Meinian Onehealth Reports Record-Breaking 2017 Annual Results with Revenue Doubling to RMB 6.23 Billion, Up 102.25%

VCBeat (WeChat ID: vcbeat) reported on April 18 that Meinian Onehealth (002044), a leading player in the physical examination industry, released its 2017 annual report, posting substantial growth in both revenue and profit.

The report shows that the company achieved a total operating revenue of RMB 6.23 billion in 2017, representing a year-on-year increase of 102.25%; the total profit amounted to RMB 900 million, up by 80.69% from the same period last year; among which, the net profit attributable to shareholders of the listed company was RMB 610 million, a year-on-year increase of 81.11%. Meanwhile, Meinian Onehealth announced its dividend plan, distributing a cash dividend of RMB 0.50 (before tax) for every 10 shares and issuing 2 additional shares for every 10 shares held.

On October 11, 2017, Meinian Onehealth completed the transfer of ownership and industrial and commercial change registration, bringing Ciming Health Checkup into its consolidated financial statements. In 2017, the company continued to focus on its core development strategy of expanding and strengthening its main business, adopting a dual approach of focusing on key cities and nationwide layout. While consolidating its advantages in first- and second-tier cities, it intensified its deep penetration and strategic presence in third- and fourth-tier markets.

In 2015, Meinian Onehealth successfully listed on China’s A-share market. In 2017, it was included as a constituent stock of the CSI 300 Index, ranking among the leaders in market capitalization among publicly listed companies in the health services sector.

In the composition of operating revenue, Meinian Onehealth's health checkup service revenue amounted to RMB 6.14 billion, accounting for 98.54%, becoming the absolute core source of income. Among this, the operating profit reached RMB 910 million, a year-on-year increase of 41.71%, with a gross profit margin of 46.61%.

In 2017, Meinian Onehealth further accelerated the offline expansion of its health checkup centers. According to cash flow data, the company’s net cash outflow from operating activities amounted to RMB 5.14 billion, representing a 43.75% increase compared with 2016. This rise was attributable to the increased number of health checkup centers and the expansion of sales scale, which led to a corresponding increase in operating costs.

Meinian Onehealth has expanded its coverage to 32 provinces, municipalities, and autonomous regions, as well as 215 core cities, with a current network of over 400 health examination centers. This includes: 146 centers controlled and 155 participated in by Meinian Onehealth; more than 100 centers under construction; 60 centers controlled and 5 participated in by Ciming Health Checkup; 2 centers controlled and 3 participated in by Meizhao Health Checkup; and 7 centers participated in by Aoya Health Checkup.

Annual health checkup visits exceeded 21.6 million, further consolidating its leading position as the primary gateway for health-related traffic. Meanwhile, the company successfully completed the merger with Ciming Health Checkup, while its premium brand, Meizhao Health Checkup, began to aggressively expand its presence. The three brands have joined forces to achieve win-win outcomes in revenue scale, brand influence, industry standing, R&D capabilities, management services, and talent reserves, ushering in a new era of precision health screening in China.

The report indicated that the company’s R&D expenditure for the full year of 2017 amounted to RMB 3.9753 million, an increase of RMB 1.7276 million, or 76.86% year-on-year. Meanwhile, the R&D team expanded from 15 members in 2016 to 30 members.

The Company adheres to the business philosophy of “Endless Service, Customers at Heart.” It continuously enhances the substance of its health examination services, with the deployment of examination equipment further advancing toward high-end, widespread, and customized solutions, thereby upgrading Precision Health Examination 2.0 to a new level.

Following the “3650” initiative, the company has launched high-end health screening services, including coronary MRI, genetic testing, capsule gastrointestinal endoscopy, and early Alzheimer’s disease (AD) detection. In partnership with Zhifei Biological Products, it has also introduced value-added services for cervical cancer vaccines, driving rapid growth in both total operating revenue and net profit from its core health screening business.

To further enhance service quality, the company continuously implements a PDCA-based service system that includes pre-examination VIP consultations, in-examination accompaniment, and post-examination follow-up. It also provides in-depth analytical reports and post-examination health management plans to optimize post-examination services and deliver added value to clients. The medical quality control system has been further upgraded by strengthening and optimizing management processes, enhancing professional training, and advancing informatization, thereby improving both quality and efficiency.

