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Analysis Sep 4, 2019 10:36 am EqualOcean

Ucommune is preparing to go public in the US

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Jun 15, 2020 09:02 pm ·

Miaoshou Doctor Announces CNY 600 Million Funding in Series D1 Led by Sequoia

Beijing Yuanxin Technology, whose brands include Miaoshou Doctor, has announced that it has closed a Series D1 funding round at a CNY 600 million amount. This funding was co-invested by Sequoia China, Qingming Ventures, INCE Capital, CITIC Securities and Index VC. Miaoshou Doctor plans to utilize this bankroll to push a collaborative construction, pivoting to medical consultation, medicines and insurance, connecting Internet hospitals, medical technologies, description distribution and healthcare insurance. Founded in 2015, this startup has built three primary platforms pivoting medicine trade, consultation trade and insurance technology, tightly interlinking patients, doctors,  hospitals, drug distribution and insurers. Apart from Miaoshou Doctor, this Beijing-based company has four other product brands: Yuanxin Medical, Yuanxin Pharmacy, Yuanyin Insurance and WuJie Medical (literally ‘Infinite Improvement’ for doctors). Now the 'healthcare platform' is a buzzword in China. It benefits the new generation of 'consumer-users;' on the other side, it transforms the tremendous C-end traffic into revenue boosts in online consultation, offline clinic services, medicine sales and insurance products. Several telehealth platforms backed up by these giants demonstrate different characteristics. Ali Health, the oldest entrant, is still playing an e-commerce game but in the arena of medicine and offline services. WeDoctor connects with doctors by building an online network and providing online registration services. Ping An Good Doctor makes a closed-circuit business model with a strong anchor in insurance products offered by its parent company, Ping An Insurance – the largest insurance group in China by far. Another big name is JD Health, a new rising star in this arena. JDH is sticking to its supply chain-specific logic – landing on the ground in those hospitals to facilitate workflow and digitize their internal operations. More or less, all these players are trying to take up some market space and cultivate a unique ecology. Yuanxin Tech seems to have one step ahead. This AI-driven medical tech company has come to the stage of creating synergies out of these differentiated portfolios based on five particular brands. “As a dedicated investor from the seed phase to Series D1, we witnessed the fast growth during the last five years,” says Mr. Zhou Kui, the partner of Sequoia China. “Yuanxin Tech has always been exploring an ‘Internet+’ and big-data solution to facilitate medical services, lower healthcare costs and drug prices,” says Mr. Hu Xubo, the managing partner of Qingming Ventures. Many industries have the potential to be digitized and revitalized by adding Internet power. In China, there seems to be more possibilities.

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Mar 7, 2020 08:21 pm ·

Will WeDoctor Be the ‘Billionaire Doctor’?

