major approvals and licences in accordance with the information provided
by the Company and the opinion of the PRC Legal Adviser:
Certificate of Real Estate Ownership /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Y es (Part)
Contract for Grant of State-owned Land Use Rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Planning Permit for Construction Land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Construction Works Completion Examination Certificate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
Business Licence /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Ye s
(9) The average unit rate of medical land parcels in the locality as at the V aluation Date is in the range of
RMB5,200 per sq.m. to RMB6,200 per sq.m.
(10) Our valuer, Bowen Huang (Master of Property and Development and Master of Construction Project
Management with 2 years of experience of property valuation) of our Shanghai Office, inspected the Property
on 4 June 2025.
APPENDIX III PROPERTY V ALUATION
– III-9 –


--- page 548 ---
Set out below is a summary of certain provisions of the constitution of the Company and
certain aspects of the company laws of the Cayman Islands.
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on 5 January 2009 under the Companies Act. The Company’s constitutional
documents consist of the Memorandum of Association and the Articles of Association.
1. MEMORANDUM OF ASSOCIATION
The Memorandum provides, inter alia , that the liability of the members of the Company
is limited, that the objects for which the Company is established are unrestricted (and therefore
include acting as an investment holding company) and that the Company shall have full power
and authority to carry out any object not prohibited by the Companies Act or any other law of
the Cayman Islands.
2. ARTICLES OF ASSOCIATION
The Articles were conditionally adopted on December 3, 2025 and will become effective
on the Listing Date. A summary of certain provisions of the Articles is set out below.
2.1 Shares
(a) Classes of Shares
The share capital of the Company consists of a single class of ordinary shares.
(b) V ariation of Rights of Existing Shares or Classes of Shares
If at any time the share capital of the Company is divided into different classes of Shares,
all or any of the rights attached to any class of Shares for the time being issued (unless
otherwise provided by the terms of issue of the Shares of that class) may, whether or not the
Company is being wound up, be varied with the consent in writing of the holders of at least
three-fourths of the issued Shares of that class, or with the approval of a resolution passed by
at least three-fourths of the votes cast by the holders of the Shares of that class present and
voting in person (whether physically or by virtual attendance with the use of technology) or by
proxy at a separate meeting of such holders. The provisions of the Articles relating to general
meetings shall apply mutatis mutandis to every such separate meeting, except that the
necessary quorum shall be two persons together holding (or, in the case of a member being a
corporation, by its duly authorised representative), or representing by proxy, at least one-third
of the issued Shares of that class. Every holder of Shares of the class shall be entitled on a poll
to one vote for every such Share held by him, and any holder of Shares of the class present in
person (whether physically or by virtual attendance with the use of technology), or, by proxy
may demand a poll.
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For the purposes of a separate class meeting, the Board may treat two or more classes of
Shares as forming one class of Shares if the Board considers that such classes of Shares would
be affected in the same way by the proposals under consideration, but in any other case shall
treat them as separate classes of Shares.
Any rights conferred upon the holders of Shares of any class shall not, unless otherwise
expressly provided in the rights attaching to the terms of issue of the Shares of that class, be
deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.
(c) Alteration of Capital
The Company may by ordinary resolution:
(i) increase its share capital by the creation of new Shares of such amount and with such
rights, priorities and privileges attached to such Shares as it may determine;
(ii) consolidate and divide all or any of its share capital into Shares of a larger amount
than its existing Shares. On any consolidation of fully paid Shares and division into
Shares of a larger amount, the Board may settle any difficulty which may arise as
it thinks expedient and, in particular (but without prejudice to the generality of the
foregoing), may as between the holders of Shares to be consolidated determine
which particular Shares are to be consolidated into a consolidated Share, and if it
shall happen that any person shall become entitled to fractions of a consolidated
Share or Shares, such fractions may be sold by some person appointed by the Board
for that purpose and the person so appointed may transfer the Shares so sold to the
purchaser(s) thereof and the validity of such transfer shall not be questioned, and the
net proceeds of such sale (after deduction of the expenses of such sale) may either
be distributed among the persons who would otherwise be entitled to a fraction or
fractions of a consolidated Share or Shares rateably in accordance with their rights
and interests or may be paid to the Company for the Company’s benefit;
(iii) sub-divide its Shares or any of them into Shares of an amount smaller than that fixed
by the Memorandum; and
(iv) cancel any Shares which, as at the date of passing of the resolution, have not been
taken or agreed to be taken by any person and diminish the amount of its share
capital by the amount of the Shares so cancelled.
The Company may by special resolution reduce its share capital or any undistributable
reserve, subject to the provisions of the Companies Act.
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(d) Transfer of Shares
Subject to the terms of the Articles, any member of the Company may transfer all or any
of his Shares by an instrument of transfer. If the Shares in question were issued in conjunction
with rights, options, warrants or units issued pursuant to the Articles on terms that one cannot
be transferred without the other, the Board shall refuse to register the transfer of any such Share
without evidence satisfactory to it of the like transfer of such right, option, warrant or unit.
Subject to the Articles and the requirements of the Stock Exchange, all transfers of Shares
shall be effected by an instrument of transfer in the usual or common form or in such other
form as the Board may approve and may be under hand or, if the transferor or transferee is a
recognised clearing house or its nominee(s), under hand or by machine imprinted signature, or
by such other manner of execution as the Board may approve from time to time.
Execution of the instrument of transfer shall be by or on behalf of the transferor and the
transferee, provided that the Board may dispense with the execution of the instrument of
transfer by the transferor or transferee or accept mechanically executed transfers. The
transferor shall be deemed to remain the holder of a Share until the name of the transferee is
entered in the register of members of the Company in respect of that Share.
Subject to the provisions of the Companies Act, if the Board considers it necessary or
appropriate, the Company may establish and maintain a branch register or registers of members
at such location or locations within or outside the Cayman Islands as the Board thinks fit. The
Board may, in its absolute discretion, at any time transfer any Share on the principal register
to any branch register or any Share on any branch register to the principal register or any other
branch register.
The Board may, in its absolute discretion, decline to register a transfer of any Share (not
being a fully paid Share) to a person of whom it does not approve or on which the Company
has a lien, or a transfer of any Share issued under any share option scheme upon which a
restriction on transfer subsists or a transfer of any Share to more than four joint holders. It may
also decline to recognise any instrument of transfer if the proposed transfer does not comply
with the Articles or any requirements of the Listing Rules.
The Board may decline to recognise any instrument of transfer unless a certain fee, up to
such maximum sum as the Stock Exchange may determine to be payable, is paid to the
Company, the instrument of transfer is properly stamped (if applicable), is in respect of only
one class of Share and is lodged at the relevant registration office or the place at which the
principal register is located accompanied by the relevant share certificate(s) and such other
evidence as the Board may reasonably require is provided to show the right of the transferor
to make the transfer (and if the instrument of transfer is executed by some other person on his
behalf, the authority of that person so to do).
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The register of members may, subject to the Listing Rules and the relevant section of the
Companies Ordinance, be closed at such time or for such period not exceeding in the whole 30
days in each year as the Board may determine (or such longer period as the members of the
Company may by ordinary resolution determine, provided that such period shall not be
extended beyond 60 days in any year).
Fully paid Shares shall be free from any restriction on transfer (except when permitted by
the Stock Exchange) and shall also be free from all liens.
(e) Redemption of Shares
Subject to the provisions of the Companies Act, the Listing Rules and any rights conferred
on the holders of any Shares or attaching to any class of Shares, the Company may issue Shares
that are to be redeemed or are liable to be redeemed at the option of the members or the
Company. The redemption of such Shares shall be effected in such manner and upon such other
terms as the Company may by special resolution determine before the issue of such Shares.
(f) Power of the Company to Purchase its own Shares
Subject to the Companies Act, or any other law or so far as not prohibited by any law and
subject to any rights conferred on the holders of any class of Shares, the Company shall have
the power to purchase or otherwise acquire all or any of its own Shares (which includes
redeemable Shares), provided that the manner and terms of purchase have first been authorised
by ordinary resolution and that any such purchase shall only be made in accordance with the
relevant code, rules or regulations issued from time to time by the Stock Exchange and/or the
Securities and Futures Commission of Hong Kong from time to time in force.
(g) Power of any Subsidiary of the Company to own Shares in the Company
There are no provisions in the Articles relating to the ownership of Shares in the Company
by a subsidiary.
(h) Calls on Shares and Forfeiture of Shares
Subject to the terms of allotment and issue of any Shares (if any), the Board may, from
time to time, make such calls as it thinks fit upon the members in respect of any monies unpaid
on the Shares held by them (whether in respect of par value or share premium). A member who
is the subject of the call shall (subject to receiving at least 14 clear days’ notice specifying the
time or times for payment) pay to the Company at the time or times so specified the amount
called on his Shares. A call may be made payable either in one sum or by instalments, and shall
be deemed to have been made at the time when the resolution of the Board authorising such
call was passed. The joint holders of a Share shall be severally as well as jointly liable for the
payment of all calls and instalments due in respect of such Share.
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If a call remains unpaid after it has become due and payable, the member from whom the
sum is due shall pay interest on the unpaid amount at such rate as the Board shall determine
(together with any expenses incurred by the Company as a result of such non-payment) from
the day it became due and payable until it is paid, but the Board may waive payment of such
interest or expenses in whole or in part.
If a member fails to pay any call or instalment of a call after it has become due and
payable, the Board may, for so long as any part of the call or instalment remains unpaid, give
to such member not less than 14 clear days’ notice requiring payment of the unpaid amount
together with any interest which may have accrued and which may still accrue up to the date
of payment (together with any expenses incurred by the Company as a result of such
non-payment). The notice shall specify a further day on or before which the payment required
by the notice is to be made. The notice shall also state that, in the event of non-payment at or
before the appointed time, the Shares in respect of which the call was made will be liable to
be forfeited.
If such notice is not complied with, any Share in respect of which the notice was given
may, before the payment required by the notice has been made, be forfeited by a resolution of
the Board. Such forfeiture shall include all dividends, other distributions and other monies
payable in respect of the forfeited Share and not paid before the forfeiture.
A person whose Shares have been forfeited shall cease to be a member in respect of the
forfeited Shares, shall surrender to the Company for cancellation the certificate(s) for the
Shares forfeited and shall remain liable to pay to the Company all monies which, as at the date
of forfeiture, were payable by him to the Company in respect of the Shares together with (if
the Board shall in its discretion so require) interest thereon from the date of forfeiture until the
date of payment as the Board may determine and any expenses incurred by the Company as a
result of such non-payment.
2.2 Directors
(a) Appointment, Retirement and Removal
The Company may by ordinary resolution of the members elect any person to be a
Director. The Board may also appoint any person to be a Director at any time, either to fill a
casual vacancy or as an additional Director subject to any maximum number fixed by the
members in general meeting or the Articles. Any Director so appointed shall hold office only
until the first annual general meeting of the Company after his appointment and shall then be
eligible for re-election at such meeting. Any Director so appointed by the Board shall not be
taken into account in determining the Directors or the number of Directors who are to retire
by rotation at an annual general meeting.
There is no shareholding qualification for Directors nor is there any specified age limit
for Directors.
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The members may by ordinary resolution remove any Director (including a managing or
executive Director) before the expiration of his term of office, notwithstanding anything in the
Articles or any agreement between the Company and such Director, and may by ordinary
resolution elect another person in his stead. Nothing shall be taken as depriving a Director so
removed of any compensation or damages payable to such Director in respect of the
termination of his appointment as Director or of any other appointment or office as a result of
the termination of his appointment as Director.
The office of a Director shall be vacated if:
(i) the Director gives notice in writing to the Company that he resigns from his office
as Director;
(ii) the Director is absent, without being represented by proxy or an alternate Director
appointed by him, for a continuous period of 12 months without special leave of
absence from the Board, and the Board passes a resolution that he has by reason of
such absence vacated his office;
(iii) the Director becomes bankrupt or has a receiving order made against him or
suspends payment or compounds with his creditors generally;
(iv) the Director dies or an order is made by any competent court or official on the
grounds that he is or may be suffering from mental disorder or is otherwise
incapable of managing his affairs and the Board resolves that his office be vacated;
(v) the Director is prohibited from being or ceases to be a Director by operation of law;
(vi) the Director has been required by the Stock Exchange to cease to be a Director or
no longer qualifies to be a Director pursuant to the Listing Rules; or
(vii) the Director is removed from office by notice in writing served upon him signed by
not less than three-fourths in number (or, if that is not a round number, the nearest
lower round number) of the Directors (including himself) then in office.
At each annual general meeting, one-third of the Directors for the time being shall retire
from office by rotation. If the number of Directors is not a multiple of three, then the number
nearest to but not less than one-third shall be the number of retiring Directors, provided that
every Director shall be subject to retirement by rotation at least once every three years. The
Directors to retire at each annual general meeting shall be those who have been in office
longest since their last re-election or appointment and, as between persons who became or were
last re-elected Directors on the same day, those to retire shall (unless they otherwise agree
among themselves) be determined by lot.
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(b) Power to Allot and Issue Shares and other Securities
Subject to the provisions of the Companies Act, the Memorandum and Articles and, where
applicable, the Listing Rules, and without prejudice to any rights or restrictions for the time
being attached to any Shares, the Board may allot, issue, grant options over or otherwise
dispose of Shares with or without preferred, deferred or other rights or restrictions, whether
with regard to dividend, voting, return of capital or otherwise, to such persons, at such times,
for such consideration and on such terms and conditions as it in its absolute discretion thinks
fit, provided that no Shares shall be issued at a discount to their par value.
The Company may issue rights, options, warrants or convertible securities or securities of
a similar nature conferring the right upon the holders thereof to subscribe for, purchase or
receive any class of Shares or other securities in the Company on such terms as the Board may
from time to time determine.
Neither the Company nor the Board shall be obliged, when making or granting any
allotment of, offer of, option over or disposal of Shares, to make, or make available, any such
allotment, offer, option or Shares to members or others whose registered addresses are in any
particular territory or territories where, in the absence of a registration statement or other
special formalities, this is or may, in the opinion of the Board, be unlawful or impracticable.
However, no member affected as a result of the foregoing shall be, or be deemed to be, a
separate class of members for any purpose whatsoever.
(c) Power to Dispose of the Assets of the Company or any of its Subsidiaries
Subject to the provisions of the Companies Act, the Memorandum and Articles and any
directions given by special resolution of the Company, the Board may exercise all powers and
do all acts and things which may be exercised or done by the Company to dispose of the assets
of the Company or any of its subsidiaries. No alteration to the Memorandum or Articles and
no direction given by special resolution of the Company shall invalidate any prior act of the
Board which would have been valid if such alteration or direction had not been made or given.
(d) Borrowing Powers
The Board may exercise all the powers of the Company to raise or borrow money, secure
the payment of any sum or sums of money for the purposes of the Company, mortgage or
charge all or any part of its undertaking, property and uncalled capital of the Company, and,
subject to the Companies Act, issue debentures, debenture stock, bonds and other securities,
whether outright or as collateral security for any debt, liability or obligation of the Company
or of any third party.
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(e) Remuneration
A Director shall be entitled to receive such sums as shall from time to time be determined
by the Board or the Company in general meetings. The Directors shall also be entitled to be
repaid all expenses reasonably incurred by them in connection with attendance at meetings of
the Board or committees of the Board, or general meetings of the Company or separate
meetings of the holders of any class of Shares or debentures of the Company, or otherwise in
connection with the business of the Company and the discharge of their duties as Directors,
and/or to receive fixed allowances in respect thereof as may be determined by the Board.
The Board or the Company in general meetings may also approve additional remuneration
to any Director for any services which in the opinion of the Board or the Company in general
meetings go beyond such Director’s ordinary routine work as a Director.
(f) Compensation or Payments for Loss of Office
There are no provisions in the Articles relating to compensation or payment for loss of
office.
(g) Loans to Directors
There are no provisions in the Articles relating to making of loans to Directors.
(h) Disclosure of Interest in Contracts with the Company or any of its Subsidiaries
With the exception of the office of auditor of the Company, a Director may hold any other
office or place of profit with the Company in conjunction with his office of Director for such
period and upon such terms as the Board may determine, and may be paid such extra
remuneration for that other office or place of profit, in whatever form, in addition to any
remuneration provided for by or pursuant to the Articles. A Director may be or become a
director, officer or member of any other company in which the Company may be interested, and
shall not be liable to account to the Company or the members for any remuneration or other
benefits received by him as a director, officer or member of such other company.
No person shall be disqualified from the office of Director or alternate Director or
prevented by such office from contracting with the Company, nor shall any such contract or any
other contract or transaction entered into by or on behalf of the Company in which any Director
or alternate Director is in any way interested be or be liable to be avoided, nor shall any
Director or alternate Director so contracting or being so interested be liable to account to the
Company for any profit realised by or arising in connection with any such contract or
transaction by reason of such Director or alternate Director holding such office or of the
fiduciary relationship established by it, provided that the nature of interest of any Director or
alternate Director in any such contract or transaction shall be disclosed by such Director or
alternate Director at or prior to the consideration and vote thereon.
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A Director shall not vote on (or be counted in the quorum in relation to) any resolution
of the Board in respect of any contract or arrangement or other proposal in which he or any of
his close associate(s) has/have a material interest, and if he shall do so his vote shall not be
counted and he shall not be counted in the quorum for such resolution. This prohibition shall
not apply to any of the following matters:
(i) the giving of any security or indemnity to the Director or his close associate(s) in
respect of money lent or obligations incurred or undertaken by him or any of them
at the request of or for the benefit of the Company or any of its subsidiaries;
(ii) the giving of any security or indemnity to a third party in respect of a debt or
obligation of the Company or any of its subsidiaries for which the Director or his
close associate(s) has/have himself/themselves assumed responsibility in whole or
in part whether alone or jointly under a guarantee or indemnity or by the giving of
security;
(iii) any proposal concerning an offer of Shares, debentures or other securities of or by
the Company or any other company which the Company may promote or be
interested in for subscription or purchase, where the Director or his close
associate(s) is/are or is/are to be interested as a participant in the underwriting or
sub- underwriting of the offer;
(iv) any proposal or arrangement concerning the benefit of employees of the Company
or any of its subsidiaries, including the adoption, modification or operation of (A)
any employees’ share scheme or any share incentive or share option scheme under
which the Director or his close associate(s) may benefit or (B) any pension fund or
retirement, death or disability benefits scheme which relates to the Director, his
close associates and employees of the Company or any of its subsidiaries and does
not provide in respect of any Director or his close associate(s) any privilege or
advantage not generally accorded to the class of persons to which such scheme or
fund relates; and
(v) any contract or arrangement in which the Director or his close associate(s) is/are
interested in the same manner as other holders of Shares, debentures or other
securities of the Company by virtue only of his/their interest in those Shares,
debentures or other securities.
2.3 Proceedings of the Board
The Board may meet anywhere in the world for the despatch of business and may adjourn
and otherwise regulate its meetings as it thinks fit. Unless otherwise determined, two Directors
shall be a quorum. Questions arising at any meeting shall be determined by a majority of votes.
In the case of an equality of votes, the chairman of the meeting shall have a second or casting
vote.
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2.4 Alterations to the Constitutional Documents and the Company’s Name
The Memorandum and Articles may only be altered or amended, and the name of the
Company may only be changed, by special resolution of the Company.
2.5 Meetings of Members
(a) Special and Ordinary resolutions
A special resolution must be passed by a majority of not less than two-thirds (other than
in relation to any resolution approving changes to the Company’s constitutional documents or
a voluntary winding up of the Company, in which case a special resolution must be passed by
a majority of not less than three-fourths) of the voting rights held by such members as, being
entitled so to do, vote in person (whether physically or by virtual attendance with the use of
technology), or by proxy or, in the case of any members which is a corporation, by its duly
authorised representative(s) or by proxy, at a general meeting of which notice specifying the
intention to propose the resolution as a special resolution has been duly given. A special
resolution may also be approved in writing by all the members entitled to vote at a general
meeting in one or more instruments each signed by one or more of such members.
An ordinary resolution, in contrast, is a resolution passed by a simple majority of the
voting rights held by such members as, being entitled to do so, vote in person (whether
physically or by virtual attendance with the use of technology), or by proxy or, in the case of
any member which is a corporation, by its duly authorised representative(s) or by proxy, at a
general meeting. An ordinary resolution may also be approved in writing by all the members
entitled to vote at a general meeting in one or more instruments each signed by one or more
of such members.
The provisions of special resolutions and ordinary resolutions shall apply mutatis
mutandis to any resolutions passed by the holders of any class of shares.
(b) V oting Rights and Right to Demand a Poll
Subject to any rights, restrictions or privileges as to voting for the time being attached to
any class or classes of Shares, at any general meeting: (a) on a poll every member present in
person (whether physically or by virtual attendance with the use of technology), or, in the case
of a member being a corporation, by its duly authorised representative or by proxy shall have
one vote for every Share and (b) on a show of hands every member who is present in person
(whether physically or by virtual attendance with the use of technology), or, in the case of a
member being a corporation, by its duly authorised representative or by proxy shall have one
vote. For the avoidance of doubt, votes may be cast by members by electronic means.
In the case of joint holders, the vote of the senior holder who tenders a vote, whether in
person or by proxy shall be accepted to the exclusion of the votes of the other join holders, and
seniority shall be determined by the order in which the names of the holders stand in the
register of members of the Company.
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No person shall be counted in a quorum or be entitled to vote at any general meeting
unless he is registered as a member on the record date for such meeting, nor unless all calls
or other monies then payable by him in respect of the relevant Shares have been paid.
At any general meeting a resolution put to the vote of the meeting shall be decided by way
of poll save that the chairman of the meeting may, pursuant to the Listing Rules, allow a
resolution which relates purely to a procedural or administrative matter to be voted on by a
show of hands (whether physically or by virtual attendance with the use of technology).
Any corporation or other non-natural person which is a member of the Company may in
accordance with its constitutional documents, or in the absence of such provision by resolution
of its directors or other governing body or by power of attorney, authorise such person as it
thinks fit to act as its representative at any meeting of the Company or of any class of members,
and the person so authorised shall be entitled to exercise the same powers as the corporation
or other non-natural person could exercise as if it were a natural person member of the
Company.
If a recognised clearing house or its nominee(s) is a member of the Company, it may
appoint proxies or authorise such person or persons as it thinks fit to act as its representative(s),
who enjoy rights equivalent to the rights of other members, at any meeting of the Company
(including but not limited to general meetings and creditors meetings) or at any meeting of any
class of members of the Company, provided that if more than one person is so authorised, the
authorisation shall specify the number and class of Shares in respect of which each such person
is so authorised. A person so authorised shall be entitled to exercise the same rights and powers
on behalf of the recognised clearing house or its nominee(s) as if such person were a natural
person member of the Company, including the right to speak and vote individually on a show
of hands or on a poll (whether physically or by virtual attendance with the use of technology).
All members of the Company (including a member which is a recognised clearing house
(or its nominee(s))) shall have the right to (i) speak at a general meeting and (ii) and vote at
a general meeting (whether physically or virtual attendance with the use of technology), except
where a member is required by the Listing Rules to abstain from voting to approve the matter
under consideration. Where any member is, under the Listing Rules, required to abstain from
voting on any particular resolution or restricted to voting only for or only against any particular
resolution, any votes cast by or on behalf of such member in contravention of such requirement
or restriction shall not be counted.
(c) Annual General Meetings and Extraordinary General Meetings
The Company must hold a general meeting as its annual general meeting in each financial
year. Such meeting shall be specified as such in the notices calling it, and must be held within
six months after the end of the Company’s financial year. A meeting of the members or any
class thereof may be held by telephone, tele-conferencing or other electronic means, provided
that all participants can attend the meeting virtually with the use of technology and are able to
communicate contemporaneously with one another, and participation in a meeting in such
manner shall constitute presence at such meetings.
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The Board may convene an extraordinary general meeting whenever it thinks fit. In
addition, one or more members holding, as at the date of deposit of the requisition, in aggregate
not less than one-tenth of the voting rights (on a one vote per Share basis) in the share capital
of the Company may make a requisition to convene an extraordinary general meeting and/or
add resolutions to the agenda of a meeting. Such requisition, which must state the objects and
the resolutions to be added to the agenda of the meeting and must be signed by the
requisitionists, shall be deposited at the principal place of business of the Company in Hong
Kong or, in the event the Company ceases to have such a principal place of business, the
registered office of the Company. If the Board does not within 21 days from the date of deposit
of such requisition duly proceed to convene a general meeting to be held within the following
21 days, the requisitionists or any of them representing more than one-half of the total voting
rights of all the requisitionists may themselves convene a general meeting, but any such
meeting so convened shall be held no later than the day falling three months after the expiration
of the said 21-day period. A general meeting convened by requisitionists shall be convened in
the same manner as nearly as possible as that in which general meetings are to be convened
by the Board, and all reasonable expenses incurred by the requisitionists shall be reimbursed
to the requisitionists by the Company.
(d) Notices of Meetings and Business to be Conducted
An annual general meeting of the Company shall be called by at least 21 days’ notice in
writing, and any other general meeting of the Company shall be called by at least 14 days’
notice in writing. The notice shall be exclusive of the day on which it is served or deemed to
be served and of the day for which it is given, and must specify the date, time, place and agenda
of the meeting, the particulars of the resolution(s) to be considered at the meeting, the general
nature of the business to be considered at the meeting and details for members to attend the
meeting virtually with the use of technology.
Except where otherwise expressly stated, any notice or document (including a share
certificate) to be given or issued under the Articles shall be in writing, and may be served by
the Company on any member personally, by post to such member’s registered address, (to the
extent permitted by the Listing Rules and all applicable laws and regulations) by electronic
means or (in the case of a notice) by advertisement published in the manner prescribed under
the Listing Rules and all applicable laws, rules and regulations, or by sending or otherwise
