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.

Equity Bottom-Up

Alibaba Health Information Tec / Equity Bottom-Up

<ul>
<li>On 22nd June, China released a draft rule that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.</li>
<li>Alibaba Health’s share price is down more than 10% since the announcement of the draft rule, however, third-party e-commerce platforms accounts for about 10% of Ali Health’s revenues.</li>
<li>Pharmaceutical direct sales business has been generating lower GPM compared to JD Health’s direct biz, and the company’s margins have continued to deteriorate during the last 2-years.</li>
</ul>


On 22nd June, China released a draft rule that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.
Alibaba Health’s share price is down more than 10% since the announcement of the draft rule, however, third-party e-commerce platforms accounts for about 10% of Ali Health’s revenues.
Pharmaceutical direct sales business has been generating lower GPM compared to JD Health’s direct biz, and the company’s margins have continued to deteriorate during the last 2-years.


Alibaba Health: New Digital Healthcare Policy to Have Less Impact but Tumbling Margins Is Worrying

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Huayiwang Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huayiwang-technology-inc" target="_blank" data-smartkarma-citation="entities:35518:1" rel="noopener">Huayiwang Technology (1985554D HK)</a> is strong in its digital medical education solutions, which is the cornerstone business for the continuous expansion of other solution offerings and ecosystem.</li>
<li>HUAYIWANG charges service fees mainly from pharmaceutical companies, which could be a more sustainable profit model than charging from patients directly.</li>
<li>However, the increasing competition and potential risk of losing medical professionals could shake the foundations of HUAYIWANG's business. </li>
</ul>



Huayiwang Technology (1985554D HK) is strong in its digital medical education solutions, which is the cornerstone business for the continuous expansion of other solution offerings and ecosystem.
HUAYIWANG charges service fees mainly from pharmaceutical companies, which could be a more sustainable profit model than charging from patients directly.
However, the increasing competition and potential risk of losing medical professionals could shake the foundations of HUAYIWANG's business. 


Pre-IPO Huayiwang Technology - The Business Model Is Reasonable, but There Are Also Challenges

<ul>
<li>Alibaba Health’s core pharmaceutical direct sales business is facing challenges in terms of increasing competition as well as lower revenue growth and margins, dragging down the overall performance.</li>
<li>The recent new policies about online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties on Alibaba Health’s business and outlook.</li>
<li>If such unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. It’s not easy to break the deadlock. Investors may need to take heed.</li>
</ul>


Alibaba Health’s core pharmaceutical direct sales business is facing challenges in terms of increasing competition as well as lower revenue growth and margins, dragging down the overall performance.
The recent new policies about online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties on Alibaba Health’s business and outlook.
If such unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. It’s not easy to break the deadlock. Investors may need to take heed.


Alibaba Health Information Technology (241.HK) - It’s Not Easy to Break a Deadlock

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

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technology (1833 HK)

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Ping An Healthcare and Technology (1833 HK)

Alibaba Health: New Digital Healthcare Policy to Have Less Impact but Tumbling Margins Is Worrying

We expect the impact from the new draft rule on Digital healthcare platforms to be minimal on Ali Health. However, eroding margins is a concern and...

Shifara Samsudeen, ACMA, CGMA

Pre-IPO Huayiwang Technology - The Business Model Is Reasonable, but There Are Also Challenges

The business model of taking medical professional network as the foundation for expansion of other solution offerings/ecosystem is logical....

Xinyao (Criss) Wang

Alibaba Health Information Technology (241.HK) - It’s Not Easy to Break a Deadlock

Alibaba Health is facing challenges in both business and policy sides,with declining performance.The gap with JD Health becomes wider.It’s not easy...

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)