Author: Pan Yan
Producer: Insight IPO
Following the June 2023 announcement, Healthway, an Internet medical company, recently resubmitted its prospectus to the Hong Kong Stock Exchange, with CCB International as the sole sponsor.
Looking back on the development process of the road to health for more than 20 years, it can be described as "getting up early in the morning and catching up late".
Founded in 2001, Health Road, formerly known as the medical network launched by Fuzhou Renren Health, was founded in the early days, mainly for individual users to provide first-class doctor and other services, and is one of the earliest enterprises to enter the Internet medical track.
However, serving C-end users has not brought much breakthrough to the road to health, and traffic growth and monetization models have become important bottlenecks restricting the company's development. Until 2014, with the rise of the "Internet +" tide, the road to health began to receive an olive branch thrown by capital.
In December 2014, Healthway received US$60 million in Series A financing from Hong Kong, becoming the second largest shareholder of Healthway. As of the end of June 2023, the Healthy Way is 1246% stake.
Since then, Healthway has received multiple rounds of financing, including Shanghai Jiejia, Shangrao State-owned Assets, Meizun Renhe, etc., plus the first round of financing, Healthway has a cumulative financing amount of about 43.7 billion yuan. According to the last round of financing plan in July 2023, Healthway is valued at about 4.1 billion yuan.
In this process, the business focus of Healthway has gradually shifted from the digital health care service business for C-end users to the B-end enterprise service business, mainly providing IT solutions and digital marketing solutions for enterprises and institutions.
The B-end force drives the company's overall performance, and from 2020 to 2022, the operating income of Healthway is 18.7 billion yuan, 43.1 billion yuan, 56.9 billion yuan, with a compound annual growth rate of 746%。The operating income for the first half of 2023 was 53.4 billion yuan, nearly 7% of the revenue during the reporting period** in the enterprise service business.
However, in the entire Internet medical industry, the revenue scale of the health road of less than 600 million yuan is difficult to be competitive. Taking Ping An Good Doctor, which was established in 2014, as an example, its revenue in 2022 will be 61600 million yuan, which is more than ten times the road to health.
In the increasingly competitive Internet track, in order to improve its influence, the road to health has embarked on the road of "emphasizing marketing and ignoring R&D".
From 2020 to 2022 and the first half of 2023, the sales expenses of Healthway were 03.3 billion yuan, 12.6 billion yuan, 14.7 billion yuan, 781890,000 yuan, the sales expense rate is. 64%。During the same period, R&D expenses were 118780,000 yuan, 141420,000 yuan, 544100,000 yuan, 363670,000 yuan, the R&D expense rate is. 87%。
Rising costs are a drag on Healthway's profitability. From 2020 to 2022 and the first half of 2023, the loss during the period was 06.5 billion yuan, 15.5 billion yuan, 2$5.6 billion and $10.5 billion yuan, with a cumulative loss of 5$8.1 billion.
In this regard, Healthway explained that this is mainly due to factors such as changes in the book value of redemption liabilities. Excluding the above factors, the company's adjusted net profit for the same period was 40.6 million yuan, 500,000 yuan, 30.4 million yuan and -5.8 million yuan, respectively.
Although in the generally loss-making Internet medical industry, Healthway can have a balanced revenue and a slight surplus, but judging from the relatively meager figures, it does not seem to have strong sustained profitability. During the reporting period, the gross profit margin of Healthway also showed a downward trend, and the comprehensive gross profit margin was respectively. 2% and 326%。
What's more important to note is that Healthway's operating cash flow is also showing a downward trend. From 2020 to 2022 and the first half of 2023, Healthway's net operating cash flow was 3,218., respectively60,000 yuan, 141570,000 yuan, 87810,000 yuan and 128790,000 yuan.
The asset-liability ratio remains even higher. After calculation, from 2020 to 2022 and the first half of 2023, the asset-liability ratio of Healthway is as follows: 36% and 66937%。
Healthway ProspectusHealthway bluntly states that if cash resources are insufficient to meet the Company's cash needs, the Company may seek to issue additional equity or debt** or obtain new or expanded credit facilities.
The threshold for digital health medical service business is high, requiring a large amount of upfront investment, and at the same time, the business itself has problems such as difficult transformation and difficult charging, which makes it very difficult to increase the proportion of business.
As of the first half of 2023, the Healthway platform has registered users17.9 billion, but the number of monthly active users has dropped from 9.7 million in 2020 to 4 million, and the number of paid individual users has dropped from 1.3 million to 300,000. In terms of the number of medical consultations, it has decreased from 18.5 million in 2020 to 5.9 million in 2022.
"The decrease in the number of medical consultations arranged by our platform is mainly due to the decrease in direct user traffic. ”
It is worth mentioning that after becoming a shareholder of Healthway in 2014, it has cooperated with Healthway in a number of business areas, mainly involving search engine technology and information release, and has become its major customer and important businessman. However, in the past three years, the proportion of revenue from the road to health has decreased year by year, from 194% to 44%。
Mainly due to the change of business strategy in the medical consultation online appointment business, the traffic is tilted towards self-operated ** consulting service providers, and the cooperation with third-party platforms is reduced. ”
It can be seen that although the road to health has been in the industry for a long time, it has not formed its own core competitiveness in terms of traffic acquisition. In this context, seeking change is the next main theme of the road to health.
Looking at the Internet medical industry, whether it is Ali Health, JD Health or Ping An Health, selling drugs is the main way to generate income, but Health Road has not made much achievements in the pharmaceutical retail business before.
As a result, in recent years, Healthway has begun to adjust its strategic direction, aiming at the "selling medicine" market, and preparing to transform into a physical pharmacy.
In December 2022, Healthway spent 664770,000 yuan to acquire the chain pharmacy Jianmingtang 4432% equity to 204550,000 yuan to subscribe for its new registered capital. In the end, Healthy Road held a 51% stake in Jian Ming Tong Pharmacy. Through this acquisition, Healthway has acquired 6 specialty pharmacies and 1 community pharmacy under Jian Mingtang.
However, at present, the business has not formed a scale effect. In the first half of 2023, Healthway's pharmaceutical retail business achieved an operating income of 2,43200,000 yuan, accounting for 46%。
In the prospectus, Healthway also made it clear that it would expand its territory in the pharmaceutical retail business and explore other strategic investments and acquisitions.
In the fundraising project of this IPO, Healthway plans to use part of the funds to expand the network of specialty pharmacies near ** hospitals, and plans to open about 30 specialty pharmacies in Fujian Province in the next three years, and recruit about 160 resident pharmacists and other pharmacy assistants, about 30 ** chain managers to support inventory procurement, and about 10 pharmacy operation professionals to manage and coordinate its specialty pharmacies.
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