making it available to the relevant person through such other means, whether electronically or
otherwise, to the extent permitted by and in accordance with the Listing Rules and all
applicable laws, rules and regulations.
Notwithstanding that a meeting of the Company is called by shorter notice than as
specified above, if permitted by the Listing Rules, such meeting may be deemed to have been
duly called if it is so agreed:
(i) in the case of an annual general meeting, by all members of the Company entitled
to attend and vote thereat; and
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(ii) in the case of an extraordinary general meeting, by a majority in number of the
members having a right to attend and vote at the meeting holding not less than 95%
of the total voting rights held by such members.
If, after the notice of a general meeting has been sent but before the meeting is held, or
after the adjournment of a general meeting but before the adjourned meeting is held (whether
or not notice of the adjourned meeting is required), the Board in its absolute discretion consider
that it is impractical or unreasonable for any reason to hold a general meeting on the date or
at the time and place specified in the notice calling such meeting, it may change or postpone
the meeting to another date, time and place.
The Board also has the power to provide in every notice calling a general meeting that
in the event of a gale warning, a black rainstorm warning or extreme conditions is/are in force
at any time on the day of the general meeting (unless such warning is cancelled at least a
minimum period of time prior to the general meeting as the Board may specify in the relevant
notice), the meeting shall be postponed without further notice to be reconvened on a later date.
Where a general meeting is postponed:
(A) the Company shall endeavour to cause a notice of such postponement, which shall
set out the reason for the postponement in accordance with the Listing Rules, to be
placed on the Company’s website and published on the Stock Exchange’s website as
soon as practicable, provided that failure to place or publish such notice shall not
affect the automatic postponement of a general meeting due to a gale warning, a
black rainstorm warning or extreme conditions being in force on the day of the
general meeting;
(B) the Board shall determine the date, time, place and details for members to attend
virtually with the use of technology for the reconvened meeting and at least seven
clear days’ notice shall be given for the reconvened meeting. Such notice shall
specify the date, time and place at which the postponed meeting will be reconvened,
details for members to attend such postponed meeting virtually with the use of
technology and the date and time by which proxies shall be submitted in order to be
valid at such reconvened meeting (provided that any proxy submitted for the original
meeting shall continue to be valid for the reconvened meeting unless revoked or
replaced by a new proxy); and
(C) only the business set out in the notice of the original meeting shall be considered at
the reconvened meeting, and notice given for the reconvened meeting does not need
to specify the business to be considered at the reconvened meeting, nor shall any
accompanying documents be required to be recirculated. Where any new business is
to be considered at such reconvened meeting, the Company shall give a fresh notice
for such reconvened meeting in accordance with the Articles.
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(e) Quorum for Meetings and Separate Class Meetings
No business shall be considered at any general meeting unless a quorum is present when
the meeting proceeds to business, and continues to be present until the conclusion of the
meeting.
The quorum for a general meeting shall be two members present in person (whether
physically or by virtual attendance with the use of technology), or in the case of a member
being a corporation, by its duly authorised representative or by proxy and entitled to vote. In
respect of a separate class meeting (other than an adjourned meeting) convened to approve the
variation of class rights, the necessary quorum shall be two persons holding or representing by
proxy not less than one-third of the issued Shares of that class.
(f) Proxies
Any member of the Company (including a member which is a recognised clearing house
(or its nominee(s)) entitled to attend and vote at a meeting of the Company is entitled to appoint
another person (being a natural person) as his proxy to attend and vote in his place. A member
who is the holder of two or more Shares may appoint more than one proxy to represent him
and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need
not be a member of the Company and shall be entitled to exercise the same powers on behalf
of a member who is a natural person and for whom he acts as proxy as such member could
exercise. In addition, a proxy shall be entitled to exercise the same powers on behalf of a
member which is a corporation and for which he acts as proxy as such member could exercise
as if it were a natural person member present in person (whether physically or by virtual
attendance with the use of technology) at any general meeting. On a poll or on a show of hands,
votes may be given either personally (or, in the case of a member being a corporation, by its
duly authorised representative) or by proxy.
The instrument appointing a proxy shall be in writing and executed under the hand of the
appointor or of his attorney duly authorised in writing, or if the appointor is a corporation or
other non-natural person, either under its seal or under the hand of a duly authorised
representative.
The Board shall, in the notice convening any meeting or adjourned meeting, or in an
instrument of proxy sent out by the Company, specify the manner by which the instrument
appointing a proxy shall be deposited and the place and time (being no later than the time
appointed for the commencement of the meeting or adjourned meeting to which the instrument
of proxy relates) at which such instrument shall be deposited.
Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such
form that complies with the Listing Rules as the Board may from time to time approve. Any
form issued to a member for appointing a proxy to attend and vote at a general meeting at
which any business is to be considered shall be such as to enable the member, according to his
intentions, to instruct the proxy to vote in favour of or against (or, in default of instructions,
to exercise the discretion of the proxy in respect of) each resolution dealing with any such
business.
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2.6 Accounts and Audit
The Board shall cause to be kept such books of account as are necessary to give a true
and fair view of the state of the Company’s affairs and to explain its transactions in accordance
with the Companies Act.
The books of accounts of the Company shall be kept at the principal place of business of
the Company in Hong Kong or, subject to the provisions of the Companies Act, at such other
place or places as the Board thinks fit and shall always be open to inspection by any Director.
No member (not being a Director) or other person shall have any right to inspect any account,
book or document of the Company except as conferred by the Companies Act or ordered by a
court of competent jurisdiction or as authorised by the Board or the Company in general
meeting.
The Board shall cause to be prepared and laid before the Company at every annual general
meeting a profit and loss account for the period since the preceding account, together with a
balance sheet as at the date to which the profit and loss account is made up, a Directors’ report
with respect to the profit or loss of the Company for the period covered by the profit and loss
account and the state of the Company’s affairs as at the end of such period, an auditors’ report
on such accounts and such other reports and accounts as may be required by law and the Listing
Rules.
The members shall at each annual general meeting appoint auditor(s) to hold office by
ordinary resolution of the members until the conclusion of the next annual general meeting on
such terms and with such duties as may be agreed with the Board. The auditors’ remuneration
shall be fixed by the members at the annual general meeting at which they are appointed by
ordinary resolution of the members or in any other manner as specified in such ordinary
resolution. The members may, at any general meeting convened and held in accordance with
the Articles, remove the auditors by ordinary resolution at any time before the expiration of the
term of office and shall, by ordinary resolution, at that meeting appoint new auditors in their
place for the remainder of the term.
The accounts of the Company shall be prepared and audited based on the generally
accepted accounting principles of Hong Kong, the International Accounting Standards or such
other standards as may be permitted by the Stock Exchange.
2.7 Dividends and other Methods of Distribution
Subject to the Companies Act and the Articles, the Company may by ordinary resolution
resolve to declare dividends and other distributions on Shares in issue in any currency and
authorise payment of the dividends or distributions out of the funds of the Company lawfully
available therefor, provided that (i) no dividends shall exceed the amount recommended by the
Board, and (ii) no dividends or distributions shall be paid except out of the realised or
unrealised profits of the Company, out of the share premium account or as otherwise permitted
by law.
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The Board may from time to time pay to the members of the Company such interim
dividends as appear to the Board to be justified by the financial conditions and the profits of
the Company. In addition, the Board may from time to time declare and pay special dividends
on Shares of such amounts and on such dates as it thinks fit.
Except as otherwise provided by the rights attached to any Shares, all dividends and other
distributions shall be paid according to the amounts paid up on the Shares that a member holds
during the period in respect of which the dividends and distributions are paid. No amount paid
up on a Share in advance of calls shall for this purpose be treated as paid up on the Share.
The Board may deduct from any dividends or other distributions payable to any member
of the Company all sums of money (if any) then payable by him to the Company on account
of calls or otherwise. The Board may retain any dividends or distributions payable on or in
respect of a Share upon which the Company has a lien, and may apply the same in or towards
satisfaction of the debts, liabilities or engagements in respect of which the lien exists.
No dividends or other distributions payable by the Company on or in respect of any Share
shall carry interest against the Company.
Where the Board or the Company in general meeting has resolved that a dividend should
be paid or declared, the Board may further resolve:
(a) that such dividend be satisfied in whole or in part in the form of an allotment of
Shares credited as fully paid on the basis that the Shares so allotted shall be of the
same class as the class already held by the allottee, provided that the members
entitled thereto will be entitled to elect to receive such dividend (or part thereof) in
cash in lieu of such allotment; or
(b) that the members entitled to such dividend will be entitled to elect to receive an
allotment of Shares credited as fully paid in lieu of the whole or such part of the
dividend as the Board may think fit on the basis that the Shares so allotted shall be
of the same class as the class already held by the allottee.
Upon the recommendation of the Board, the Company may by ordinary resolution resolve
in respect of any one particular dividend of the Company determine that notwithstanding the
foregoing, a dividend may be satisfied wholly in the form of an allotment of Shares credited
as fully paid without offering any right to members to elect to receive such dividend in cash
in lieu of such allotment.
Any dividends, distributions or other monies payable in cash in respect of Shares may be
paid by wire transfer to the holder of such Shares or by cheque or warrant sent by post to the
registered address of such holder, or in the case of joint holders, to the registered address of
the holder who is first named on the register of members of the Company, or to such person
and to such address as the holder or joint holders may in writing direct. Any one of two or more
joint holders may give effectual receipts for any dividends, distributions or other monies
payable in respect of the Shares held by them as joint holders.
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Whenever the Board or the Company in general meeting has resolved that a dividend be
paid or declared, the Board may further resolve that such dividend be satisfied in whole or in
part by the distribution of specific assets of any kind.
Any dividends or other distributions which remain unclaimed for six years from the date
on which such dividends or distributions become payable shall be forfeited and shall revert to
the Company.
2.8 Inspection of Corporate Records
For so long as any part of the share capital of the Company is listed on the Stock
Exchange, any member may inspect any register of members of the Company maintained in
Hong Kong (except when the register of members is closed in accordance with the Companies
Ordinance) without charge and require the provision to him of copies or extracts of such
register in all respects as if the Company were incorporated under and were subject to the
Companies Ordinance.
2.9 Rights of Minorities in relation to Fraud or Oppression
There are no provisions in the Articles concerning the rights of minority members in
relation to fraud or oppression. However, certain remedies may be available to members of the
Company under the Cayman Islands laws, as summarised in paragraph 3.6 below.
2.10 Procedures on Liquidation
Subject to the Companies Act, the members of the Company may by special resolution
resolve to wind up the Company voluntarily or by the court.
Subject to any rights, privileges or restrictions as to the distribution of available surplus
assets on liquidation for the time being attached to any class or classes of Shares:
(a) if the assets available for distribution among the members of the Company are more
than sufficient to repay the whole of the Company’s paid up capital at the
commencement of the winding up, the surplus shall be distributed pari passu among
such members in proportion to the amount paid up on the Shares held by them at the
commencement of the winding up; and
(b) if the assets available for distribution among the members of the Company are
insufficient to repay the whole of the Company’s paid up capital, such assets shall
be distributed so that, as nearly as may be, the losses shall be borne by the members
in proportion to the capital paid up, or ought to be paid up, on the Shares held by
them at the commencement of the winding up.
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--- page 565 ---
If the Company is wound up (whether the liquidation is voluntary or compelled by the
court), the liquidator may, with the approval of a special resolution and any other approval
required by the Companies Act, divide among the members in kind the whole or any part of
the assets of the Company, whether the assets consist of property of one kind or different kinds,
and the liquidator may, for such purpose, set such value as he deems fair upon any one or more
class or classes of property to be so divided and may determine how such division shall be
carried out as between the members or different classes of members and the members within
each class. The liquidator may, with the like approval, vest any part of the assets in trustees
upon such trusts for the benefit of the members as the liquidator thinks fit, provided that no
member shall be compelled to accept any shares or other property upon which there is a
liability.
3. COMPANY LA WS OF THE CAYMAN ISLANDS
The Company was incorporated in the Cayman Islands as an exempted company on 5
January 2009 subject to the Companies Act. Certain provisions of the company laws of the
Cayman Islands are set out below but this section does not purport to contain all applicable
qualifications and exceptions or to be a complete review of all matters of the company laws of
the Cayman Islands, which may differ from equivalent provisions in jurisdictions with which
interested parties may be more familiar.
3.1 Company Operations
An exempted company such as the Company must conduct its operations mainly outside
the Cayman Islands. An exempted company is also required to file an annual return each year
with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the
amount of its authorised share capital.
3.2 Share Capital
Under the Companies Act, a Cayman Islands company may issue ordinary, preference or
redeemable shares or any combination thereof. Where a company issues shares at a premium,
whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium
on those shares shall be transferred to an account, to be called the share premium account. At
the option of a company, these provisions may not apply to premium on shares of that company
allotted pursuant to any arrangements in consideration of the acquisition or cancellation of
shares in any other company and issued at a premium. The share premium account may be
applied by the company subject to the provisions, if any, of its memorandum and articles of
association, in such manner as the company may from time to time determine including, but
without limitation, the following:
(a) paying distributions or dividends to members;
(b) paying up unissued shares of the company to be issued to members as fully paid
bonus shares;
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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--- page 566 ---
(c) any manner provided in section 37 of the Companies Act;
(d) writing-off the preliminary expenses of the company; and
(e) writing-off the expenses of, or the commission paid or discount allowed on, any
issue of shares or debentures of the company.
Notwithstanding the foregoing, no distribution or dividend may be paid to members out
of the share premium account unless, immediately following the date on which the distribution
or dividend is proposed to be paid, the company will be able to pay its debts as they fall due
in the ordinary course of business.
Subject to confirmation by the court, a company limited by shares or a company limited
by guarantee and having a share capital may, if authorised to do so by its articles of association,
by special resolution reduce its share capital in any way.
3.3 Financial Assistance to Purchase Shares of a Company or its Holding Company
There are no statutory prohibitions in the Cayman Islands on the granting of financial
assistance by a company to another person for the purchase of, or subscription for, its own, its
holding company’s or a subsidiary’s shares. Therefore, a company may provide financial
assistance provided the directors of the company, when proposing to grant such financial
assistance, discharge their duties of care and act in good faith, for a proper purpose and in the
interests of the company. Such assistance should be on an arm’s-length basis.
3.4 Purchase of Shares and Warrants by a Company and its Subsidiaries
A company limited by shares or a company limited by guarantee and having a share
capital may, if so authorised by its articles of association, issue shares which are to be
redeemed or are liable to be redeemed at the option of the company or a member and, for the
avoidance of doubt, it shall be lawful for the rights attaching to any shares to be varied, subject
to the provisions of the company’s articles of association, so as to provide that such shares are
to be or are liable to be so redeemed. In addition, such a company may, if authorised to do so
by its articles of association, purchase its own shares, including any redeemable shares; an
ordinary resolution of the company approving the manner and terms of the purchase will be
required if the articles of association do not authorise the manner and terms of such purchase.
A company may not redeem or purchase its shares unless they are fully paid. Furthermore, a
company may not redeem or purchase any of its shares if, as a result of the redemption or
purchase, there would no longer be any issued shares of the company other than shares held
as treasury shares. In addition, a payment out of capital by a company for the redemption or
purchase of its own shares is not lawful unless, immediately following the date on which the
payment is proposed to be made, the company shall be able to pay its debts as they fall due
in the ordinary course of business.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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Shares that have been purchased or redeemed by a company or surrendered to the
company shall not be treated as cancelled but shall be classified as treasury shares if held in
compliance with the requirements of section 37A(1) of the Companies Act. Any such shares
shall continue to be classified as treasury shares until such shares are either cancelled or
transferred pursuant to the Companies Act.
A Cayman Islands company may be able to purchase its own warrants subject to and in
accordance with the terms and conditions of the relevant warrant instrument or certificate. Thus
there is no requirement under the Cayman Islands laws that a company’s memorandum or
articles of association contain a specific provision enabling such purchases. The directors of a
company may under the general power contained in its memorandum of association be able to
buy, sell and deal in personal property of all kinds.
A subsidiary may hold shares in its holding company and, in certain circumstances, may
acquire such shares.
3.5 Dividends and Distributions
Subject to a solvency test, as prescribed in the Companies Act, and the provisions, if any,
of the company’s memorandum and articles of association, a company may pay dividends and
distributions out of its share premium account. In addition, based upon English case law which
is likely to be persuasive in the Cayman Islands, dividends may be paid out of profits.
For so long as a company holds treasury shares, no dividend may be declared or paid, and
no other distribution (whether in cash or otherwise) of the company’s assets (including any
distribution of assets to members on a winding up) may be made, in respect of a treasury share.
3.6 Protection of Minorities and Shareholders’ Suits
It can be expected that the Cayman Islands courts will ordinarily follow English case law
precedents (particularly the rule in the case of Foss vs. Harbottle and the exceptions to that
rule) which permit a minority member to commence a representative action against or
derivative actions in the name of the company to challenge acts which are ultra vires, illegal,
fraudulent (and performed by those in control of the Company) against the minority, or
represent an irregularity in the passing of a resolution which requires a qualified (or special)
majority which has not been obtained.
Where a company (not being a bank) is one which has a share capital divided into shares,
the court may, on the application of members holding not less than one-fifth of the shares of
the company in issue, appoint an inspector to examine the affairs of the company and, at the
direction of the court, to report on such affairs. In addition, any member of a company may
petition the court, which may make a winding up order if the court is of the opinion that it is
just and equitable that the company should be wound up.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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In general, claims against a company by its members must be based on the general laws
of contract or tort applicable in the Cayman Islands or be based on potential violation of their
individual rights as members as established by a company’s memorandum and articles of
association.
3.7 Disposal of Assets
There are no specific restrictions on the power of directors to dispose of assets of a
company, however, the directors are expected to exercise certain duties of care, diligence and
skill to the standard that a reasonably prudent person would exercise in comparable
circumstances, in addition to fiduciary duties to act in good faith, for proper purpose and in the
best interests of the company under English common law (which the Cayman Islands courts
will ordinarily follow).
3.8 Accounting and Auditing Requirements
A company must cause proper records of accounts to be kept with respect to: (i) all sums
of money received and expended by it; (ii) all sales and purchases of goods by it; and (iii) its
assets and liabilities.
Proper books of account shall not be deemed to be kept if there are not kept such books
as are necessary to give a true and fair view of the state of the company’s affairs and to explain
its transactions.
If a company keeps its books of account at any place other than at its registered office or
any other place within the Cayman Islands, it shall, upon service of an order or notice by the
Tax Information Authority pursuant to the Tax Information Authority Act (2021 Revision) of
the Cayman Islands, make available, in electronic form or any other medium, at its registered
office copies of its books of account, or any part or parts thereof, as are specified in such order
or notice.
3.9 Exchange Control
There are no exchange control regulations or currency restrictions in effect in the Cayman
Islands.
3.10 Taxation
The Cayman Islands currently levy no taxes on individuals or corporations based upon
profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to the Company levied by the
Government of the Cayman Islands save for certain stamp duties which may be applicable,
from time to time, on certain instruments.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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3.11 Stamp Duty on Transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands
companies save for those which hold interests in land in the Cayman Islands.
3.12 Loans to Directors
There is no express provision prohibiting the making of loans by a company to any of its
directors. However, the company’s articles of association may provide for the prohibition of
such loans under specific circumstances.
3.13 Inspection of Corporate Records
The members of a company have no general right to inspect or obtain copies of the
register of members or corporate records of the company. They will, however, have such rights
as may be set out in the company’s articles of association.
3.14 Register of Members
A Cayman Islands exempted company may maintain its principal register of members and
any branch registers in any country or territory, whether within or outside the Cayman Islands,
as the company may determine from time to time. There is no requirement for an exempted
company to make any returns of members to the Registrar of Companies in the Cayman Islands.
The names and addresses of the members are, accordingly, not a matter of public record and
are not available for public inspection. However, an exempted company shall make available
at its registered office, in electronic form or any other medium, such register of members,
including any branch register of member, as may be required of it upon service of an order or
notice by the Tax Information Authority pursuant to the Tax Information Authority Act (2021
Revision) of the Cayman Islands.
3.15 Register of Directors and Officers
Pursuant to the Companies Act, the Company is required to maintain at its registered
office a register of directors, alternate directors and officers. The Registrar of Companies shall
make available the list of the names of the current directors of the Company (and, where
applicable, the current alternate directors of the Company) for inspection by any person upon
payment of a fee by such person. A copy of the register of directors and officers must be filed
with the Registrar of Companies in the Cayman Islands, and any change must be notified to the
Registrar of Companies within 30 days of any change in such directors or officers, including
a change of the name of such directors or officers.
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3.16 Winding up
A Cayman Islands company may be wound up by: (i) an order of the court; (ii) voluntarily
by its members; or (iii) under the supervision of the court.
The court has authority to order winding up in a number of specified circumstances
including where, in the opinion of the court, it is just and equitable that such company be so
wound up.
A voluntary winding up of a company (other than a limited duration company, for which
specific rules apply) occurs where the company resolves by special resolution that it be wound
up voluntarily or where the company in general meeting resolves that it be wound up
voluntarily because it is unable to pay its debt as they fall due. In the case of a voluntary
winding up, the company is obliged to cease to carry on its business from the commencement
of its winding up except so far as it may be beneficial for its winding up. Upon appointment
of a voluntary liquidator, all the powers of the directors cease, except so far as the company
in general meeting or the liquidator sanctions their continuance.
In the case of a members’ voluntary winding up of a company, one or more liquidators
are appointed for the purpose of winding up the affairs of the company and distributing its
assets.
As soon as the affairs of a company are fully wound up, the liquidator must make a report
and an account of the winding up, showing how the winding up has been conducted and the
property of the company disposed of, and call a general meeting of the company for the
purposes of laying before it the account and giving an explanation of that account.
When a resolution has been passed by a company to wind up voluntarily, the liquidator
or any contributory or creditor may apply to the court for an order for the continuation of the
winding up under the supervision of the court, on the grounds that: (i) the company is or is
likely to become insolvent; or (ii) the supervision of the court will facilitate a more effective,
economic or expeditious liquidation of the company in the interests of the contributories and
creditors. A supervision order takes effect for all purposes as if it was an order that the
company be wound up by the court except that a commenced voluntary winding up and the
prior actions of the voluntary liquidator shall be valid and binding upon the company and its
official liquidator.
For the purpose of conducting the proceedings in winding up a company and assisting the
court, one or more persons may be appointed to be called an official liquidator(s). The court
may appoint to such office such person or persons, either provisionally or otherwise, as it
thinks fit, and if more than one person is appointed to such office, the court shall declare
whether any act required or authorised to be done by the official liquidator is to be done by all
or any one or more of such persons. The court may also determine whether any and what
security is to be given by an official liquidator on his appointment; if no official liquidator is
appointed, or during any vacancy in such office, all the property of the company shall be in the
custody of the court.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
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3.17 Mergers and consolidations
The Companies Act permits mergers and consolidations between Cayman Islands
companies and between Cayman Islands companies and non-Cayman Islands companies. For
these purposes, (a) “merger” means the merging of two or more constituent companies and the
vesting of their undertaking, property and liabilities in one of such companies as the surviving
company, and (b) “consolidation” means the combination of two or more constituent
companies into a consolidated company and the vesting of the undertaking, property and
liabilities of such companies to the consolidated company. In order to effect such a merger or
consolidation, the directors of each constituent company must approve a written plan of merger
or consolidation, which must then be authorised by (a) a special resolution of each constituent
company and (b) such other authorisation, if any, as may be specified in such constituent
company’s articles of association. The written plan of merger or consolidation must be filed
with the Registrar of Companies of the Cayman Islands together with a declaration as to the
solvency of the consolidated or surviving company, a list of the assets and liabilities of each
constituent company and an undertaking that a copy of the certificate of merger or
consolidation will be given to the members and creditors of each constituent company and that
notification of the merger or consolidation will be published in the Cayman Islands Gazette.
Dissenting members have the right to be paid the fair value of their shares (which, if not agreed
between the parties, will be determined by the Cayman Islands court) if they follow the
required procedures, subject to certain exceptions. Court approval is not required for a merger
or consolidation which is effected in compliance with these statutory procedures.
3.18 Mergers and Consolidations involving a Foreign Company
Where the merger or consolidation involves a foreign company, the procedure is similar,
save that with respect to the foreign company, the directors of the Cayman Islands exempted
company are required to make a declaration to the effect that, having made due enquiry, they
are of the opinion that the requirements set out below have been met: (i) that the merger or
consolidation is permitted or not prohibited by the constitutional documents of the foreign
company and by the laws of the jurisdiction in which the foreign company is incorporated, and
that those laws and any requirements of those constitutional documents have been or will be
complied with; (ii) that no petition or other similar proceeding has been filed and remains
outstanding or order made or resolution adopted to wind up or liquidate the foreign company
in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has
been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs
or its property or any part thereof; (iv) that no scheme, order, compromise or other similar
arrangement has been entered into or made in any jurisdiction whereby the rights of creditors
of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands exempted company, the directors of
the Cayman Islands exempted company are further required to make a declaration to the effect
that, having made due enquiry, they are of the opinion that the requirements set out below have
been met: (i) that the foreign company is able to pay its debts as they fall due and that the
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND THE COMPANY LA WS OF THE CAYMAN ISLANDS
– IV-24 –


