Ping An Good Doctor Reports H1 Revenue of RMB 1.12 Billion, Up 150.3% YoY, and Acquires Ping An Wanjia for RMB 980 Million

VCBeat (WeChat: vcbeat)It is reported that Ping An Good Doctor (01833), a subsidiary of Ping An Insurance, announced its 2018 interim financial results this afternoon, marking its first financial report since going public.

According to the financial report, as of June 30, 2018, Ping An Good Doctor’s revenue for the first half of the year reached RMB 1.12 billion, a year-on-year increase of 150.3%; the company’s net loss was RMB 444.2 million, representing a 2.6% year-on-year decrease in losses; gross profit amounted to RMB 308 million, up 65.3% year on year, with a basic loss per share of RMB 0.5.The announcement stated that the losses were due to share-based payments, net foreign exchange losses, and one-time listing expenses.

Ping An Good Doctor’s Key Financial Data (Source: Ping An Good Doctor Semi-Annual Report)

In the first half of 2018, the company achieved significant results in customer operations and traffic accumulation, realizing dual growth in both user base and consultation volume.

The announcement stated that the company’s revenue maintained rapid growth. Specifically, revenue from the family doctor business reached RMB 186.2 million, a year-on-year increase of 91.4%. As of the end of June 2018, the number of registered users reached 228 million, an increase of 35.2 million from the end of 2017, representing a growth rate of 18.3%; in June 2018, monthly active users (MAU) reached 48.6 million, a year-on-year increase of 50.9%; and the average daily number of consultations in the first half of 2018 reached 531,000, a year-on-year increase of 58.0%.

Meanwhile, Ping An Healthcare addresses users’ medical and health needs by leveraging its in-house medical team augmented with artificial intelligence to deliver convenient, high-quality healthcare services. The company is also actively exploring commercial insurance partnership models to assist insurers in managing user health and enhancing risk control capabilities.

By integrating AI-assisted proprietary medical team resources, external physician resources, and healthcare network resources, we create a closed-loop service system that combines online consultations with online medication purchases, as well as online consultations with offline medical appointment arrangements, enabling users to enjoy convenient, high-quality, and efficient family doctor services.

Data disclosed in the semi-annual report revealed that, as of the end of June 2018, Ping An Good Doctor’s in-house medical team had reached 1,037 members, with 4,650 contracted external renowned physicians (all holding the title of associate chief physician or above at Grade III Class A hospitals).

Meanwhile, Ping An Good Doctor launched its “in-home service.” The “1-hour medication delivery” network has now expanded to cover over 80 cities, up from 62 as of June 30, 2018, and 14 at the end of 2017. As of the end of June 2018, the number of partner hospitals exceeded 3,100, including more than 1,200 Grade A tertiary hospitals, while the number of partner pharmacies surpassed 12,000, with over 4,000 covered by the “1-hour medication delivery” service.

Currently, Ping An Good Doctor’s revenue is primarily derived from four major segments: family doctor services, consumer healthcare, the health mall, and health management and interaction. Among these, the core business of family doctor services has achieved rapid growth, with significant results driven by AI technology.

Family Doctor

In the first half of the year, revenue from Ping An Good Doctor’s core business—its family doctor services—reached RMB 186 million, a year-on-year increase of 91.4%. The average daily consultation volume reached 531,000, up 58% year on year.

As of the end of June 2018, Ping An Good Doctor’s “1-Minute Consultation + 1-Hour Drug Delivery” service had covered 62 cities, with 4,150 partner pharmacies. By the end of July, the service had expanded to more than 80 cities across China, including partnerships with well-known national pharmacy chains such as Yifeng Pharmacy, Neptune Star, Laobaixing Pharmacy, and Guoda Pharmacy.

The rapid growth in Ping An Good Doctor’s family doctor service revenue was primarily driven by the significant uptake of its new product, “Medical Care 360,” launched in late 2017, as well as a substantial increase in e-prescription service revenue. In the first half of the year, Ping An Good Doctor also achieved major breakthroughs in insurance collaborations, pioneering the industry’s first “Health + Insurance” innovative model to provide one-stop healthcare solutions for insurance customers, thereby fueling significant growth in its core business revenue.

