Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

Equity Bottom-Up

Ping An Healthcare and Technol / Equity Bottom-Up

<ul><li>Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be negatively affected by the transformation.</li><li>GPM improvement showed that the differentiation strategy is working. Due to the lowered-than-expected revenue in 1H23, we have reduced our FY23/FY24 revenue forecasts by 30.9%/30.8% and our TP by 30% to HK$14.13.</li><li>As our new TP implies a potential downside of 20%, we downgrade PAGD to SELL.</li></ul>

Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be negatively affected by the transformation.GPM improvement showed that the differentiation strategy is working. Due to the lowered-than-expected revenue in 1H23, we have reduced our FY23/FY24 revenue forecasts by 30.9%/30.8% and our TP by 30% to HK$14.13.As our new TP implies a potential downside of 20%, we downgrade PAGD to SELL.

Ping An Good Doctor (1833 HK) - Strategic Changes Done but Valuation Is High

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.</li><li>The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.</li><li>In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

<ul><li>We expect PA Good Doctor (PAGD) to experience a revenue decline of 7.0% YoY in 1H23E, mainly taking into consideration its proactive reduction of lowsynergy business with its Strategy 2.0 Continuum.</li><li>However, we see the Company to continue to record positive progress on expanding its health management business for enterprise clients amid its strategic transition.</li><li>We expect the Company to deliver good gross profit margin (GPM) improvements and cost savings in 1H23E as its Strategy 2.0 transition takes effect. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We expect PA Good Doctor (PAGD) to experience a revenue decline of 7.0% YoY in 1H23E, mainly taking into consideration its proactive reduction of lowsynergy business with its Strategy 2.0 Continuum.However, we see the Company to continue to record positive progress on expanding its health management business for enterprise clients amid its strategic transition.We expect the Company to deliver good gross profit margin (GPM) improvements and cost savings in 1H23E as its Strategy 2.0 transition takes effect. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PA Good Doctor (1833 HK) – Expecting Strategy 2.0 to Gain Momentum in Post-Pandemic Periods

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<li>Ping An Good Doctor ("PAGD") is still in the progress of its strategic shift, which should help improving profitability in the long term by synergizing between different business sectors as well as the operations of its parent Ping An group.</li>
<li>However, we believe it would take time for the company to adjust and reallocate resources, so the transformation will continue to hit short-term revenue.</li>
<li>We have reduced our FY23/FY24 revenue forecasts by 19.4%/19.1% and our TP by 17% to HK$20.47. </li>
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Ping An Good Doctor ("PAGD") is still in the progress of its strategic shift, which should help improving profitability in the long term by synergizing between different business sectors as well as the operations of its parent Ping An group.
However, we believe it would take time for the company to adjust and reallocate resources, so the transformation will continue to hit short-term revenue.
We have reduced our FY23/FY24 revenue forecasts by 19.4%/19.1% and our TP by 17% to HK$20.47. 






Ping An Good Doctor - Strategic Transformation Still in Progress

<ul><li>Better-than-expected narrowing of net loss in 2022. PA Good Doctor (PAGD) reported 2022 revenue of RMB6,160mn, down by 16% YoY, and adjusted non-IFRS net loss of RMB848mn, narrowed by 40% YoY.</li><li>PAGD’s revenue slightly missed our forecast/ consensus by 2.8%/ 4.5%, respectively, while adjusted non-IFRS net loss beat our forecast/ consensus by 12.4%/ 20.3%, respectively, thanks to the continuous margin improvements and cost savings under its Strategy 2.0 Continuum.</li><li>In 2022, gross profit margin (GPM) increased by 4.1 ppts, mainly supported by the GPM improvement of 4.2 ppts from its health service segment. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Better-than-expected narrowing of net loss in 2022. PA Good Doctor (PAGD) reported 2022 revenue of RMB6,160mn, down by 16% YoY, and adjusted non-IFRS net loss of RMB848mn, narrowed by 40% YoY.PAGD’s revenue slightly missed our forecast/ consensus by 2.8%/ 4.5%, respectively, while adjusted non-IFRS net loss beat our forecast/ consensus by 12.4%/ 20.3%, respectively, thanks to the continuous margin improvements and cost savings under its Strategy 2.0 Continuum.In 2022, gross profit margin (GPM) increased by 4.1 ppts, mainly supported by the GPM improvement of 4.2 ppts from its health service segment. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PA Good Doctor (1833 HK) – Temporary pains in strategic transition

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 Technol (1833 HK)

Ping An Good Doctor (1833 HK) - Strategic Changes Done but Valuation Is High

Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be...

Quam Securities

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.

CMB International

PA Good Doctor (1833 HK) – Expecting Strategy 2.0 to Gain Momentum in Post-Pandemic Periods

We expect the Company to deliver good gross profit margin (GPM) improvements and cost savings in 1H23E as its Strategy 2.0 transition takes effect.

CMB International

Ping An Good Doctor - Strategic Transformation Still in Progress

We have reduced our FY23/FY24 revenue forecasts by 19.4%/19.1% and our TP by 17% to HK$20.47. As our new TP implies a potential upside of only 3%,...

Quam Securities

PA Good Doctor (1833 HK) – Temporary pains in strategic transition

Better-than-expected narrowing of net loss in 2022. PA Good Doctor (PAGD) reported 2022 revenue of RMB6,160mn, down by 16% YoY, and adjusted non...

CMB International