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Guangdong Kanghua Healthcare Co., Ltd. operated two private for-profit general hospitals, namely Kanghua Hospital, our flagship hospital, and Renkang Hospital. Both Kanghua Hospital and Renkang Hospital are located in Dongguan. We also had a management agreement with respect to Zhonglian Cardiovascular Hospital, a cardiovascular hospital currently under development in Chongqing.
 

Kanghua Hospital

Having commenced operations in November 2006, Kanghua Hospital is our flagship hospital and was the first private for-profit general hospital in the PRC rated as a Grade A Class III hospital, the highest attainable rating for hospitals in the PRC. It was also the largest private for-profit general hospital in the PRC in terms of the number of registered beds as at 31 December 2015, according to Frost & Sullivan. In terms of revenue, Kanghua Hospital was the third largest private for-profit general hospital in the PRC for the year ended 31 December 2015, according to Frost & Sullivan. It is a large scale purpose-built healthcare institution integrating multi-disciplinary clinical care, full range of diagnostic testing and a platform for medical training and research. It particularly focuses on mid- and high-end patients and critically ill patients requiring

 

complex treatment and care. As at 30 April 2016, it had over 400 doctors, over 50 multi-site doctors and more than 30 Hong Kong doctors working in large multi-disciplinary teams to deliver continuum of healthcare services to its patients. Kanghua Hospital plays a leading role in the development of new and improved medical and surgical interventions for its patients.

Operational capacity
As at 30 April 2016, Kanghua Hospital had 1,076 beds in operation, 1,752 full-time staff (1,294 of which are healthcare professionals) and a leased GFA of approximately 254,000 sq.m. The outpatient area of Kanghua Hospital occupies a leased GFA of approximately 50,000 sq.m. and has an estimated design capacity to treat up to approximately 10,000 outpatients a day. The inpatient area of Kanghua Hospital occupies a leased GFA of approximately 100,000 sq.m. and Kanghua Hospital is licensed to deploy up to 2,006 beds for operation.

Infrastructure, facilities and equipment
Equipped with advanced medical facilities, we believe Kanghua Hospital is one of the most advanced general hospitals in the PRC, with the capability to diagnose and treat the most complex and critical medical emergencies and conditions. Kanghua Hospital was the first hospital in Southern China equipped with a Toshiba Aquilion ONE 640-slice CT scanner, one of the most advanced CT scanners in the world for cardiac imaging. Other advanced medical equipment include Philips ACHIEVA 1.5T MRI scanner, Philips ALLURA cardiovascular x-ray systems for digital subtraction angiography, Siemens YSIO digital radiography systems for general purpose diagnostics, Philips Forte Gamma Cameras for nuclear imaging and GE Healthcare Voluson E8, one of the most advanced O&G ultrasound systems in the world. The Department of Medical Imaging of Kanghua Hospital is recognised as a Guangdong Province Key Clinical Discipline (廣東省臨床重點專科). Committed to delivering the highest standard of clinical service and efficiency, we have implemented advanced streamlined laboratory automation systems and sample transmission systems at Kanghua Hospital. Such systems facilitate our doctors in making accurate diagnosis efficiently and reduce the risk of human error. The CCU, ICU and NICU at Kanghua Hospital have the capability to provide emergency and intensive care to a wide range of patients through multi-disciplinary teams of healthcare professionals and specialised equipment.



An internationally renowned architectural and engineering consultant HWP Planungsgesellschaft mbH from Germany was engaged to design the infrastructure and facility layout of Kanghua Hospital, including the location of its wards and medical departments and installation of medical and laboratory equipment, with a view to maximising specialisation, patients’ comfort and rehabilitation, operational efficiencies, and health and safety for our patients and staff. For example, with the extensive use of atriums, skylights and glass corridors, our buildings and facilities in Kanghua Hospital were purposely constructed and positioned in a manner to maximise air ventilation and exposure to natural sunlight, thereby minimising the risk of cross-infection within the hospital. The highly dispersed layout of Kanghua Hospital with clear zoning and adequate isolation was designed to prevent over-concentration of patients and staff and minimise their unnecessary exposure to high risk clinical processes, such as biological waste management and radioactive procedures.

