Metal Component Engineering (MCE) is venturing into the healthcare metaverse after acquiring a host of new businesses and attracting new investors. To signal its entry into the patient aftercare business, MCE has also changed its name to Meta Health.

Last July, MCE announced the acquisition of an 85.07% stake in healthcare and pharmaceutical e-commerce firm Gainhealth for $4.25 million. Meta Health also acquired a 70% stake in Gaido Digital Medika, 10% stake in MedTel Healthcare and 17.28% stake in social commerce company Adazal. It also started a joint venture with MNR Food for the development and distribution of clinical nutrition products.

“The thing about the healthcare industry is that it is huge. We don’t have any real limit to the number of companies that can be in this industry because the size of it is just very big,” says Dr Vas Metupalle, chief medical officer of the company’s healthcare arm 5Digital, in an interview with The Edge Singapore.

In addition, Metupalle thinks the industry is not yet saturated despite several new healthcare companies popping up. For one, market insights firm Fitch expects the Singapore healthcare market to grow to $68.7 billion by 2029. Healthcare spending, which comprises both public and private healthcare expenditure, is also expected to go up to 9% by 2029. Already, 2020 saw a 9% y-o-y growth increase in the local healthcare market, reaching some $29.8 billion, with healthcare spending accounting for 5.9% of GDP that year.

Asia’s ageing population will require newer and more efficient ways to deliver affordable healthcare too. One solution is to focus on digital care and patient data analysis. Some of the MCE’s current focus includes rolling out telemedicine and internet of things (IoT) healthcare equipment to supplement and support patient aftercare services.

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Gainhealth, Meta Health’s maiden acquisition, operates a chain of clinics but also has a healthcare technology business through its e-commerce arm. Gainhealth cuts out the middlemen with its vertically-integrated business model consisting of pharmacy-equipped licensed clinics, an online self-branded e-commerce portal as well as product placements on several large e-commerce platforms. It is also able to bundle its healthcare services such as online medical consultations and health coaching for its members.

As a strategic tie-up with Gainhealth, Meta Health invested in India-based medical Internet of things (IoT) company MedTel, which works with over 50 healthcare providers in India to deploy remote healthcare services, WhatsApp chatbots and healthcare kiosks. Meta Health now has the exclusive rights to deploy this technology in Southeast Asia, with Singapore being the first stop, followed by Indonesia and Malaysia.

In the second quarter of this year, Meta Health plans to embed its telemedicine service and medical IoT platforms within so-called “Virtual Medical Cities”, a healthcare-focused space in the metaverse.

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By partnering with blockchain e-health platform provider Aimedis, Meta Health aims to establish a virtual platform that includes blockchain storage of medical data uploaded from the IoT devices as well as 5Digital’s consultation data.

Metupalle says this is necessary as many clinical data systems are unsecured and could be easily stolen by hackers. “Some clinics still use weak passwords or websites that are not SSL secured and there are too many weak points in the current Web that we have today. That’s why we think blockchain-based electronic medical records are the future. Aside from being secure, it is also auditable,” he adds.

Dr Bernard Ng, 5Digital’s executive director, points out that leveraging blockchain technology for health-related data is not new. Singapore’s HealthCert, which was developed by the Government Technology Agency of Singapore and the Ministry of Health, uses blockchain technology to facilitate cross-border verification of health documents.

The duo explains that Aimedis has already built a blockchain-based platform for the hospital information system and electronic medical records. Aimedis has also established a Health City metaverse where the World Federation of Neuro Rehabilitation as well as three university hospitals are part of the metaverse.

Aimedis is currently localising Health City as well as the blockchain technology for health data storage for the Singapore market. Built from the ground up, Virtual Medical Cities will be a very secure location for the medical practice, says Metupalle.

Unlike typical telemedicine, Virtual Medical Cities will “mirror real hospitals” where patients can access medical attention for chronic diseases, ancillary services such as physiotherapy as well as other additional features such as gamification and community social interactions.

