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ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended
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Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
ORGANIZATION AND BASIS OF PRESENTATION |
| 1. | ORGANIZATION AND BASIS OF PRESENTATION
The accompanying consolidated financial statements include the financial statements of Concord Medical Services Holdings Limited (the “Company”) and its subsidiaries, consolidated variable interest entity (the “VIE”) and subsidiaries of the VIE, which are collectively referred to as the “Group”. The Company was incorporated under the laws of the Cayman Islands on November 27, 2007. The Group is principally engaged in the leasing of radiotherapy and diagnostic imaging equipment, and the provision of management services to hospitals. Starting April 2015, the Group is also engaged in hospital operations as a result of the acquisition of Concord Healthcare Singapore Pte. Ltd. (note 4).
| (a) | As of December 31, 2018, subsidiaries of the Company and its consolidated variable interest entities included the following entities:
Entities |  | Date of establishment/acquisition |  | Place of establishment |  | Percentage of ownership by the Company |  |  | Principal activities
Subsidiaries |  |  |  |  |  |  |  |  |
Ascendium Group Limited (“Ascendium”) |  | September 10, 2007 |  | British Virgin Islands (“BVI”) |  | 100 | % |  | Investment holding
Concord Medical Investment Management Ltd. |  | October 28, 2016 |  | BVI |  | 100 | % |  | Investment holding
Our Medical Services Limited (“OMS”) |  | August 22, 1996 |  | BVI |  | 100 | % |  | Investment holding
Medstar Overseas Ltd. (“Medstar Overseas”) |  | September 22, 2011 |  | BVI |  | 100 | % |  | Investment holding
Cyber Medical Networks Limited (“Cyber”) |  | May 26, 2006 |  | Hong Kong |  | 100 | % |  | Investment holding
China Medical Services Holdings Limited (“CMS Holdings”) |  | July 18, 2008 |  | Hong Kong |  | 100 | % |  | Investment holding
King Cheers Holdings Limited (“King Cheers”) |  | May 18, 2001 |  | Hong Kong |  | 100 | % |  | Investment holding
Shenzhen Aohua Medical Technology Development Co., Ltd. (“Aohua Technology ”) |  | February 21, 2008 |  | PRC |  | 60 | % |  | Leasing of medical equipment and provision of management services
Medstar (Shanghai) Leasing Co., Ltd. (“Shanghai Medstar”) ** |  | March 21, 2003 |  | PRC |  | 100 | % |  | Leasing of medical equipment and provision of management services
Beijing MeizhongJiahe Hospital Management Co., Ltd. (“MHM”) * |  | July 23, 2008 |  | PRC |  | 60 | % |  | Provision of management services
Beijing Yundu Internet Technology Co., Ltd. (“Yundu”) |  | July 26, 2007 |  | PRC |  | 60 | % |  | Provision of management services
Tianjin Concord Medical Technology Limited (“Tianjin Concord Medical”) |  | April 22, 2010 |  | PRC |  | 100 | % |  | Leasing of medical equipment and provision of management services
Guangzhou Jinkangshenyou Investment Co., Ltd. (“JKSY”) |  | August 12, 2010 |  | PRC |  | 100 | % |  | Leasing of medical equipment
Guangzhou Concord Cancer Center (“Guangzhou Concord Cancer Hospital”) |  | June 29, 2011 |  | PRC |  | 48 | % |  | Group’s medical treatment and service business
CCM (Hong Kong) Medical Investments Limited (“CCM (HK)”) |  | June 03, 2013 |  | Hong Kong |  | 85.71 | % |  | Investment holding
Entities |  | Date of establishment/acquisition |  | Place of establishment |  | Percentage of ownership by the Company |  |  | Principal activities
Shenzhen Concord Medical Investment Limited (“SZ CMS”) |  | January 10, 2014 |  | PRC |  | 60 | % |  | Investment holding
Shanghai Concord Cancer Center Co., Ltd (“SHC”) |  | March 17, 2014 |  | PRC |  | 60.26 | % |  | Group’s medical treatment and service business
Global Medical Imaging (HongKong) Ltd. (“GMI”) |  | May 26, 2014 |  | Hong Kong |  | 100 | % |  | Investment holding
Datong Meizhong Jiahe Cancer Center (“DTMZ”) |  | October 23, 2014 |  | PRC |  | 60 | % |  | Group’s medical treatment and service business
