The Zhitong Finance app learned that in the intraday period on December 5, Ping An Health (01833) bucked the trend and led the industry, closing more than 3.7% at HK$17.62. It is worth noting that the company's 2023 interim report shows that the company's business restructuring has basically been completed, and the share of strategic business revenue continues to rise. Revenue for the first half of the year was 2.22 billion yuan, and the share of medical service revenue increased to 46.5%. Enterprise health management revenue and the number of paying users increased markedly. Along with the continuous optimization of the business structure, the effect of cost reduction and efficiency was remarkable. Gross margin increased by 5.6 percentage points to 32.2% year on year, and net loss narrowed sharply by 47.2% year on year to 245 million yuan, accelerating progress towards profit targets.

According to Guojin Securities's latest research report, since entering the strategy 2.0 deepening stage at the end of 2021, the company has accelerated collaborative development with Ping An Group and adjusted low-strategy collaborative business. As of 2023 H1, the company has established a team of about 50,000 internal and external doctors covering 22 departments, continuously demonstrating the core competitiveness of medical services. For the first time, the bank covered Ping An Health's “increased holdings” rating.

According to the bank, Ping An Health's F-side strategic business is growing steadily, and the future is optimistic that the company will continue to increase the penetration rate of the F-side strategic business; as of 2023 H1, the B-side strategic business has achieved revenue of 449 million yuan (+88.9%), and the cumulative number of service enterprises is 1198, an increase of 449 over the previous year, covering nearly 3.9 million enterprise employees and users. The B-side strategic business is expected to lead the new corporate health management circuit.

Damo, on the other hand, lowered Ping An Health's total revenue forecasts for 2023, 2024, and 2025 by 22%, 21%, and 20%, respectively, to reflect the company's initiative to reduce low-profit traditional businesses under Strategy 2.0. Meanwhile, the lower total revenue forecast will be offset by the company's higher gross margin after 2023, which better reflects the economic state of the company's core business and prudent management of operating expenses. The bank still expects the company to reach break-even in 2025 and maintain a target price of HK$21.00.

According to the Zhongtai Securities Research Report, Ping An Health recently cooperated strategically with companies such as Sannuo Biotech and Usmile to increase strategic cooperation with high-quality enterprises and accelerate the competitiveness of the company's products and services. Furthermore, the company has accelerated the implementation of Strategy 2.0, and various businesses have progressed smoothly. As of H1 in 2023, the number of LTM paid users of the company reached about 45.1 million, of which the number of F-side LTM paid users reached about 38.1 million, and the number of B-side LTM paid users reached about 3.9 million.

The data shows that regardless of the number of paying users, the number of B-side enterprise customers, or the scale of related revenue, they are showing good growth, and the company's new strategy is being promoted at an accelerated pace. Considering the high growth of the Internet medical industry, the company's strong competitive advantage, and continuous optimization of business quality, Zhongtai Securities gave Ping An Health a “buy” rating.