Yuyue Medical, a Chinese medical device manufacturer also known as Yuwell, announced on September 19 that internet giant Tencent plans to invest 291 million yuan ($41.5 million) in its subsidiary, Xunjie Medical. After this deal is completed, Tencent will become the second-largest shareholder of Xunjie, accounting for 19.5% of shares. Under the background of Tencent‘s shrinking overall investment, it is quite remarkable for it to invest such a large amount in the medical field.
Xunjie Medical mainly focuses on the first aid business field. German company Primedic GmbH, which was acquired by Xunjie in 2017, brings more than 40 years of experience in the field of medical equipment and first aid. The semi-automatic external defibrillator and cardiac defibrillation monitoring products produced by the German firm are highly popular in the global medical first aid industry. According to Xunjie Medical’s financial data, in the first half of this year, the company’s revenue was 66.4887 million yuan ($9.49 million), the operating net profit was 28.3745 million yuan, and the net profit was 25.844 million yuan.
According to public data, Tencent has invested in many projects across the medical field, including companies such as Gengmei, SoYoung and Synyi AI. Its investment covers fields like medical information services, hospital management services, internet medical platforms, smart medical care, pharmaceutical R&D and other sub-sectors.
It is worth mentioning that in September last year, the “CT Image-Assisted Triage and Evaluation Software for Pneumonia” independently developed by Tencent was officially granted the third-class medical equipment registration certificate by Chinese regulators, and it officially became the first enterprise in China’s internet technology industry to obtain a third-class medical AI certificate. In March this year, the company also took a stake in Sonosemi, a high-end medical device designer and manufacturer.
Tencent has previously invested mainly in the consumer internet sector, such as content, games and the entertainment industry. This has conventionally been followed by retail, education and medical care. In 2018, it made 170 deals, and 16 companies invested by Tencent went public, setting a record. However, since the end of 2021, the company has successively reduced its holdings in firms such as JD.com, Sea Limited and New Oriental Education, and it has already suffered losses from the investments. According to Tencent‘s latest financial report, as of June 30, 2022, the fair value of shares of listed companies held by Tencent Holdings dropped from 982.8 billion yuan at the end of 2021 to 601.9 billion yuan.
According to Huaxi Securities, since 2022, Tencent has tightened its investment in the entertainment industry. Together with its main business’s investment in cloud computing business, its focus now is on enterprise services and hard technology represented by advanced manufacturing. Among them, since March 2022, there have been eight deals related to the enterprise services field, with an overall amount of 883 million yuan. Meanwhile, there were seven deals related to advanced manufacturing and blockchain, involving a total of 755 million yuan.