Focusing on high-end private healthcare, Zhuozheng Medical makes its third attempt at the Hong Kong Stock Exchange

Zhuozheng Medical has established a medical service network covering economically developed regions of China, operating 19 medical service institutions in first and second-tier cities in China. Key Points: Zhuozheng Medical adopts a family medical model, transforming single, low-frequency medical needs into multi-person, higher-frequency services. In the first eight months of 2025, it achieved positive operating profit for the first time, recording a net profit of 83.211 million yuan during the same period. Molly Against the backdrop of tightening policy regulations and medical insurance payment reforms, many private hospitals in China have fallen into operational difficulties, even facing a wave of bankruptcies. However, private medical services targeting the mid-to-high-end market have shown strong resilience, with revenue scales continuously expanding. On November 5, Zhuozheng Medical Holdings Limited, targeting middle-class families, submitted its listing application to the Hong Kong Stock Exchange, marking its third submission since May 2024, with Haitong International and Pudong Development Bank International as joint sponsors. Zhuozheng Medical's business began in 2012 and now offers a range of specialized services including pediatrics, dentistry, ophthalmology, dermatology, otolaryngology, surgery, gynecology, and internal medicine, targeting affluent individuals with strong purchasing power who prefer more personalized medical services. According to Frost & Sullivan data, based on 2024 revenue, Zhuozheng Medical is the third-largest private mid-to-high-end comprehensive medical service institution in China, with a market share of 2.0%. The number of affluent individuals in China continues to grow, increasing from 104 million in 2020 to 123 million in 2024. The growth of the affluent population drives a rapid rise in demand for mid-to-high-end medical services, with the market size expanding from 322.3 billion yuan in 2020 to 641.1 billion yuan in 2024. Frost & Sullivan estimates that by 2029, this market size will further expand to 1,165.9 billion yuan. After 13 years of development, Zhuozheng Medical has built a medical service network covering economically developed regions of China, operating 19 medical service institutions in Shenzhen, Guangzhou, Beijing, Chengdu, Suzhou, Changsha, Shanghai, Chongqing, Hangzhou, and Wuhan, including 17 clinics and 2 hospitals. Zhuozheng Medical has also expanded its business overseas, operating four general clinics in Singapore and one general clinic in Malaysia, becoming one of the few Chinese private medical brands to go abroad. Unlike the individual medical model adopted by the vast majority of medical institutions in China, Zhuozheng Medical employs a family medical model, transforming single, low-frequency medical needs into multi-person, higher-frequency services. Using pediatrics as an entry point, it drives the entire family's medical consumption. In the first eight months of 2025, the total number of pediatric visits at Zhuozheng Medical reached 158,900, accounting for 30% of the total 541,000 visits. To attract more family members for consultations, Zhuozheng Medical launched a membership plan based on an annual fee starting in 2020, which can provide priority appointments, discounts on certain medical services and products for up to six members under one account, significantly increasing patient retention rates. As of the end of August 2025, Zhuozheng Medical had a total of 116,500 member accounts In 2023, 2024, and the first eight months of 2025, there were 733,400, 905,800, and 642,100 patient visits, respectively, at Zhuozheng Medical service institutions and online medical service platforms. Profitability is not easy Despite the rapid growth of Zhuozheng Medical's business, its financial performance has not been satisfactory. In 2023, 2024, and the first eight months of 2025, Zhuozheng Medical's revenue was 690 million yuan, 958 million yuan, and 696 million yuan, respectively, but its path to profitability has not been easy. In 2022 and 2023, the company reported net losses of 222 million yuan and 353 million yuan, respectively. In 2024, supported by changes in the fair value of convertible redeemable preferred shares, the company achieved a net profit of 80.227 million yuan, while the operating profit during the same period still recorded a loss of 46.877 million yuan. It wasn't until the first eight months of 2025 that the company achieved positive operating profit for the first time, recording a net profit of 83.211 million yuan during the same period. Among them, the huge employee salary and benefits expenses are one of the main reasons affecting Zhuozheng Medical's financial performance. In 2023, 2024, and the first eight months of 2025, Zhuozheng's total employee salary and benefits expenses were 436 million yuan, 565 million yuan, and 377 million yuan, accounting for 63.2%, 58.9%, and 54.2% of total revenue during the same periods, respectively. This portion of expenditure is difficult to significantly reduce, as the medical team is the core competitiveness of Zhuozheng Medical. As of the end of August 2025, the company had 387 full-time doctors with an average practice experience of about 15 years, of which approximately 79% had practiced in top-tier hospitals. However, with improved operational efficiency and the economies of scale brought about by increased patient visits, Zhuozheng Medical's gross profit margin is improving, with the overall gross profit margin rising from 9.3% in 2022 to 24% in the first eight months of 2025. Zhuozheng Medical has always been favored by investment institutions, completing five rounds of financing since 2014, with investors including Tencent, H Capital, Tiantu Capital, and Matrix Partners China, among other well-known institutions. Tencent is the largest institutional investor in Zhuozheng Medical, holding a 19.39% stake