Meixin Health is set to enter the Hong Kong Stock Exchange with a valuation of 10 billion, welcoming a new player in the innovative drug and medical device payment sector

A platform company connecting insurance, pharmaceutical companies, and patients is making a push into the Hong Kong stock market.

Recently, the domestic healthcare service platform Shanghai Meixin Health Technology Group (hereinafter referred to as "Meixin") submitted its application to the Hong Kong Stock Exchange under the joint sponsorship of Goldman Sachs (Asia), China International Capital Corporation, and HSBC.

Meixin was established in August 2017, spun off from Shanghai Pharmaceuticals Holding Co., Ltd., and adopts an "Internet + pharmaceutical insurance" model, linking pharmaceutical companies, insurance companies, and patients to form a closed loop.

Since its establishment, Meixin has completed a total of 7 rounds of financing, with a valuation of 11.678 billion yuan after the C+ round; among them, the B+ and C rounds completed in 2021 reached a scale of 2.595 billion yuan.

Multiple rounds of financing have allowed it to have strong shareholders, including Ant Group, China Reinsurance, Shanghai Pharmaceuticals, and HSBC Group.

Market participants estimate that if Meixin successfully goes public within the year, it is expected to set the record for the largest IPO on the Hong Kong Stock Exchange in the first half of the year.

Behind the hot expectations, the market anticipates the supplementary role that this platform can play in the current multi-payment system for innovative drug healthcare.

In 2024, China's sales of innovative drugs are expected to reach 162 billion yuan; among them, the amounts paid by medical insurance funds, individuals, and commercial health insurance are 71 billion yuan, 78.6 billion yuan, and 12.4 billion yuan, respectively, with coverage rates of 44%, 49%, and 7.7%.

The excessively high proportion of personal payments suppresses payment capacity, leaving patients unable to afford drug costs, and innovative pharmaceutical companies also face sales difficulties.

If the proportion of personal out-of-pocket expenses is to be reduced from around 50% to below 30%, experts estimate that commercial health insurance needs to increase its annual payment scale to 40-50 billion yuan, which would be 3-4 times the current level.

The numbers reflect the enormous potential of health insurance; if it can facilitate effective connections between pharmaceutical companies and insurance companies, allowing more innovative drugs to enter the commercial insurance catalog, it may achieve a win-win situation for pharmaceutical companies, insurance companies, and patients.

This has given rise to service providers like Meixin, Yuanxin, and Sipai, which aim to link the three parties.

Among them, Meixin focuses on a light asset model: it does not open hospitals, does not provide insurance, and does not produce drugs, but instead connects patients, pharmaceutical companies, and insurance companies through a platform.

Its "pay after treatment" direct payment plan in cooperation with insurance companies has attracted over 150,000 registered users and established partnerships with more than 20,000 hospitals nationwide, with a cumulative transaction volume of 170 million yuan.

Pharmaceutical Business: "Difficult to Increase Revenue and Profit"

Based on different service targets, Meixin's business is divided into three categories: Smart Drug Solutions, Smart Insurance Solutions, and consumer-facing ToC business.

The target of Smart Drug Solutions is pharmaceutical companies, involving the inclusion of innovative drug products in the commercial insurance catalog, directly reaching downstream customers, pharmacies, and clients of pharmaceutical companies, as well as monitoring patient medication adherence;

The pricing for helping innovative drugs enter commercial insurance mainly relies on the number of patients, the GPV processed, the complexity of the projects, and other values that can bring to pharmaceutical companies.

Over the years, the Smart Drug business has been the absolute mainstay of Meixin's revenue, maintaining a revenue contribution rate of over 50%, reaching 59.3% in 2024.

However, the contribution of the main revenue source to profitability is minimal.

In 2024, the gross profit margins for Meixin's Smart Drug, Smart Insurance, and ToC businesses are expected to be 10.8%, 81.5%, and 2.8%, respectively. The Smart Drug business, which accounts for nearly 60% of total revenue, contributes less than 20% to overall gross profit This phenomenon is not unique to Meixin; innovative drug distributors that do not master core technologies often have limited business profit margins due to a lack of bargaining chips when negotiating with pharmaceutical companies.

