Health 160 Reports 47% YoY Revenue Growth in H1, with C-end Income Accounting for 50%

Health 160 (Shenzhen Ningyuan Technology Co., Ltd., stock code: 834750) released its first semi-annual report following its brand upgrade on August 30, which was promptly covered by VCBeat (WeChat ID: vcbeat). In the first half of 2017, Health 160 achieved revenues of RMB 40.75 million, representing a 47% year-on-year increase. Based on historical revenue patterns, where second-half revenues are typically twice those of the first half, full-year income is projected to exceed RMB 120 million, achieving comprehensive profitability.

During the reporting period, Shenzhen Ningyuan Technology (Health 160) achieved an operating cash flow of RMB 78 million, double that of the same period last year. In the same period, Shenzhen Ningyuan Technology also secured RMB 22 million in financing, led by Yuanzhi Capital, an investment arm under the Shenzhen Municipal Government.

Furthermore, as the traffic gateway for the Health 160 platform, appointment registration has accumulated over 140 million users.

The company's revenue is divided into B-side and C-side revenue. Since the beginning of this year, C-side revenue has grown rapidly, mainly including personal value-added services, pharmaceutical e-commerce, insurance, physical examinations, etc., currently accounting for 50% of the company's total revenue.

In the first half of 2017, Shenzhen Ningyuan Technology reported operating revenue of RMB 40.75 million. Cash inflows from its internet healthcare platform services amounted to approximately RMB 37 million, representing a year-on-year increase of 70%. Revenue from medical software sales and related services reached RMB 4.79 million, a 40% increase compared to the same period last year, with full-year revenue expected to surpass RMB 15 million.

The pharmaceutical e-commerce business has grown from scratch, achieving significant results in converting substantial healthcare traffic. Patients are gradually forming the consumption habit of making online appointment registrations via the platform, visiting hospitals for consultations, and purchasing medications at 160 Pharmacy. During the reporting period, revenue from 160 Pharmacy reached RMB 8.49 million, with monthly sales peaking at over RMB 4 million.

In the first half of 2017, Shenzhen Ningyuan Technology achieved effective control over administrative costs, with selling expenses reduced by nearly half. Following continuous optimization of its internal framework, the company has focused more on core revenue-generating businesses, resulting in a clearer business model.

Due to continued R&D investment and business expansion, the traditional seasonal downturn in the first quarter, and the fact that relevant government subsidies were not fully recognized, Shenzhen Ningyuan Technology still incurred a certain degree of loss in the first half of the year. However, compared with the same period last year, the loss has been significantly reduced by 51%. Given the current growth trend of Shenzhen Ningyuan Technology’s related business revenue and the effectiveness of its cost control measures, the company is expected to turn a profit in 2017.

As of June 30, 2017, the services of the Health 160 platform had covered more than 200 cities across 31 provinces, including Beijing, Shanghai, Guangzhou, Shenzhen, Hong Kong, Changsha, Zhengzhou, Hefei, Chengdu, Wuhan, Nanjing, and Haikou. The platform served 3,245 hospitals, over 1,200 of which were Grade 3A hospitals. It provided access to more than 500,000 doctors, with over 10,000 daily active doctors on the provider side, and had cumulatively served more than 140 million patients.

During the reporting period, with the upgrading and improvement of functions such as appointment registration, mobile payment, doctor consultation, and online drug purchase, the volume of appointment registrations on the Health 160 platform steadily increased, with the monthly peak exceeding 9 million appointments.

The payment volume during consultations on the Health 160 platform grew even more rapidly, with a single-month peak exceeding RMB 120 million and the annual payment volume reaching RMB 1.5 billion.

The company has invested substantial R&D resources and partnered with institutions such as Alipay and WeChat to promote mobile medical insurance payments. As of the disclosure date, this service has been sequentially launched at more than 10 hospitals, including Peking University Shenzhen Hospital. By linking their medical insurance cards to their mobile phones, patients can make real-time payments. The service has gained high recognition from patients since its launch, resulting in a surge in usage. It is slated for nationwide rollout across China in the future, indicating a vast market potential.

Since the launch of the Health 160 Doctor Platform, both the number of registered physicians and their activity levels have increased significantly. During the reporting period, the gross merchandise value (GMV) of value-added services for doctors and patients reached RMB 6.1 million, representing a year-on-year growth of 388%, with the highest monthly GMV exceeding RMB 1.2 million. By partnering with Health 160, physicians can build their follower base, establish their professional brand, and conduct patient follow-ups and management.

Shenzhen Ningyuan Technology has been committed to helping physicians build their personal brands by encouraging multi-site practice. In April this year, in response to national policy initiatives, Shenzhen Ningyuan Technology launched its Medical Consortium product, leveraging its extensive experience in internet healthcare operations and platform advantages to provide users with referral appointment and consultation services. This innovative product optimizes the allocation of medical resources through vertical integration and horizontal cross-regional collaboration, thereby guiding residents to change their healthcare-seeking concepts and habits and gradually establishing an orderly pattern of medical care utilization.

Shenzhen Ningyuan Technology aims to leverage its integrated internet-based hardware and software systems to enable physicians in internet hospitals to overcome administrative regional restrictions and practice at multiple locations. Meanwhile, patients' imaging data, electronic medical records, and health archives can also be interconnected and shared.

In May 2017, Health 160 joined the China Family Doctor Platform as one of the first batch of cooperative partners. The platform aims to facilitate residents’ online selection and contracting with family doctors by aggregating primary healthcare institutions, family doctors, and their teams across China, thereby enabling efficient service delivery. As a member of the China Family Doctor Platform, Health 160 allows its users to more easily establish service relationships with family doctors.