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See How This Chinese Guy Stop His Studies To Build His Medical Empire!

Now iKang operates 58 centers and has 400 partner clinics across 150 Chinese cities. Clients range from state-run banks to multinationals, and expatriate employees are included.

Zhang holds 13% of iKang stock but much wider sway through the voting shares. The company reflects his own vision. He left eLong after major disagreements with some of the partners. “I feel I have more say in the health care business,” Zhang explains. “My previous training is helpful.”

An increasingly health-conscious population and the central government’s encouragement of private participation in the sector bode well for more growth. China’s preventive health care market is expanding at 15% annually, according to Citigroup. China health care analyst Richard Yeh. It has reached 40 billion to 50 billion yuan (approaching $9 billion), says global management consulting firm LEK.

At the high end, iKang’s Evergreen brand has premium centers in Beijing, Nanjing and Guangzhou. The company invested 100 million yuan in the Beijing unit alone and flies in doctors affiliated with Harvard Medical School for rich clients. The company will soon add a fourth Evergreen in Shanghai by upgrading a center from WA Health Care, after investing an unspecified amount for a 70% stake in the Hong Kong firm in March.

But fierce competition is coming. In January Meinian Onehealth Healthcare, a medical-checkup chain backed by private equity firm Carlyle Group, invested in smaller rival Ciming Health Checkup Group. Meinian, which has said it will eventually acquire Ciming, is eyeing an IPO in China through a reverse takeover of Jiangsu Sanyou Group.

Combined, Meinian and Ciming would operate close to 150 centers across China, making it the country’s biggest company in preventive health care. But Zhang says he is more upscale, with clients being billed about 500 yuan per patient visit, twice that of Meinian. Meinian spokeswoman Cui Lan agrees there’s room. “This is not a stable market where everyone fights everyone for market share,” she says. “There is a lot of untapped potential.”

One direction Meinian is pursuing is introducing more traditional Chinese medicine services. The company has built a TCM clinic in Beijing with the China Academy of Chinese Medical Sciences.

“I am not seeing a real threat to us, because we are in different markets,” Zhang says. Citigroup’s Yeh thinks, however, that the battle will be joined in second-tier cities, even if the market is big enough for more than one outfit to prosper.

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