Ecmoho Limited (MOHO) Debuts on Nasdaq as First Non-Medical Integrated Health Services Provider, Reports Nearly $200M Revenue in 2018

Currently, the global health industry has become a worldwide hotspot, with many domestic enterprises rushing into this sector, ushering in a period of rapid growth for China's health industry.

As a booming industry, the broader health sector comprises two distinct segments: pharmaceuticals and healthcare, and non-pharmaceutical healthcare. The presence of the non-pharmaceutical healthcare segment has been steadily increasing in recent years, driven by an emerging force behind its growth.

Whether it is Alibaba Health, JD Health, or Ping An Good Doctor, all are deeply rooted in the general health industry. Leveraging the strength of tech giants, their development in this sector has indeed been smooth and successful.

Although industry giants enjoy numerous advantages, many enterprises have identified suitable business models and rapidly emerged as new unicorns in the broader health sector, with Yiheng Health being a typical example.

Yiheng Health Listed on Nasdaq Last Night with the Ticker Symbol “MOHO,” Marking the Debut of the First Comprehensive Non-Medical Internet Healthcare Service Provider on the Exchange. The IPO Price Was $10 per Share, Valuing the Company at $342 Million.

This revelation has drawn increased attention to the non-pharmaceutical healthcare sector within the broader health and wellness industry.

As a vital component of the broader health and wellness industry, the non-pharmaceutical and non-clinical healthcare sector is witnessing increasingly clear growth prospects. This trend has enabled companies like Yiheng Health to seize development opportunities, becoming the first integrated service provider in the non-clinical health and wellness sector to list on a U.S. stock exchange. From an investment perspective, what growth potential does Yiheng Health possess?

In the non-pharmaceutical healthcare sector, there are still relatively few companies listing in the U.S. Therefore, Yiheng Health’s successful IPO as the first comprehensive service provider has naturally drawn significant attention. According to the prospectus disclosed by Yiheng Health, the company demonstrates considerable competitiveness.

For companies preparing to go public, growth in revenue and net profit are key metrics that attract the attention of the capital markets.

It is understood that Yiheng Health was established in 2011, with its management headquarters registered in the Shanghai Zizhu High-Tech Park. According to data disclosed in the prospectus, Yiheng Health’s total revenue in 2018 amounted to US$199 million, representing a year-on-year increase of 103.1%; its revenue for the first half of 2019 reached US$151 million, a year-on-year increase of 112.7%.

In addition to stable revenue growth, Yiheng Health’s overall net profit margin has also maintained healthy growth. According to U.S. Non-GAAP standards, the net profit margin rose from 2.8% in 2017 to 3.3% in 2018; notably, the net profit margin in the second half of 2018 reached 4.3%, which was 3.07 times that of the first half (3.07%). In the first half of 2019, net profit increased by 131% year over year.

In terms of growth rate, Yiheng Health also outperformed the industry average. Over the past five years, Yiheng’s compound annual growth rate (CAGR) was approximately twice that of the overall industry. Why has Yiheng Health been able to maintain such a high growth rate? In addition to its own business model, another critical factor is the benefit derived from the development of the entire industry.

Industry data show that the scale of China’s healthcare industry grew from RMB 1.6 trillion in 2011 to RMB 5.1 trillion in 2017, more than tripling in size. The market size of China’s big health industry is projected to reach RMB 10 trillion by 2020 and exceed RMB 16 trillion by 2030.

Judging from this growth rate, the big health industry has immense potential for expansion. As a high-potential segment within the broader big health sector, the non-pharmaceutical and non-clinical healthcare industry holds promising prospects. Public awareness is shifting from seeking treatment only after falling ill to prioritizing preventive care before illness occurs. Yijiasancan (Shanghai) E-commerce Co., Ltd. (Yiheng Health) has been operating in the non-pharmaceutical and non-clinical healthcare sector for nearly eight years, establishing itself as a seasoned player in this field. By gaining a firm foothold during the industry’s early stages and maintaining simultaneous growth in both revenue and net profit, Yiheng Health is poised to further widen its competitive gap with rivals.

With the influx of capital, industry competition has intensified to some extent. To establish a firm foothold in this sector, companies must still rely on unique business models to attract the market.

Unlike JD.com and Alibaba Health, Yiheng Health is a comprehensive service provider deeply rooted in the field of preventive medicine, with a vertical and clear strategic layout.

