Company Overview
Health 160 is a leading digital healthcare service platform in China, connecting healthcare institutions, healthcare professionals and individual users to provide serious medical and consumer medical services. The company's vision is to "build China's leading offline integrated medical and health service entrance, and become the most intimate health guardian for everyone", by creating a comprehensive product and service system, building a health ecosystem, and providing users with a full life cycle health management solution from prevention, diagnosis, protection to protection. Health 160 submitted a prospectus to the Hong Kong Stock Exchange on December 15, 2023, with Shenwan Hongyuan Hong Kong and Qingke Capital as its joint sponsors.
Based on Frost & Sullivan, calculated on the basis of (i) the number of passes through the Platform** in 2022;(ii) calculation of the number of partner hospitals as of December 31, 2022;(iii) Calculation of the number of ** hospitals cooperated as of December 31, 2022;and (iv) in terms of the number of healthcare workers connected to the platform as of 31 December 2022, Health160 was the largest digital healthcare service platform in China's digital healthcare integrated service industry in 2022.
Business model
As of June 30, 2023, Health160's platform has connected to more than 30,000 healthcare institutions with more than 44.9 million registered users. Health 160's business model is divided into two main categories: selling pharmaceutical and health products and providing digital healthcare solutions.
Sales of medical and health products
Health 160 sells all kinds of medical and health products, including prescription drugs, over-the-counter drugs, health care products, medical equipment, beauty and personal care, etc., covering the daily health needs of users.
Health 160's sales business is mainly carried out through online channels, including its own mobile app, WeChat mini-program, official **, etc., as well as cooperation with third-party platforms, such as JD.com, Pinduoduo, Meituan, etc. Health 160 also has its own logistics and distribution network, covering major cities across the country, ensuring that users' orders can be delivered in a timely and accurate manner.
The revenue from the sales business of Health 160 reached the proportion of its total revenue in 2020, 2021 and 2022, respectively. 3% and 732%。
Provide digital healthcare solutions
Health160 provides high-quality services to healthcare institutions, healthcare professionals and individual users by providing digital healthcare solutions, including (i) marketing solutions for healthcare institutions and third-party merchants(ii) digital hospital solutions for healthcare organizations;and (iii) ** health services for individual users, the proportions of revenue of these three segments in 2022 are respectively. 5% and 24%。
Health 160's digital healthcare solutions accounted for a percentage of its total revenue in 2020, 2021 and 2022, respectively. 7% and 268%。
Financial analysis
Health 160's financial position is characterized by rapid growth but continuous losses. Health 160 achieved revenue of 27.9 billion yuan, 42.3 billion and 52.6 billion yuan, with a compound annual growth rate of 375%。Health 160's revenue growth was mainly due to the expansion of its sales business.
The Health 160 recorded a loss from 2020 to 2022, with -2987 respectively60,000 yuan, -15.2 billion and -1$200 million, mainly due to higher costs and expenses.
The gross profit margin of Health 160 from 2020 to 2022 is: 4% and 225%, which is significantly lower than the industry average, mainly due to the low gross margin of its sales business, respectively. 0% and 41%。The sales business in turn contributes a large part of the revenue.
Competitive advantage
The competitive advantages of Health 160 are mainly reflected in the following aspects:
Broad user base and loyal user base. Health 160 has more than 4,490 registered users, with an average monthly active user count of 3 million. By providing high-quality products and services, as well as rich marketing activities, Health 160 has established a good user reputation and brand image, attracting a large number of new and old users.
Comprehensive product and service system and strong technical support. Health 160 provides users with a full life cycle health management solution from prevention, diagnosis, protection to protection through the sale of medical and health products and the provision of digital medical and health solutions. By introducing innovative technologies, such as artificial intelligence, big data, cloud computing, etc., Health 160 has improved the efficiency, quality, and accessibility of its products and services, providing users with a more intelligent, convenient, and personalized experience.
Stable partners and a wide range of industry resources. Health 160 with more than 30,000 medical and health institutions, 720,000 medical staff, hundreds of medical and health supplies suppliers, dozens of third-party platforms, etc. have established long-term cooperative relations, forming a strong industry ecosystem, providing users with richer and more diverse choices, and providing partners with a broader and deeper market.
Professional management team and excellent talent team. Health160's management team is comprised of individuals with extensive industry experience and expertise who are able to effectively develop and execute the company's strategy and operations. Health160's talent team is made up of talented people from different fields and backgrounds, who are able to continuously innovate and optimize the company's products and services.
Industry outlook
The digital medical and health service industry in which Health160 is located has huge market potential and room for growth.
According to the prospectus, the size of China's digital healthcare services market will be 135.2 billion yuan in 2022 and is expected to reach 14 trillion yuan, with a projected CAGR of 33 from 2022 to 20309%。
The growth of China's digital healthcare services market is primarily driven by the following factors:
China's aging population and the increase in chronic diseases have led to an increase in the demand for medical and health services, as well as a change in the structure of medical and health services, from focusing on prevention to prevention.
The inadequacy and unevenness of medical and health resources in China have led to the insufficient supply of medical and health services, as well as the low quality and efficiency of medical and health services, resulting in user dissatisfaction and distrust.
The development and popularization of digital technology in China has led to the innovation of medical and health service models and the expansion of medical and health service channels, thus providing users with a more convenient and personalized experience, as well as richer and more diverse choices.
The support and encouragement of China's policies have led to the improvement of the environment for medical and health services, as well as the formulation of standards for medical and health services, thus providing more favorable and standardized conditions for the development of medical and health services.
Valuation analysis
At present, the listed Internet medical companies in Hong Kong include JD Health, Ali Health, Ping An Good Doctor, Zhong'an**, etc., and their valuations have undergone significant adjustments, and the current median and average PS are close to 2 times. At this multiple, the current valuation of the Health 160 should be 11200 million RMB.