Comprehensively carry out investigations, inspections, and supervision of medical quality; deepen third-party monitoring reports; collect first-hand user feedback; and strengthen service management improvements. Meanwhile, establish the Health 100 Research Institute, allowing the advantages of its scientific research and academic platform to become increasingly prominent, and conduct big data-based scientific innovation and public health services.

In terms of ecosystem building, leveraging the advantages of its massive, precise big data entry platforms, the company continuously strengthens its control over core sectors including artificial intelligence, genetic testing, early cancer screening, intelligent diagnostics, health services, and health insurance. It further consolidates its standards, technological, and data barriers in the professional physical examination field, thereby forming a highly potential health industry cluster and core ecosystem.

In 2018, based on its core strategy of “expanding the main business, building an ecosystem, and forming a closed loop,” Meinian Onehealth proposed to further upgrade its core strategy by continuing to focus on the three key elements of “revenue growth, quality control enhancement, and technological innovation.”

1) Revenue growth is the fundamental imperative. By implementing the “Thousand-Store Plan,” we are strengthening the foundation of Healthy China. Our national footprint continues to expand: in 2018, the total number of health examination centers exceeded 600, serving 30 million visits. Our three major brands achieve deep market coverage and synergistic development. Amid the Health Consumption Upgrade 3.0, average revenue per customer continues to rise, core service offerings are further expanded, multi-channel collaboration drives revenue growth, and ecosystem partners mutually empower one another, truly achieving simultaneous growth in both volume and price.

2) Quality control upgrades are the lifeline; there is no end to improving medical quality services. The company will continue to enhance quality through standardization, refinement, and intelligence, strengthen and improve the formulation of industry standards for health check-ups, and build a domestically leading and internationally first-class quality control system and quality standards centered on medical imaging and clinical laboratory testing.

3) Technological innovation is a "nuclear weapon," accelerating the construction of the ecosystem. Strategic efforts are focused on key areas such as big data and artificial intelligence, advanced diagnostics, chronic disease management, genetic testing, health insurance, and customized health products. By leveraging health AI technologies to uncover the underlying patterns of diseases and shift disease intervention upstream, a technical foundation has been laid to address challenges in national medical insurance and cost containment, while enhancing the quality of healthcare services. The establishment of a national biobank provides an irreplaceable data infrastructure for public health, disease prevention and control, new drug development, and major innovations.

It is worth mentioning that, in terms of business innovation, Meinian Onehealth has proposed to further deepen the connotation of health examinations, upgrade products and technologies, increase the average transaction value per customer, intensify investment in new high-end examination products, and continue to strengthen its focus on the B2B sector.

Building on our portfolio of high-end products—including CT, MRI, capsule gastrointestinal endoscopy, and early cancer screening—we will continue to intensify the launch of major innovative offerings. We will further introduce new premium health checkup packages such as genetic testing combined with coronary MRI and liver ultrasound, alongside significant innovation initiatives in brain health, remote ECG monitoring, and intelligent Traditional Chinese Medicine (TCM) health assessments.

By integrating genetic data with physical examination results, we comprehensively assess health indicators to deliver precision health screenings. Through a partnership with Zhifei Biological Products for cervical cancer vaccination, we advance women’s health. By signing a collaborative agreement with the National Clinical Research Center for Respiratory Diseases (the Respiratory Center of China-Japan Friendship Hospital), we promote the widespread adoption of pulmonary function testing, jointly advancing into a “screening-diagnosis-treatment” model under the “Health Screening Center–Specialist Medical Consortium” framework.

While continuously consolidating and expanding the corporate group examination market, we actively explored opportunities in the individual examination and value-added services sectors, resulting in a 10% increase in the average revenue per user (ARPU) and an adjustment of the ratio between corporate group and individual examinations to 70:30.

In terms of business synergy, Meinian Onehealth continues to strengthen its position in key sectors, prioritizing the development of ecosystem businesses such as U-Health, Meiyingen, Daxiang Doctor, and Meivie Dental. The company is also continuously integrating additional services, including specialized examinations, advanced diagnostics, precise assessments, health management, intelligent diagnosis, specialty care, and telemedicine. Meanwhile, the company will accelerate the application process for establishing a professional health insurance company, thereby achieving a closed-loop system spanning prevention, medical treatment, and payment.