U160 Reports Exponential Revenue Growth with RMB 27.7 Million in H1 2016, Files IPO Prospectus

Recently, JiuYi160 (Ningyuan Technology) released its semi-annual report for 2016. According to VCBeat (WeChat Official Account: vcbeat), during the reporting period, JiuYi160’s operating revenue reached RMB 27,696,617.57, representing a year-on-year increase of 247.21% and amounting to 116.77% of the total revenue for the entire previous year. Among this, revenue from internet healthcare platform services was approximately RMB 24.29 million, compared to around RMB 4.95 million in the same period last year, marking an approximate fivefold increase.

Jiuyi160: Key Business Highlights of the Past Six Months

In the first half of this year, leveraging its traffic advantages as a key "entry point," the JiuYi160 platform has extensively onboarded various partners across the healthcare industry chain—including private hospitals, physical examination centers, pharmaceutical distributors, medical device manufacturers, financial and insurance institutions, wearable medical device vendors, and health management organizations—to co-build an internet healthcare ecosystem. Centered on its user base of patients seeking medical care, the platform has established a profitability model comprising two main streams: internet-based value-added services and internet technical services.

Among these, JiuYi160’s out-of-pocket payment business during consultations has grown rapidly, with the platform’s daily payment volume exceeding RMB 800,000. By partnering with third-party payment providers such as Alipay, WeChat Pay, and Ping An Fu, JiuYi160 has been promoting mobile medical insurance payments across major hospitals in Shenzhen. As of the disclosure date, an increasing number of hospitals have launched this service. In addition, JiuYi160 has collaborated with large insurance institutions such as China Ping An and Pacific Insurance to introduce new types of internet-based medical insurance products, including “Appointment Cancellation Insurance,” “Diabetes Insurance,” and “Vaccine Insurance.”

During the reporting period, the Company partnered with more than 100 hospitals, including Peking University Shenzhen Hospital, the Second Traditional Chinese Medicine Hospital of Guangdong Province, and Dongguan People’s Hospital, to comprehensively implement end-to-end online hospital services. These services span pre-consultation, during-consultation, and post-consultation phases, further digitizing a broader range of offline service scenarios. The Company jointly established a pilot program for tiered diagnosis and treatment with the Luohu Hospital Group in Shenzhen, a key demonstration unit for tiered diagnosis and treatment under the National Health and Family Planning Commission (NHFPC). It signed a Strategic Cooperation Framework Agreement with Hainan Yuluo Information Technology Co., Ltd. to co-develop the Smart Hainan Public Healthcare Platform. Additionally, the Company collaborated with the Chongqing Municipal Health and Family Planning Commission to build a one-stop health platform, entered into a strategic cooperation agreement with the Nanjing Municipal Health and Family Planning Commission, and implemented the Unified Appointment Registration Platform Cooperation Agreement signed with the Hechi Municipal Health and Family Planning Commission across multiple hospitals in Guangxi, gradually replicating the “Shenzhen Model” nationwide.

Regarding the international medical services channel, JiuYi160 has expanded its platform to multiple countries, including the United States, South Korea, Japan, and Thailand, with 76 top-tier global medical institutions now affiliated.

Furthermore, JiuYi160 has partnered with leading Chinese internet companies such as Didi Chuxing, Shenzhou Zhuanche, and Amap to jointly address the transportation challenges patients face when seeking medical care. It has also collaborated with renowned domestic health examination institutions to launch “BOSS Benefits,” an exclusive corporate health service, and introduced a “comprehensive employee-specific health management package” for enterprises and public institutions, thereby further expanding its value-added membership services.

As of June 30, 2016, the services of the Jiuyi 160 platform had covered more than 200 cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hong Kong, Changsha, Zhengzhou, Hefei, Chengdu, Wuhan, Nanjing, and Haikou, spanning 31 provinces; it served 3,017 hospitals. During the reporting period, the company added 830 new serviceable hospitals, including 342 newly added Grade A tertiary hospitals; the number of newly registered users exceeded 29 million. The number of serviceable doctors exceeded 470,000, an increase of more than 30,000 during the reporting period; the number of real-name registered users exceeded 97 million, an increase of 29 million during the reporting period; the cumulative number of patients who made appointments exceeded 69 million; and the proportion of mobile users exceeded 60%.

Meanwhile, the number of hospitals served by Jiuyi 160’s healthcare-associated infection control software has exceeded 5,000. In the first half of 2016, the Jiuyi 160 platform comprehensively promoted its physician-facing products, providing services such as transparent income opportunities and brand building for doctors, including online consultations, private physician services, and telephone/video consultations. Additionally, the Jiuyi 160 platform actively organized activities such as physician exchange salons, patient health education campaigns, and micro-lectures for doctors. During the reporting period, the gross merchandise value (GMV) of Jiuyi 160’s value-added services for doctors and patients reached RMB 1.25 million, representing a year-on-year increase of 489%, with the highest monthly GMV exceeding RMB 300,000.

According to the report, Jiuyi 160 achieved an operating revenue of RMB 27,696,617.57 in the first half of this year, representing a year-on-year increase of 247.21% and amounting to 116.77% of the total revenue for the entire previous year. Among this, revenue from internet healthcare platform services reached RMB 24,287,903.78, compared to RMB 4,947,402.87 in the same period last year, marking a 4.91-fold increase. The proportion of revenue from internet healthcare platform services rose significantly to 87.69%, driving the overall gross profit margin up by 14.64 percentage points year-on-year to 83.00%, thereby substantially enhancing profitability. Meanwhile, revenue from medical software sales and related services maintained steady growth, increasing by 12.52% compared to the same period last year.

Jiuyi160: Key Profit and Loss Overview for the First Half of the Year

However, behind the substantial year-on-year revenue growth in the first half of the year, JiuYi 160’s expenditures also rose rapidly, particularly labor costs. Driven by the need for large-scale market expansion, the number of employees in the first half of this year was three times that of the same period last year. JiuYi 160 incurred labor costs of RMB 59.19 million, compared with only RMB 14.32 million in the same period last year, representing a more than threefold increase.

Although still operating at a loss, the internet healthcare platform business of JiuYi160 has begun to exhibit exponential growth. The revenue potential from value-added services on the platform remains largely untapped, indicating substantial room for future income growth.

Furthermore, due to JiuYi160’s increased investment in R&D for core technologies and additional manpower allocated to sales channels, its net cash flow from operating activities turned negative. To address its funding needs, JiuYi160 has been continuously raising capital in the capital markets. Meanwhile, the company has been engaging with multiple commercial banks and has already secured credit lines from relevant institutions. It is expected that in the second half of the year, JiuYi160 will enter into comprehensive cooperation with several major banks in areas such as online payments and credit facilities. However, this has also pushed JiuYi160’s debt-to-asset ratio to 70%, which is relatively high and poses certain operational risks.

Jiuyi160: Half-Year Balance Sheet Position

Industry insiders stated that the operational performance of JiuYi160 aligns with the developmental characteristics of the internet healthcare sector. With adjustments to its business strategy and continuous optimization of its organizational structure, JiuYi160 is expected to significantly reduce operating costs, thereby narrowing its losses. The company is projected to turn a profit next year, potentially becoming the first mobile healthcare enterprise to achieve profitability.