Metupalle says expensive devices like virtual reality goggles will not be required to access Virtual Medical Cities as it is accessible via mobile phones and can be complemented with medical IoT devices.

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Meta Health is also focusing on data collection via its investment in Adazal to help it understand how to better sell to its customers. Adazal operates a platform that allows community influencers and leaders to sell online via its live-streaming capabilities. The platform also includes management of end-to-end merchant and consumer data as well as logistics.

Launched in the Philippines, Adazal will soon be expanding to the Vietnamese market, providing Meta Health with ample data sources. “We believe we cannot compete without data — we need it for machine learning and artificial intelligence to help us find further opportunities. It is not something that we can jump into without collecting data [first],” says Ng.

To fund its forays in a different field, MCE launched two placement exercises. The first round last July raised $800,000 with 14.48 million new shares issued at 5.526 cents each.

The second round involving $3.3 million was launched in November 2021. The company issued around 66.5 million shares at 4.95 cents each to a group of 15 investors, some with deep experience in the healthcare sector.

These include Dr Lim Cheok Peng, former CEO of Parkway Holdings and managing director of IHH Healthcare. He had acquired some 8.2 million shares for a total of $405,900. The single largest investment came from Yong Yean Chau, CEO of Parkway Life REIT, who acquired 17 million shares for $841,500. He will hold 3.37% of MCE upon completion of the exercise.

“We have been active with our key shareholders and taking their advice. Dr Lim has given several good advice to us and we engage him as we develop and progress in the industry. The network that he has is extensive around the region,” says Metupalle.

MCE was once the manufacturer of products used in data storage, office automation peripherals, automated teller machines and kiosk products.

But when the trade war between US and China broke out and the pandemic struck, MCE suffered a loss of $2 million in FY2020 ended December 2020.

Despite its divestment, the company will keep its manufacturing business. “[The metal business] will continue to be a core to the company. Meanwhile, our CEO and the board of the company continue to see the need for new avenues of growth and returns to shareholders,” says Metupalle.

In its FY2021 financial report, Meta Health reported maiden earnings of $7.7 million versus a loss of $2 million in FY2020. Revenue in the same period was up 33% to $43 million, led by higher demand in its original metal parts business. Recent acquisition Gainhealth contributed revenue of $1.3 million.

In its FY2021 financial statement, Meta Health says it is upbeat about its healthcare segment, seeing higher demand for its services in telemedicine, nursing services and e-pharmacy.

“We are also making good progress engaging relevant stakeholders to provide care for the elderly. We believe this will continue to strengthen the company’s financial performance. The team will continue to review strategic options on how to improve the shareholder’s value over the next few months,” the company says. As for its original manufacturing business which is showing signs of a turnaround, the company remains cautious for FY2022.

Looking further ahead though, Metupalle and Ng expect consumers and doctors to readily hop onto the digital healthcare bandwagon. This would lead to higher demand for their services.

“I think a geographical expansion into Indonesia is going to be a core focus for our healthcare strategy this year. We will continue to test and grow our products in Singapore and launch new ones too,” says Metupalle.

In Singapore, Meta Health plans to launch IoT products and digital services to support homecare and smaller nursing homes that are not digitalising fast enough. It plans to leverage the metaverse to better provide some of the services remotely, such as home care physiotherapy and rehabilitation. Already under construction, Virtual Medical Cities is expected to launch sometime in 2Q2022.

As data is at the core of the company’s growth within the digital healthcare sector, the company also has plans to expand its social commerce presence into Vietnam to capture consumer interest and data before pushing out its healthcare services.

So far, the market seems not to have reacted strongly to developments in Meta Health. Year to date, shares of Meta Health have declined by 10.64% to last trade at 42 cents on March 24, giving the company a market value of $22.5 million. However, if its top management team can get the execution right, that could breathe new life into the stock.

Photo: Albert Chua/The Edge Singapore

Former Metal Component Engineering ventures into healthcare metaverse

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