Incident: The company issued an announcement with the intention to repurchase shares. The board of directors of the company announced that in accordance with the general share repurchase authorization passed at the annual general meeting of shareholders of the company on June 16, 2023 and any subsequent general share repurchase authorization renewed or updated with shareholders' approval from time to time (if applicable), it was decided to repurchase the company's shares on the open market, with a total repurchase amount not exceeding HK$80 million.
The buyback shows the company's confidence in long-term development and is expected to maintain a steady financial position. The company will repurchase by exercising its powers under the share repurchase authorization and in accordance with the Company's Memorandum and Rules, the Hong Kong Stock Exchange Limited securities listing rules, the Cayman Islands Companies Act (as amended), and all other applicable laws and regulations to which the company is subject. The company believes that the share repurchase shows that the company is confident in its business outlook and prospects, and will ultimately bring benefits to the company and create value for shareholders. The board of directors believes that the company's current financial resources are sufficient to support share repurchases while maintaining a sound financial position.
The in-hospital & out-of-hospital scenes are developing steadily at the same time, covering a wide range of channels. In terms of in-hospital solutions, it is distributed to terminal hospital customers through the company's supply of hospital medical supplies and the company's dealer and hospital network, while providing professional medical digital marketing services and charging certain service fees for pharmaceutical companies. As of June 2023, 2,658 hospitals have installed Zhiyun Hospital SaaS, including 780 tertiary public hospitals and 1,115 level-2 public hospitals. In terms of pharmacy solutions, the company provides online consultation and prescription services for pharmacies to collect annual subscription fees, enable pharmacies to provide medical services, and distribute pharmacy supplies related to chronic diseases for suppliers to terminal pharmacy customers. As of June 2023, over 200,000 pharmacies have installed Zhiyun Consultation, covering 32% of pharmacies in China. In terms of personal chronic disease solutions, patients with chronic diseases can be monitored, consulted, and prescribed outside of hospital through the company's mobile app for doctors and patients, mini-programs, and WeChat accounts.
Strategic cooperation with Jinbo to expand collagen categories. Zhiyun Health will become the exclusive general distributor of Jinbo Biotech's specific products through offline pharmacy channels. During the cooperation period, Zhiyun Health will use the Group's offline pharmacy network to cooperate on the marketing promotion and product sales of Jinbo BioHealth products, and the Group will also use its technical expertise to provide customized software services for Jinbo Biotech. Through strategic partnerships, the company is expected to enter the collagen circuit, provide high-quality collagen products to the pharmacies it covers, and improve the quality of pharmacy cooperation.
Investment advice: We expect the company to achieve revenue of 4,064 billion yuan, 5.187 billion yuan and 6.761 billion yuan in 2023-2025, and achieve net profit of -260 million yuan, -156 million yuan, and -029 million yuan (adjusted net profit of -81 million yuan, 23 million yuan and 151 million yuan after excluding equity incentive expenses). The corresponding PS is 0.88x, 0.69x, and 0.53x, respectively, maintaining a “buy” rating.
Risk Alerts: Macroeconomic Uncertainty, Market Competition Heightens Risks, Industry Regulatory Changes