--- page 572 ---
merger or consolidated is bona fide and not intended to defraud unsecured creditors of the
foreign company; (ii) that in respect of the transfer of any security interest granted by the
foreign company to the surviving or consolidated company (a) consent or approval to the
transfer has been obtained, released or waived; (b) the transfer is permitted by and has been
approved in accordance with the constitutional documents of the foreign company; and (c) the
laws of the jurisdiction of the foreign company with respect to the transfer have been or will
be complied with; (iii) that the foreign company will, upon the merger or consolidation
becoming effective, cease to be incorporated, registered or exist under the laws of the relevant
foreign jurisdiction; and (iv) that there is no other reason why it would be against the public
interest to permit the merger or consolidation.
3.19 Reconstructions and Amalgamations
Reconstructions and amalgamations may be approved by (i) 75% in value of the members
or class of members or (ii) a majority in number representing 75% in value of the creditors or
class of creditors, in each case depending on the circumstances, as are present at a meeting
called for such purpose and thereafter sanctioned by the Grand Court of the Cayman Islands.
Whilst a dissenting member has the right to express to the court his view that the transaction
for which approval is being sought would not provide the members with a fair value for their
shares, it can be expected that the court would approve the transaction if it is satisfied that (i)
the company is not proposing to act illegally or beyond the scope of our corporate authority
and the statutory provisions as to majority vote have been complied with, (ii) the members have
been fairly represented at the meeting in question, (iii) the transaction is such as a businessman
would reasonable approve and (iv) the transaction is not one that would more properly be
sanctioned under some other provisions of the Companies Act or that would amount to a “fraud
on the minority”.
If the transaction is approved, no dissenting member would have any rights comparable
to the appraisal rights (namely the right to receive payment in cash for the judicially
determined value of his shares), which may be available to dissenting members of corporations
in other jurisdictions.
3.20 Takeovers
Where an offer is made by a company for the shares of another company and, within four
months of the offer, the holders of not less than 90% of the shares which are the subject of the
offer accept, the offeror may, at any time within two months after the expiration of that
four-month period, by notice require the dissenting members to transfer their shares on the
terms of the offer. A dissenting member may apply to the Cayman Islands courts within one
month of the notice objecting to the transfer. The burden is on the dissenting member to show
that the court should exercise its discretion, which it will be unlikely to do unless there is
evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares
who have accepted the offer as a means of unfairly forcing out minority members.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND THE COMPANY LA WS OF THE CAYMAN ISLANDS
– IV-25 –


