JD Health buys into insurtech firm Shanghai Kingstar Winning ahead of HK IPO

JD Health, the health subsidiary of Chinese e-commerce giant JD.com (NASDAQ: JD), has agreed to pay a total of RMB 150 million (USD 22.2 million) to gain a 7.71% stake in Shanghai Kingstar Winning Software Science and Technology Co Ltd, according to a filing of its parent company Winning Health (SHZ: 300253) on Monday.

The investment comes after JD.com announced last month that it was to spin off and list JD Health, which owns China’s largest online pharmacy, on the main board of the Hong Kong Stock Exchange.

WuXi AppTec (SHH: 603259), which provides drug R&D and manufacturing services to pharmaceuticals, will also buy a 7.71% stake in Shanghai Kingstar Winning, according to the filing. The new investors will buy the shares from existing holders, as well as new equity issued by Shanghai Kingstar Winning, which was valued before at RMB 1.8 billion (USD 266.9 million).

When the deal is completed, Winning Health, which counts Alibaba’s fintech unit Ant Group as a strategic investor, will have its stake lowered from 42.86% to 36.82%.

Founded in 2012, Shanghai Kingstar Winning is monitoring and protecting China’s public medical insurance funds from frauds, misuse, and squander, supervising the financial operation and internal auditing, and providing risk warning systems for insurance companies and medical institutions.

Its clients include the National Healthcare Security Administration, Alibaba, JD.com, Shanxi Provincial People’s Hospital, the state-owned life insurer China Life, as well as Reinsurance Group of America.

Shanghai Kingstar Winning plans to use the new capital to develop its core business, for products related to the national and local public medical insurance funds, as well as a commercial insurance actuary and compensation platform.