183 Million Related Party Capital Increase Investment, Jimin Health Provides "Blood Transfusion" to Loss-Making Subsidiary for Self-Rescue

Ask AI · Can this blood transfusion-style self-rescue bring long-term operational improvements?

Recently, Jimin Health Management Co., Ltd. (referred to as “Jimin Health”) announced that its wholly-owned subsidiary, Ezhou Second Hospital Co., Ltd. (“Ezhou Second Hospital”), has introduced a strategic investor, Hubei Changhe Military-Civilian Innovation Medical Technology Co., Ltd. (“Changhe Military-Civilian Innovation”). The latter plans to invest 183 million yuan in cash to increase its stake in Ezhou Second Hospital. After the capital increase, it will hold 40%, while Jimin Health will hold 60%, maintaining control rights. Amid ongoing losses, providing capital support to the medical sector through related-party investments and optimizing asset structure may be Jimin Health’s self-rescue move.

Still a controlling subsidiary after the capital increase

The announcement shows that this transaction is based on a pre-investment valuation of 274 million yuan for Ezhou Second Hospital. Changhe Military-Civilian Innovation will subscribe to the new shares with 183 million yuan in cash, corresponding to a 40% stake. Jimin Health waives its pre-emptive rights, reducing its ownership from 100% to 60%. Ezhou Second Hospital changes from a wholly-owned subsidiary to a controlling subsidiary, but the scope of consolidated financial statements remains unchanged. As of now, Ezhou Second Hospital has received the first installment of 18.2606 million yuan.

This transaction constitutes a related-party deal. Jimin Health owns 40.54% of Hubei Changhe Intelligent Technology Venture Partnership (Limited Partnership) (“Changhe Intelligent Technology”), which in turn owns 40% of Changhe Military-Civilian Innovation. This related-party structure provides natural advantages in business synergy and resource integration but also requires greater transparency and regulation during the process.

Regarding valuation, the total equity valuation of Ezhou Second Hospital exceeds its book value by 30.3694 million yuan, an increase of 12.47%, mainly due to the higher valuation of intangible assets (land use rights) compared to their book value.

The investor in this capital increase, Changhe Military-Civilian Innovation, was established at the end of September 2025. Although it had no revenue and a net loss of 2.3522 million yuan in 2025, its low total debt of 87,500 yuan and total assets of 448 million yuan demonstrate strong financial capacity.

Double losses weigh heavily

As a company involved in healthcare services, medical devices, and chemical pharmaceuticals, Jimin Health’s main profit pillar is the medical device sector, with products covering safety injection needles, pre-filled catheter washers, in vitro diagnostics, and hemodialysis concentrates.

Since 2022, Jimin Health’s performance has declined sharply, with net profit attributable to shareholders dropping 76.64% year-over-year to 34.46 million yuan, after exceeding 100 million yuan in 2021. In 2023 and 2024, it turned to losses. In 2025, losses are expected to further expand, with an estimated net loss of between 210 million and 250 million yuan, compared to a loss of 59.7117 million yuan in 2024.

The company attributes the losses to factors such as US tariff policies and the “He Qinghong private seal engraving incident,” which further reduced revenue and increased losses. In 2025, Ezhou Second Hospital’s performance declined compared to the previous year, and the company has provisioned about 20 million yuan for goodwill impairment related to the acquisition.

In March 2025, Vice President He Qinghong and her team were exposed for illegally engraving company and subsidiary seals, forging company signatures to sign “Supplementary Agreements” with distributors, which included unconditional returns and 10% fund occupation compensation. This incident caused a 92.24% year-over-year drop in sales of pre-filled catheter washers and safety syringes (domestic sales) in the first half of 2025, with an estimated loss of about 38 million yuan and inventory write-downs of approximately 37 million yuan. Coupled with the impact of US tariffs, export revenue also declined significantly, leading to continuous deterioration in performance under dual internal and external pressures.

As the core asset of the company’s medical sector, Ezhou Second Hospital saw outpatient visits and inpatient discharges increase by 12.99% and 5.64%, respectively, in the first half of 2025, with revenue up 4.25%. However, net profit lost 8.1088 million yuan, and operating profit was negative 10.3753 million yuan; the loss in the first three quarters of 2025 widened to 13.2359 million yuan. Ongoing losses and operational investment needs have put the hospital under significant financial pressure.

For Jimin Health, this capital increase is a key move to balance short-term interests with long-term development. However, this “blood transfusion” self-rescue is not a permanent solution. The company warns that if the parties fail to fulfill their obligations as per the agreement, the progress of the capital increase may be delayed or even impossible. Moreover, the increase can only address short-term funding gaps; restoring core medical device operations, fixing internal control issues, resolving distributor litigation disputes, and turning around Ezhou Second Hospital’s losses are long-term challenges. To truly escape the loss cycle, Jimin Health must confront deeper operational problems.

The Beijing News reporter: Zhang Zhaohui

Proofreader: Mu Xiangtong