When it comes to making appointments, I believe many people are familiar with the "Health 160" applet.
No matter in terms of the number of platforms, the number of cooperative hospitals, or the number of medical staff accessed, Health 160 International (hereinafter referred to as "Health 160") is the largest digital medical and health service platform in China's digital medical and health comprehensive service industry.
Now, the largest appointment platform, has also launched its IPO journey for Hong Kong stocks.
After nearly 20 years of development since 2005, Health 160's business far includes not only appointments, but also diversified medical and health services such as marketing solutions, digital hospital solutions, health services, and sales of medical and health supplies. And as such a platform with rich business types and a huge user base, does Health160 make money?
The cost of inventory is high, and it has accumulated a loss of 3 in three and a half years2.7 billion.
Zhitong Financial APP learned that according to the prospectus, Health 160 chose Shenwan Hongyuan Hong Kong and Qingke Capital as its joint sponsors. As early as 2015, the company completed the shareholding reform and was listed in the first place, and the listing was terminated in June 2018.
Earlier, the predecessor of Health 160 was also named Shenzhen Ningyuan, and then in June 2017, that is, during the listing period, it was officially renamed "Health 160". As for the delisting from ***, the company has said that it is preparing for the launch of Hong Kong stocks or GEM listing.
And perhaps even the company did not expect that the preparation for the transfer of listing after the delisting of the company would take 5 years.
So far, according to Frost & Sullivan data, whether it is calculated in terms of the number of hospitals through the platform in 2022, the number of hospitals cooperating as of December 31, 2022, and the number of medical staff connected to the platform, Health 160 is the largest digital medical and health service platform in China's digital medical and health comprehensive service industry in 2022.
With the continuous expansion of business scale, the revenue scale of Health 160 has also achieved continuous growth. For the year 2020-2022 and the six months ended June 30, 2023, the revenue of Health 160 was 2., respectively7.9 billion yuan, 42.3 billion yuan, 5$2.6 billion and $2.6 billion6.9 billion yuan.
However, Health 160 also has a pain point faced by many Internet medical companies, that is, it is difficult to make profits. According to the company's prospectus, in 2020-2022 and the six months ended June 30, 2023, the health 160 period lost 2,98760,000 yuan, 15.2 billion yuan, 12 billion and 247760,000 yuan, with a cumulative loss of 3 in the past three and a half years2.7 billion yuan.
If dismantled, the cost of inventory is the core of the company's loss. Zhitong Financial APP learned that in 2020-2022 and the six months ended June 30, 2023, the inventory cost of Health 160 was 14 billion yuan, 25 billion yuan, 3$6.5 billion and $1RMB8.2 billion, accounting for the total cost of sales and services for the same period. 5% and 902%。
Among them, the inventory cost mainly refers to the cost of purchasing products from third-party suppliers, including medicines, medical and health supplies, and medical supplies and equipment.
At present, Health 160 divides its business into two main lines:Digital healthcare solutionsandSales of medical and health products。The above-mentioned procurement of drugs and medical supplies mainly occurs in the sales line of pharmaceutical and health products.
In the sales process of pharmaceutical and health products, Health 160 mainly plays the role of "sales intermediary", and mainly focuses on wholesale sales. For the six months ended June 30, 2023, the share of sales made on a wholesale basis reached 912%。However, compared with the retail model, the gross profit margin of the wholesale model is lower, which greatly reduces the overall gross profit margin of the sales of pharmaceutical and health products.
But even so, Health 160 has not been able to get rid of its dependence on the sales of pharmaceutical and health products in terms of revenueThe proportion of sales revenue of pharmaceutical and health products remained at about 70%.
Behind this, to a certain extent, is the manifestation of the sluggish growth of Health 160 in the digital medical and health solution business. As the largest digital medical and health service platform in the country, even though the number of registered users of Health 160 continues to grow, butHowever, the monthly activity showed a downward trend
Zhitong Financial APP learned that in 2021, the average monthly active users of Health 160 were 3.9 million, which dropped to 3.3 million in 2022 and further decreased to 3 million in the first half of 2023. The decline in average monthly active users has also led to a downward trend in the company's digital healthcare solution revenue.
As a result, for Health 160, the company is facing a bottleneck in the growth of its high-gross margin business, and has to rely on its low-gross margin business to drive revenue growth. However, the company's current main reliance on the sales of medical and health products is not high, and the company's inventory costs are high, which further exacerbates the risk of loss.
The bargaining power of the sales of medical and health products is weak, and the liquidity is under pressure.
After a long period of not turning a profit, Health 160 is also facing some pressure in terms of liquidity.
For the years 2020-2022 and for the six months ended June 30, 2023, the net cash from operating activities of Health 160 amounted to 1968., respectively60,000 yuan, -35090,000 yuan, -423910,000 yuan, -364120,000 yuan. To do this, the company had to supplement the company's cash flow by making financing. As of mid-2023, Health 160 ended with cash and cash equivalents of 5,74370,000 yuan, of which 5,22410,000 yuan** for financing.
For Health 160, if the company cannot complete the listing and obtain financing as soon as possible, the company may face the risk of cash flow disruption.
On the other hand, according to Zhitong Financial APP, due to its focus on the expansion of drug sales business, Health 160 also has a certain risk of accounts receivable. For the six months ended June 30, 2023, the Company's ** net receivables were 14.8 billion yuan, accounting for about 56 percent of total assets8%。
*The number of days of receivables turnover has also been continuously extended, and in 2020, 2021 and 2022, the company's **accounts receivable** days were 48, 52 and 52 days, respectively. In the first half of 2023, the number of days of **accounts receivable** has reached 71 days, and the bargaining power is at a disadvantage in the industry chain.
In terms of funds, the health 160 subsidiary has also been restricted in its bank account because of a lawsuit. Among them, in a sales transaction in July 2020, the company was unable to deliver masks to the customer due to business problems, so the customer filed a judicial lawsuit against the health 160 subsidiary. As a litigation preservation measure, the bank accounts of Health 160's subsidiaries were restricted in November 2022.
In addition, most of the amounts receivable from related parties of Health 160 are also related to Luo Ningzheng, the company's single largest shareholder, chairman and chief executive officer. From 2019 to 2023, Health160 provided certain term loans to Luo Luo Ningzheng. In 2020, 2021 and 2022, the outstanding amounts receivable from Luo Ningzheng by the company were 35 million yuan, 9.5 million yuan and 1.2 million yuan, respectively. In the first half of 2023, the outstanding amount receivable from Luo Ningzheng is still 1.2 million.
For Health 160, choosing to go to Hong Kong can only alleviate the company's short-term predicament. Only by finding a suitable business model and building hematopoietic capacity to reverse the current situation of continuous losses can we achieve long-term development. Health 160 also mentioned in the prospectus that the company has implemented a comprehensive monetization mechanism. In the future, whether Health 160 can find a real growth profit point and break through the current predicament is a question it needs to consider.