Harmonicare Medical Holdings (01509.HK), which operates obstetrics and gynecology hospitals in China, expects its business to get a significant boost from the mainland’s new two-child policy.
The eased family planning rules could result in 5-8 million babies being born in the next two to three years, which will be a boon to maternity services firms such as Harmonicare, a senior executive said.
Chen Wei, vice president and company secretary, told the Hong Kong Economic Journal in an interview that he expects his firm’s revenue to rise 20 to 30 percent next year and also enjoy a higher gross profit margin.
For the first half this year, Harmonicare posted 445 million yuan in revenue, down 2.34 percent compared to the same period in 2014, while net profit declined 13.3 percent to 38.37 million yuan.
The company plans to open three hospitals next year, on top of two additions in 2015. Through organic growth as well as mergers and acquisitions, Harmonicare plans to take its hospital number to over 20 in three years’ time, from 11 at the moment.
The primary targets in acquisitions will be private hospitals that are more resilient to government policy changes, said Chen.
The new hospitals are likely to be in Beijing, Shanghai, Nanjing, Hangzhou and Suzhou, with each facility seen measuring 20,000 to 30,000 square meters in total floor space.
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