It was reported that China's real estate giant Dalian Wanda Group plans to set up a new health industry branch. A solid source told NBD on Thursday that Wanda is indeed under internal restructuring.

Wanda's health industry ambition unveiled itself earlier this year during the 47th World Economic Forum (WEF) Annual Meeting in Davos-Klosters. At the forum, Wanda's founder and chairman Wang Jianlin mentioned that the company was considering building a hospital chain.

He commented at the forum that in China healthcare has been in the exclusive charge of the government, but a year ago the market was opened up to the private sector. With a large number of commercial centers in its portfolio that would be good locations for hospitals, Wanda is considering entering the field.

Guo Yi, marketing director at Yahao, commented that investment in health industry supplements Wanda's current business spectrum and also seizes opportunities in this emerging industry with high profit potentials. Different branches belonging to Wanda could achieve concerted administration and development.

Data released by analysis institute CRIC shows that effectively managed private hospitals can yield a gross profit margin of 30%~40% and even 15%~20% in net margin.

According to NBD reporter's incomplete statistics based on information from Wanda's official website, Wanda plans to invest more than 130 billion yuan (19.4 billion U.S. dollars) in the health industry.

This is a part of Wanda's strategy of shedding real estate and shifting to light assets and Wanda is not the only real estate enterprise that pursues restructuring. China Vanke, Evergrande Real Estate Group and Sino-Ocean Group have also made an entrance into the health industry, setting out on their multiplex journey.

Real estate enterprises' diversified business layout was formulated after they closely followed the changes in market need, said Yan Yuejin, research director with E-house China R&D Institute. In his opinion, real estate enterprises see the health industry as a new derived demand which they can benefit from. 

Email: gaohan@nbd.com.cn