In recognition of its ingenuity in design, engineering and construction, Kanghua Hospital was awarded a silver prize for the National Construction and Engineering Award of Excellence (國家工程建設質量獎) by the National Construction and Engineering Quality Award Committee (國家工程建設質量獎審定委員會) in 2007. We engage landscape contractors to maintain the pleasant environment in the premises of Kanghua Hospital conducive to patients’ recuperation. Furthermore, Kanghua Hospital has dedicated high-end facilities, such as the purpose-built Huaxin Building, to serve the needs of its VIP patients with luxurious hotel standard accommodation, and we believe it offers truly unique experience to patients unmatched in other public or mid-end private hospitals.

As part of our initiative in maximising clinical efficiency and patient convenience, in December 2015, Kanghua Hospital implemented an intelligent medical platform (智能醫療平台) that enables patients to perform online booking and registration, provide feedback on our services and doctors, make payments with their WeChat accounts and view medical reports with the use of only a mobile phone. Such platform provides added flexibility to our patients in managing their appointments, significantly reduces their waiting time involved, eliminates their unnecessary visitations to the hospital for medical reports that can be viewed online and, at the same time, allows us to allocate human resources to more critical clinical areas. We believe the use of such platform will continue to increase going forward and we intend to develop more functionalities with a view to improving our patients’ experience.

Renkang Hospital

Having commenced operations in March 2008, Renkang Hospital is a full service general hospital that offers multi-disciplinary diagnosis and treatments to inpatients and outpatients similar to our Kanghua Hospital. It particularly focuses on geriatric patients in the community. It has a notably strong reputation in O&G, hand and foot microsurgery, digestive system and liver diseases, traumatology and geriatrics. It has not applied to be rated under the NHFPC classification system but is currently being operated according to the standard of a Grade A Class II general hospital. In May 2012, Renkang Hospital was recognised as a top 30 hospital with sustainable development potential in Guangdong Province (廣東省可持續發展力三十强醫院) for 2010 to 2011 by the Provincial Affairs Investigation Centre of Guangdong Province (廣東省情調查研究中心) and Guangdong Province Hospital Association (廣東省醫院協會).

Renkang Hospital is recognised as a “designated” hospital (定點醫院) under the following healthcare programmes and services:

Social Insurance in Dongguan (東莞市社保定點醫院);
Emergency Centre in the National Emergency Hotline “120” Network (120急救中心);
Prevention of Cervical Cancer in the PRC (中國宮頸癌防治工程定點醫院).


Operational capacity
As at 30 April 2016, Renkang Hospital had 424 beds in operation, 657 full-time staff (350 of which are healthcare professionals) and a leased GFA of approximately 73,000 sq.m. The outpatient area of Renkang Hospital occupies a leased GFA of approximately 10,000 sq.m. and has an estimated capacity to treat up to 4,000 outpatients a day. The inpatient area of Renkang Hospital occupies a leased GFA of approximately 29,800 sq.m. and is licensed to deploy up to 480 beds.

Infrastructure, facilities and equipment
Similar to Kanghua Hospital, Renkang Hospital is equipped with advanced equipment to offer a wide range of medical diagnosis and procedures commonly required by the general public, such as MRI, ultrasound, CT scans, digital subtraction angiography, radiology, biochemistry analysis, genetic sequencing analysis, and multi-disciplinary endoscopic procedures. It features centralised air conditioning systems and intelligent infrastructure to improve clinical efficiency and maximise patient comfort. Being an Emergency Centre of the National Emergency Hotline “120” Network (120 急救中心), the ICU and CCU at Renkang Hospital are fully equipped to respond to a wide range of emergency conditions requiring intensive care around the clock.

