Acquire the Internet Hospital Pioneer and enter Internet Healthcare
Incidents:
1. The company announced that it intends to acquire 100% of the shares of Youde Medical and Win Yitong by issuing shares and paying cash.
Among them, the total cost of the 100% shares of Youde Medical was 2 billion dollars, and the total price of the 100% shares of Win Yitong was 3.5 billion.
At the same time, the company will raise no more than 5.5 billion yuan in supporting capital, with an issue price of 20.55 yuan/share. After the transaction is completed, Jiang Hongwen and Zhao Cheng's shareholding ratio in the listed company will reach 34.99%, making them the actual controllers of the listed company.
2. Youde Medical promised that the deducted non-net profit achieved in 2016-2021 would not be less than 145 million yuan, 189 million yuan, 246 million yuan, 295 million yuan, 354 million yuan, and 425 million yuan respectively; Win Yitong promised that the deducted non-net profit achieved in 2016-2021 would not be less than 255 million yuan, 331 million yuan, 430 million yuan, 516 million yuan, 619 million yuan and 743 million yuan respectively.
Commentary:
Youde Medicine and Win Yitong are pioneers of online hospitals in China. Youde Medical is the first online hospital platform provider approved by the Health Planning Commission in Guangdong Province. As the first online hospital in the country to be approved by the Health and Family Planning Department, it pioneered B2C telemedicine. Patients can access the online hospital platform provided by Youde Medical through wearable telemedicine devices, videos and other tools at online clinics such as community medical centers or pharmacy chains to consult online experts from partner hospitals. Using partner pharmacies, the platform can complete a one-stop service from diagnosis to drug purchase. As an important part of online hospitals, Win Medical Connect is mainly responsible for offline health management, examinations and testing. In the future, it will also provide services such as unified drug purchasing to primary medical institutions such as village health stations.
Internet hospitals are in line with the direction of medical reform policy and are the development trend of Internet medical care. After Youde Medical completed its online hospital debut at the end of 2014, the network hospital industry ushered in a climax of development in 2015. Industry giants such as Weimei Group and Ali Health tested the waters one after another, confirming the development prospects of the online hospital business model from the industry side. We believe that the model of cooperation between the company and hospitals and pharmacies provides patients with a one-stop service from diagnosis to drug purchase; at the same time, it achieves the effective allocation and drainage of resources for hospitals and pharmacies to meet the needs of all parties in the industry. It is also in line with the national policy direction of hierarchical diagnosis and treatment and separation of medicines, which will be the future development direction of Internet healthcare.
Profit models are diversified, and performance promises are guaranteed. The profit models of the company's online hospitals are very diverse, including fees for telemedicine diagnosis services and drug purchase shares in pharmacies. By combining Yingyitong's value-added services such as health management and inspection services, the company's layout in the industrial chain has been improved, and future profit margins are more open. According to the company announcement, at present, the promotion of network hospitals in B-side partner pharmacies and primary medical institutions is progressing smoothly. It is expected that 10,000 offline service points (village doctors) of online hospitals will be completed in the first quarter of 2016; on the C side, by the end of 2015, they already had more than 1 million members, which is progressing smoothly. We believe that with the support of diverse profit models and effective market development, the performance of Youde Medicine and Win Yitong will be strongly guaranteed.
Investment proposal: The company plans to acquire Youde Medical and Win Yitong to enter Internet healthcare. As pioneers of online hospitals, Youde Medical and Yingyitong are pioneers of online hospitals. Their model effectively alleviates the difficulties of seeking medical treatment for patients, rationally allocates medical resources for hospitals, helps pharmacies achieve drainage, successfully opens the pharmaceutical separation gap, and explores the direction of hierarchical diagnosis and treatment, which conforms to the interests of various parties in the industry chain and the direction of medical reform policies. We are very optimistic about the company's business model, management execution, and the development prospects of Internet healthcare. It is estimated that the diluted EPS for 2016-2017 exam preparation will be 0.65 and 0.92 yuan. It will be covered for the first time, giving a “buy-A” rating, with a target price of 45 yuan for 6 months.