China’s Ping An Insurance Group has raised nearly $1 billion for a medical data collection and analysis business ahead of a Hong Kong IPO, two people familiar with the matter said, in what would be the second healthcare unit it plans to bring to market.
The funding round values the unit, Ping An Healthcare Management, at $8.8 billion and has attracted SoftBank Group‘s $93 billion Vision Fund, the world’s largest private equity fund, and Japanese financial firm SBI Holdings Inc as lead investors, the people said. SoftBank’s Vision Fund and SBI have invested about $400 million and $450 million respectively, one of the people said. That would follow two other planned listings for Ping An units in the city in 2018 – Lufax, China’s biggest online wealth management platform, and Ping An Good Doctor, an online medical platform which allows users to consult doctors for diagnosis. The sources declined to be named as the information was confidential.
Ping An and SoftBank declined to comment, while SBI did not respond to requests for comment. SoftBank’s investment is its latest bet on Ping An, a Shenzhen-based financial conglomerate whose businesses also include banking, securities and investment. The Japanese technology and investment group has also invested in Good Doctor and Finance One Account, a finance unit under Ping An, the second source said. Set up in late 2016, Ping An Healthcare Management provides support to China’s public medical insurance services and guidance on medical fees with its health data system, according to Ping An’s website.
It aims to become China’s largest open platform for healthcare services such as medical treatment, social health insurance (SHI) and drug distribution, the group’s 2016 annual report showed. By the end of this year, the unit is expected to provide 5,000 hospitals in about 220 cities across China with SHI services and health records, which is in line with government efforts to cut medical costs, the first source said. It is projecting a net profit of $150 million for 2018 and $175 million for next year, the source added. Goldman Sachs was the financial advisor on the funding round, the sources said. The Wall Street Bank declined to comment. Lufax is expected to sell $6 billion to $9 billion of shares in its IPO, and is seeking a valuation of $60 billion, the South China Morning Post reported on Monday. Good Doctor has hired banks for an IPO of up to $1 billion.