On April 8, China Resources Healthcare Group Ltd. (“CR Healthcare”) and Phoenix Healthcare Group Ltd. (“Phoenix Healthcare,” HKEX Code: 1515) signed a “term sheet” for assets and equity transactions.

Phoenix Healthcare will acquire a subsidiary of CR Healthcare (the subsidiary holds some of CR Healthcare’s assets and equities) and will pay a purchase consideration through re-issuing new shares to CR Healthcare. After completing the transaction, CR Healthcare will become the single largest shareholder of Phoenix Healthcare, with its proportion of shares being no less than 35.7%. Phoenix Healthcare will be renamed CR Phoenix Healthcare Ltd. (hereafter referred to as “CR Phoenix”).

After the reorganization, CR Phoenix will operate 107 medical institutions and 3 endowment institutions in total, including 7 tertiary hospitals, 12 secondary hospitals, 34 primary hospitals, and 54 community medical institutions according to existing hospital number and beds. All together, approximately 11,780 beds will be open in affiliated medical institutions. It will become one of the largest medical service groups in Asia in terms of number of beds in operation. CR Phoenix will give full play to the experience and resources of both parties in hospital operation and the industrial investment field. Against the background of China’s medical system reform, CR Phoenix will actively participate in public hospital reform, constantly expand medical institution networking in China, and establish a medical and health enterprise group that has the strongest influence in China and a notable influence worldwide. Meanwhile, CR Phoenix will continuously improve medical service quality, enhance clinical technique levels, and strengthen service abilities to effectively control medical costs through establishing a collectivized and standard operations management system with shared resources. Additionally, it will strive to provide high quality medical services to Chinese residents, tend to the enterprise development rooted in Chinese residents’ health lives, and lay a rock solid foundation for the future development of the enterprise. In terms of industrial distribution, CR Phoenix will focus on developing RIDS (Regional Integrated Delivery System). It will realize the medical reform goal of a hierarchical diagnosis and treatment system, and will explore industry modes for optimizing medical resource allocation through the coordinated development of three service networks, including primary diagnosis and treatment, severe disease diagnosis and treatment, and health care services. Based on this, it will expand further towards insurance and endowment industry chain, explore the combined industries of medical-insurance and medical-nursing in development mode, strive to become an important part of the medical and health supply side economy in China, and achieve the developmental idea of fulfilling social responsibility through industry development.

This cooperation is a cooperation between two strong enterprises so that they can complement each other’s advantages. Phoenix Healthcare focuses its main medical resources in the Beijing-Tianjin-Hebei region. After years of development, it has accumulated rich experience in public hospital reform and collectivized hospital management. Signing the term sheet will let CR Healthcare fill in the blank of industrial distribution in the Beijing-Tianjin-Hebei region. Additionally, with Phoenix Healthcare’s rich experience in hospital management and operation, CR Healthcare will further improve its existing medical resource management and service levels, and provide better medical service to the general public.