Korea’s sole foreign clinic operator CHA Healthcare to go public in 2025

CHA Healthcare Co. operating nearly 90 hospitals and infertility treatment centers across the world, is set to pave the way for South Koreans' investment in foreign hospitals as it restarts the process to go public in Korea by 2025 after its earlier attempt in 2021 flopped due to the COVID-19 pandemic.

CHA Healthcare will kick off the initial public offering process to list on the Korean stock market by 2025, Oh Sang-hoon, chief executive officer of CHA Biotech Co., announced at CHA Bio/Healthcare Day on Wednesday.

CHA Biotech is the largest shareholder of CHA Healthcare with a 59.3% stake, followed by Mirae Asset Group’s private equity fund with 38.6%.

CHA Healthcare picked an underwriter for its IPO in 2021 but shelved the plan in the face of sprawling COVID-19 outbreaks. It recently decided to resume the IPO process with the easing of the pandemic, creating better market conditions for an IPO valuation.  

As Korea’s only operator of overseas healthcare facilities, CHA Healthcare hopes to follow in the footsteps of its bigger foreign peers such as HCA Healthcare, an American for-profit medical service provider that owns 184 hospitals in the US and UK and boasts about 78 trillion won ($59.3 billion) in revenue in 2022. Its enterprise value is estimated at 91 trillion won.

Raffles Medical Group, a private medical provider in Singapore, is another offshore peer that the Korean peer is modeling. It reaped 910 billion won in revenue last year with a corporate value of 2.5 trillion won.  

CHA Healthcare’s revenue for 2022 is estimated at 700 billion won, up 25% from the prior year, and is forecast to grow to about 865 billion won this year. It aims to rake in 1.13 trillion won in revenue by 2025.

KOREA’S SOLE MEDICAL FIRM WITH AN OVERSEAS PRESENCE

Founded in 2013, CHA Healthcare is Korea’s only medical service provider that makes profits from operating offshore healthcare facilities.

It owns and operates 86 hospitals and in vitro fertilization (IVF) clinics in seven countries including the US, Australia, Singapore and Japan, using its extensive know-how from running CHA Medical Center’s several branches in Korea that have been offering medical services to local patients for about 60 years.

CHA Healthcare made inroads into the foreign healthcare market with LA CHA Hollywood Presbyterian Medical Center, the biggest private general hospital in Los Angeles. It is currently building a new building for the hospital at a cost of 457 billion won.

It also acquired City Fertility in Australia in 2018 and Fertility Specialists of Western Australia (FSWA), a major fertility center in Western Australia, in 2022. The Korean medical facility operator manages 21 fertility centers in the country and plans to foray into neighboring New Zealand.

It is also partnering with Singapore Medical Group (SMG), which runs 48 clinics in Singapore, Indonesia, Vietnam and Australia, after acquiring its 24% stake, and plans to open hospitals in other Southeast Asian countries such as Malaysia, Thailand and the Philippines. It earned 110 billion won in revenue last year.

GLOBAL AMBITION ARMED WITH DIGITAL HEALTHCARE

The medical service operator under CHA Medical Group, Korea’s major healthcare provider with leading IVF and stem cell cure technologies, is bracing to join the ranks of the big global players with its IPO.

In a separate move, it is seeking to raise 810 billion won via a fund formed with IGIS Asia Investment Management to expand its global healthcare network. It plans to build virtual hospitals and artificial intelligence (AI)-backed digital healthcare platforms with the proceeds.

It currently offers immune cell treatments to cancer patients and stem-cell cures to diabetes patients at its affiliate Chaum’s Total Cell Clinic Tokyo in Japan, which is expected to become a clinical trials platform for local new drugs.

Write to Ji-Hyun Lee at bluesky@hankyung.com

Sookyung Seo edited this article.