Wuxi Concord Medical Development Ltd. ("Wuxi Concord”) |  | December 29, 2015 |  | PRC |  | 100 | % |  | Group’s medical treatment and service business
Concord Hospital Management Group Ltd. (“CHMG”) |  | July 7, 2015 |  | Hong Kong |  | 100 | % |  | Group’s medical treatment and service business
Beijing Concord Medical Technology Ltd.(“BJCMT”)** |  | January 4, 2016 |  | PRC |  | 100 | % |  | Provision of management services
Shanghai Taifeng Medical Technology Ltd (“Taifeng”) ** |  | March 30, 2016 |  | PRC |  | 60 | % |  | Group’s medical treatment and service business
Taizhou Concord Leasing Co., Ltd.** |  | April 20, 2016 |  | PRC |  | 100 | % |  | Group’s medical treatment and service business
Guofu Huimei (Tianjin) Investment Management Partnership Firm (LP) (“Guofu Huimei”) (note 4) |  | October 8, 2018 |  | PRC |  | 100 | % |  | Investment holding
Beijing Century Friendship Science & Technology Development Co., Ltd (“Beijing Century Friendship”) (note 4) |  | October 8, 2018 |  | PRC |  | 60 | % |  | Group’s medical treatment and service business
Beijing Proton Medical Center Co., Ltd (“BPMC”) (note 4) |  | October 8, 2018 |  | PRC |  | 58 | % |  | Group’s medical treatment and service business
Shanghai Meizhong Jiahe Cancer Center Co., Ltd. (“CMCC”) (note 4) |  | October 8, 2018 |  | PRC |  | 55.42 | % |  | Group’s medical treatment and service business
VIE |  |  |  |  |  |  |  |  |
ZR ConcordHealthcare Investment Fund SP (“SP”) |  | November 2016 |  | Cayman Islands |  | 25 | % |  | Investment holding
Subsidiaries of VIE |  |  |  |  |  |  |  |  |
US Proton Therapy Holdings Limited (“Proton BVI”) |  | May 16, 2011 |  | BVI |  | 25 | % |  | Investment holding
US Proton Therapy Holdings Limited (“US Proton”) |  | June 29, 2011 |  | United States of America |  | 25 | % |  | Investment holding
Concord Medical Services (International) Pte. Ltd. (“China Medstar”) (formerly known as China Medstar Pte. Limited) |  | August 8, 2003 |  | Singapore |  | 25 | % |  | Investment holding
Concord Healthcare Singapore Pte. Ltd. (“CHS”) |  | April 1, 2015 |  | Singapore |  | 25 | % |  | Group’s medical treatment and service business
* On August 27, 2015, the Group changed the name of CMS Hospital Management Co., Ltd. (“CHM”) to Beijing MeizhongJiahe Hospital Management Co., Ltd. (“MHM”), providing management service to the Group’s existing network. On September 29, 2016, MHM completed its first-round private offering of additional 926,000 ordinary shares to five institutional investors with a consideration of RMB41,670, among which one investor thereafter transferred all the shares acquired back to the Group in the secondary market. In November 2016, the Group transferred 1,483,000 ordinary shares to and bought 10,000 ordinary shares from other existing shareholders in the secondary market. On December 30, 2016, MHM completed its second-round private offering of additional 6,666,666 ordinary shares to two new institutional investors with a consideration of RMB100,000. In March 2018, two wholly-owned subsidiaries, Shanghai Medstar and BJCMT subscribed about 66,073,984 and 40,500,000 new issued shares of MHM at a consideration of RMB229,276 (US$ 33,347 ) and RMB140,535(US$ 20,440 ) in cash, respectively. On March 26, 2018 and July 10, 2018, the Company entered into agreements with CICC Capital Management Company Limited (“CICC Capital”), a wholly-owned subsidiary of China International Capital Corporation Limited (“CICC”), and six other investors (“Other Investors”). Pursuant to the agreements, CICC Capital and Other Investors make a strategic investment and subscribe new issued 100,000,000 shares of the Company’s subsidiary MHM, with total consideration of RMB1,500,000 (US$ 218,166 ). CCIC Capital subscribes 60,000,000 shares of MHM while Other Investors subscribe 40,000,000 shares of MHM. After the completion of all transactions mentioned above, the Group’s equity shares in MHM had been diluted from 85.34% to 60%. Pursuant to the agreement, CCIC Capital and Other Investors can request the Company to redeem their interests in MHM upon the occurrence of certain events (ie, failure to complete a qualified IPO by June 30, 2024). The