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修复行情开启,平安好医生(1833.HK)估值重构正当时

The market recovery has begun, and it is time for the valuation of Dr. Ping An (1833.HK) to be restructured

Gelonghui Finance ·  Jun 2, 2022 09:00

At noon on May 31, when the heavy policy of stabilizing the economy hit, the State Council issued the Circular on issuing a solid package of policies and measures to stabilize the economy, including 33 specific policy measures and division of labor arrangements in six areas. With the epidemic situation in Beijing and Shanghai under effective control, more targeted policies are ushering in a window for centralized landing to take effect.

CITIC predicted that in June, the economy will enter the stage of accelerated improvement brought about by the resumption of work and production and the resumption of business, the maximum stage of overseas disturbance pressure has passed, the main market for mid-term repair is opening, and the main investment logic of resuming work and production will be firmly laid out.

In fact, some smart funds have begun to lay out high-quality stocks ahead of time.

Among them, Ping an Health Medical Technology Co., Ltd. (stock abbreviation: Ping An Healthcare And Technology, 1833.HK) has first rebounded by 33% in the past half a month, substantially outperforming the 11% rise of the Hang Seng Composite Index in the same period. And Goldman Sachs Group, Huatai, BNP Paribas and other large bank institutions from the company's business model, profitability, the effect of new products and other dimensions, optimistic about the future development of the company, give a positive rating.

So what is the underlying logic of the rebound in safety and health? What is the direction of the company's valuation after resuming work and production?

Figure 1: the trend of the company's stock price

Underlying logic: performance repair, profit improvement

In the environment of COVID-19 epidemic, the underlying logic comes from the core two key factors: anti-risk ability and repair ability to judge the fundamentals of an enterprise.

During the period of COVID-19 's resurgence, Ping an Health has better anti-risk ability, and its business situation is "resilient".

Since October last year, Ping an Health has further deepened its strategic upgrading, focusing on B2C users, and put forward the overall business model of "HMO Health Management + Family Doctor membership + O2O Medical Services" to provide users with specific differentiated medical and health services, thus driving the growth of the number of customers, customer stickiness, customer recognition and so on.

During the resurgence period of COVID-19, online consultation became the main way for many family members to seek medical treatment.With Ping an Health helping to prevent and control the epidemic, the experience optimization and model innovation of its online consultation service, the company's business situation continues to improve.According to the 2021 report, the contribution income of Ping an Health and Medical Services reached 2.288 billion yuan, an increase of 8 percent over the same period last year, accounting for 31.2 percent of the total revenue. Goldman Sachs Group pointed out in the latest research newspaper, "Notice that there are still positive signs of safety and health under the resurgence of the epidemic. For example, the company's 2C-end business online traffic increased by 20% in April compared with the same period last year.

Under the improvement of the epidemic situation in many places, the ability of safe and healthy repair is strong, and the profit situation is "flexible".

With the overall stability and improvement of the recent epidemic situation, Ping an Health aims at the problems of how to do a good job in personal protection in the workplace and how to adjust the mentality of returning to work. Through the medical staff from respiratory, internal medicine, psychology and other departments to carry out professional science popularization for users, to help enterprises return to work and return to production.

The rapid provision of medical services to 2B-end users is mainly due to the optimization of the B-end business structure of the company, and relying on the huge ecosystem of the parent company Ping an Group, the introduction of new products and services is boosting the market's assessment of corporate profitability.

For example,Huatai is optimistic about Ping an's healthy business model.Ping An Healthcare And Technology will focus on generating revenue by providing membership services and value-added services for high-value users through the upgrade strategy. Compared with the drug / product-centric business model, this business model has better prospects for economies of scale and profit margins. "

It is worth noting that with the deepening of strategy 2.0, Ping an Health focuses on B2C users, better service payers empower suppliers, and uses membership fees to match value-added service revenue, layering users and classifying products. Improve user coverage and stickiness. In 2021, the total number of paid households of the company increased rapidly to more than 38 million, and the conversion rate of paying users reached 24.8%.With the HMO model working, the paying subscriber market is opening up the ceiling.

According to the estimates of BNP Paribas, among the 70 million users with new products in the total available market, there are currently 1 million paying users through its HMO model, the market saturation is less than 1%, and the demand for new products is still very high. In the future, driven by the growth in sales of prescription drugs, paid users are expected to account for 42.4% of total revenue in 2024 (data source: Huatai).

More than 200 million share buybacks to support long-term value

In fact, from the third-party brokerage research report, it is not difficult to find that the fundamentals of safety and health and future development prospects are unanimously optimistic. And from the company's own point of view,The management of Ping an Health also believes that the company is undervalued by the market and proposes to take practical action to buy back the company's shares to boost the confidence of market investors.

Specifically, Ping an Health has been planning share buybacks since last year's annual general meeting. The proposal was approved by the board of directors on December 13, 2021, and the company reacted quickly and invested in a buyback. And,Ping an Health began a new round of share buybacks in March this year, and the latest round of share buybacks has been completed by the end of April.According to the author's statistics, the company buys back a total of about 10.52 million shares, at a cost of nearly HK $213 million.

Chart 2: the new round of buybacks of Ping an Health

Then, on May 13, 2022, Ping an Health also cancelled the 10.52 million repurchased shares, thus directly reducing the total share capital of the company. According to the theory of supply and demandAt present, the total number of shares in circulation on the market has been reduced to 1.119 billion shares, if the demand remains unchanged, the company's share price should be revised upward.

