Company overview

Zhongchao helps healthcare professionals in China keep their medical knowledge current. Its operating entities work with medical professionals to produce courses and content delivered through MDMOOC, alongside in-person training and academic events. Nonprofit organizations supply most revenue, and pharmaceutical companies are another important customer group. Most nonprofit customers receive pharmaceutical-company sponsorship to commission training on specific healthcare topics; doctors, nurses and other healthcare workers are the end users, rather than the main paying customers.

The company also manages patient-aid projects, including through Zhongxin Health. It reviews patient applications, tracks drug use and collects information. Pharmaceutical companies or nonprofit organizations pay for this administration and related training; those customers supply eligible patients with free drugs. Zhongchao has ended its former patented-drug sales business.

Revenue depends on a small group of customers without long-term purchase commitments, and on pharmaceutical companies’ willingness to fund education and promotion. Chinese rules restrict pharmaceutical promotion and relationships with physicians. The operating entities also lack an online audiovisual transmission license and are ineligible to apply because they are not state-owned or state-controlled; if regulators classify their course content as covered programming, they could have to suspend it.

The listed company is a Cayman Islands holding company. It relies on contracts, rather than equity ownership, to control Zhongchao Shanghai and receive payments from it, making access to that business dependent on those arrangements.