HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Through perfect partnership system, Gushengtang locks in the scarce TCM physicians, and then quickly establishes/merges offline medical institutions to occupy the market. Such development mode works well so far.</li>
<li>The challenges are the risks of losing talents to competitors and the weak sales of healthcare products leading to lower profitability. </li>
<li>Gushengtang is in an industry that receives government encouragement/preferential policies. The 2022 revenue growth forecast could fall back to about 25% considering the pandemic/lockdown. The EPS could narrowly turn positive.</li>
</ul>


Through perfect partnership system, Gushengtang locks in the scarce TCM physicians, and then quickly establishes/merges offline medical institutions to occupy the market. Such development mode works well so far.
The challenges are the risks of losing talents to competitors and the weak sales of healthcare products leading to lower profitability. 
Gushengtang is in an industry that receives government encouragement/preferential policies. The 2022 revenue growth forecast could fall back to about 25% considering the pandemic/lockdown. The EPS could narrowly turn positive.


Gushengtang (2273.HK) - The Development Momentum Is Good, but There Are Also Challenges

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

JD Health International  / Equity Bottom-Up

<ul>
<li>China has released a draft rule on 22nd June that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.</li>
<li>Alibaba Health as well as JD Health’s shares dropped 15% at the end of trade on 22nd June while Ping An Health's shares lost about 5.7% of its value.</li>
<li>This is the <strong>First</strong> of a series of reports where we analyse the impact of the above draft rule on leading digital-healthcare players in China. This report discusses JD Health.</li>
</ul>


China has released a draft rule on 22nd June that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.
Alibaba Health as well as JD Health’s shares dropped 15% at the end of trade on 22nd June while Ping An Health's shares lost about 5.7% of its value.
This is the First of a series of reports where we analyse the impact of the above draft rule on leading digital-healthcare players in China. This report discusses JD Health.


JD Health: Minimal Impact from New Policy on Digital Healthcare

Ping An Healthcare and Technology / Equity Bottom-Up

<ul>
<li>Just as we analyzed before, things get worse for PAGD. The loss expanded and gross margin declined. The gap between PAGD and its peers (JD Health, Alibaba Health) is widening. </li>
<li>PAGD’s Achilles' heel is its business model/profit model is untenable. The new HMO services system would not help turn things around because China's national condition is different from the US.</li>
<li>Being on the wrong track, PAGD’s financial performance is expected to further weaken. We are conservative about PAGD’s outlook. Any brief upwards movement is just dead cat bounce.</li>
</ul>


Just as we analyzed before, things get worse for PAGD. The loss expanded and gross margin declined. The gap between PAGD and its peers (JD Health, Alibaba Health) is widening. 
PAGD’s Achilles' heel is its business model/profit model is untenable. The new HMO services system would not help turn things around because China's national condition is different from the US.
Being on the wrong track, PAGD’s financial performance is expected to further weaken. We are conservative about PAGD’s outlook. Any brief upwards movement is just dead cat bounce.


Ping An Healthcare and Technology (1833.HK) - Untenable Business Model Worsen the Logic and Outlook

Equity Capital Markets

Beijing Yuanxin Technology Group Co Ltd / Equity Capital Markets

<ul>
<li>Based on the business analysis, <a href="https://www.smartkarma.com/entities/beijing-yuanxin-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:34685:1" rel="noopener">Beijing Yuanxin Technology Group Co Ltd (1865453D CH)</a> is more of a traditional offline chain drugstores than a healthcare technology company.</li>
<li>Yuanxin has been suffering from loss for years. With a gross margin of lower than 10%, it's going to be tough to turn a profit, leading to concerns on survival. </li>
<li>Due to the fierce competition in each of its businesses, homogeneous business model, weak financial position, lack of high moat, policy risks, etc., we are conservative about the Company’s outlook.</li>
</ul>


Based on the business analysis, Beijing Yuanxin Technology Group Co Ltd (1865453D CH) is more of a traditional offline chain drugstores than a healthcare technology company.
Yuanxin has been suffering from loss for years. With a gross margin of lower than 10%, it's going to be tough to turn a profit, leading to concerns on survival. 
Due to the fierce competition in each of its businesses, homogeneous business model, weak financial position, lack of high moat, policy risks, etc., we are conservative about the Company’s outlook.


Pre-IPO Beijing Yuanxin Technology Group - Conservative About the Outlook

<ul>
<li>ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved and plans to raise proceeds of around US$500m.</li>
<li>The company is well positioned to benefit from growing demand for digital healthcare marketing and services in China driven by increased health awareness, technological advancements and prevalence of chronic conditions.</li>
<li>In this insight, we examine the company’s business model, segments and financials.</li>
</ul>


ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved and plans to raise proceeds of around US$500m.
The company is well positioned to benefit from growing demand for digital healthcare marketing and services in China driven by increased health awareness, technological advancements and prevalence of chronic conditions.
In this insight, we examine the company’s business model, segments and financials.


ClouDr IPO: Strong Business Model with Multiple Revenue Channels

China

Alibaba Health Information Technology Limited is an integrated healthcare information and content service provider. The Company uses product identification, authentication, and tracking system data for its healthcare information.

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Alibaba Health Information Tec (241 HK)

Gushengtang (2273.HK) - The Development Momentum Is Good, but There Are Also Challenges

Gushengtang's business model works well, but increasing competition and weak healthcare product sales could negatively affect performance. 2022...

Xinyao (Criss) Wang

JD Health: Minimal Impact from New Policy on Digital Healthcare

This is the First of a series of reports where we analyse the impact of the above draft rule on leading digital-healthcare players in China. We...

Shifara Samsudeen, ACMA, CGMA

Ping An Healthcare and Technology (1833.HK) - Untenable Business Model Worsen the Logic and Outlook

PAGD’s Achilles' heel is its business/profit model is untenable.The new HMO services will not turn things around.PAGD will enter a vicious circle...

Xinyao (Criss) Wang

Pre-IPO Beijing Yuanxin Technology Group - Conservative About the Outlook

Yuanxin is more of a traditional offline drugstores than a healthcare technology company. The fierce competition/homogeneous business model/weak...

Xinyao (Criss) Wang

ClouDr IPO: Strong Business Model with Multiple Revenue Channels

ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved...

Shifara Samsudeen, ACMA, CGMA

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