At the same time, although Meixin operates with a light asset model, its distribution business to downstream customers still involves payment pressure due to procurement costs.

For example, inventory including pharmaceuticals and medical products procured from pharmaceutical companies and healthcare companies increased from 10 million yuan in 2022 to 432 million yuan by the end of April 2025, while cash and cash equivalents decreased from 1.354 billion yuan to 166 million yuan during the same period.

The health insurance business, which contributes less than 40% of revenue, accounts for over 80% of gross profit.

Health insurance services can support insurance companies in providing critical illness, medical services, and special drug coverage at inclusive prices, while integrating AI technology, medical resources, and infrastructure to support the actuarial, pricing, marketing, and claims processes of insurance companies.

There are two types of revenue models for this business: one is priced by the number of policies, and the other charges a certain percentage of the total premium.

The remaining ToC business scale is relatively small and still in its early stages, primarily providing global medical resources to customers through the BluePass high-end health membership program and customizing self-operated online pharmacies for patients with complex conditions through DTC pharmacies.

From 2022 to the end of April 2025, Meixin has not been profitable.

The company explains that the uniqueness of China's multi-payment pharmaceutical market and its early development stage mean that the company's strategic focus is on building infrastructure and continuous innovation;

It states that short-term losses are a necessary strategic investment that will bring considerable long-term growth opportunities and establish a solid foundation for future profitability.

Meixin's reported losses have indeed been decreasing year by year, with losses in 2024 reduced from 446 million yuan two years ago to 76 million yuan.

However, one of the main reasons for its losses is the significantly increasing sales costs that lower the gross profit of the intelligent drug business; conversely, the sales costs of the health insurance business are showing a decreasing trend.

The key to Meixin's future turnaround may lie more in the health insurance business and the related health insurance market.

The Key to Breaking the Deadlock May Lie in Insurance

Whether it can help insurance companies directly face the structural challenges of the current health insurance market will determine Meixin's future direction.

Currently, insurance companies need to launch differentiated products while balancing the dual pressures of payment accessibility and risk.

However, a single insurance company is often limited by insufficient network coverage, making it difficult to reach the potential customer base nationwide. They also generally lack bargaining power when negotiating with hospitals and pharmaceutical companies, making it hard to control costs and secure discounts.

This creates a survival space for third-party service providers.

Meixin has currently established partnerships with over 90 insurance companies, including 20 of the top insurance companies by premium in mainland China for 2024;

The cooperation involves mainly commercial health insurance and inclusive insurance, covering the entry of innovative drugs into the commercial insurance catalog, as well as related actuarial, sales, and claims services throughout the entire process.

Insurance companies are clearly under pressure from inclusive insurance, which is difficult to contribute to profitability, but as a government-supported health insurance project, this business was once Meixin's flagship.

As early as 2019, Meixin laid out its inclusive insurance business, launching the first inclusive insurance "Su Huibao" designed for patients with basic diseases the following year, and fully promoting the "Meixin Inclusive Insurance Hundred Cities Plan." By the number of policies, Meixin has become the largest comprehensive service provider for Huimin Insurance in China, with products covering 160 cities.

However, the shadow that has loomed over Huimin Insurance since its inception has not yet dissipated.

Due to a decline in participation rates, healthy individuals exiting, and an increase in claims ratios, Huimin Insurance still faces uncertainty in the future under moral hazard and adverse selection.

Meixin also candidly stated in its prospectus that it views Huimin Insurance as a government-led public welfare project rather than a profit-driven commercial project.

The vision for profitability is pinned on a more market-oriented commercial health insurance.

Meixin empowers insurance companies by supporting their actuarial, pricing, marketing, and claims processes with its integrated AI technology, medical resources, and infrastructure, making insurance products more aligned with the market;

On the other hand, it resolves the cumbersome processes in health insurance claims through its direct payment service, optimizing the experience for policyholders.

These two innovations have supported the growth of Meixin's smart insurance revenue but also brought certain challenges.