Synergies between Kanghua Hospital and Renkang Hospital

Kanghua Hospital and Renkang Hospital have separate senior management teams, healthcare teams, clinical governance structures, healthcare equipment and inventories. Their day-to-day management and clinical operations are largely independent of each other. However, since they are located only within a 15-minute drive of each other, we can leverage their combined expertise and resources where possible. For example:

Renkang Hospital and Kanghua Hospital jointly established an outpatient service to provide the latest facial plastic procedures and comprehensive care for ENT;
with the support from the Plastic Surgery Medical Centre at Kanghua Hospital, advanced plastic surgery offerings are made available at Renkang Hospital ; the healthcare teams at Kanghua Hospital also provide regular professional training in plastic surgery to the healthcare teams at Renkang Hospital ;
we consolidate the procurement requirements of both our hospitals and collectively negotiate with their common suppliers for volume discounts, where practicable;
with a view to facilitating knowledge exchange and promoting our brand, our hospitals regularly organise and participate in joint academic conferences and seminars, clinical research projects, training programmes and charity events. For example, an annual conference is held for young medical professionals of both hospitals for information exchange, training and development purposes;
depending on the respective business and/or technical needs of Kanghua Hospital and Renkang Hospital , a dynamic allocation of workforce is implemented; doctors at Kanghua Hospital often consult at Renkang Hospital and provide guidance to their medical teams on rare and difficult medical conditions, surgeries and treatment of critically ill patients;
Renkang Hospital regularly refers patients who require more specialised and advanced diagnosis and/or medical care to Kanghua Hospital, for example, to use the 640-slice CT scanner or to undergo complex surgeries and procedures not available at Renkang Hospital .

Renkang Hospital has not applied to be rated under the NHFPC classification system but it is currently being operated according to the standard of a Grade A Class II general hospital. We intend to position Renkang Hospital as a more affordable community hospital targeted towards the local mass market in the immediate vicinity, while providing competitive pricing, better facilities, environment, service capabilities and quality than those of local public hospitals and other mid-end private hospitals. On account of the difference in target segment, Kanghua Hospital offers a wider scope of services with more sub-disciplines and more high-end medical services than Renkang Hospital .

Our management arrangement with Zhonglian Cardiovascular Hospital

In June 2016, we, through our wholly-owned subsidiary, Kanghua Healthcare Management, entered into a management agreement with respect to Zhonglian Cardiovascular Hospital in Chongqing, a hospital owned by Independent Third Parties. Pursuant to the agreement, we were granted exclusive management rights over Zhonglian Cardiovascular Hospital.

Zhonglian Cardiovascular Hospital is located in Jiangbei District (江北區), Chongqing. The land and building underlying Zhonglian Cardiovascular Hospital were previously occupied by a public hospital, Chongqing Red Cross Hospital (重慶市紅十字會醫院). Zhonglian Cardiovascular Hospital acquired the land and building from the Chongqing government in January 2016 and obtained the relevant title certificates in May and June 2016. The hospital building has a GFA of approximately 17,000 sq.m. and is currently being refurnished into a medical complex with inpatient and outpatient capability and specialisation in cardiovascular diseases. The hospital is expected to be a private for-profit hospital and is currently in the process of obtaining the requisite licenses for its operations and hiring a team of hospital operators, medical professionals and support staff. The hospital is expected to become operational by the end of 2016 with an initial operational capacity of 100 beds and 300 staff (approximately 200 of which are expected to be healthcare personnel). The hospital is expected to open up approximately 15 healthcare disciplines upon commencement, including outpatient (門診部), emergency medicine (急診醫學部), health management centre (健康管理中心), respiratory medicine (呼吸內科), cardiovascular medicine (心血管內科), paediatric cardiac surgery (小兒心臟外科), adult cardiac surgery (成人心臟外科), thoracic surgery (胸外科), anaesthesiology (麻醉科), laboratory medicine (醫學檢驗科), medical imaging (醫學影像科), special clinic (特診科), blood transfusion (輸血科), nutrition (營養科) and rehabilitation medicine (康復醫學科). The operational capacity of the hospital is expected to be gradually increased to more than 500 beds by its third year of operation when it is fully completed. The design maximum outpatient capacity of the hospital is estimated at 540,000 patients a year. The hospital is intended to be positioned as a regional integrated institution providing high level of cardiovascular healthcare services to patients from Chongqing and neighbouring provinces and regions.