--- page 573 ---
3.21 Indemnification
The Cayman Islands laws do not limit the extent to which a company’s articles of
association may provide for indemnification of officers and directors, save to the extent any
such provision may be held by the court to be contrary to public policy, for example, where a
provision purports to provide indemnification against the consequences of committing a crime.
3.22 Economic Substance
The Cayman Islands enacted the International Tax Co-operation (Economic Substance)
Act (2021 Revision) together with the Guidance Notes published by the Cayman Islands Tax
Information Authority from time to time. The Company is required to comply with the
economic substance requirements from 1 July 2019 and make an annual report in the Cayman
Islands as to whether or not it is carrying on any relevant activities and if it is, it must satisfy
an economic substance test.
4. GENERAL
Harney Westwood & Riegels, the Company’s legal adviser on Cayman Islands laws, has
sent to the Company a letter of advice summarising the aspects of the Companies Act set out
in section 3 above. This letter, together with copies of the Companies Act, the Memorandum
and the Articles, is on display on the websites of the Stock Exchange and the Company as
referred to in the paragraph headed “Documents Available on Display” in Appendix VI. Any
person wishing to have a detailed summary of the Companies Act or advice on the differences
between it and the laws of any jurisdiction with which he is more familiar is recommended to
seek independent legal advice.
APPENDIX IV SUMMARY OF THE CONSTITUTION OF THE COMPANY
AND THE COMPANY LA WS OF THE CAYMAN ISLANDS
– IV-26 –