same right is also given to the existing noncontrolling interest shareholder. Given these events are not solely within the control of MHM, the noncontrolling interests of CCIC Capital and Other Investors are contingently redeemable noncontrolling interests and are classified as mezzanine equity. The noncontrolling interests of other existing noncontrolling interests’ holders are also reclassified from permanent equity to mezzanine equity as contingently redeemable noncontrolling interests. The Company accounts for the changes in accretion to the redemption value in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. The Company elects to use the effective interest method to account for the changes of redemption value over the period from the date of issuance to the earliest redemption date of the noncontrolling interest. **On January 4, 2016, the Group set up BJCMT for the purpose to provision of management services. On March 30 and April 20, 2016, the Group set up Shanghai Taifeng Medical Technology Ltd and Taizhou Concord Leasing Ltd. for the purpose to develop Group’s medical treatment and service business. On September 26, 2016, Shanghai Medstar introduced a new shareholder called Shanghai Huifu Technology Development Co., Ltd. (“Shanghai Huifu”), but Shanghai Huifu has not paid the subscribed captial. Therefore, the equity interest in Shanghai Medstar owned by the Group was still 100%.
| (b) | Establishment of Onshore Fund and Offshore Fund
In November 2016, the Company entered into a framework agreement with Zhongrong Guofu Investment Management Company Limited (“ZR Guofu”) to establish an offshore fund, namely SP, for the purpose of acquiring several hospital businesses of the Company, including 100% shares of CHS through China Medstar, 70% shares of Guangzhou Concord Cancer Hospital through CMS Holdings and 59.51% shares of PTC-Houston Management, LP (“PTC”) through Proton (BVI), collectively the “CCM Hospital Business”. ZR Guofu will provide management and consultation services on the funds and the Group will continue to manage the CCM Hospital Businesses. ZR Guofu subscribes Class A shares of SP with a consideration of RMB521,396, while the Group subscribes Class B shares of the SP using 1) creditor’s rights of RMB166,299 due from CCM Hospital Business and 2) RMB7,500 cash as consideration. During the year ended December 31, 2016, the Group and ZR Guofu had injected RMB7,500 and RMB521,396, respectively, into the SP which was then granted as loans to the CCM Hospital Business. In addition, the Group and ZR Guofu established an onshore fund, namely Guofu Huimei Investment Management Limited Partnership (“Guofu Huimei”). The registered capital of Guofu Huimei is RMB1,009,000, of which RMB746,001and RMB262,999 were subscribed by ZR Guofu and the Group, for 73.93% and 26.07% equity interest, respectively. General partners of the Guofu Huimei are Shanghai Medstar and ZR Guofu. During the year of 2016, the Group has injected RMB174,000 into Guofu Huimei. As of December 31, 2016, SP has been established but changes of registration of shareholders and the articles of association of the CCM Hospital Businesses were still in process. As a result, the cash injected by the Group to the SP and Guofu Huimei amounting to RMB181,500 was recorded as “prepayment for long-term investments” under non-current assets and the loans received by the CCM Hospital Business amounted to RMB528,896 was recorded as “advances from long-term investment” under non-current liabilities in the consolidated balance sheet as of December 31, 2016. In addition, the Group has prepaid RMB53,141 to ZR Guofu for the interest expense and consultation expense as of December 31, 2016 which was recorded in “prepayments and other current assets” on the consolidated balance sheet. In April 2017, the change in register members of Proton (BVI) and China Medstar to SP was completed. Further in April 2017, the Group and ZR Guofu entered into a supplemental contract to the framework agreement, pursuant to which, Guofu Huimei will be used as the platform to invest and provide loans to some