Investment Strategy

Capturing the investment opportunities brought about by consumption upgrade and structural reforms

Cenova has a differentiated strategy of investing in life sciences and healthcare by leveraging its healthcare services portfolio to access adjacent opportunities in the healthcare products and services sub-sectors. As a value-oriented investor, Cenova uses a methodical, research-based approach to uncover unique proprietary investment opportunities and has built a synergistic, highly profitable healthcare services portfolio, in infertility, maternity, dental, ophthalmology, ENT, and aesthetics / plastic surgery, etc.



To take advantage of the favorable government policies and the broad range of investment opportunities available, Cenova invest across the healthcare value chain in four main sub-sectors:

  1. Healthcare services (private specialty hospitals, clinics) and its adjacencies;
  2. Innovative medical devices and diagnostics
  3. Innovative bio-pharmaceuticals
  4. Health technologies (artificial intelligence, big data, digital health).
Healthcare services and adjacencies

The transformation of the reimbursement system will result in numerous structural changes in the healthcare sector. Pressured by both financial constraint and growing demand, a multi-tiered Medicare system will develop and change the way people seek medical care. This will encourage doctors, traditionally tied to a single public hospital, to practice across multiple institutions, in both public and private institutions. Private clinics and hospitals, with additional medical professionals, will be able to address patients’ increasing demands. With higher medical coverage, it will result in the growth of alternative medical institutions such as high-end specialty clinics, out-patient day-surgery centers, private specialty hospitals and clinic chains.

Other trends include a shift from treatment to prevention,  with more people interested in proactive health management plans. This present opportunities for the growth of third-party healthcare management administrators, preventive healthcare service providers, and the establishment of a primary care system in China. As hospitals struggled with poor management and inefficient administration, we will see the divestment (or spin-out) and outsourcing of non-core services such as third-party diagnostics, medical devices sterilization services, rehabilitation, logistics solutions, and human resource management from large tertiary hospitals. These adjacent independent businesses will develop to serve the tertiary hospitals to increase efficiency and quality, and reduce cost.

Health technologies

The digital health and medical “big data” market has increased 70% to over RMB 17 billion from 2014 to 2015, and is estimated to reach RMB 1 trillion by 2020. Insurance companies and patients are driving the development and adoption of a multi-tiered healthcare system and referrals across tiers are increasingly becoming mandatory. Patients will soon be making appointments with their designated doctors or primary care providers prior to visiting the hospitals. They will increasingly demand better services from their doctors and will no longer be satisfied with the current ‘three-minute’ consultations. Together, these will drive the formation of specialty doctors’ groups.

Medical devices and diagnostics

The medical device market in China has grown at a compound annual growth of 25% from 2004 to 2014. However, it only accounts for 10% of the entire pharmaceutical industry. Compare to 42% in developed countries, there is still significant room for growth. China has traditionally relied on imported medical devices, but domestic manufacturers are rapidly gaining knowledge and skillsets not only in basic medical devices, but also in more complex innovative development. The theme of “In China, for China. In China, for global.” will become a major theme for most investors.


Since 2013, China has surpassed Japan to become the world's second largest pharmaceutical market. In 2015, the total size of China's pharmaceutical market reached RMB 1.43 trillion. In recent years, the government has put in place various policies to promote innovation and new drug development. Policies to support the development of the biomedical industry and to increase original drug research and development were put in place, CFDA speed up the approval process of innovative drugs and the inclusion of innovative products in the recent updates to the drug reimbursement list all help to boost market and investors’ confidence. In April 2018, the Hong Kong Stock Exchange finalized its listing rules to allow pre-revenue-innovative biopharmaceutical companies to be listed. This has generated interest from investors to invest in drug development companies due to more funding options and exit possibilites. Innovative drugs including biotechnology drugs are priority areas for investment consideration.