--- page 574 ---
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation
Our Company was incorporated under the laws of the Cayman Islands on January 5, 2009
as an exempted company with limited liability. Upon our incorporation, our authorized share
capital was US$300,000,000.00 divided into 300,000,000 shares of a par value of US$1.00
each.
Our registered office address is at the offices of Vistra (Cayman) Limited, P .O. Box 31119
Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman KY1-1205, Cayman
Islands. Accordingly, our Company’s corporate structure and Memorandum and Articles are
subject to the relevant laws of the Cayman Islands. A summary of our Memorandum and
Articles is set out in Appendix IV to this prospectus.
Our registered place of business in Hong Kong is at Room 1901, 19/F, Lee Garden One,
33 Hysan Avenue, Causeway Bay, Hong Kong. We were registered as a non-Hong Kong
company under Part 16 of the Companies Ordinance on March 21, 2024 with the Registrar of
Companies in Hong Kong. Ms. LAI Ying Tung has been appointed as the authorized
representative of our Company for the acceptance of service of process in Hong Kong. The
address for service of process is Room 1901, 19/F, Lee Garden One, 33 Hysan Avenue,
Causeway Bay, Hong Kong.
2. Changes in the share capital of our Company
As at the date of our incorporation, our authorized share capital was US$300,000,000.00
divided into 300,000,000 shares of a par value of US$1.00 each.
On December 3, 2025, our Company resolved, among other things, that immediately after
the Underwriting Agreements becoming unconditional and in any event before the Listing, the
authorized share capital of our Company be increased from US$300,000,000.00 divided into
300,000,000 shares of a par value of US$1.00 each to US$500,000,000.00 divided into
500,000,000 ordinary shares each of a par value of US$1.00 each.
Immediately following the completion of the Global Offering (assuming the options
granted under the Pre-IPO Share Option Plan are not exercised), the issued share capital of the
Company will be US$311,945,001 divided into 311,945,001 Shares, all fully paid or credited
as fully paid.
Save as disclosed in “History, Development and Corporate Structure” in this prospectus,
there has been no alteration in our share capital within the two years immediately preceding
the date of this prospectus.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 1–


--- page 575 ---
3. Changes in the share capital of members of our Group
A summary of the corporate information and the particulars of our subsidiaries are set out
in note 1 to the Accountants’ Report as set out in Appendix I to this prospectus.
The following sets out the changes in the issued shares or registered capital of members
of our Group within the two years immediately preceding the date of this prospectus:
Nanjing BenQ Hospital
On October 19, 2023, the registered capital of Nanjing BenQ Hospital was increased from
US$182,014,983.65 to US$192,014,983.65.
BenQ Healthcare Consulting
On September 20, 2023, the total number of shares issued by BenQ Healthcare Consulting
was increased from 2,276,330 shares to 2,347,414 shares.
Save as disclosed above, as of the Latest Practicable Date, there has been no alteration
in the share capital of any member of our Group within the two years immediately preceding
the date of this prospectus.
4. Resolutions of our Shareholders dated December 3, 2025
Pursuant to the resolutions passed by our Shareholders on December 3, 2025, it was
resolved, among others,
(1) that immediately after the Underwriting Agreements becoming unconditional and in
any event before the Listing, the authorized share capital of our Company be
increased from US$300,000,000.00 divided into 300,000,000 shares of a par value
of US$1.00 each to US$500,000,000.00 divided into 500,000,000 ordinary shares
each of a par value of US$1.00 each; and
(2) that conditional upon the conditions of the Global Offering (as set out in this
prospectus) being fulfilled:
(a) our Company approved and adopted the Memorandum and Articles of
Association with effect upon Listing;
(b) the Global Offering and the Listing were approved and our Directors were
authorized to effect the same and to allot and issue new Shares pursuant to the
Global Offering; and
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 2–


--- page 576 ---
(c) a general unconditional mandate was granted to our Directors to, inter alia,
allot, issue and deal with Shares, securities convertible into Shares (the
“Convertible Securities ”) or options, warrants or similar rights to subscribe
for any Shares or such convertible securities (the “ Options and Warrants ”)
and to make or grant offers, agreements or options which might require such
Shares, the Convertible Securities or the Options and Warrants to be allotted
and issued or dealt with at any time subject to the requirement that the
aggregate nominal value of the Shares or the underlying Shares relating to the
Convertible Securities or the Options and Warrants so allotted and issued or
agreed conditionally or unconditionally to be allotted and issued, shall not
exceed the sum of 20% of the aggregate nominal value of the share capital of
our Company in issue immediately following the completion of the Global
Offering.
This mandate does not cover Shares to be allotted, issued or dealt with under
a rights issue or scrip dividend scheme or similar arrangements or a specific
authority granted by our Shareholders. Such mandate will remain in effect
until:
a. the conclusion of our next annual general meeting;
b. the expiration of the period within which the next annual general meeting
of our Company is required to be held under any applicable laws or the
Memorandum and Articles of Association; or
c. it is varied or revoked by an ordinary resolution of our Shareholders at a
general meeting,
whichever is the earliest;
(d) a general unconditional mandate was granted to our Directors to exercise all
powers of our Company to repurchase Shares with an aggregate nominal value
not exceeding 10% of the aggregate nominal value of the share capital of our
Company in issue immediately following completion of the Global Offering
(“Repurchase Mandate ”).
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 3–


