Jiamei to use backdoor route to public listing

Company to acquire main board firm while it pursues plans to transform its core business

Jiamei Medical Group, the largest privately owned chain of dental clinics in China, will use the backdoor listing route to go public this year, a top company official said on Thursday.

Backdoor listing is a strategy of going public used by a company that fails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company desiring to go public acquires an already listed company.

"We will acquire a controlling interest in a company that is already listed on the main board," said Liu Jia, chairman and chief executive officer of Jiamei Medical Group, adding that the company would be the first privately owned general medical service provider that would be listed.

Meanwhile, the group will also transform its main business from dental clinics to general hospitals, Liu said.

Jiamei Medical, which has been in operation for more than 22 years, already has about 100 dental clinics all over the country and the group intends to cap it at that level.

Liu said his group aims to integrate 100 private hospitals to form an allied company, in which Jiamei Medical will hold a 51 percent stake.

"We expect to complete this by the next year. We have already integrated 26 other private hospitals. The funds raised from the stock market will be mainly used for the general hospital plan," he said.

To attract other private hospitals to the allied company, Jiamei Medical plans to provide about 20 value-added services to its partners, such as training of doctors, corporate clients and long-distance medical services, he said.

Jiamei Medical's goal is to achieve a net profit of about $200 million by 2016, the chairman said.

The private medical company's ambition is not unachievable, as the government is focusing more on healthcare reforms, said industry experts.