domestic entities engaging in hospital business. During 2017, Guofu Huimei acquired 78.31% equity interest of Beijing Century Friendship Science & Technology Development Co., Ltd. ("Beijing Century Friendship”) which holds 55% equity interest of BPMC at consideration of RMB388,500, 54.8% equity interest of Shanghai Meizhongjiahe Cancer Centers Co., Ltd. (formerly known as Shanghai ProMed Cancer Center Co. Ltd , “CMCC”) at consideration of RMB182,100, 28.77% equity interest of Tianjin Jiatai Entity Management limited Partnership (“Tianjin Jiatai”) at consideration of RMB106,500 and established Shanghai Rongchi Medical Management Limited (“SH Rongchi”) with share capital of RMB695,305. Guofu Huimei also provided loans of RMB17,900 to CMCC and loans of RMB300,000 to Guangzhou Concord Cancer Hospital which had been repaid on July 13, 2018 and June 22, 2018 respectively. The profit or loss of these domestic entities engaging in hospital business is shared proportionally among investors based on the percentage of their respective subscribed share capital. Pursuant to the supplemental contract, the 75% equity interest in SP held by the ZR Guofu is contractually required to be repurchased by the Group at the end of four years from the establishment of SP in November 2016 at a consideration equivalent to the investment cost of RMB521,396. ZR Guofu is also entitled to an annual premium at 15% for its capital contribution of RMB521,396 in SP in the form of interest expense and consultation expense. In addition, the Group’s share in Beijing Century Friendship (note 15), certain construction in progress (note 10) and certain prepaid land lease payments (note 11) are pledged to secure the capital contribution from ZR Guofu. On December 20, 2017, the Company repaid a loan with principal of RMB97,106 to ZR Guofu, and repurchased 100% equity interest of CMS Holdings at a consideration of US$1. Upon completion, the shares in CMS Holdings was pledged to ZR Guofu by the Company. In June 2018, MHM entered into agreements with Guofu Huimei to purchase its 78.31% equity interests in Beijing Century Friendship which holds 55% equity interest of BPMC and 54.8% equity interest in CMCC at a consideration of RMB388,500 and RMB182,100 respectively. Meanwhile, ZR Guofu and Guofu Huimei reached an agreement according to which ZR Guofu will withdraw its original investments in Guofu Huimei, amounting to RMB746,000. Therefore, MHM hold 100% equity interest of Beijing Century Friendship, 80% equity interest of BPMC and 90% equity interests of CMCC upon execution and closing of the agreement and the Group became the sole shareholder of Guofu Huimei (note4). After the withdrawal, ZR Guofu is no longer part of the onshore fund Guofu Huimei, and the domestic hospital businesses. Meanwhile, on November 29, 2018, the PTC business had been disposed by Proton (BVI) (note 15). As of December 31, 2018, only CHS was retained in the CCM Hospital Business. The offshore fund SP is determined as a variable interest entity as the cash injection from ZR Guofu of RMB521,396 was not equity at risk. As the Company maintains the power to direct the activities that most significantly affect SP’s economic performances through supplemental contracts agreed terms and absorbs the expected losses of SP, the Company is the primary beneficiary of SP and consolidates SP and its subsidiaries under by ASC 810-10 Consolidation: Overall . The 75% equity interest held by the ZR Guofu in SP is accounted for as a liability recorded as “Mandatorily redeemable noncontrolling interests” in the Company’s consolidated balance sheets as a result of the mandatory redemption feature and is carried at the redemption value at the end of each reporting date as determined in accordance with the contract terms from the day of on which control is transferred to the Company. The 15% annual premium is accrued as an interest expense and consultation expense during each reporting period. As of December 31, 2017 and 2018, the balance of mandatorily redeemable noncontrolling interest was RMB396,281 and RMB434,216 (US$ 63,154 ), respectively.