--- page 577 ---
(e) This mandate only relates to repurchase made on the Stock Exchange or on any
other stock exchange on which the Shares may be listed (and which is
recognized by the SFC and the Stock Exchange for this purpose) and which is
in accordance with all applicable laws and regulations. Such mandate will
remain in effect until:
a. the conclusion of our next annual general meeting;
b. the expiration of the period within which the next annual general meeting
of our Company is required to be held under any applicable laws or the
Memorandum and Articles of Association; or
c. it is varied or revoked by an ordinary resolution of our Shareholders at a
general meeting,
whichever is the earliest; and
(f) the general unconditional mandate as mentioned in paragraph (c) above was
extended by the addition to the aggregate nominal value of the Shares which
may be allotted and issued or agreed to be allotted and issued by our Directors
pursuant to such general mandate of an amount representing the aggregate
nominal value of the Shares purchased by our Company pursuant to the
mandate to repurchase Shares referred to in paragraph (d) above (up to 10% of
the aggregate nominal value of the Shares in issue immediately following the
completion of the Global Offering).
5. Explanatory statement on repurchase of our own securities
The following summarizes restrictions imposed by the Listing Rules on share repurchases
by a company listed on the Stock Exchange and provides further information about the
repurchase of our own securities.
Shareholders’ approval
A listed company whose primary listing is on the Stock Exchange may only purchase its
shares on the Stock Exchange, either directly or indirectly, if: (i) the shares proposed to be
purchased are fully-paid up, and (ii) its shareholders have given a specific approval or general
mandate by way of an ordinary resolution of shareholders.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 4–


--- page 578 ---
Size of mandate
The exercise in full of the Repurchase Mandate, on the basis of 311,945,001 Shares in
issue immediately following completion of the Global Offering (assuming the options granted
under the Pre-IPO Share Option Plan are not exercised), could accordingly result in up to
approximately 31,194,000 Shares being repurchased by our Company.
The total number of shares which a listed company may repurchase on the Stock
Exchange may not exceed 10% of the number of issued shares as of the date of the shareholder
approval.
Reasons for repurchases
Our Directors believe that it is in the best interests of our Company and Shareholders for
our Directors to have general authority from the Shareholders to enable our Company to
repurchase Shares in the market. Such repurchases may, depending on market conditions and
funding arrangements at the time, lead to an enhancement of the net asset value per Share
and/or earnings per Share and will only be made where our Directors believe that such
repurchases will benefit our Company and Shareholders.
Source of funds
Purchases must be funded out of funds legally available for the purpose in accordance
with the Memorandum and Articles and the applicable laws of the Cayman Islands.
Our Company shall not purchase its own Shares on the Stock Exchange for a
consideration other than cash or for settlement otherwise than in accordance with the trading
rules of the Stock Exchange from time to time.
Any purchases by our Company may be made out of profits or out of an issue of new
shares made for the purpose of the purchase or, if authorized by its Memorandum and Articles
and subject to the Companies Ordinance, out of capital, and, in the case of any premium
payable on the purchase out of profits or from sums standing to the credit of our share premium
account or, if authorized by its Memorandum and Articles and subject to the Companies
Ordinance, out of capital.
Suspension of repurchase
A listed company shall not repurchase its shares on the Stock Exchange at any time after
inside information has come to its knowledge until the information is made publicly available.
In particular, during the period of one month immediately preceding the earlier of: (i) the date
of the board meeting (as such date is first notified to the Stock Exchange in accordance with
the Listing Rules) for the approval of the company’s results for any year, half-year, quarterly
or any other interim period (whether or not required under the Listing Rules); and (ii) the
deadline for the issuer to announce its results for any year or half-year under the Listing Rules,
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 5–


--- page 579 ---
or quarterly or any other interim period (whether or not required under the Listing Rules), until
the date of the results announcement, the company may not repurchase its shares on the Stock
Exchange unless there are exceptional circumstances.
Trading restrictions
A listed company is prohibited from repurchasing its shares on the Stock Exchange if the
purchase price is 5% or more than the average closing market price for the five preceding
trading days on which its shares were traded on the Stock Exchange.
A listed company may not repurchase its shares if that repurchase would result in the
number of listed securities which are in the hands of the public falling below the relevant
prescribed minimum percentage as required by the Stock Exchange.
Status of repurchased shares
The listing of all repurchased shares (whether through the Stock Exchange or otherwise)
shall be automatically cancelled and the relevant documents of title must be cancelled and
destroyed as soon as reasonably practicable.
Close associates and core connected persons
None of our Directors or, to the best of their knowledge having made all reasonable
enquiries, any of their close associates have a present intention, in the event the Repurchase
Mandate is approved, to sell any Shares to our Company.
No core connected person of our Company has notified our Company that they have a
present intention to sell Shares to our Company, or have undertaken to do so, if the Repurchase
Mandate is approved.
A listed company shall not knowingly purchase its shares on the Stock Exchange from a
core connected person (namely a director, chief executive or substantial shareholder of the
company or any of its subsidiaries, or a close associate of any of them), and a core connected
person shall not knowingly sell their interest in shares of the company to it.
Takeover implications
If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the
voting rights of our Company increases, such increase will be treated as an acquisition for the
purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting
in concert could obtain or consolidate control of our Company and become obliged to make a
mandatory offer in accordance with Rule 26 of the Takeovers Code. Save as aforesaid, our
Directors are not aware of any consequences which would arise under the Takeovers Code as
a consequence of any repurchases pursuant to the Repurchase Mandate.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 6–


--- page 580 ---
General
If the Repurchase Mandate were to be carried out in full at any time, there may be a
material adverse impact on our working capital or gearing position (as compared with the
position disclosed in our most recent published audited accounts). However, our Directors do
not propose to exercise the Repurchase Mandate to such an extent as would have a material
adverse effect on our working capital or gearing position.
Our Directors have undertaken to the Stock Exchange to exercise the Repurchase
Mandate in accordance with the Listing Rules and the applicable laws in the Cayman Islands.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of material contracts
The following are contracts (not being contracts entered into in the ordinary course of
business) entered into by any member of our Group within the two years immediately
preceding the date of this prospectus that are or may be material:
(a) the cornerstone investment agreement dated December 5, 2025 entered into among
our Company, Heron Neutron Medical Corp. (ʮ̡), China
International Capital Corporation Hong Kong Securities Limited and Citigroup
Global Markets Asia Limited, details of which are included in the section headed
“Cornerstone Investors” in this prospectus;
(b) the cornerstone investment agreement dated December 5, 2025 entered into among
our Company, Cowealth Medical China Co., Ltd. ( Υబ(ʕ਷)ʮ
̡), China International Capital Corporation Hong Kong Securities Limited and
Citigroup Global Markets Asia Limited, details of which are included in the section
headed “Cornerstone Investors” in this prospectus;
(c) the cornerstone investment agreement dated December 5, 2025 entered into among
our Company, Suzhou Zhanxingtou Industrial Fund Partnership (Limited
Partnership) (ΥྫΆุ(Υྫ)), China International
Capital Corporation Hong Kong Securities Limited and Citigroup Global Markets
Asia Limited, details of which are included in the section headed “Cornerstone
Investors” in this prospectus; and
(d) the Hong Kong Underwriting Agreement.
2. Intellectual property rights
Save as disclosed below, as of the Latest Practicable Date, there were no other
trademarks, service marks, patents, intellectual property rights, or industrial property rights
which are or may be material in relation to our business.
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 7–


--- page 581 ---
Trademarks
As of the Latest Practicable Date, we had been granted by BenQ Corp. the rights to use
the following registered trademarks in the PRC which we consider to be or may be material to
our business:
No. Trademark Registered owner Class
Registration
number Expiry date
1.ਿ BenQ Corp. 44 15758705 January 13, 2026 (1)
2.ਿ BenQ Corp. 44 3564489 June 27, 2035
3. BenQ BenQ Corp. 44 15758704 January 13, 2026 (1)
4. BenQ BenQ Corp. 44 3560997 June 27, 2035
Note:
(1) An application will be made by BenQ Corp. to renew this trademark prior to the expiry date.
As of the Latest Practicable Date, we had been granted by BenQ Corp. the rights to use
the following registered trademarks in Hong Kong which we consider to be or may be
material to our business:
No. Trademark Registered owner Class
Registration
number Registration date
1. (A)
(B)
(C)
(D)
BenQ Corp. 5, 10,
16 &
44
306428052 December 15,
2023
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 8–


--- page 582 ---
No. Trademark Registered owner Class
Registration
number Registration date
2. (A)
(B)
(C)
(D)
BenQ Corp. 5, 10,
16 &
44
306428061 December 15,
2023
Copyrights
As of the Latest Practicable Date, we had registered the following computer software
copyright in the PRC:
No. Copyright Registered owners
Registration
number
Development
completion date
Registration
date
1. Nanjing BenQ Hospital
(ਿᔼ৫)
BenQ Zhulu Software
(Suzhou) Co,. Ltd.
(ਿ஼௤ழ΁(ᘽψ)
ʮ̡); Nanjing
BenQ Hospital
2020SRE020334 September 29,
2020
November 18,
2020
2. Nanjing BenQ Hospital
Intern Management
System (ਿᔼ৫
ྼ୦͛၍ଣӻ୕)
Nanjing BenQ Hospital 2025SR0309951 October 24,
2024
February 21,
2025
3. Nanjing BenQ Hospital
ITS Project
Management System
(ਿᔼ৫ITSධͦ
၍ଣӻ୕)
Nanjing BenQ Hospital 2025SR1895653 – September 28,
2025
4. Nanjing BenQ Hospital
Advanced Training
Management System
(၍
ଣӻ୕)
Nanjing BenQ Hospital 2025SR1918411 – September 30,
2025
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 9–


--- page 583 ---
As of the Latest Practicable Date, we had registered the following copyright in the PRC:
No. Copyright
Registration
number Classification
Registered
owner
Development
completion date
Registration
date
1 Home Care Series
(ᚐଣӻΐ)
͚Ъ೮ο-2023-
F-00021248
Artworks Nanjing BenQ
Hospital
May 10, 2023 May 19,
2023
Domain names
As of the Latest Practicable Date, we owned the following domain names which we
consider to be or may be material to our business:
No. Domain name Registered owner Expiry date
1. benqhospital.com Nanjing BenQ Hospital May 12, 2032
2. benqmedicalcenter.com Nanjing BenQ Hospital November 13, 2032
3. benqmedicalcentersz.com Suzhou BenQ Hospital February 14, 2032
C. FURTHER INFORMATION ABOUT OUR DIRECTORS
1. Particulars of Directors’ service contracts and appointment letters
Our executive Director entered into a service contract with our Company on December 3,
2025, and such service contract is for an initial term of three years commencing from the
Listing Date. The service contracts may be renewed in accordance with our Articles and the
applicable laws, rules and regulations.
Each of our non-executive Directors and our independent non-executive Directors,
entered into a letter of appointment with our Company on December 3, 2025. Each letter of
appointment is for an initial term of three years commencing from the Listing Date. The letters
of appointment may be renewed in accordance with our Articles and the applicable laws, rules
and regulations.
Save as disclosed above, none of our Directors has or is proposed to have a service
contract with any member of our Group other than contracts expiring or determinable by the
employer within one year without the payment of compensation (other than statutory
compensation).
2. Remuneration of Directors
For details of the remuneration of our Directors, see “Directors and Senior Management
— Emolument of Directors and Senior Management” in this prospectus and Note 8 to the
Accountants’ Report to this prospectus.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-10 –


