HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Hunan Xizi Health Group / Equity Capital Markets

<ul>
<li>Despite high revenue growth, the direct cost of relying on traffic is the squeeze on profits by the high marketing costs, thus leading to low net profit margin of Xizi. </li>
<li>After traffic dividend of e-commerce platforms fades, enterprises that overly rely on a single channel would have weak risk resistance capabilities.Adjustments in platform algorithms/intensified competition will cause fluctuations in performance.</li>
<li>Xizi has a faster growth rate and a lighter online model, and thus can be given a certain valuation premium. We think valuation of Xizi could be higher than <a href="https://www.smartkarma.com/entities/by-health-co-ltd-a" target="_blank" data-smartkarma-citation="entities:6395:1" rel="noopener">By-Health</a>.</li>
</ul>


Despite high revenue growth, the direct cost of relying on traffic is the squeeze on profits by the high marketing costs, thus leading to low net profit margin of Xizi. 
After traffic dividend of e-commerce platforms fades, enterprises that overly rely on a single channel would have weak risk resistance capabilities.Adjustments in platform algorithms/intensified competition will cause fluctuations in performance.
Xizi has a faster growth rate and a lighter online model, and thus can be given a certain valuation premium. We think valuation of Xizi could be higher than By-Health.


Pre-IPO Hunan Xizi Health Group - Weak Profitability Is a Pain Point

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Hunan Xizi Health Group (HXH HK)

Pre-IPO Hunan Xizi Health Group - Weak Profitability Is a Pain Point

Relying solely on traffic for revenue growth leads to squeezed profits, despite Xizi's faster growth and lighter online model. Adjustments in...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Hunan Xizi Health Group - Weak Profitability Is a Pain Point

​Relying solely on traffic for revenue growth leads to squeezed profits, despite Xizi's faster growth and lighter online model. Adjustments in...

Xinyao (Criss) Wang

Relying solely on traffic for revenue growth leads to squeezed profits, despite Xizi's faster growth and lighter online model. Adjustments in...