BENQ HOLDING must urgently shift from spinning capital narratives to demonstrating tangible profitability.

On December 22, 2025, BENQ HOLDING finally listed on the Hong Kong Stock Exchange (HKEX) after four attempts, with stock code 02581.HK. The debut proved disastrous—shares opened at the IPO price of HK$9.34 but plummeted nearly 50% by close, marking the worst first-day performance for a Hong Kong IPO this year. Investors holding 500-share lots lost over HK$2,300 in a single day.

**Taiwanese Roots, State-Backed Growth** Founded in 2003 through a joint investment by Taiwan's BenQ-AUO Group and Nanjing State-Owned Assets Group, BENQ HOLDING leveraged its mixed-ownership structure to secure early local resources and policy support. Its Nanjing and Suzhou hospitals launched in 2008 and 2013, respectively, establishing a foothold in the Yangtze River Delta. By 2015, state shareholders had exited, with parent company Qisda Corporation acquiring full ownership. In 2022, Nanjing BENQ Hospital became Jiangsu's first private "Grade 3A" general hospital—China's highest accreditation.

Private equity firm CDH Investments injected $100 million in 2014, valuing BENQ at $375 million. Yet CDH's $195 million exit in 2023—just before the IPO—sparked concerns about insider confidence, delivering near 100% returns over nine years.

**Cracks Beneath the Surface** Despite titles like "East China's largest private for-profit hospital group" and "highest revenue per bed," BENQ's financials reveal alarming trends. Revenue growth stalled at RMB2.659 billion in 2024 (down 1.07% YoY), while net profit plunged 34.73% to RMB109 million. Gross margins slipped from 18.9% to 18.1%, signaling a shift from "revenue without profits" to outright decline.

**Rocky Road to Listing** After failed attempts in April and October 2024, BENQ finally passed its HKEX hearing in April 2025. The IPO adopted "Mechanism B," allocating 90% to institutional investors—a strategy that backfired when weak demand met aggressive pricing. Joint sponsors CICC and Citigroup secured three cornerstone investors committing $39.9 million, but the stock still cratered.

**Why the Collapse?** By December 23 midday, shares traded at HK$4.76—49% below IPO price. Pre-market dark pool trading had already shown weakness, dropping 23%. Analysts noted BENQ's 29.8x P/E ratio dwarfed Hong Kong's private hospital sector average of 16.72x. With only two hospitals and 74.3% of IPO proceeds earmarked for expansion amid shrinking profits, investors rejected the growth narrative.

**Industry Headwinds** China's 23,500 private hospitals collectively lost RMB130 billion in 2024 (RMB553,000 per facility). DRG payment reforms slashed average inpatient spending—Nanjing BENQ's fell from RMB18,500 in 2022 to RMB16,400 in 2025 H1, while Suzhou's dropped to RMB14,200. Meanwhile, rising labor and supply costs created a "reverse scissors gap" squeezing margins. Public hospitals' policy advantages further intensified competition.

**Regulatory Risks** BENQ's prospectus disclosed 231 medical disputes (54 involving deaths), with 60 unresolved. Another 284 patient complaints cited inefficiencies and poor service—raising doubts about its "Grade 3A" standards. Past regulatory probes into billing practices also damaged credibility.

**Sector-Wide Crisis** BENQ's struggles mirror broader challenges. Competitors like United Family Healthcare (down 27.91% revenue in 2024) and others have faced similar IPO roadblocks. Hong Kong investors clearly prefer specialty hospitals (30%+ margins) over general hospitals like BENQ (16-18% margins).

The listing bell's echo fades as BENQ faces its ultimate test: transforming rankings into sustainable profits. Surviving this industry winter requires proving real earnings—not just telling stories.