--- page 584 ---
3. Disclosure of interests
Interests and short positions of our Directors in the share capital of our Company or our
associated corporations following completion of the Global Offering
Immediately following completion of the Global Offering (assuming the options granted
under the Pre-IPO Share Option Plan are not exercised), the interests or short positions of our
Directors and chief executives in the shares, underlying shares and debentures of our Company
or our associated corporations (within the meaning of Part XV of the SFO), which will have
to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part
XV of the SFO (including interests and short positions which he/she is taken or deemed to have
under such provisions of the SFO), or which will be required, pursuant to section 352 of the
SFO, to be entered in the register referred to therein, or which will be required, pursuant to the
‘Model Code for Securities Transactions by Directors of Listed Issuers’ contained in the
Listing Rules, to be notified to our Company and the Stock Exchange are set out below:
Interest in our Company
Name of director Nature of interest
Number of
Shares
Approximate % interest
in Shares of our
Company immediately
after the Global Offering
Mr. HSIAO Tze-Jung /H1118/H1118/H1118/H1118Beneficial Owner 120,000 0.04%
Mr. CHEN Chi-Hong /H1118/H1118/H1118/H1118Beneficial Owner 500,000 0.16%
Ms. HUNG Chiu-Chin /H1118/H1118/H1118Beneficial Owner 50,000 0.02%
Interest in associated corporations of our Company
The following table lists out the directors’ and chief executive’s interests in our
associated corporations as of the Latest Practicable Date:
Associated
corporation Name Title
Nature of
interest
Number of
shares/
underlying
shares (if
applicable)
Interest in
associated
corporation
Qisda Corporation /H1118/H1118/H1118Mr. HSIAO
Tze-Jung
Executive Director
and chief
executive officer
Beneficial
owner
418,000 0.03%
Mr. CHEN
Chi-Hong
Chairperson and
non-executive
Director
Beneficial
owner
1,627,733 0.10%
Ms. HUNG
Chiu-Chin
Non-executive
Director
Beneficial
owner
534,316 0.03%
APPENDIX V STATUTORY AND GENERAL INFORMATION
–V - 1 1–


--- page 585 ---
Associated
corporation Name Title
Nature of
interest
Number of
shares/
underlying
shares (if
applicable)
Interest in
associated
corporation
BenQ Materials Corp.
(ʮ
̡)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Mr. CHEN
Chi-Hong
Chairperson and
non-executive
Director
Beneficial
owner
72,825 0.02%
Ms. HUNG
Chiu-Chin
Non-executive
Director
Beneficial
owner
153,250 0.05%
BenQ Medical
Technology Ltd. (׼
΅
ʮ̡)
(2) /H1118/H1118/H1118/H1118/H1118/H1118
Mr. CHEN
Chi-Hong
Chairperson and
non-executive
Director
Beneficial
owner
200,000 0.45%
Notes:
(1) BenQ Material Corp. (ʮ̡) is a company listed on the Taiwan Stock Exchange
(stock code: 8215. TW) and is a subsidiary of Qisda Corporation.
(2) BenQ Medical Technology Ltd. (ʮ̡) is a company listed on the Taipei
Exchange (stock code: 4116. TPEx) and is a subsidiary of Qisda Corporation.
Save as disclosed above, as of the Latest Practicable Date, each of our Directors confirms
with respect to himself or herself, to the best of his or her knowledge, information and belief,
that he or she did not hold other long positions or short positions in the Shares, underlying
Shares, debentures of our Company or any associated corporation (within the meaning of Part
XV of the SFO).
Interests and short positions disclosable under Divisions 2 and 3 of Part XV of the SFO
For information, so far as is known to our Directors or chief executive, of each person,
other than our Director or chief executive, who immediately following completion of the
Global Offering (assuming the options granted under the Pre-IPO Share Option Plan are not
exercised) will have an interest or short position in the Shares or underlying shares of our
Company which would fall to be disclosed to our Company under the provisions of Divisions
2 and 3 of Part XV of the SFO, or, is, directly or indirectly, interested in 10% or more of the
issued voting shares of any class of shares of our Company or any other member of our Group,
see “Substantial Shareholders” in this prospectus for further details.
APPENDIX V STATUTORY AND GENERAL INFORMATION
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D. PRE-IPO SHARE OPTION PLAN
The following is a summary of the principal terms of the Pre-IPO Share Option Plan and
the details regarding the outstanding options granted under the Pre-IPO Share Option Plan. The
terms of the Pre-IPO Share Option Plan are not subject to the provisions of Chapter 17 of the
Listing Rules as the Pre-IPO Share Option Plan will not involve the grant of options by us to
subscribe for Shares after the Listing.
We have applied to the Stock Exchange and SFC, respectively for (i) a waiver from strict
compliance with the disclosure requirements under Rule 17.02(1)(b) of, and paragraph 27 of
Appendix D1A to, the Listing Rules; and (ii) a certificate of exemption under Section 342A of
the Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting the
Company from strict compliance with the disclosure requirements under paragraph 10(d) of
Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance. See “Waivers From Strict Compliance With the Listing Rules and Exemption From
Strict Compliance With the Companies (Winding Up and Miscellaneous Provisions) Ordinance
— Waiver and Exemption in Respect of the Pre-IPO Share Option Plan” in this prospectus for
further details.
(a) Purpose
The purpose of the Pre-IPO Share Option Plan is to enable our Company to incentive and
reward eligible participants for their contribution to our Group so as to strengthen their sense
of belonging, encourage them to contribute to the long-term growth of the Company and to
enhance the value of the Company and the benefit of Shareholders.
(b) Administration
The Plan shall be subject to the administration of the administrator or administrative
committee authorized by the Board of the Company (“ Administrator ”).
(c) Eligible Participants
Persons eligible to receive grants of options under the Pre-IPO Share Option Plan are
senior officers, directors and employees of our Company and its subsidiaries (i.e. Nanjing
BenQ Hospital, Suzhou BenQ Hospital and BenQ Healthcare Consulting) selected by the
Administrator based on the position, performance, length of service and other factors of the
candidates, in its sole discretion.
(d) Maximum Number of Shares
The maximum number of Shares which may be issued upon exercise of all options granted
under the Pre-IPO Share Option Plan shall be 6,000,000 Shares, representing 1.92% of the total
issued Shares immediately following the completion of the Global Offering (assuming the
options granted under the Pre-IPO Share Option Plan are not exercised).
APPENDIX V STATUTORY AND GENERAL INFORMATION
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--- page 587 ---
(e) Vesting Schedule
The options shall be vested in three tranches as follows: (i) fifty percent (50%) of the
options shall be vested on the Listing Date; (ii) twenty-five percent (25%) of the options shall
be vested on the date falling on the first anniversary of the Listing Date; and (iii) twenty-five
percent (25%) of the options shall be vested on the date falling on the second anniversary of
the Listing Date.
(f) Exercise of Option
The exercise price of options shall be US$1.00 per Share.
The option period shall be five years from the vested date (“ Option Period ”). Unless
otherwise provided in the Pre-IPO Share Option Plan, any option that has been vested shall be
exercisable by the grantee from the relevant vesting date until the expiry of the Option Period.
An option shall lapse automatically on the expiry date.
(g) Effects of Cease of Employment and Other Events
(i) If a grantee ceases to be employed by reason of the grantee’s voluntary resignation
or dismissal in accordance with relevant labor laws, the grantee may exercise any
vested option within the period of three months following the date of resignation or
dismissal, and any unvested option shall lapse automatically on the date of
resignation or dismissal.
(ii) If a grantee ceases to be employed by reason of the grantee’s retirement, all unvested
options shall be vested automatically at the date of retirement, and the grantee may
exercise any vested option within the period of three months following the date of
retirement or the first exercisable date after our Company’s Listing, whichever is
later.
(iii) If a grantee ceases to be employed by reason of the grantee’s leave without pay as
authorized by the Company, (a) the grantee may exercise any vested option within
the period of three months following the date of such leave, (b) any vested option
not exercised within such period shall be frozen and extended until the resumption
of work, and (c) the vesting of any unvested option shall be extended accordingly
until the resumption of work, but shall not exceed the Option Period.
(iv) If a grantee ceases to be employed by reason of the grantee’s death (not caused by
occupational hazard), the successor of the grantee may exercise any vested option
within the period of three months following the date of resignation or dismissal, and
any unvested option shall lapse automatically on the date of death.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-14 –


--- page 588 ---
(v) If a grantee ceases to be employed by reason of the grantee’s disability (caused by
occupational hazard), all unvested options shall be vested automatically at the date
of cessation, and the grantee may exercise any vested option within the period of
three months following the date of cessation, the first exercisable date after our
Company’s Listing or the second anniversary of the grant date, whichever is later.
(vi) If a grantee ceases to be employed by reason of the grantee’s death (caused by
occupational hazard), all unvested options shall be vested automatically at the date
of death, and the successor of the grantee may exercise any vested option within the
period of three months following the date of death or the first exercisable date after
our Company’s Listing, whichever is later.
(vii) If a grantee ceases to be employed by reason of the grantee’s transfer of employment
to related companies or other companies for personal reasons, the outstanding
options the grantee is entitled to shall be processed in accordance with paragraph
(g)(i) above, while transfers for our Company’s operational needs assigned by the
Company shall not be subject to this clause.
(viii) If a grantee ceases to be employed by reason of the grantee’s severance in
accordance with relevant labor laws, (a) the grantee may exercise any vested option
within the period of three months following the date of severance, and any unvested
option shall lapse automatically on the date of severance; or (b) the Administrator
may determine the vesting and exercise of options within the vesting period.
(ix) If a grantee violates the confidentiality regulations, inquires into others’ information
or discloses relevant information (including but not limited to the number of other
grantees’ options and the rights and interests related thereto), the options (to the
extent not already exercised) such grantee entitled to may be forfeited by the
Company.
(x) In the event of any serious negligence such as breach of labor contract, violation of
work rules or Company’s regulations, the options (to the extent not already
exercised) such grantee entitled to may be forfeited by the Company.
(h) Lapse of Options
An option shall lapse automatically and not be exercisable (to the extent not already
exercised) on the earliest of:
(i) the expiry of the option period relevant to that option referred to in paragraph (f);
and
(ii) the expiry of any of the periods referred to in paragraph (g).
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-15 –


--- page 589 ---
(i) Duration
Unless otherwise terminated early by the Board, the Pre-IPO Share Option Plan shall be
valid and effective from November 1, 2018 until the Listing Date (as no option shall be granted
pursuant to the Pre-IPO Share Option Plan on or after the Listing Date).
The provisions of the Pre-IPO Share Option Plan shall remain in full force and effective
to the extent necessary to give effect to the exercise of any Pre-IPO Share Options granted prior
thereto or otherwise as may be required in accordance with the provisions of the Pre-IPO Share
Option Plan.
(j) Transferability
Any option shall be personal to the grantee and no grantee shall in any way transfer,
charge, mortgage, donate or dispose by any other means.
(k) Outstanding Options Granted
As of the Latest Practicable Date, our Company had granted outstanding options under the
Pre-IPO Share Option Plan to 150 grantees to subscribe for an aggregate of 2,877,000 Shares
representing approximately 0.92% of the total issued Shares immediately upon completion of
the Global Offering (assuming the options granted under the Pre-IPO Share Option Plan are not
exercised), and all these options are still outstanding and unexercised. Our Company will not
grant any further options under the Pre-IPO Share Option Plan on or after the Listing Date. The
exercise price of the outstanding options is US$1.00 per Share. As confirmed by the Company,
no consideration is required to be paid for the grant of the options. The tables below set out
the details of the outstanding options as of the Latest Practicable Date.
Director, senior management and connected person
Name Address
Number of
Shares
Underlying
the options
granted Date of grant
Exercise
period
Approximate %
of issued Shares
immediately after
completion of the
Global Offering (1)
Mr. HSIAO Tze-Jung
(ጽዣ࿲) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Room 3071, Qisda
Zhuyuan, No. 169,
Zhujiang Road, High-
tech Zone, Suzhou City,
Jiangsu Province, PRC
200,000 January 1, 2019 Five (5) years
from the
vesting date
0.06%
Dr. W ANG Liming
(׼)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Room 2101, Building 8,
Xindu Plaza, Industrial
Park District, Suzhou
City, Jiangsu Province,
PRC
100,000 January 1, 2019 Five (5) years
from the
vesting date
0.03%
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-16 –


