Century galaxy group: The price of compassion

• Main Authors: CHIU, Tzu-Kuan, LIANG, Hao, WANG, Jialun
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: Social investments; social return on investment; venture capital; corporate social responsibility; empathy; healthcare; Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/318; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-20-BATCH%20%5BPDF-Pic%5D/SMU-20-0023%20%5BCentury%20Galaxy%5D/SMU-20-0023%20%5BCentury%20Galaxy%5D.pdf
• Institution: Singapore Management University

The case describes what happened in December 2019 when Guo Meiling, the chairwoman of Beijing Century Galaxy Group, needed to decide whether she should invest in the RMB 50 million (US$7.1 million) deal of Yisheng Health. Yisheng Health consisted of two O2O platforms, Yisheng At-home and Yisheng Carefree. Guo Meiling has already invested RMB 60 million in the firm in 2016, and this will be the second round of investment. Century Galaxy Group is established in 1994 as a for-profit group. It mainly operates in the healthcare business, in two major sectors, industrial operations and investment. The group has invested in several companies, and is also actively involved in CSR initiatives that includes charity donation drives and volunteering activities. In addition, Guo is attracted to impact investing, hoping that she can integrate her sense of compassion into the healthcare business. Under her leadership, the group has reinterpreted ‘natural wellness’ and made several double bottom-line investments. Yisheng Health is one of them. Guo’s decision to invest further depends on her views on social investment, especially on impact investing. To date, China has accumulated limited knowledge about impact investing, and domestic scholars has not yet published any related articles. If Century Galaxy were to attempt to conduct impact investing, what would be a good international standard to follow? How could this type of investment be integrated into healthcare to create synergy for Century Galaxy? From the perspective of impact investing, should Guo invest in Yisheng Health? Students would be able to 1) define impact investing under international standards and illustrate the role of investors, financial intermediaries, and investees in the ecosystem; 2) analyse potential deals from the perspectives of financial returns and social impact; 3) understand the rationale behind the trade-off between financial returns and social impacts based on state-of-the-art research; 4) analyse the relationship and difference between impact investing and CSR.