HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Although DeepSeek's continuous updates, iterations, and deep integration with more and more healthcare enterprises in China will bring positive market sentiment, we have seen certain limitations and even risks behind.</li>
<li>Currently, AI healthcare relies heavily on government subsidies or hardware sales in China, which lacks sustainable payment scenarios and profit model. The data security/privacy/compliance issue may not be completely solve.</li>
<li>For the companies that have integrated with DeepSeek, investors need to verify their afterwards financial performance and fundamentals. If it does not meet expectations, investors are recommended sell in time.</li>
</ul>


Although DeepSeek's continuous updates, iterations, and deep integration with more and more healthcare enterprises in China will bring positive market sentiment, we have seen certain limitations and even risks behind.
Currently, AI healthcare relies heavily on government subsidies or hardware sales in China, which lacks sustainable payment scenarios and profit model. The data security/privacy/compliance issue may not be completely solve.
For the companies that have integrated with DeepSeek, investors need to verify their afterwards financial performance and fundamentals. If it does not meet expectations, investors are recommended sell in time.


DeekSeek May Not Be The "Game Changer" In China Healthcare - Time to Be Rational

<ul>
<li>DeepSeek, as a domestically produced open-source model in China, combined with the rapid development of AI technology, is profoundly changing the landscape of pharmaceutical and medical industry.</li>
<li>AI pharmaceuticals/AI diagnosis/AI R&amp;D would benefit the most from DeepSeek. However, data security is an issue. The US has enacted legislation to restrict cooperation with Chinese companies due to DeepSeek.</li>
<li>More and more Chinese companies have announced their integration into DeepSeek, involving multiple subsectors. We listed some representative companies and they will become attractive investment targets for investors.</li>
</ul>


DeepSeek, as a domestically produced open-source model in China, combined with the rapid development of AI technology, is profoundly changing the landscape of pharmaceutical and medical industry.
AI pharmaceuticals/AI diagnosis/AI R&amp;D would benefit the most from DeepSeek. However, data security is an issue. The US has enacted legislation to restrict cooperation with Chinese companies due to DeepSeek.
More and more Chinese companies have announced their integration into DeepSeek, involving multiple subsectors. We listed some representative companies and they will become attractive investment targets for investors.


DeepSeek Ignites China Healthcare - The Investment Opportunities and Risks Behind

Equity Capital Markets

Xunfei Healthcare Technology / Equity Capital Markets

<ul>
<li>Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. </li>
<li>Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.</li>
<li>Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.</li>
</ul>


Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. 
Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.
Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.


Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

<ul>
<li>In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand. </li>
<li>The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.</li>
<li>We’re not optimistic about XUNFEI's profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.</li>
</ul>


In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand. 
The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.
We’re not optimistic about XUNFEI's profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.


Pre-IPO Xunfei Healthcare Technology - Continuous Losses Will Be the Norm

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

AInnovation Technology Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/qingdao-ainnovation-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:35405:1" rel="noopener">Qingdao Ainnovation Technology Group (2121 HK)</a> was listed on 27th Jan 2022, with its one-year lockup expiring on 27th January 2023.</li>
<li>Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.</li>
<li>Coming up for one-year lockup expiry are the pre-IPO shareholders. Bulk of them are in the money as some have invested as early as 2018.</li>
</ul>



Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2022, with its one-year lockup expiring on 27th January 2023.
Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.
Coming up for one-year lockup expiry are the pre-IPO shareholders. Bulk of them are in the money as some have invested as early as 2018.


AInnovation Technology Lock-Up - US$670m Worth of Pre-IPO Investment Is Still Well in the Money

China

Beijing Airdoc Technology provides AI-empowered retina-based solutions for early detection, diagnosis, and health risk assessment of chronic diseases. The company offers AI-based software solutions, such as Airdoc-AIFUNDUS for retinal disease diagnosis, and hardware devices, leveraging retinal imaging and deep learning algorithms. It was founded in 2015 and is headquartered in Beijing, China.

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Beijing Airdoc Technology (2251 HK)

DeekSeek May Not Be The "Game Changer" In China Healthcare - Time to Be Rational

DeepSeek's integration with companies brings market optimism, but risks remain due to unsustainable profit model and data security...

Xinyao (Criss) Wang

DeepSeek Ignites China Healthcare - The Investment Opportunities and Risks Behind

DeepSeek is revolutionizing the healthcare industry, but face data security issue and US restriction on cooperation with China.Companies...

Xinyao (Criss) Wang

Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...

Xinyao (Criss) Wang

Pre-IPO Xunfei Healthcare Technology - Continuous Losses Will Be the Norm

The willingness to purchase healthcare AI products/services is not strong enough. The real turning point for commercialization of healthcare AI...

Xinyao (Criss) Wang

AInnovation Technology Lock-Up - US$670m Worth of Pre-IPO Investment Is Still Well in the Money

Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2023, with its one-year lockup expiring on 27th January 2023. Coming up for...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

DeekSeek May Not Be The "Game Changer" In China Healthcare - Time to Be Rational

​DeepSeek's integration with companies brings market optimism, but risks remain due to unsustainable profit model and data security...

Xinyao (Criss) Wang

DeepSeek Ignites China Healthcare - The Investment Opportunities and Risks Behind

DeepSeek is revolutionizing the healthcare industry, but face data security issue and US restriction on cooperation with China.Companies...

Xinyao (Criss) Wang

Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

​Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...

Xinyao (Criss) Wang

Pre-IPO Xunfei Healthcare Technology - Continuous Losses Will Be the Norm

The willingness to purchase healthcare AI products/services is not strong enough. The real turning point for commercialization of healthcare AI...

Xinyao (Criss) Wang

AInnovation Technology Lock-Up - US$670m Worth of Pre-IPO Investment Is Still Well in the Money

Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2023, with its one-year lockup expiring on 27th January 2023. Coming up for...

Clarence Chu

DeepSeek's integration with companies brings market optimism, but risks remain due to unsustainable profit model and data security...

Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...