In terms of product sales channels, we have engaged in deep, multi-dimensional cooperation across both online and offline domains. This includes comprehensive e-commerce platforms such as Tmall and JD.com (Nasdaq: JD); social e-commerce platforms such as Pinduoduo (Nasdaq: PDD), Yunji (Nasdaq: YJ), and Xiaohongshu; our proprietary vertical e-commerce platform, Xianggui Health; as well as other online and offline retailers. As of September 2019, Yiheng Health had partnered with 64 global brands, offering approximately 5,500 products.

According to Yiheng Health’s prospectus, in 2018, revenue from its top ten partner brands accounted for 67.6% of its total annual revenue. As of September 2019, eight partner brands had each contributed more than $10 million in product sales revenue. In terms of revenue growth, Yiheng Health has demonstrated stable and healthy performance, even outperforming Ping An Good Doctor in profitability.

Currently, China’s comprehensive general health services market—excluding pharmaceuticals and medical treatments—is highly fragmented, with numerous competitors, leading to intense industry competition. For Yiheng Health, expanding into multi-dimensional revenue monetization channels has further diversified its revenue structure. In addition to product sales, Yiheng Health offers service-based solutions, unlocking additional commercial monetization opportunities from B-side enterprise clients.

Traditional TP (Third-Party Partner) providers merely offer e-commerce operations and content marketing services to brands, charging service fees. This third-party service model entails weak upstream relationships and high substitutability. In contrast, as an Integrated Service Provider (ISP), Yiheng Health exercises significant autonomy in operations and retailing, enabling it to accumulate downstream consumer data and build strong momentum for business expansion. This model better serves enterprises by uncovering more potential demands.

In terms of channels, Yiheng Health does not rely on a single channel but instead builds its own closed-loop ecosystem. In the first half of 2019, only 21% of Yiheng Health’s sales revenue came from Alibaba, leaving ample room for transformation and expansion.

From these two perspectives, it is evident that Yiheng Health maintains its own competitiveness, whether facing industry giants or competing with other peer platforms. This has also ensured that it can maintain a good growth rate in terms of revenue and net profit. After going public, what other factors will support its future development?

In China, preventive medicine remains an emerging industry in development, whereas it has reached a high level of maturity in European and American markets. In the United States, preventive medicine boasts a high penetration rate among consumers within the broader health and wellness sector. Driven by capital investment, the development of preventive medicine in China is expected to accelerate further. Based on current trends, Yiheng Health, which holds a favorable position in this sector, will be well-positioned to capture greater market opportunities and share in the industry’s growth dividends.

I. Favorable Policy Developments Safeguard Preventive Medicine

From a policy perspective, at the end of September this year, the state issued the “Outline of Actions for Promoting High-Quality Development of the Health Industry (2019–2022)” (hereinafter referred to as the “Outline”), implementing 10 major projects focusing on key areas and critical links. A succession of favorable policies has been continuously introduced, propelling the medical and broader health industry into an unprecedented phase of rapid, high-quality development. As disease prevention remains a core policy priority, it will drive continuous innovation and expansion in the health checkup industry.

II. User Demand Drives Further Expansion of Market Size

Although the penetration rate of preventive medicine in the Chinese market remains relatively low at present, domestic consumers’ awareness of health prevention has been rising in recent years, making preventive medicine a major growth driver for big health products. Data show that the scale of China’s medical and healthcare industry grew from RMB 1.6 trillion in 2011 to RMB 5.1 trillion in 2017, more than doubling in size. The “Healthy China 2030” Planning Outline projects that the total scale of China’s health industry will exceed RMB 8 trillion by 2020. As an important component of the big health sector, the non-pharmaceutical and non-medical segments are poised for further expansion in the future.

With policy support and the expansion of market scale, the development prospects of China’s non-pharmaceutical healthcare sector will become increasingly clear. Enterprises that establish greater competitiveness in the broader non-clinical health and wellness industry will naturally capture larger market shares.

As the first service provider in China’s non-medical health and wellness sector to list on a U.S. stock exchange, Yiheng Health is poised for greater breakthroughs in growth while strengthening its business moat. Notably, Yiheng Health is currently leveraging the Matthew Effect to drive industry consolidation opportunities, suggesting substantial room for development and significant growth potential in the future. With its own stable growth rate maintained, Yiheng Health’s future prospects are indeed promising.

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Yiheng Health Plans to List on Nasdaq