Tencent expands healthcare business with US$41.5 million investment in medical equipment maker

September 20, 2022 10:35 pm

Tencent Holdings has expanded its burgeoning healthcare businesses with new US$41.5 million investment in Xunjie Medical.

According to an exchange filing by Jiangsu Yuyue Medical Equipment & Supply Co to the Shenzhen Stock Exchange on Monday, Tencent plans to buy a 19.5 per cent stake in its subsidiary Jiangsu Xunjie Medical Technology Co for 291 million yuan. Xunjie Medical owns German firm Metrax, a maker of defibrillators and other first aid medical equipment under the Primedic brand.

Prior to the latest investment, Tencent has already invested a number of healthcare companies this year, including Beijing-based drug discovery firm Singlomics and nursing home company Fortune Care in Shanghai, according to Chinese business information and corporation registry service Tianyancha.

COVID-19 and related restrictions on movement have sparked rapid growth in health sectors including medical equipment, online pharmacy and medical services. The sector is forecast to grow at a compound annual rate of 39% from 2019 to 2024, JD Health International Inc. said in its IPO prospectus last year, citing consultancy Frost & Sullivan.

Investors have seized on the potential. In August, TikTok owner ByteDance acquired Beijing Amcare Medical Management Co operator of the country’s largest private hospital chain specialising in obstetrics and gynaecology. Amcare operates 7 women's and children's hospitals, 2 general outpatient centers, and 5 confinement centers, primarily in China's first- and second-tier cities, including Beijing, Shanghai, and Shenzhen.

Chinese social network and gaming giant Tencent has built up its empire encompassing social network, games, music, film, online literature, video streaming and TV shows through active investments, but its pace of investment has slowed down because of the tightened scrutiny of the country’s regulator. Tencent has only made 32 investments and acquisiton for the first half of this year, which accounts for about a quarter of its 129 total transactions in the same period in 2021.