--- page 590 ---
Name Address
Number of
Shares
Underlying
the options
granted Date of grant
Exercise
period
Approximate %
of issued Shares
immediately after
completion of the
Global Offering (1)
Mr. CHIANG Che-Min
(ᦩ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
7F, No. 1, Lane2, No. 49,
Mingde Street, No. 19
Sixianli, Xinzhuang
District, New Taipei
City, Taiwan
50,000 January 1, 2019 Five (5) years
from the
vesting date
0.02%
YU Zhenkun, M.D.
(տ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Renheng International
Apartment, No. 116,
Lushan Road, Nanjing
City, Jiangsu Province,
PRC
150,000 August 4, 2023 Five (5) years
from the
vesting date
0.05%
Ms. LO Tsui-Ling
(ࡗ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
21F, No. 68-3, Zhonghua
Road, Wenhua Village,
Taoyuan District,
Taoyuan City, Taiwan
60,000 December 17,
2018
Five (5) years
from the
vesting date
0.02%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 560,000 0.18%
Other grantees who have been granted options to subscribe for 40,001 or more Shares
Name Address
Number of
Shares
Underlying
the options
granted Date of grant
Exercise
period
Approximate %
of issued Shares
immediately after
completion of the
Global Offering (1)
Mr. CHEN Yi-Te
(௓ሒᅃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
No. 24, Lane 12, Fuda
Road, Neighborhood 20,
Rixin Li, Dali District,
Taichung City, Taiwan
60,000 December 5,
2018
Five (5) years
from the
vesting date
0.02%
Mr. HSUEH Fu Y uan
(ࡡ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
No. 169, Zhujiang Road,
Suzhou New District,
Suzhou, Jiangsu
Province, PRC
60,000 January 1, 2019 Five (5) years
from the
vesting date
0.02%
Mr. Y ANG Detong
(เᅃΝ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Unit 202, Building 12,
Y uefu, No. 169 Suo
Street, Nanjing, Jiangsu
Province, PRC
50,000 December 12,
2018
Five (5) years
from the
vesting date
0.02%
Mr. FAN Wenchi
(˖ʉ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
No. 71, Hexi Avenue,
Jianye District, Nanjing,
Jiangsu Province, PRC
45,000 January 1, 2019 Five (5) years
from the
vesting date
0.01%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 215,000 0.07%
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-17 –


--- page 591 ---
Range of Shares
underlying the
options granted
Total
number
of grantees
Total
number
of Shares
underlying
the options
granted Date of grant Exercise period
Approximate %
of issued Shares
immediately after
completion of the
Global Offering
(1)
1 to 10,000
Shares /H1118/H1118/H1118/H1118/H1118/H1118
64 508,000 From January 1,
2019 to June
26, 2019
Five (5) years
from the
vesting date
0.16%
10,001 to 20,000
Shares /H1118/H1118/H1118/H1118/H1118/H1118
54 832,000 From March 28,
2018 to June
20, 2019
Five (5) years
from the
vesting date
0.27%
20,001 to 30,000
Shares /H1118/H1118/H1118/H1118/H1118/H1118
11 297,000 From January 1,
2019 to August
4, 2023
Five (5) years
from the
vesting date
0.10%
30,001 to 40,000
Shares /H1118/H1118/H1118/H1118/H1118/H1118
12 465,000 From December
12, 2018 to
August 4, 2023
Five (5) years
from the
vesting date
0.15%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,102,000 0.67%
Notes:
(1) The percentage is calculated based on the number of Shares in issue immediately following the completion of
the Global Offering (assuming the options granted under the Pre-IPO Share Option Plan are not exercised).
(2) For the vesting schedule, Option Period and exercise price of the options, please refer to the sub-paragraph (e)
and (f) in this section above.
(l) Potential Dilution Effect
If all the outstanding options under the Pre-IPO Share Option Plan were exercised, the
shareholding of our Shareholders immediately following completion of the Global Offering
will be diluted by approximately 0.91%. The dilution effect on our earnings per Share would
be approximately 0.91%.
E. OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to fall
upon any member of our Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-18 –


--- page 592 ---
2. Litigation
As of the Latest Practicable Date, no member of our Group was involved in any litigation,
arbitration or claim of material importance, and, so far as we are aware, no litigation,
arbitration or claim of material importance is pending or threatened against any member of our
Group, which would have a material adverse effect on our financial condition or results of
operations, taken as a whole.
3. Joint Sponsors
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors set
out in Rule 3A.07 of the Listing Rules.
The sponsor fee payable to the Joint Sponsors by our Company is US$1,000,000 in total.
4. Consent of experts
This prospectus contains statements made by the following experts:
Name Qualification
China International Capital
Corporation Hong Kong
Securities Limited
A licensed corporation under the SFO for Type 1
(dealing in securities), Type 2 (dealing in futures
contracts), Type 4 (advising on securities), Type 5
(advising on futures contracts) and Type 6 (advising on
corporate finance) of the regulated activities as defined
under the SFO
Citigroup Global Markets
Asia Limited
Licensed to conduct Type 1 (dealing in securities),
Type 2 (dealing in futures contracts), Type 4 (advising
on securities), Type 5 (advising on futures contracts),
Type 6 (advising on corporate finance) and Type 7
(providing automated trading services) of regulated
activities as defined under the SFO
Commerce & Finance
Law Offices
Legal advisor as to PRC law to our Company
KPMG Certified Public Accountants
Public Interest Entity Auditor registered in accordance
with the Accounting and Financial Reporting Council
Ordinance
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-19 –


--- page 593 ---
Name Qualification
Harney Westwood & Riegels Legal advisor as to Cayman Islands law to our
Company
Lee and Li, Attorneys-at-Law Legal advisor as to Taiwan law to our Company
Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co.
Industry consultant
Cushman & Wakefield Limited Independent property valuer
As of the Latest Practicable Date, none of the experts named above has any shareholding
in any member of our Group or the right (whether legally enforceable or not) to subscribe for
or to nominate persons to subscribe for securities in any member of our Group.
Each of the experts named above has given and has not withdrawn its written consent to
the issue of this prospectus with copies of its reports, letters, opinions or summaries of opinions
(as the case may be) and the references to its name included herein in the form and context in
which they are respectively included.
5. Binding effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
6. Bilingual document
The English language and Chinese language versions of this prospectus are being
published separately in reliance upon the exemption provided by section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
7. Preliminary expenses
We have not incurred any material preliminary expenses in relation to the incorporation
of our Company.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-20 –


--- page 594 ---
8. Disclaimers
(a) Save as disclosed in this prospectus, within the two years immediately preceding the
date of this prospectus:
(i) there are no commissions for subscribing or agreeing to subscribe, or procuring
or agreeing to procure subscriptions, for any shares in or debentures of our
Company; and
(ii) there are no commissions, discounts, brokerages or other special terms granted
in connection with the issue or sale of any capital of any member of our Group,
and no Directors, promoters or experts named in “— E. Other Information —
4. Consent of experts” in this section above received any such payment or
benefit.
(b) Save as disclosed in this prospectus:
(i) there are no founder, management or deferred shares in our Company or any
member of our Group;
(ii) we do not have any promoter and no cash, securities or other benefit has been
paid, allotted or given within the two years immediately preceding the date of
this prospectus, or are proposed to be paid, allotted or given to any promoters;
(iii) none of the Directors or the experts named in “— E. Other Information — 4.
Consent of experts” in this section above has any interest, direct or indirect, in
the promotion of, or in any assets which have been, within the two years
immediately preceding the date of this prospectus, acquired or disposed of by
or leased to, any member of our Group, or are proposed to be acquired or
disposed of by or leased to any member of our Group;
(iv) there are no bank overdrafts or other similar indebtedness by our Company or
any member of our Group;
(v) there are no hire purchase commitments, guarantees or other material
contingent liabilities of our Company or any member of our Group;
(vi) there are no outstanding convertible debt securities or debentures of our
Company or any member of our Group;
(vii) there are no other stock exchange on which any part of the equity or debt
securities of our Company is listed or dealt in or on which listing or permission
to deal is being or is proposed to be sought;
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-21 –


--- page 595 ---
(viii) no capital of any member of our Group is under option, or is agreed
conditionally or unconditionally to be put under option;
(ix) there has not been any interruption in the business of our Group which may
have or has had a significant effect on the financial position of our Group in
the 12 months preceding the date of this prospectus; and
(x) there are no contracts or arrangements subsisting at the date of this prospectus
in which a Director is materially interested or which is significant in relation
to the business of our Group.
APPENDIX V STATUTORY AND GENERAL INFORMATION
– V-22 –


--- page 596 ---
DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES
The documents attached to the copy of this prospectus delivered to the Registrar of
Companies in Hong Kong for registration were:
(a) the written consents referred to in “Statutory and General Information — E. Other
Information — 4. Consent of experts” in Appendix V to this prospectus; and
(b) copies of the material contracts referred to in “Statutory and General Information —
B. Further Information about our Business — 1. Summary of material contracts” in
Appendix V to this prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the Stock Exchange’s website
(www.hkexnews.hk ) and the Company’s own website ( www.benqmedicalcenter.com ) for a
period of time for 14 days from the date of this prospectus:
(a) the Memorandum of Association and the Articles of Association;
(b) the material contracts referred to in “Statutory and general information — B. Further
Information About Our Business — 1. Summary of material contracts” in Appendix
V to this prospectus;
(c) the service contracts and the letters of appointment with our Directors referred to in
“Statutory and General Information — C. Further Information About Our Directors
— 1. Particulars of Directors’ service contracts and appointment letters” in
Appendix V to this prospectus;
(d) the Accountants’ Report and the report on the unaudited pro forma financial
information of our Group prepared by KPMG, the texts of which are set out in
Appendix I and Appendix II, respectively, to this prospectus;
(e) the audited consolidated financial statements of our Company for three years ended
December 31, 2022, 2023 and 2024 and the six months ended June 30 2025;
(f) the valuation report from Cushman & Wakefield Limited, the text of which is set out
in Appendix III;
(g) the report issued by Frost & Sullivan, a summary of which is set forth in “Industry
Overview” in this prospectus;
(h) the PRC legal opinions issued by Commerce & Finance Law Offices in respect of
certain general corporate matters and property interests in the PRC of our Group;
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY
– VI-1 –


--- page 597 ---
(i) the letter of advice prepared by Harney Westwood & Riegels, our legal advisor on
Cayman Islands law, summarizing certain aspects of Cayman companies laws
referred to in Appendix IV to this prospectus;
(j) the legal opinion issued by Lee and Li, Attorneys-at-Law, our legal advisor as to
certain aspects of Taiwan laws;
(k) the terms of the Pre-IPO Share Option Plan;
(l) the Cayman Companies Act; and
(m) the written consents referred to in “Statutory and General Information — E. Other
Information — 4. Consent of experts” in Appendix V to this prospectus.
DOCUMENTS A V AILABLE FOR INSPECTION
A list of grantees under the Pre-IPO Share Option Plan will be available for inspection at
the office of O’Melveny & Myers, 31/F, AIA Central, 1 Connaught Road Central, Hong Kong
during normal business hours from 9:00 a.m. to 5:00 p.m., up to and including the date which
is 14 days from the date of this prospectus.
APPENDIX VI DOCUMENTS DELIVERED TO THE REGISTRAR
OF COMPANIES AND A V AILABLE ON DISPLAY
– VI-2 –


--- page 598 ---
明基醫院集團股份有限公司
BenQ BM Holding Cayman Corp.
