Check on China: Chindex International, Inc.

Health is a major issue in China. Cancer has become the nation’s leading killer, causing 1.5 million deaths annually. About one-third of the world's 400 million people infected with the hepatitis-B virus are in China. By 2025, it is estimated that two million Chinese will die from lung cancer and illnesses related to smoking and indoor air pollution. By the same year, China will also have some 38 million diabetes patients, says PricewaterhouseCoopers.

As the Chinese grow more prosperous and succumb to the influence of Western lifestyles, the incidence of cardiovascular diseases, cancer, diabetes and infectious diseases will rise. No wonder that in recent years, American and European drugmakers and medical device companies have put down stakes and gained a foothold in the country.

The fast-growing demand for premium medical services in China has translated into success for Chindex International, Inc. (Nasdaq: CHDX), a U.S.-based company that provides health-care services and supplies medical equipment, instruments and products to the Chinese market.

Chindex is divided into two segments: health-care services and medical products. The health-care services division consists of the company's United Family Healthcare network that operates two private 50-bed hospitals and satellite clinics in Beijing and Shanghai. The medical products side of the business markets, distributes and sells diagnostic imaging devices, robotic surgical systems, chemical analyzers, sterilization systems, lasers for cosmetic surgery and cancer diagnostic devices to hospitals in the mainland and Hong Kong.

While the vast majority of hospitals in China remain state-owned, in 2000, amid a massive health-care system overhaul, the government began restructuring and selling off hospitals to individual investors, which sparked the birth of a private hospital industry in China. Chindex is one of only a few foreign entities that own private hospitals in the country (only 0.15% of all registered medical facilities have any foreign investors, according to some statistics).

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