Liu Qiangdong played another trump card in the capital market.

On December 8, 2020, JD Health officially landed in Hong Kong stocks. On the day of the listing, JD Health opened at HK $94.50, up more than 33 per cent from the offering price. As of press time, JD Health's market capitalization has exceeded HK $300 billion.

JD Health was born in JD.com Group and officially announced its independent operation in May 2019. At present, JD Health's main business is retail pharmacy and online medical and health services, the former provides high-quality flow to the latter, while the latter creates demand for the former; the strong synergy of the two businesses finally formed JD Health's closed-loop system of "medicine linkage".

Due to his rapid growth and his popularity in the capital market, JD Health was also named "the youngest unicorn in the world" by the 2020 Hurun Unicorn list. In a year, two rounds of financing were obtained in a row, and the valuation quadrupled, which basically formed the tone of JD Health's growth.

JD Health also brought in six cornerstone investors in this IPO, including Hillhouse Capital, Tiger Global, Lake Bleu Prime, China State-owned Enterprise restructuring Fund, GIC (GIC Pte) and Blackrock Group (BlackRock).

With the successful listing of JD Health, "JD.com Department" is the next city in the imperial territory of the capital market. For Liu Qiangdong, this not only releases the positive effect of personal brand, but also sets off a wealth frenzy.

According to the prospectus, before IPO, JD.com Group held 78.29% of the shares, making it JD Health's largest shareholder. If you add the two listed companies, JD.com Group and Dada, which are already owned by Liu Qiangdong, and large unicorns, including JD.com and JD Logistics, Inc., which will be listed smoothly in the future, Liu Qiangdong's price will also directly usher in a sharp rise.

Here comes the world's youngest unicorn: JD.com holds 78.29% of the shares, and Hillhouse is the largest institutional shareholder.

JD Health, who was born with a "golden key", was highly expected by Liu Qiangdong from the very beginning.

"for the time being, we are not sure how much we can do to get into health. But I feel that when this is done, the scale is equivalent to that of another JD.com. At a dinner party, Liu Qiangdong once said to JD Health CEO Xin Lijun, vice president of JD.com Group.

At that time, JD Health had just been established, and Xin Lijun had just taken up the post of JD Health CEO.

In the later development, JD Health also lived up to Liu Qiangdong's expectations.

JD.com launched the retail business of health products for the first time in 2013. A year later, in 2014, the main leaders of Taizhou City, Jiangsu Province, approached Liu Qiangdong, hoping to work with JD.com platform to build a "Medicine City" project. From then on, Liu Qiangdong planted the seeds of the layout of the medical and health industry in his heart.

Without hesitation, Liu Qiangdong sent two teams one after another to inspect. However, both surveys concluded that it was too difficult to do.

In many cases, the more difficult it is, the more opportunities there are, and Liu Qiangdong sees new possibilities. He told the Xinlijun team, "there are a lot of problems that need to be solved in the pharmaceutical and medical industries, and the opportunities are huge. You can either make it or change people!" "

When you make up your mind, things are often done. After in-depth investigation, exploration and exchange again and again, Taizhou China Pharmaceutical City and JD.com signed a strategic cooperation agreement in August 2017. the two sides will cooperate in the fields of modern pharmaceutical circulation system, smart medical care and modern pharmaceutical e-commerce to promote "Internet +" medical reform.

Then, in December 2017, JD.com Internet Hospital launched trial operation and launched Internet medical business for the first time. In January 2019, JD.com Internet Hospital Suqian Branch was officially launched, and the first online payment order for medical insurance drug purchase was completed in JD.com.

Since then, JD.com 's layout in the medical sector is no longer just pharmaceutical retail business, JD Health's main business map has been basically formed.

Relying on the resource advantages and various capabilities of JD.com Group, JD Health accelerated his run all the way. In the capital market, it is also constantly favored and recognized.

