Events:

Wanfang Development and Sichuan Health and Family Planning Commission signed a "Strategic Cooperation Framework Agreement". Sichuan Health and Family Planning Commission and Wanfang Development will give full play to their respective advantages in the direction of "Internet + Medical treatment" and jointly create an intelligent medical service ecosystem.

The company announces the draft employee stock ownership plan that the total number of planned stock holders shall not exceed 60, and the total amount of funds raised will be 20 million yuan (10 million yuan for each phase). The source of funds comes from employees' self-raised funds and other ways permitted by laws and administrative regulations, with a duration of 18 months.

Core ideas:

Based on Sichuan, deeply explore the path of intelligent medical transformation

At present, Sichuan Province has listed the health service industry as one of the five emerging leading service industries in the province. at the same time, the major medical institutions in Sichuan Province have also responded positively to the strategic plan of "Internet + Medical Care". With the gradual promotion of the medical reform policy, the traditional medical industry is expected to develop by leaps and bounds under the promotion of "Internet +". The company is currently focusing on Sichuan. After the signing of this strategic framework agreement, Wanfang Development, as an investor and operator of "intelligent health care" in Sichuan Province, will actively improve the medical environment and explore new ways for the information construction of medical and health industry in Sichuan Province.

We believe that the acquisition of government data is the first step in the current layout of Internet medical enterprises. as for the later data operation and realization, there are naturally a large number of participants in the industrial chain. for example, foreign relatively mature data buyers (hospitals, insurance and pharmaceutical companies, etc.) will naturally gather together to realize value. At present, the establishment of the regional medical information platform is gradually entering a peak period, and the core of the medical information platform lies in the investment of the government. at present, the coverage areas of other enterprise service users involved in Internet medical care do not include Sichuan. We expect that the company will be based in Sichuan by virtue of the advantage of first-mover cooperation with the government. Through this cooperation, the company will take Sichuan Province as the core province of intelligent health care and extend to the southwest in the future. The construction of intelligent medical southwest industrial structure, for the company's business transformation to provide a good development platform, this cooperation regional medical information platform, the establishment of medical and health information innovation and entrepreneurship fund will be a win-win choice.

Card position medicine Internet platform, integrate software and hardware strength to strengthen layout

Prior to this, Wanfang Development has successively acquired shares in Zhixiang Network and Yixiang Network, and gradually formed an Internet health industry chain by laying out the business areas of pharmaceutical Internet (B2C model) and mobile Internet medical services (O20 mode).

Introduction of the acquisition company:

Chengdu Yifei Network is a high-tech company with mobile Internet medical service as its core. The company focuses on mobile medical software development and application, WIFI smart hospital solution and mobile medical O2O service as its main business, and through deep integration with mobile Internet to form a convenient medical service platform, which can greatly improve hospital management efficiency, at the same time improve medical satisfaction, effectively alleviate doctor-patient conflicts such as three long and one short, and provide an effective solution for the reform of medical service mode in Internet + era. It has carried out the promotion and platform service of "wisdom hospital" in the western region, has accumulated a number of project benchmarking cases of third-class and first-class hospitals, and has reached Wechat Wisdom Hospital cooperation with Huaxi second Hospital and Sichuan Odiskang Bone Hospital.

Development vision: the first stage of development focuses on serving public and private hospitals, and the second stage will focus on developing mobile Internet convenient medical services based on "smart TV". Release the hospital's core medical resources to the family through smart TV, build a family multi-screen convenient medical service platform, and serve the traditional medical industry and the general public with Internet + 's concept.

Sichuan Zhixiang Network, founded in December 2008, is an Internet software enterprise jointly established by Shanghai Fosun long March Medical Science Co., Ltd., a wholly-owned subsidiary of Shanghai Shanghai Fosun Pharmaceutical (Group) Co., Ltd., and the Zhi Xiang network R & D team. The company was certified as a national software enterprise in 2011. The company is mainly engaged in the construction and operation of pharmaceutical website, Internet solution and supporting operation of pharmaceutical retail industry, construction of Internet drug trading platform (B2C mode), construction of medical and health system portal, supporting software development and so on. Started the strategic cooperation with Sina in September 2012, was fully responsible for the operation of Sina's Sina pharmaceutical sector, and became the product promotion auditor of Sina Weibo Corp's pharmaceutical industry. In December 2014, we have signed a bilateral strategic partnership agreement with Beijing Baidu, Inc. Netcom Technology Co., Ltd., the cooperation methods include Baidu, Inc. Direct account, Baidu, Inc. Health, Baidu, Inc. search, etc., the company's main operating projects are drugstore network, drugstore member APP.

At present, the docking of hospital resources depends on the Yixiang network, and it is expected that the model of the second Hospital in West China will be extended to other hospitals when the model is mature. The "Digital Oral cavity" grading diagnosis and treatment platform co-sponsored by Zhi Xiang Network and Baidu, Inc. and jointly built by Huaxi Stomatology expert team has entered the public trial stage, and the smart drugstore project built by Baidu, Inc. and Sina has established a long-term cooperative relationship with 36000 drugstores across the country. At present, it includes three parts: digital drugstore system, pharmacist training system and patient management system, which can achieve accurate user behavior analysis, chronic disease management, personnel training, licensed pharmacist intervention, prescription drug remote management, mobile payment and other functions. We believe that through the acquisition of the above Internet medical service platform and the previously acquired harmonious rehabilitation hospital, the company will make use of high-quality hardware and offline high-quality medical resources to create an one-stop Internet medical closed loop for medical management.

Cover for the first time to give a "buy" rating

Considering the smooth progress of the company's transformation, the layout with the Sichuan provincial government as the core is conducive to the subsequent cooperation of the company, we estimate that the company's EPS in 2015-2017 will be 0.02 / 0.06 / 0.07 yuan respectively, and the corresponding PE will be 1255 / 400 / 316 times, although the company's current valuation is on the high side, we expect the company to have more room to improve its future profits after the transformation of Internet health care, giving it a "buy" rating.

Risk hints: the company's transformation of Internet medical care is not up to expectations, Internet medical profit model is uncertain, and so on.