For example, Meixin's multidisciplinary team, which includes clinical experts, pharmacists, and actuaries, can compensate for the deficiencies of insurance companies in the pharmaceutical field. However, as a drug supplier involved in the entire process from actuarial to design, there are doubts about being "both the seller and the buyer."

In the early stages, Meixin collaborated with insurance companies to share the costs of some high-priced drug treatments through insurance, but due to "covering treatment costs for diagnosed diseases," insurance companies became mere channels for medical services and were placed on the regulatory watch list.

As regulatory requirements for specialty drug health insurance become increasingly clear, Meixin has begun to promote embedding the logic of specialty drug coverage into a more mature and standardized product system.

Another major innovation from Meixin is its flagship product, the direct payment service.

In 2024, Meixin partnered with Alipay and Taikang Online to launch the commercial insurance code, exploring a one-stop synchronous settlement model where policyholders "receive medical treatment first and pay later" at hospitals;

Under this model, insurance users can bind their policies on the direct payment platform and directly present the direct payment QR code to medical institutions or pharmacies to complete medical treatment and medication purchases, then submit claims and settlement applications online to the insurance company.

The first product to incorporate direct payment is Taikang Online's "Medical Worry-Free" health insurance.

At that time, Yang Liping, General Manager of the Product Center at Taikang Online, revealed that customers were very satisfied with direct payment products, and this new format could become an important channel for commercial insurance payments.

However, the convenience for policyholders comes at the cost of Meixin using its own funds for advance payments. While this optimizes the experience for policyholders by lacking many underwriting and claims reviews, it also exposes certain risks.

According to Xinfeng, Meixin mainly strengthens risk identification through AI technology, focusing on mid-to-high-end health insurance products to facilitate direct payment transactions for high-value treatments and hospitalization services.

Outlook for Innovative Drugs and Devices

With the growth of innovative drugs, the future space for health insurance is undoubtedly vast.

In 2023, the expenditure on innovative drugs in high-income and upper-middle-income countries accounted for 50% and 36% of drug usage, respectively, an increase of 21 and 13 percentage points compared to ten years ago.

In July 2025, the Medical Insurance Bureau officially announced the "Commercial Health Insurance Innovative Drug Catalog," providing policy support for commercial health insurance coverage of innovative drugs by optimizing the collaborative rules between medical insurance and commercial insurance; This includes the exclusion of innovative drugs from the basic medical insurance self-payment rate indicators, the exclusion from the monitoring of alternative products selected in centralized procurement, and the exclusion of cases from the scope of payment by disease.

The "three exclusions" create an independent payment channel for innovative drugs, providing greater market potential for commercial health insurance, which in turn benefits payment service providers like Meixin.

However, in this process, Meixin not only faces challenges from more new entrants but also needs to maintain its current position as a third-party service provider amid insurance companies' continuous optimization of payments and enhancement of actuarial capabilities.

In the last round of financing in 2023, Meixin raised less than 200 million yuan, which is more than ten times less than the 2 billion yuan raised in the C round.

The decline in financing scale combined with ongoing losses may constitute Meixin's current thirst for funds.

Meixin has outlined its fundraising plan for this IPO, which includes expanding and upgrading the services and solutions provided to pharmaceutical and insurance companies, promoting the development of an integrated direct payment platform, strengthening infrastructure, and further expanding its business footprint in domestic and international markets through strategic cooperation, investment, and acquisitions.

Meixin's understanding of its core development seems to point towards the flywheel effect.

Meixin believes that the company's products, platforms, infrastructure, and technology will continuously reinforce and grow: insurance companies and the company will incorporate more new drugs, serve more patients, help pharmaceutical companies achieve performance, and attract more pharmaceutical companies to enter, creating a cycle.

Previously, a company with a similar positioning to Meixin, Sipai, successfully listed on the Hong Kong stock market, while Yuanzhong has halted its efforts after five submissions.

Whether Meixin can expand its first-mover advantage and maintain its leading position in the wave of diversified payments for innovative drugs remains to be seen