HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Ping An Healthcare and Technology / Equity Bottom-Up

<ul>
<li>PAGD achieved a dual increase in revenue and profit in 25Q1, which was mainly driven by the revenue from F-end business and B-end corporate health management business (up 43% YoY).</li>
<li>We always question PAGD's capability of expanding new customers and business externally, apart from relying on the resource support of Ping A Group.This makes PAGD difficult to match high valuations.</li>
<li>Our forecast for 2025 revenue is RMB5.1 billion.If based on P/S of 3x, market value is RMB15.3 billion. Market value of RMB24 billion could be the peak of PAGD’s valuation</li>
</ul>


PAGD achieved a dual increase in revenue and profit in 25Q1, which was mainly driven by the revenue from F-end business and B-end corporate health management business (up 43% YoY).
We always question PAGD's capability of expanding new customers and business externally, apart from relying on the resource support of Ping A Group.This makes PAGD difficult to match high valuations.
Our forecast for 2025 revenue is RMB5.1 billion.If based on P/S of 3x, market value is RMB15.3 billion. Market value of RMB24 billion could be the peak of PAGD’s valuation


Ping An Healthcare and Technology (1833 HK) 25Q1 Results - Concerns Behind and the Valuation Outlook

<ul>
<li>PAGD’s 2024 performance beat expectations. The support of Ping An Group remains the key for PAGD to turning losses into profits. A breakthrough point is the Senior care services business.</li>
<li>The CAGR of PAGD’s revenue could be 12%-15% from 2025 to 2027, and revenue in 2027 may reach RMB6.5-7 billion. The peak revenue scale could be just about RMB8 billion.</li>
<li>Adjusted net profit could reach RMB250-300 million in 2025 and exceed RMB400 million in 2027.If based on P/S of 2-3x, revenue of RMB6.5-7 billion in 2027, valuation is RMB13-21 billion.</li>
</ul>


PAGD’s 2024 performance beat expectations. The support of Ping An Group remains the key for PAGD to turning losses into profits. A breakthrough point is the Senior care services business.
The CAGR of PAGD’s revenue could be 12%-15% from 2025 to 2027, and revenue in 2027 may reach RMB6.5-7 billion. The peak revenue scale could be just about RMB8 billion.
Adjusted net profit could reach RMB250-300 million in 2025 and exceed RMB400 million in 2027.If based on P/S of 2-3x, revenue of RMB6.5-7 billion in 2027, valuation is RMB13-21 billion.


Ping An Healthcare and Technology (1833 HK) - Updates on Performance Forecast and Valuation Outlook

<ul>
<li>Recent surge of share price is driven by the craze for DeepSeek/AI in digital healthcare, not the improvement of fundamentals or effective validation of business model.So, the rally won’t last.</li>
<li>Although AI is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified. Small revenue scale may lead to low valuation premium.</li>
<li>PAGD is expected to turn loss into profits in 2024. Short-term valuation should be lower than peers. When PAGD achieve profitability/revenue in large scale, P/B would approach the industry average.</li>
</ul>


Recent surge of share price is driven by the craze for DeepSeek/AI in digital healthcare, not the improvement of fundamentals or effective validation of business model.So, the rally won’t last.
Although AI is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified. Small revenue scale may lead to low valuation premium.
PAGD is expected to turn loss into profits in 2024. Short-term valuation should be lower than peers. When PAGD achieve profitability/revenue in large scale, P/B would approach the industry average.


Ping An Good Doctor (1833 HK) - The Mandatory General Offer and DeepSeek Story May Not Turn the Tide

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Ping An Healthcare and Technology / Event-Driven

<ul>
<li>
<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 (1833 HK)</a> (PA Gooddoctor), which was spun off from <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance (601318 CH)</a> and listed in May 2018, has announced a<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1114/2024111400573.pdf" target="_blank" rel="noopener"> change in use of proceeds</a>.</li>
<li>Part of that change includes the payment of a punchy HK$9.70/share special dividend.</li>
<li>The more interesting aspect is that a scrip dividend is also afforded, which should allow a stealth MBO from Ping An at zero premium.</li>
</ul>



Ping An Healthcare (1833 HK) (PA Gooddoctor), which was spun off from Ping An Insurance (601318 CH) and listed in May 2018, has announced a change in use of proceeds.
Part of that change includes the payment of a punchy HK$9.70/share special dividend.
The more interesting aspect is that a scrip dividend is also afforded, which should allow a stealth MBO from Ping An at zero premium.


2025 High Conviction: PA Gooddoctor (1833 HK) - The Arb Is To Take The Stock

<ul>
<li>In 2025, the NHSA will continue to deepen the VBP of drugs and centralized procurement of medical consumables, covering 700 drug varieties in total. </li>
<li>Valuation of the entire industry has been sluggish for three years. With the positive changes, we think it is the time to be optimistic on China healthcare in 2025.</li>
<li>Due to the craze for DeepSeek/AI, PAGD's stock price surged.Although this is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified.</li>
</ul>


In 2025, the NHSA will continue to deepen the VBP of drugs and centralized procurement of medical consumables, covering 700 drug varieties in total. 
Valuation of the entire industry has been sluggish for three years. With the positive changes, we think it is the time to be optimistic on China healthcare in 2025.
Due to the craze for DeepSeek/AI, PAGD's stock price surged.Although this is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified.


China Healthcare Weekly (Feb.23)-Ping An Good Doctor Shares Surge, China Healthcare Has Bottomed Out

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technology (1833 HK)

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Ping An Healthcare and Technology (1833 HK)