| (c) | VIE disclosures
Creditors of the VIE and its subsidiaries have no recourse to the general credit of the primary beneficiaries of the VIE and its subsidiaries, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The VIE and its subsidiaries operate the hospital business are recognized in the Company’s consolidated financial statements. The Company has not provided any financial or other support that it was not previously contractually required to provide to the VIE and its subsidiaries during the periods presented. The following tables represent the financial information of the VIE and its subsidiaries as of December 31, 2017 and 2018 and for the years ended December 31, 2017 and 2018 before eliminating the intercompany balances and transactions between the VIE and its subsidiaries and other entities within the Group:
|  | As at December 31, |  |  | As at December 31, |
|  | 2017 |  |  | 2018 |  |  | 2018 |
|  | RMB |  |  | RMB |  |  | US$ |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  |  | 13,161 |  |  |  | 15,935 |  |  |  | 2,318 |
Restricted cash, current portion |  |  | 42 |  |  |  | - |  |  |  | - |
Accounts receivable (net of allowance of RMB 73 (US$ 11 ) as of December 31, 2018) |  |  | 3,985 |  |  |  | 4,494 |  |  |  | 654 |
Inventories |  |  | 1,399 |  |  |  | 1,946 |  |  |  | 283 |
Prepayments and other current assets |  |  | 1,988 |  |  |  | 1,986 |  |  |  | 289 |
Amount due from inter-companies* |  |  | - |  |  |  | 80,523 |  |  |  | 11,711 |
Total current assets |  |  | 20,575 |  |  |  | 104,884 |  |  |  | 15,255 |
Non-current assets: |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment, net |  |  | 279,240 |  |  |  | 281,395 |  |  |  | 40,927 |
Intangible assets, net |  |  | 202 |  |  |  | 100 |  |  |  | 15 |
Deposits for non-current assets |  |  | 172 |  |  |  | - |  |  |  | - |
Long-term investments |  |  | 195,040 |  |  |  | 31,496 |  |  |  | 4,581 |
Other non-current assets |  |  | 481 |  |  |  | 464 |  |  |  | 67 |
Total non-current assets |  |  | 475,135 |  |  |  | 313,455 |  |  |  | 45,590 |
Total assets |  |  | 495,710 |  |  |  | 418,339 |  |  |  | 60,845 |
|  | As at December 31, |  |  | As at December 31, |
|  | 2017 |  |  | 2018 |  |  | 2018 |
|  | RMB |  |  | RMB |  |  | US$ |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  |  | 1,978 |  |  |  | 462 |  |  |  | 67 |
Accrued expenses and other liabilities |  |  | 21,321 |  |  |  | 42,681 |  |  |  | 6,208 |
Income tax payable |  |  | - |  |  |  | 2,870 |  |  |  | 417 |
Amount due to inter-companies* |  |  | 54,563 |  |  |  | - |  |  |  | - |
Total current liabilities |  |  | 77,862 |  |  |  | 46,013 |  |  |  | 6,692 |
Non-current liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax liabilities |  |  | 8,316 |  |  |  | - |  |  |  | - |
Accrued unrecognized tax benefits & surcharge, non current portion |  |  | - |  |  |  | 20,208 |  |  |  | 2,939 |
Mandatorily redeemable noncontrolling interests |  |  | 396,281 |  |  |  | 434,216 |  |  |  | 63,154 |
Total non-current liabilities |  |  | 404,597 |  |  |  | 454,424 |  |  |  | 66,093 |
Total liabilities |  |  | 482,459 |  |  |  | 500,437 |  |  |  | 72,785 |
* Amount due from/to inter-companies represented receivable/payable balances of VIE and its subsidiaries due from/to other subsidiaries within the Group.
|  | As at December 31, |  |  | As at December 31, |
|  | 2017 |  |  | 2018 |  |  | 2018 |
|  | RMB |  |  | RMB |  |  | US$ |
Net revenues |  |  | 28,673 |  |  |  | 41,350 |  |  |  | 6,014 |
Net loss |  |  | (141,188 | ) |  |  | (95,788 | ) |  |  | (13,931 | )
|  | As at December 31, |  |  | As at December 31, |
|  | 2017 |  |  | 2018 |  |  | 2018 |
|  | RMB |  |  | RMB |  |  | US$ |
Net cash used in operating activities |  |  | (54,113 | ) |  |  | (260,884 | ) |  |  | (37,944 | )
Net cash (used in) generated from investing activities |  |  | (5,582 | ) |  |  | 221,130 |  |  |  | 32,162 |
Net cash generated from financing activities |  |  | 56,787 |  |  |  | 41,886 |  |  |  | 6,092 |
Exchange rate effect on cash, net |  |  | 748 |  |  |  | 600 |  |  |  | 87 |
(Decrease) increase in cash and cash equivalents |  |  | (2,160 | ) |  |  | 2,732 |  |  |  | 397 |

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