Consumer Healthcare

In the consumer healthcare segment, sales reached RMB 346.5 million, a year-on-year increase of 47.5%. Gross profit amounted to RMB 113.8 million, up 40.6% year on year. This growth was primarily driven by the sustained positive momentum in the health check-up card business. The gross profit margin for the consumer healthcare business in the first half of 2018 was 45.9%, slightly lower than that of the same period last year. By the end of June 2018, the healthcare service provider network covered more than 1,200 health check-up centers, over 700 dental clinics, and more than 110 medical aesthetics institutions, representing an increase of approximately 500 providers compared to the end of 2017. Meanwhile, significant breakthroughs were achieved in corporate health management, with nearly 200 enterprise clients signed, including large publicly listed companies.

Health Mall

Focusing on scenarios closely related to users’ healthcare needs, we offer a wide range of health and medical products online. As of June 30, 2018, the Health Mall had partnered with over 500 merchants, offering approximately 265,000 SKUs covering numerous categories, including Western and traditional Chinese medicines, nutritional supplements, medical devices, maternal and infant care, and sports and fitness products.

During the reporting period, the GMV contributed by Ping An Good Doctor’s Health Mall business reached RMB 1.56 billion, a year-on-year increase of 130.4%. Revenue from the Health Mall business amounted to RMB 628.2 million, up 302.7% year on year; gross profit reached RMB 63.9 million, representing a year-on-year increase of 120.2%.

The report stated that the primary drivers of growth were the diversification of the company’s health products and the continuous increase in app activity. Additionally, rising internal procurement demand within the Ping An Group further boosted the growth of the Health Mall business.

Health Management and Interaction

By leveraging recommendation engines to predict user interests and preferences, Ping An Good Doctor delivers targeted health content to users. Generating advertising revenue through precise medical and healthcare traffic is also one of its income sources, with its advertiser base comprising well-known enterprises in the domestic and international medical and healthcare industries.

During the reporting period, revenue from health management and interactive services reached RMB 60.2 million, a year-on-year increase of 119.2%; gross profit amounted to RMB 49.7 million, up by 133.5% year on year; and the gross profit margin stood at 82.6%, representing a year-on-year increase of 5.1 percentage points.

Furthermore, as of June 30, 2018, Ping An Good Doctor had accumulated over 300 million online consultation records. Benefiting from massive data volumes and the continuous optimization of its AI-assisted diagnosis and treatment system, the consultation efficiency of its in-house medical team improved rapidly. Meanwhile, it began exploring offline deployment of “One-Minute Clinics,” which integrate smart medicine cabinets with AI-assisted diagnosis and treatment systems.

Since its inception, Ping An Good Doctor has focused on enhancing its capabilities in artificial intelligence (AI) and big data. As of the end of June 2018, Ping An Good Doctor had filed a total of 26 patent applications for AI research and development, while also beginning to explore the deployment of “One-Minute Clinics” that integrate smart medicine cabinets with AI-assisted diagnosis and treatment systems. According to Ping An Good Doctor, the company will continue to strengthen its AI R&D efforts in the future, improving the accuracy and applicability of AI-driven medical applications and building a robust intelligent engine.

In its semi-annual report, Ping An Good Doctor disclosed its acquisition of Wanjiayiliao, another affiliate under the Ping An umbrella, as well as its partnership with Grab.

On August 16, 2018, Ping An Healthcare and Technology Company Limited signed an equity transfer agreement, announcing the acquisition of 100% equity interest in Ping An Wanjia Medical Investment Management Co., Ltd. (“Wanjia Medical”) for RMB 980 million. Wanjia Medical focuses on connecting and empowering primary healthcare institutions, forming a trinity primary healthcare solution comprising “systems + standards + services,” with the aim of building China’s leading primary healthcare service platform.

The announcement stated that the acquisition of Wanjia Medical would accelerate offline expansion, perfect the online-to-offline (O2O) closed-loop family doctor service, enable bidirectional traffic flow between medical services, further promote close integration with insurance operations, and explore the development of new commercial health insurance models.

In addition, Ping An Good Doctor has signed a subscription agreement with Grab to establish a joint venture in Southeast Asia. The joint venture will primarily provide one-stop healthcare services via a mobile platform in Southeast Asia, including online medical consultations, consumer healthcare, a health e-commerce marketplace, and health management and engagement services. The joint venture’s registered capital is USD 20 million, with Ping An Good Doctor holding a controlling stake. In the future, depending on the joint venture’s development, both parties may make further investments in cash or valuable assets (approximately equivalent to USD 120 million).

Grab is Southeast Asia’s leading online-to-offline (O2O) platform, currently operating in 225 cities across eight countries, including Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar, and Cambodia. It offers services such as ride-hailing, food delivery, shopping delivery, and an integrated e-wallet (GrabPay). The Grab platform currently hosts 7.1 million individual service providers, including drivers.