CVSource data show that in November 2019, JD Health received $1 billion in round A financing, with a post-investment valuation of about $7 billion, including JD.com Group, CPEChina Fund, CICC Capital, Baring Asia and so on. At the same time, JD Health also became the third "giant unicorn" created by JD.com Group after JD.com and JD Logistics, Inc..

Subsequently, in August 2020, JD Health received another round of financing of more than $830 million, with a post-investment valuation of $30 billion, invested by Hillhouse Capital. In terms of valuation, JD Health's valuation has quadrupled within a year.

JD.com said at that time that with the industry experience and resources of Hillhouse, JD Health would continue to strengthen its pharmaceutical supply chain and further explore more business opportunities in the field of health care.

It is worth mentioning that on the eve of round B financing, JD Health was also rated as "the youngest unicorn in the world" in the 2020 Hurun Global Unicorn list with a valuation of 40 billion yuan.

According to the prospectus, before IPO, JD.com Group held 78.29% of the shares, making it the company's largest shareholder; Hillhouse Capital held 4.34%, making it the company's second largest shareholder and largest institutional shareholder; Baring Asia and CPEChina Fund both held 3.05%, China International Capital Corporation 2.29%, and China Life Insurance Company Limited 2.19%.

In addition, it is worth noting that Jade Capital also through Suzhou Danqing Phase II innovative pharmaceutical industry investment partnership and Danqing-JDHInvestment L.P. It holds a total of 0.44% of JD Health's shares. According to equity penetration, the LP composition of Suzhou Danqing II innovative pharmaceutical industry investment partnership happens to be the Suqian Tianqiang equity investment partnership (limited partnership) jointly held by Liu Qiangdong and Zhang Zetian.

In other words, not only all kinds of capital, Liu Qiangdong's wife Zhang Zetian also participated in JD Health's listing feast and became a direct beneficiary.

The annual revenue exceeds 10 billion yuan, and the average daily number of online consultations is nearly 90,000.

In the queue of the Internet giant layout in the field of health care, although JD Health started relatively late, it can be said that he ran out of "acceleration" in terms of business growth.

JD Health is China's largest online health care platform and largest online retail pharmacy in terms of 2019 revenue, with a market share of 29.8%, according to the Frost Sullivan report.

Moreover, compared with Alibaba Health Information Technology's successive losses since the listing, JD Health also made a profit long before the listing.

According to the prospectus, JD Health's operating income in 2017, 2018, 2019 and as of June 30, 2020 was 5.553 billion yuan, 8.169 billion yuan, 10.842 billion yuan and 8.777 billion yuan respectively. JD Health's profits were 209 million yuan, 248 million yuan, 344 million yuan and 371 million yuan respectively.

"it is never too late to have a good meal. Cooking late can give me a clearer picture of the structure of the industry and the pain points of the industry. Xin Lijun once stressed in an interview that it is more difficult to make a profit in the field of Internet medicine in the short term, but because there are many paths, JD Health chooses a path that is not the same as others. Everyone chooses different paths and may get different results.

Judging from the current results, JD Health seems to be generously labeled as "overtaking around the corner".

In terms of income structure, nearly 90% of JD Health's income comes from retail pharmacy business. According to the prospectus, JD Health's sales of pharmaceutical and health products from 2017 to June 30, 2020 were 4.907 billion yuan, 7.255 billion yuan, 9.435 billion yuan and 7.693 billion yuan respectively, accounting for 88.4%, 88.8%, 87.0% and 87.6% of total revenue, respectively.

Like the logic of JD.com e-commerce, JD Health's retail pharmacy business is also operated through three modes: self-management, online platform and omni-channel layout. Based on JD.com 's nationwide distribution network, JD Health has also set up 11 drug warehouses and more than 230 other warehouses.

As of June 30, 2020, JD Health's online platform has more than 9000 third-party merchants and omni-channel layout covering more than 200 cities. Through full-scene retail and omni-directional cooperation with hospitals, it can meet the needs of users in various medical and health scenarios such as "heavy, urgent and slow".

