FAST NEWS: Fosun Pharma Spends $160 Million on Singapore Cancer Clinic

The latest: Shanghai Fosun Pharmaceutical (Group) Co. Ltd. (2196.HK; 600196.SH) announced Monday evening it will acquire a 60% stake in Oncocare Medical Pte Ltd, one of the local largest private medical oncology specialist centers in Singapore, for a consideration of no more than S$218 million ($160 million).

Looking up: Fosun Pharma said the acquisition will help expand the company’s medical services business in Southeast Asia and further strengthen its overall cancer treatment services.

Take Note: Upon completion of the transaction, the board of directors of Oncocare Medical will comprise five directors, three appointed by Fosun Pharma and two appointed by the seller, Solid Success, with both parties having the right to appoint a co-chief executive officer. The two co-chief executive officers have the same responsibilities, but due to their different backgrounds, may take time to adjust to each other’s management style.

Digging Deeper: As an integrated pharmaceutical, medical equipment and healthcare services company, Fosun Pharma has a diversified business portfolio, with revenue of 38.9 billion yuan ($5.8 billion) last year, up 28.8% year-on-year, of which 28.8 billion yuan was from pharmaceutical manufacturing, accounting for 74% of the total revenue. While revenue from healthcare services was 4.11 billion yuan, it was only 10.6% of overall revenue. The company disclosed in its results report that it will continue to build a regional healthcare model and health services industry chain through continuous advancement of its medical institution’s specialty construction, by internal integration and outward expansion, along with the acquisition of the Singapore Oncology Medical Center is in line with the company’s business strategy.

Market Reaction: Fosun Pharma opened a modest 1.7% lower on Tuesday morning before moving up 0.5% to HK$32.35 at the midday break. The stock now trades at the lower end of its 52-week price range.

Translation by Jony Ho

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