YiJiu160 Reports 2016 Annual Results: Revenue Triples Year-over-Year, Achieves Profitability in Q4

VCBeat learned that JiuYi160 (stock code: 834750), the first internet healthcare company to go public, released its 2016 annual report on April 27.

During the reporting period, driven by a substantial increase in revenue from its internet healthcare platform, the company’s total revenue reached RMB 70.15 million in 2016, representing a nearly threefold year-on-year growth. Notably, despite significant investments throughout the year in expanding its network of hospitals and physicians across China, the company delivered robust performance in the fourth quarter and has already achieved profitability.

In early 2016, Health 160 proposed an internet healthcare ecosystem strategy centered on “connectivity, openness, and ecology.” Leveraging its platform traffic advantages, Health 160 aggregated user traffic through appointment registration services. The company’s operational capabilities for its internet healthcare platform have continuously improved, with a sustained increase in the number of online platform users, expanding geographic coverage, and a rapid upward trend in revenue from internet-based value-added services.

Notably, revenue from internet platform services—comprising end-to-end online hospital services and internet value-added services—achieved remarkable results. The annual report disclosed that revenue from internet healthcare platform services surged significantly during the year, generating RMB 58.22 million, a year-on-year increase of 270%, and accounting for as much as 80% of the total annual revenue.

Jiuyi160 provides hospitals with internet-based services, including online appointment scheduling, online payment, online medical insurance payment, online inquiry of laboratory test reports, and patient follow-up. These services have demonstrated significant effectiveness in reducing consultation time, improving clinical efficiency, and accelerating hospital operational efficiency.

As of 2016, the total number of hospitals that had launched the full-process services provided by Jiuyi 160 exceeded thirty. Among these, the monthly in-hospital payment volume grew from RMB 8.19 million in January to RMB 44.42 million in December, representing a nearly five-fold increase. It is reported that the current monthly in-hospital payment volume has reached RMB 100 million.

Data indicates that the Jianyi 160 full-process online hospital platform is no longer confined to Shenzhen; its services now cover cities across China, with nearly 100 hospitals having signed contracts and awaiting launch. In 2017, the full-process online hospital project will further intensify its expansion efforts to serve more cities.

Recognizing the immense potential of the pharmaceutical e-commerce market, Shenzhen Ningyuan Technology (operating as “Jiuyi 160”) acquired a pharmaceutical e-commerce license and established a dedicated team in 2016, officially launching the 160 Pharmacy. Primarily serving Jiuyi 160’s vast base of patients and healthcare providers, 160 Pharmacy leverages big data to precisely target users, providing comprehensive medical devices and pharmaceutical products, as well as personalized healthcare, insurance, and physical examination services across the pre-diagnosis, during-diagnosis, and post-diagnosis stages.

Currently, 160 Pharmacy has launched its official online store and WeChat mini-program store, generating RMB 2.46 million in revenue for Health 160 in the first month of operation and laying the groundwork for future prescription drug distribution.

Blue Dragonfly, the hospital infection control software under the Jianyi 160 platform, is also a source of revenue, generating RMB 9.47 million in full-year 2016. Adopting an “infection control + internet” model, Blue Dragonfly provides a real-time monitoring and management system that enables pre-infection risk analysis and intervention, as well as controllable and traceable oversight during the infection process, serving more than 5,000 clients. With increased media coverage of healthcare-associated infection cases, hospitals at all levels have significantly heightened their emphasis on infection control monitoring, and the market is expected to experience substantial growth in the future.

As of December 31, 2016, the services of the Juyi 160 platform covered 3,194 hospitals, an increase of 1,007 from the previous year, including 1,263 Grade A tertiary hospitals, an increase of 466 from the previous year; the number of doctors available for service exceeded 470,000; the number of real-name registered users exceeded 119 million, with 51 million new registered users added throughout the year; and the cumulative number of patients who made appointments exceeded 83 million.

According to the annual report, during the reporting period, Jiuyi 160 incurred certain losses due to significant investments in expanding its network of hospitals and doctors across China; however, the company also acquired a massive user base at a low cost. Meanwhile, driven by revenue growth and organizational restructuring, Jiuyi 160 achieved profitability in the fourth quarter of 2016 and is expected to achieve comprehensive profitability in 2017.

The report shows that the company’s operating costs in 2016 increased by 89.84% year-on-year, primarily due to a corresponding rise in costs alongside substantial growth in internet platform service revenue. In addition, general and administrative expenses rose by 105.15% year-on-year, mainly driven by increased R&D expenditures, higher employee wages, and employee equity incentives.

In 2016, Health 160 added R&D of the basic core software for its online hospital and developed multiple full-process projects. The substantial investment in new project R&D directly led to a significant increase in R&D expenses.

Due to the rapid growth in business volume, the number of employees showed an upward trend in 2016. The peak headcount in 2016 increased by 31.90% compared to the beginning of the year, leading to a rise in employee compensation and benefits expenses. In addition, the Company implemented an employee equity incentive plan in 2016 and recognized share-based payment expenses of RMB 14.4395 million in accordance with accounting standards.

Industry analysts stated that in the first half of 2016, the rapid development of Jiuyi 160 led to a swift increase in costs, with annual staff salary payments rising by RMB 70.64 million compared to the previous year. With organizational structure optimization in the second half of the year, labor costs were brought under control. On the revenue side, Jiuyi 160’s gross profit margin reached 75%, an increase of nearly 15 percentage points from the previous year, marking a significant improvement. In 2017, as expenditures were further compressed and revenue generation strengthened, Jiuyi 160 was poised to become the first internet healthcare company to achieve profitability.

Luo Ningzheng, CEO of Jiuyi160, stated that the company will continue to leverage its user traffic to vigorously expand partnerships with various types of collaborators and further integrate service resources across the healthcare industry chain. Meanwhile, it aims to establish an online hospital alliance comprising high-quality public and private hospitals. By using this alliance as a nexus to connect diverse healthcare services on its ecosystem platform, Jiuyi160 seeks to build a self-improving healthcare ecosystem.