In the business of online medical and health services, JD Health provides comprehensive online medical and health services and sets up a medical team composed of its own doctors and external medical experts. As of September 20, 2020, there are 171own doctors and 68549 external doctors on the platform.

At the same time, JD Health's daily average number of online consultation is also growing rapidly. According to the prospectus, the average number of daily online consultations on JD Health's platform reached 86100 in the first half of 2020, nearly six times that of the first half of 2019.

However, compared with the number of users of Alibaba Health Information Technology's platform, JD Health is slightly inferior. As of June 2020, JD Health's cumulative number of users has exceeded 150 million, including 72.5 million annual active users in pharmaceutical retail. In the fiscal year 2020, the annual active consumers of the Tmall pharmaceutical e-commerce platform operated by Alibaba Health Information Technology exceeded 190 million, while the annual active consumers of Alibaba Health Information Technology's online self-owned store exceeded 48 million in the same period.

When it comes to competing with Alibaba Health Information Technology, Xin Lijun said bluntly that JD Health did not regard it as a competitor. "this is not a hypocritical statement. Xin Lijun said that JD Health's biggest enemy is not the other side, but users rely on offline consumption habits.

Giants rush in, hundreds of billions of Internet medical market ushered in a period of opportunity

When it comes to the hotter industries in 2020, Internet health care can definitely be regarded as one.

Especially under the catalysis of the epidemic, not only the health awareness of the whole people has been raised, the demand for online consultation has also been continuously magnified, and the value of Internet medical care has been continuously released. According to the Frost Sullivan report, the number of online consultations in Internet hospitals managed by the National Health Council increased 17-fold in the first quarter of 2020 compared with the same period in 2019.

Affected by the epidemic, the size of the Internet medical market is expected to reach 200 billion yuan in 2020, an increase of 46.7 percent over the same period last year and the highest growth rate since 2015, according to the annual report of China's Internet medical industry released by Analysys.

At the same time, the good news on the policy side is also driving the entire Internet medical market. On November 2, 2020, National Healthcare Security Administration issued the guidance on actively promoting the medical insurance payment work of "Internet +" medical services, proposing to vigorously support the innovation of the medical service model of "Internet +". Speed up the "three doctors linkage" on "medical", pharmaceutical "and medical insurance" online, and break through the bottleneck of medical insurance payment in one fell swoop.

There is no doubt that Internet medical care has entered a golden period of development. In the face of this 100 billion-level market potential, not only BABA and JD.com, the major Internet giants have poured into this track, Internet medical care seems to have become the business sector that those giants must win.

In November 2020, Tencent Medical Code announced the launch of three major plans: the Medical Popularization Officer Program, the popular Science Officer Plan and the content opening Plan, which indicated that they would benefit the public with socialization and scenes.

It can be said that the Internet medical track gathered almost all the Internet giant players, as well as Ping An Healthcare And Technology, Chunyu doctor, lilac garden and other early entrants, the market is already quite crowded.

For Internet giants, the competition for Internet health care was originally a traffic dispute. However, with the growing demand for medical services and the continuous deepening of supply-side reform in the medical and health industry, the construction and maturity of the Internet medical ecological closed loop has become the market competition point and competition theme.

JD Health obviously sees this trend. In October 2020, JD Health upgraded his corporate strategy and defined the brand-new strategic orientation of "a health management platform with supply chain as the core, medical services as the starting point, and digitally driven users in the whole life cycle and full scene". And around the pharmaceutical supply chain, Internet medical care, health management, smart medical four core business sectors to create online and offline integrated medical services.

However, there are only a handful of Internet diagnosis and treatment platforms that can really open up online and offline business. Chen Jinxiong, chairman of the Medical Branch of China IT value Alliance, has said that the medical business model will change greatly after the whole medical ecological construction is completed, which is a goal of the medical ecology in the future.