China is in the midst of a massive overhaul of its healthcare systems. The initiatives are being fueled by a concerted effort from the Chinese government which has pledged $125 billion U.S. to build or remodel 2,000 rural hospitals and to create universal access to basic healthcare over the next 10 years. The fact is that China has somewhat lagged in healthcare historically, but is on a mission to correct the issue and provide for its citizens the coverage that they have been openly asking for. Aside from the stock market, "kudos" to the government for taking action.
Medical Care Technologies, Inc. (OTCBB:MDCE) (MCT) is a Beijing-based information technology provider to the healthcare industry and looking to capitalize on the medical market that is burgeoning in China. In January 2010, MCT signed an Asset Acquisition Agreement with Great Union Corporation and acquired Great Union’s technologies associated with the development and maintenance of secure information systems which increase access to medical resources services, education and wellness, pharmaceutical and nutraceutical products.
Currently, MCT is engaged principally in the three different areas within the industry including opening and operating private health and wellness clinics for children in China; developing and maintaining online secure medical information systems used by hospitals and other healthcare institutions, and; selling pharmaceutical, nutraceutical and herbal products online and in its proposed private healthcare clinics. This business model is defined through three business segments: Children’s Medical Clinics, Medical Management Software Systems, and Pharmaceutical and Nutraceutical Products.
Today, the Company took a step in the execution of its business strategies as it announced the signing of a letter of intent (LOI) with Ocean Wise International Industrial Ltd., a private Hong Kong investment holding company to establish a joint venture for the purpose of opening and operating private pediatric clinics throughout China. The LOI is not binding, but was assembled for the purpose of outlining a framework under which the parties will negotiate the formation of a joint venture for the opening and operation of private pediatric clinics and installing its healthcare information system in these children's health centers.
Per the tentative agreement, both companies will contribute technology, research and development, financial components and other resources, but specific terms are yet to be determined and still the matter of negotiations. If the parties can come to agreement, definitive and binding agreements will be produced.
Commenting on the agreement, Luis Kuo, Chief Operating Officer of MCT, stated, "Medical Care brings extensive scientific expertise and experience in the information technology industry, specifically in the healthcare sector. Combining our companies' resources will provide a unique opportunity to further advance our business plan initiatives and to leverage those resources to open up in the China marketplace."
A Letter of Intent is always a bit of a wild card to gauge how investors are going to react, but investors are showing a very favorable reaction to Medical Care Technologies moving forward with its business model. Shares have surged in excess of 35% heading into the closing bell with more than a half a million shares changing hands.
Related Stories