It can be seen that Ping an Health pays more attention to the capital market.Attach great importance to the interests of shareholdersPut the return of investors in the important position of the company's development goal.And through the repurchase of cancelled shares to maintain the stability of the company's stock price and enhance the company's image.

In addition, from the performance of the capital market, Ping an Health share price is constantly fluctuating to the bottom.After pre-valuation digestion, the company's stock price safety margin has been relatively high, and the company's real gold and silver to buy back the company's shares, but also highlights the company's investment value.

Ping an Health's large buybacks are undoubtedly a positive sign for the company's share price, but the company's long-term value lies in whether fundamentals have improved in the final analysis. The fundamentals of safety and health have been qualitatively improved.

For example, Huatai is strongly optimistic about the company's business model and profit improvement: "the long-term profit potential of Ping an Health's service-centric business model is not fully reflected in the stock price."

On the whole, with the improvement of the income structure and the launch of new products, Ping an Health's profitability will be greatly improved, and the company's losses are expected to narrow while maintaining revenue growth. Moreover, after exploring the new business model in the future, the company will build omni-directional competition barriers, revenue and profits will grow synchronously, and its long-term value center will continue to rise.

At present, the profit data of Ping an Health also verify the high certainty of the improvement of the company's fundamentals. From the market point of view, in recent years, after many rounds of market interpretation, the capital market has a particular preference for companies with good marginal performance, and gives them a deterministic valuation premium.And Ping an Health belongs to this type of company, the recent market also gradually found the value of the company, the stock price performance also showed a "bottoming out" trend. The author believes that next, the company is expected to get more funds, which will form a strong support for the company's stock price.

External factors: market sentiment is improving, value returns at the right time

In the stock market, there is a saying: "confidence is more important than gold at the bottom of the market, and patience is more precious than diamonds." . Admittedly, the worst is over now.With the gradual repair of market confidence, undervalued quality companies such as Ping an Health will be revalued.In addition to the company's own share buybacks and consolidate fundamentals, Ping an Health will also usher in a looser policy environment and an increasingly warmer economic market.

From a macro point of view, the negative impact of the Fed's "shrinking table" on the Hong Kong stock market has been further weakened, and the interest rate range of US long-term treasury bonds has fluctuated and has begun to show signs of weakening. In addition, according to the research of Zhang Yidong, chief global strategist of Societe Generale SecuritiesThe US dollar index is expected to maintain high volatility or even periodic weakening in the future, which is conducive to the stability of the RMB exchange rate and the Hong Kong dollar exchange rate.

All this means that risk aversion among global investors has gradually dissipated and the situation of asset valuations in China has improved significantly. Although it is still possible for global funds to return to the United States,With the gradual promotion of the resumption of work and production in Shanghai and the frequent emergence of favorable policies, China's economic stabilization is strongly expected. After the pessimistic overshoot in the early stage, the investment performance-to-price ratio of A shares and Hong Kong stocks is highlighted, and the opportunity for allocation is emerging.

Focusing on the Internet industry, one of the key reasons for the panic decline in the market is that policy regulation is expected to be tighter. In October last year, the National Health Commission issued a new regulatory document, the detailed rules on the Supervision of Internet diagnosis and treatment (draft for soliciting opinions), banning requirements such as "using medicine to support doctors" and banning AI to replace doctors, leading to panic selling among investors.

In fact, the purpose of the regulatory policy is to standardize the healthy development of the online medical industry, not to restrict its growth. On the other hand, Ping an Health does not go beyond the regulatory regulations and always abide by the relevant policy guidelines. The author believes that the impact of regulatory risks worried by the market on the company is limited.

Based on this concern about policy risk, the views of the top international investment banks can also be used for reference. From JPMorgan Chase & Co's great change in attitude towards Chinese Internet Chinese stocks, it can also be found that well-known overseas investment institutions have begun to be bullish on Chinese Internet companies, and expect that China's policy in the Internet industry will be relaxed.

Not only that, in the previous pessimistic mood, the market did not explore the long-term profit potential of the company's service-centric business model. As market sentiment returns to rationality from pessimismThe value of Ping an Health will be found by the market to complete the valuation return, even in the future optimism, its valuation level will be further improved.

In addition, the target price given by securities firms to Ping an Health can also be regarded as an anchor price.In the recent research report of the securities firm, Goldman Sachs Group gave the company a target price of HK $31.00, Huatai gave the company a target price of HK $30.50, and GF Securities Co., LTD. gave the company a target price of HK $31.40. As of June 1, 2022, the market price of Ping an Health is HK $20.00.Compared with the target prices of these securities firms,50% of the upward space, the value of the company remains to be discovered by the market.

Chart 3: safety and health are favored by many brokerages

Summary

At present, the Hong Kong stock medical and health sector is in the bottoming period, after the full adjustment of the previous valuation, is brewing a new round of market outbreak. The fundamentals of some high-quality enterprises are solid, and the valuation is already quite "cheap" to highlight the performance-to-price ratio of investment, especially the leading enterprises under the subdivision track still show strong growth, but also have a higher allocation value.

Ping an Health as one of the leading enterprises of online medical service platform, the company's excellent texture and strong fundamentals, advanced business model has a strong expectation. And in the future, with the launch of new products and services, the company's profitability will be improved. Looking to the future, with the promotion of capital operations such as stock buybacks, the frequent emergence of national favorable policies and the gradual repair of market sentiment, the upside potential of Ping an and Health is full of potential, which is worth paying attention to.

The translation is provided by third-party software.


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