Another announcement has cast a shadow over the prospects of a leading A-share ophthalmology giant.

Recently, Huaxia Eye Hospital Group Co., Ltd. (stock abbreviation: "Huaxia Eye") suddenly announced that on June 6 this year, the company received a notice from Su Qingcan's family stating that the Shanghai Supervision Commission had lifted the detention measures against Su Qingcan. At the same time, Su Qingcan was placed under residential surveillance by the public security authorities, and the matters involved are unrelated to the company.

Huaxia Eye emphasized in the announcement that currently, under the leadership of the board of directors and the management team, the company's production, operations, and management are all normal. The company will carry out its work in accordance with its established development strategy to ensure steady and high-quality growth.

According to an announcement last December, Su Qingcan, the actual controller and chairman of Huaxia Eye, was detained by the Shanghai Supervision Commission for personal reasons. Huaxia Eye did not provide a detailed explanation for Su Qingcan's detention, only stating that it was "due to personal reasons."

It is worth noting that Su Qingcan and his concerted parties hold more than 60% of Huaxia Eye's shares. Whether Su Qingcan's residential surveillance will affect the company's future plans has drawn significant market attention.

Possibly affected by this, Huaxia Eye's stock price has been declining. On June 11, it once fell to 23.44 yuan per share, hitting its lowest point since its listing. Compared to the peak in 2023, the cumulative decline has reached 62.8%, with the latest total market capitalization shrinking to 20.966 billion yuan, a cumulative evaporation of 32 billion yuan.

In the industry, Huaxia Eye is nicknamed "Little Aier" and is based in Putian, Fujian, known for its private healthcare.

Su Qingcan, now under residential surveillance, is no small figure. With Huaxia Eye's listing, his net worth once reached 25.5 billion yuan. On the "2023 Hurun Global Rich List," Su Qingcan, the founder of Huaxia Eye, debuted at 841st place globally and third in Xiamen, with a net worth of 25.5 billion yuan, trailing only Ding Shizhong and Ding Shijia of Anta Group.

Born in 1969, he is also the only entrepreneur from Xianyou, Putian, Fujian, to make the list, becoming the "richest person in Xianyou."

Putian's "King of Ophthalmology"

Su Qingcan was born in 1969 and graduated from Xianyou No. 1 High School in Putian in 1988. He holds a master's degree from Xiamen University.

Su Qingcan does not come from a medical background. According to public reports, after graduating in 1992, he joined a local public institution, securing an "iron rice bowl." However, he was very interested in business and soon resigned, moving to Xiamen Haicang Economic and Trade Company.

After accumulating extensive connections through his work, Su Qingcan decided to strike out on his own, establishing his first trading company, primarily dealing in construction template trade, which earned him his first pot of gold. In March 2000, Su Qingcan founded Ouhua Import and Export Trade Co., Ltd., mainly engaged in the agency of shoes and clothing.

According to his resume, from December 1993 to May 1995, Su Qingcan served as the manager of Xiamen Haicang Economic and Trade Company. In June 1996, he established Xiamen Oulu Trading Co., Ltd. and served as its legal representative. Starting in March 2000, Su Qingcan became the general manager of Xiamen Ouhua Import and Export Trade Co., Ltd.

Su Qingcan's ophthalmology empire began in 2004. That year, Xiamen Eye Center opened a bid for restructuring, which he successfully won, entering the ophthalmology industry.

This was the predecessor of Huaxia Eye.

From August 2004 to December 2015, Su Qingcan officially served as the executive director and general manager of Huaxia Eye Hospital Group.

Starting in December 2015, he became the chairman and general manager of Huaxia Eye Hospital Group.

With his savvy business skills, Huaxia Eye began its chain expansion strategy within Fujian Province in 2010, launching ophthalmology services in Fuzhou and Quanzhou. In December of the same year, it acquired a controlling stake in Shanghai Peace Eye Hospital, officially stepping outside Fujian Province.

In November 2023, Huaxia Eye successfully entered the capital market, listing on the ChiNext board. On its first day of trading, its total market capitalization approached 40 billion yuan. Compared to the acquisition price, Su Qingcan achieved a valuation increase of over 1,200 times in just 20 years.

Thanks to his success in ophthalmology, Su Qingcan also serves as the deputy director of the Ophthalmology Professional Committee of the Chinese Non-Governmental Medical Institutions Association, permanent honorary chairman of the Hong Kong Fujian Associations Federation, deputy director of the Bright Fund Management Committee of the China Health Promotion Foundation, and vice chairman of the China Private Hospital Development Alliance.

In addition, Su Qingcan has been dubbed by the media as "the first person in Fujian's healthcare system reform" and is passionate about philanthropy. By the end of 2015, he became the executive vice president of the "Putian (China) Health Industry Association."

Now, Su Qingcan is embroiled in significant trouble.

Residential surveillance refers to a compulsory measure in criminal proceedings where the People's Court, People's Procuratorate, or public security authorities restrict a criminal suspect or defendant from leaving their residence or a designated place within a specified period, monitoring their actions and limiting their personal freedom.

Industry insiders point out that there are two possible scenarios when a corporate executive is placed under residential surveillance: either they are implicated in other issues and are cooperating with investigations, or the company itself has compliance issues. Generally, they are not detained for long. "Private hospitals have repeatedly been penalized for violations, suggesting there may be some irregularities."

According to Huaxia Eye's IPO prospectus, from 2017 to the first quarter of 2020, Huaxia Eye received 69 administrative penalties totaling approximately 2.4754 million yuan, including illegal advertising, unlicensed medical practice, social security fraud, medical malpractice, selling substandard products, and environmental violations.

Huaxia Eye's Frenzied Expansion

There is a saying in the healthcare industry: "golden eyes, silver teeth, bronze orthopedics," summarizing the profitability of various sub-sectors.

As a leader in ophthalmology, Huaxia Eye's profitability is naturally strong. Currently, Huaxia Eye is a leading large-scale ophthalmology medical chain group in China, providing comprehensive ophthalmology services to domestic and international patients, including eight major subspecialties: cataract, refractive, fundus, strabismus and pediatric ophthalmology, ocular surface, glaucoma, orbital and ocular tumors, and ocular trauma, as well as optometry.

After securing financing from the capital market, Sun Qingcan led the company on a frenzied expansion path.

According to the annual report disclosed in April this year, as of the end of 2023, Huaxia Eye had established 57 specialized ophthalmology hospitals in China, covering 47 cities across 18 provinces and municipalities, spanning East, Central, South, Southwest, and North China. It has built a nationwide network of medical service outlets through chain operations. Additionally, the company has opened 60 optometry centers in China, providing medical optometry and glasses fitting services for patients with refractive errors.

It is worth noting that amid its frenzied expansion, Huaxia Eye has repeatedly been embroiled in administrative penalties.

A review of all penalties shows that Huaxia Eye's violations mainly fall into categories such as illegal advertising, unlicensed medical practice, social security fraud, medical malpractice, selling substandard products, and environmental violations.

In its annual report, Huaxia Eye stated that due to limitations in medical knowledge, individual patient differences, varying disease conditions, diagnostic equipment, doctors' professional capabilities, and hospital conditions, there are varying degrees of risk in clinical practice. These factors, if leading to medical accidents or disputes, may result in complaints, financial compensation, administrative penalties, criminal liability, or legal actions, adversely affecting the company's reputation and brand image.