HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Whether WeiMai’s business model can operate sustainably and effectively depends on whether it can establish long-term/stable relationship with hospitals/doctors, as they are the key stakeholders to attract/retain the downstream customers.</li>
<li>However, the relationship between WeiMai and the hospital network may not be solid, thereby shaking the foundation of the entire business model. Gross margin level is unsatisfactory compared with peers.</li>
<li>Post-Money valuation after Series D+ Financing was US$559 million. Due to the concerns on business model and the profitability, WeiMai’s valuation should be lower than <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology</a>.</li>
</ul>


Whether WeiMai’s business model can operate sustainably and effectively depends on whether it can establish long-term/stable relationship with hospitals/doctors, as they are the key stakeholders to attract/retain the downstream customers.
However, the relationship between WeiMai and the hospital network may not be solid, thereby shaking the foundation of the entire business model. Gross margin level is unsatisfactory compared with peers.
Post-Money valuation after Series D+ Financing was US$559 million. Due to the concerns on business model and the profitability, WeiMai’s valuation should be lower than Ping An Healthcare and Technology.


Pre-IPO WeiMai - The Pain Points Behind the Business Model

160 Health International / Equity Capital Markets

<ul>
<li>This "high input, low output" model has led 160 Health into a profit predicament when its revenue failed to grow in tandem.The turnaround from losses to profits is far away.</li>
<li>160 Health operates as a distributor, but VBP has shifted more procurement activities to direct transactions between hospitals and manufacturers, thereby reducing pricing flexibility for intermediaries such as 160 Health.</li>
<li>Valuation of 160 Health should be lower than PAGD, JD Health, Alibaba health, who have turned losses into profits and established mature business foundation and model, but higher than ClouDr.</li>
</ul>


This "high input, low output" model has led 160 Health into a profit predicament when its revenue failed to grow in tandem.The turnaround from losses to profits is far away.
160 Health operates as a distributor, but VBP has shifted more procurement activities to direct transactions between hospitals and manufacturers, thereby reducing pricing flexibility for intermediaries such as 160 Health.
Valuation of 160 Health should be lower than PAGD, JD Health, Alibaba health, who have turned losses into profits and established mature business foundation and model, but higher than ClouDr.


Pre-IPO 160 Health (PHIP Updates) - Some Points Worth the Attention

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

<ul>
<li>The two core businesses is corporate and digital marketing services (2B business) and health and medical services (2C business),the synergy of which can form a virtuous cycle within the platform.</li>
<li>The key performance driver for HealthWay is 2B business, but the pain point is 2C business, which is hard to scale up. Actually, HealthyWay’s growth momentum has slowed down significantly.</li>
<li>After completing the final round of financing, HealthyWay’s valuation reached RMB4.1 billion. We think its valuation could be higher than ClouDr but lower than JD Health and Alibaba Health.</li>
</ul>


The two core businesses is corporate and digital marketing services (2B business) and health and medical services (2C business),the synergy of which can form a virtuous cycle within the platform.
The key performance driver for HealthWay is 2B business, but the pain point is 2C business, which is hard to scale up. Actually, HealthyWay’s growth momentum has slowed down significantly.
After completing the final round of financing, HealthyWay’s valuation reached RMB4.1 billion. We think its valuation could be higher than ClouDr but lower than JD Health and Alibaba Health.


Pre-IPO HealthyWay (PHIP Updates) - Some Points Worth the Attention

China

ClouDr Group Limited offers medical services. The Company provides in hospital solutions development, pharmacy solutions development, individual chronic condition management, and other services. ClouDr Group provides its services throughout Hong Kong.

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ClouDr Group (9955 HK)

Pre-IPO WeiMai - The Pain Points Behind the Business Model

WeiMai's sustainability hinges on building strong relationships with hospitals and doctors, but shaky ties may impact business model.Profit margin...

Xinyao (Criss) Wang

Pre-IPO 160 Health (PHIP Updates) - Some Points Worth the Attention

The "high input, low output" model has led 160 Health into profit predicament when revenue fails to grow in tandem.Valuation would be lower than...

Xinyao (Criss) Wang

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 HealthyWay (PHIP Updates) - Some Points Worth the Attention

The key growth driver of HealthyWay is 2B business, but the company is facing challenge in scaling up its 2C business. Pre-IPO valuation reached...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO WeiMai - The Pain Points Behind the Business Model

​WeiMai's sustainability hinges on building strong relationships with hospitals and doctors, but shaky ties may impact business model.Profit margin...

Xinyao (Criss) Wang

Pre-IPO 160 Health (PHIP Updates) - Some Points Worth the Attention

The "high input, low output" model has led 160 Health into profit predicament when revenue fails to grow in tandem.Valuation would be lower than...

Xinyao (Criss) Wang

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 HealthyWay (PHIP Updates) - Some Points Worth the Attention

The key growth driver of HealthyWay is 2B business, but the company is facing challenge in scaling up its 2C business. Pre-IPO valuation reached...

Xinyao (Criss) Wang

WeiMai's sustainability hinges on building strong relationships with hospitals and doctors, but shaky ties may impact business model.Profit margin...

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