Ping An Health (01833) released its mid-term performance for 2024. The group achieved a revenue of 2.093 billion yuan (RMB), a gross profit of 0.674 billion yuan, and a net profit attributable to shareholders of 56.648 million yuan. Despite the short-term fluctuations in the company's stock price, its long-term investment value is still recognized and bullish in the market. Recently, CITIC Lyon released a research report stating that Ping An Health turned its loss into a profit in the first half of 2024, exceeding market expectations. They maintain a 'outperform' rating with a target price of HK$14.70.

During the reporting period, Ping An Health's strategic business achieved steady growth. The revenue of the F-side (comprehensive financial customers) and B-side (corporate customers) strategic business increased by 19.7% compared to the previous year. In the first half of the year, the revenue and user count of the F-side doubled, with a paid user count of approximately 14.8 million, a year-on-year growth of approximately 7%, and a revenue of 1.12 billion yuan, a year-on-year growth of 3.4%. As for the B-side, the company continued to improve the construction of its corporate health management product system under 'Easy Enterprise Health,' including 'Health Management+' and 'Physical Examination+,' achieving a revenue of 0.713 billion yuan, a year-on-year growth of 58.8%. The number of corporate customers served also saw rapid growth. By the end of the reporting period, the number of corporate customers reached 1748, a 46% increase compared to the same period last year. CITIC Lyon pointed out that Ping An Health's B-side business revenue continued to grow significantly by 58.8%, indicating a huge market opportunity for corporate health management.

At the same time, the company significantly improved its efficiency in terms of manpower and expenses during the reporting period. By continuously optimizing resource and personnel allocation, strengthening production and control management, and enhancing operational efficiency through informatization, digitization, and AI empowerment, the company saw a significant decrease in expenditure. The management expenses amounted to 0.395 billion yuan, a decrease of 0.362 billion yuan, a year-on-year decrease of 47.8%. The sales and marketing expenses amounted to 0.367 billion yuan, a decrease of 83.6 million yuan, a year-on-year decrease of 18.6%.

It is worth noting that China's aging society has entered a rapid development stage, and the awareness of diversified retirement and health management among the people is also undergoing transformation, renewal, and upgrading. The market demand for medical and retirement services is constantly increasing. In this interim report, Ping An Health newly disclosed the retirement service module for the first time, alongside medical services and health services as the three major divisions. In terms of revenue for the first half of the year, the highest proportion came from medical services, with a revenue of 1.063 billion yuan, a year-on-year increase of 3%; followed by health services with a revenue of 0.983 billion yuan, a year-on-year decrease of 16.3%; and retirement services with a revenue of 47.31 million yuan, a year-on-year increase of 204.8%.

In addition, during the reporting period, Ping An Health had over 14 million individual members with healthcare benefits. The average annual usage frequency exceeded 4 times, an 8% increase from the end of 2023, and the active service coverage rate reached 100%. Ping An Health continued to deepen the construction of medical, living, care, and leisure service systems, empowering the main business of Ping An Group and optimizing customer experience. As of the end of March 2024, the average number of contracts and AUM per Ping An Group individual comprehensive financial customer who used the services of the Ping An Group's medical and retirement ecosystem was 1.6 times and 3.6 times higher than other individual customers, respectively.