Core ideas:
The company released its annual report for 21, with an income of 7.334 billion yuan, + 6.8% compared with the same period last year, and a net loss of 1.538 billion yuan, mainly due to continuous strategic upgrading and increased investment in channels, services and capacity. The adjustment of membership strategy and the resumption of the compliance rate reduced the gross profit margin by 3.9pct to 23.3% compared with the same period last year.
Reduce the access of pan-users and focus on high-quality customers so that the rate of 21H2 sales expenses is significantly reduced.
Optimize the C end, focus on the B side, and increase the proportion of medical service income. Medical services: 21 year-on-year income + 8.0% to 2.288 billion yuan, gross profit margin-9.5pct to 36.1%. Electronic prescription drug purchase and drug sales revenue from the drugstore network increased significantly, with goods sales revenue reaching 1.463 billion yuan in 21 years compared with the same period last year. The member product strategy is adjusted, and the unit price is reduced to internalize the basic product package into the insurance policy, resulting in a decline in member product income. Health services: 21 year-on-year income + 6.3% to 5.046 billion yuan, gross profit margin-1.4pct is 17.5%. In 2021, the mall's GMV increased by 11.8% over the same period last year to 6.12 billion yuan, and consumer health care grew steadily. Focus on expanding financial customers and corporate customers: cooperate with Ping an Group, through the combination of financial and health services, Service Group 2.
2.5 billion individual financial users have initially established a multi-level product system, serving a total of 520 enterprises in 2021, covering more than 1 million employees and customers.
Profit forecast and investment advice. It is expected that medical services will maintain high growth, and health services business will decline in the short term; gross profit is expected to decline first and then rise, taking into account the decline in the proportion of short-term members' income and the recovery of compliance; reduce customer input and focus on high-quality users, the expense rate is expected to decline, and the loss is gradually narrowing. Valued by SoTP method, the medical service / health service business was given 1.5 times PS for 22 years, and a reasonable value of HK $31.40 per share was obtained. With the continuous improvement of online medical service experience, the steady landing of Internet medical policy, the penetration rate of users' online consultation tends to increase, and the company continues to deepen the ability of online medical service as the leader of Internet medical service. Maintain a "buy" rating.
Risk tips: 2B customer expansion is not as expected; membership growth is not as expected; Internet hospital model is in exploration; cost growth leads to loss expansion; strict supervision and so on.