On 12th March, Li Liguo, Minister of the Ministry of Civil Affairs, said that the Ministry of Civil Affairs is now at the early stage of preparing the elderly care service scheme under the “13th Five-Year Plan”. The elderly care service industry is receiving more and more attention as the ageing population becomes a more and more serious problem. According to the relevant policy documents currently released by the state and local governments, supporting social forces to set up elderly care establishments and promoting the development of elderly care service informatization are the focuses. Listed companies are also actively making plans around these focused areas. Practitioners in the industry indicate that informatization will be a main direction for future development and those companies with the resources of portal, health and medical services will enjoy more advantages.

Listed companies actively plan for business layout.

In order to enjoy the benefits from favorable policies, listed companies speed up their business layout in the elderly care service industry. On 7th March, Youngor disclosed that the company and its affiliates decided to invest RMB 1 billion in founding a health industry fund, which would be mainly used for making equity investment in those enterprises that have the value for merge and acquisition in the big-health industry; and, to pay attention to the opportunities from the private offering of additional shares by those outstanding listed companies and the investment opportunities from the reform and reorganization of those medium- to large-sized state-owned enterprises with mixed ownership in the medical and health industry. Wang Liping from Shenwan Hongyuan Securities believes that the big health and elderly care sector will be the key directions for future investment. Youngor meets the trend of future social development by setting up a health industry fund, building a model for combining “medical and health industry + senior housing industry”, and investing in big health industry, and is expected to transform its real estate business to senior housing industry in the future.

On 28th February, Nanjing Xinjiekou Department Store Co., Ltd. (“NXDS”) disclosed that the company together with Natali Seculife Holding Ltd., an affiliate of SanPower Group, planned for making joint investment of RMB 30 million in setting up the Natali (China) Elderly Care Service Co., Ltd. (“Natali (China)”), in which NXDS will hold 35% shares for its investment of RMB 10.5 million. By joining the investment in the setup of Natali (China), NXDS meets the trend of the elderly care service industry that will boom very soon. Natali is a leading Israeli service provider of telemedicine, first aid and health service in the community. The partnership will help NXDS to develop its business of elderly care service by making full use of Natali’s overseas resources and advantages in community-based medical services and elderly care services.

On 22nd January this year, Homyear Real Estate published its revised acquisition plan for acquiring 100% of the shares of Chongqing Gener Medical Equipment Co., Ltd. with RMB 2.15 billion. Before this transaction, Homyear Real Estate was mainly specializing in real estate development and mining industry development. After completion of this transaction, the company will continue to carry out its original scope of business while having new business of medical commerce and medical services. In fact, Homyear Real Estate already planned ahead for its business layout in senior housing. In 2013, it established Beijing Homyear Kangnian Operation & Management Co., Ltd. for the operation and management of its elderly care businesses and nursing home. The company is gradually completing its business transformation and business layout, from a pure real estate business into a cross-sector business specializing in both real estate and medical + elderly care. According to the strategic plan of the company, medical health and elderly care industry will be the key area of investment.

Elderly care service informatization will be a trend

Since the issuance of Several Opinions on Accelerating the Development of Elderly Care Service Industry, many regions have released their local implementation opinions. By summarizing these documents from different regions, the reporter of China Securities Journal has found that the measures for supporting social forces to set up elderly care establishments, promoting the development of elderly care service informatization as well as accelerating the development of silver industry will be the focuses of many regions.

Regarding elderly care service informatization, Shanghai City suggests building a unified elderly care service information platform in the city, for encouraging enterprises and institutions to use the internet technology and the internet of things technology to build a technology-based elderly assistance platform for the benefit of integrating market and social resources and promoting match between supply and demand. Jiangxi City also mentions about making more efforts in building an elderly care service information network and platform, in order to fully improve the efficiency and level of elderly care services.

As a matter of fact, in October 2014, the Notice on Carrying out the Work in Pilot Spots of Elderly Care Services and Community-based Service Information Projects for People’s Benefit was jointly issued by six ministries and commissions, including the Ministry of Civil Affairs and the National Development and Reform Commission, with regard to the decision on carrying out the work nationwide in pilot spots of elderly care services and community-based service information projects for people’s benefit. The Notice also required promoting the wide application of information technology, such as the internet and the internet of things, in the areas of elderly care services and community services.  

Hao Biao from China Merchants Securities deems that it is necessary to build an unobstructed regional health information channel for community-based elderly care and health management O2O purpose, so as to provide information system support to elderly health management, create good interaction with hospitals, and use mobile terminals to provide portals for users and doctors. Therefore, those companies and manufacturers with regional portal resources and regional health and medical resources should have greatest potentials of growth. Enjoyor Co., Ltd. has portals to the community, to the region medical and to the medical information and mobile APP, so it is worth our attention.