New | China’s first listed psychiatric hospital set to break mental health taboo, and raise HK$681 million in the process
Wenzhou Kangning Hospital expansion to tap mainland’s underserved 35 billion yuan mental healthcare market
China’s first listed psychiatric hospital is on track to break the mental-health taboo in a country where such illnesses are still stigmatised by traditional perceptions.
Due to begin trading on Friday, privately-owned Wenzhou Kangning Hospital is set to raise HK$681 million in a Hong Kong initial public offering by selling 17.6 million shares priced at HK$38.7, the upper end of the indicative range of HK$32.1 to HK$38.7.
Guan Weili, chairman and founder of the Wenzhou-based operation, said overstressed young adults accounted for most of the outpatients at the hospital, with insomnia, anxiety and depression being the three most-commonly treated illnesses. “These diseases have been on the rise and are very common among ordinary people,” he said.
Investors are betting that Kangning will benefit from a market estimated by US consultants Frost & Sullivan to be worth 35 billion yuan (HK$42.4 million) this year, almost doubling to 65 billion yuan by 2019, with almost 200 million mainland Chinese said to be suffering from some form of mental health disorder. The Kangning public offering was “very significantly” oversubscribed, the company said in a statement, with applications for 220.53 million shares received for the 1.76 million shares on offer.
Net proceeds from the fundraising will be used to build more psychiatric healthcare facilities in China’s populous eastern and southwestern regions, as well as in remote country areas where services are greatly needed but scarce, Guan said.
“The demand for mental health care services exceeds supply, as there has been a major shift in the way Chinese people think about mental health,” Guan said. “People are increasingly aware of the need for treatment of those problems as society grows more prosperous.”
In the early 1990s Guan worked as a clinician in the government-owned Wenzhou Mental Hospital where he witnessed first-hand the “huge” demand for such services. Frustrated that state-owned hospitals were failing to meet the mental-health care needs of society, Guan quit his job in 1996 and founded Kangning.