WeDoctor, a Tencent-backed online healthcare startup, is keenly preparing a Hong Kong initial public offering, Bloomberg reported on February 28. As stated, the expected chief financial officer, Mr. John Cai, was formerly chief executive for AIA Group Ltd.’s operations in some key Asian markets.  Earlier in 2018, WeDoctor announced it would go public on the Hong Kong public market, at a pre-IPO value of USD 5.5 billion, following Ping An Good Doctor’s IPO in the same year. This Hangzhou-based company planned to do a spin-off, similar to Ping An Group, splitting its business modules to preserve its data business in the mainland. But this plan did not materialize, partly because the public market urged disclosure of some data items of patients. Although hearing this postponed IPO move is not surprising for WeDoctor’s analysts and watchers, it is outside the market’s expectation, considering the current tension around the epidemic. Even though investors have not heard any stark official announcement about the IPO so far, more market players are diving into telemedicine, moving with reference to Ping An Good Doctor. The online heathcare industry The first-ever ten-year national plan, Made in China 2025, sets ‘Big Health’ as a critical development area for this country of 1.4 billion. Online healthcare, or cyber-care, is one of the most potential business forms, driven by the tremendous demand for timely inquiries, remote appointments and family medicine. Looking into China’s medical supply end, the official numbers still look unsatisfactory. As of the end of 2018, there were 32 thousand hospitals nationwide, up to 1 million medical institutions, and over 11.7 million health workers – yet this army of healthcare providers is acknowledged as being insufficient for the whole population. One problem is that these resources are not delivered in balance. As the Economist pointed out, prestigious AAA hospitals only account for approximately ten percent of public medical hospitals but receive half of outpatients. According to a report on Chinese medical facilities, the over 1000 level-three (level three, the most advanced) hospitals take care of the consultation for up to 80% of Chinese.   Unfriendly experiences and low efficiency in the traditional hospitals and medical services give hope to the rise of cyber-care. The following six shortcomings of traditional healthcare are deeply imprinted in the mind of Chinese patients; each is a potential healthcare breakthrough. Impact of the 2019 novel coronavirus The continued spread of coronavirus has laid a direct and overall impact on the online healthcare industry. The consultant from Analysis, Chen Qiaoshan, thinks China’s online healthcare market may near CNY 200 billion (USD 29 billion) in 2020, up from the pre-outbreak estimate of CNY 158 billion. Since the outbreak of the epidemic, Ping An’s medical services app saw a total of 1.1 billion visits, a tenfold increase in new registrations, and a nine-fold increase in daily inquiries, according to Mr. Wang Tao, the CEO of Ping An Good Doctor. Similar explosive growth occurred in Miaoshou Doctor, JD Health and WeDoctor too. Within a week from January 23, WeDoctor mobilized over 1500 doctors from respiratory, infectious disease and internal medicines for an online free clinic. Business comparison WeDoctor, backed by the tech giant Tencent, also known as China’s social media titan, has integrated 2.7 thousand hospitals, mobilized 220 thousand doctors and served 27 million active users. Tencent invested in WeDoctor in 2014 to be in play with Ping An Good Doctor, another insurer-backed healthcare company.  Before this, it was a medial appointment registration website named Guahao.com (Guahao, the Chinese for the appointment before the medical diagnosis), founded by Jerry Liao in 2010. Now WeDoctor is running four business segments, covering healthcare, cloud, insurance and Pharma – all parts of its expansion since Tencent’s investment in 2014.  WeDoctor Healthcare provides disease diagnosis system for Western and traditional Chinese medicines, facilitated by AI technology. Its cloud business allows partner hospitals, clinics and government to do data processing, AI diagnosis, pension management and etc. In 2015 this healthcare company even started to run an Internet-based hospital in Wuzhen (a tourist town in Zhejiang), similar to the Kaiser Hospital in the US, seamlessly connecting pharmacies and medical services. The registered members can have appointments, remote diagnoses, regular checkups, digital prescription and other services at a pharmacy. All the information will be delivered to the doctors at the Wuzhen-based hospital. After the remote diagnosis, the pharmacies will send the over-the-counter medicines to patients. Although both share a similar goal to make up the healthcare breaches in an internet mindset, they have different operation model and business segments. Ping An Good Doctor mainly relies on its in-house doctor team. In PingAn’s three traffic-oriented framework, full-time doctors provide free online consultation, steps on the pedometer convert to monetary value, and the company purchases medical licenses to run the pharma e-commerce. Then the new users or visitors are guided to seek their potential demand to the cyber-care’s four major business segments: family doctor services, consumer healthcare, health mall and health management (including wellness interaction). Its first annual report in 2019 disclosed a revenue percentage drop in family doctor services. But it is never shy away from the ambition to provide family doctors to every family with e-profile for everyone. Based on the one-stop healthcare ecosystem, PingAn has accumulated data worth hundreds of millions to train the diagnostic robot. Its medical team of 1000 doctors is its core competency, distinguishing it from Alibaba’s (BABA: NYSE) arm ‘Ali Health’ and Tencent-backed ‘WeDoctor.’ Funding history Starting from 2012, WeDoctor, and former Guahao.com, went through four rounds of funding. Tencent (TECHY: Nasdaq) joined the investor board in 2014 and updated the company’s name to ‘WeDoctor’ the next year. The latest 2018 pre-IPO financing, led by AIA Insurance Group, a Hong Kong-based insurer giant, bankrolled WeDoctor with USD 500 million, at a post-deal valuation of USD 5.6 billion. Ping An Good Doctor took a different funding path during a similar period. Before going public with a market value of HKD 8.6 billion in 2018, Ping An Good Doctor received USD 500 million in a Series A, and an undisclosed amount in the Angel round. Though two competitors adopted different funding strategies, they shared similar investor composition: at least one global capital institution and one insurer. The backup from an insurance titan is seemingly a necessity for online healthcare to complete the closed business loop. WeDoctor even secured the access of Fosun Pharma (02196: HKEX), a Chinese-listed pharmaceutical company. Estimation of WeDoctor's market value  Ping An Good Doctor went public in Hong Kong Stock Exchange in 2018, five days earlier than WeDoctor’s pre-IPO funding round. Even though WeDoctor did not fulfill its IPO plan either in 2018 or in 2019, Ping An Good Doctor can still be comparable, in terms of business essence and online traffic.  In terms of valuing a cyber consumer-oriented business, the operation traffic data imply the source of value creation. In the case  of e-commerce tussle, Gross Merchandise Value (GMV) is the key value driver in the multiple valuation models. Here in the case of online healthcare, the number of registered users bring consultation visits, revenue from pharma e-commerce and subscription fees for family doctors. Ping An Good Doctor’s share price increased over one third, from HKD 54.8 (IPO day) to HKD 76.45 (2019 annual report day).  By taking reiterations and monthly active users as the key-value motivators, WeDoctor’s estimated market value ranges from USD 621M to USD 815M, by using Ping An Good Doctor’s IPO data. In a more recent scenario, the estimated market value range from USD 4.1 billion to USD 6.8 billion, by referencing Ping An Good Doctor’s data on February 11 (annual report day). As of March 6, Reuters reported WeDoctor planned to lead a USD 1 billion IPO underwritten by Goldman Sachs. From the above estimation based on Ping An Good Doctor’s case, there seems to be plenty room to touch the estimated ceiling. The IPO timing matters In the theory of real options valuation, the flexibility to make investment decisions creates value, based on the underlying principle that people learn during the postponed action time.  The market first knew the online healthcare concept in 2014. In that year, Ali Health (241: HKEX) went public in a reverse takeover of CITIC 21st Century (former 241: HKEX), at a post-deal portion of 54.33%, followed by near 400% increase in the share price. Another market exposure of online healthcare was in 2018 when Ping An Good Doctor was considered a unicorn during its prospectus time. Ping An Good Doctor (01833: HKEX) had its IPO in the Hong Kong stock market, followed by the share price falling 3.74% below its issue price of HKD 54.8. However, now the market is more familiar with its business, giving over HKD 72 after its 2019 financial report. For WeDoctor, it did not make the strategic move following Alibaba’s backdoor listing in 2014 and avoided the sluggish market in 2018 and China-US trade conflict in 2019. In early 2020, the epidemic is halting China’s economy while boosting one of the fledgling industries: online healthcare. Will WeDoctor seize the opportunity this year?

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Feb 22, 2020 12:07 am ·

Are You Qualified to Leave Your Neighborhood? A Health-Rating App Can Tell

On February 9, the Chinese digital giant Alibaba launched health-rating systems in Hangzhou to help both returners and administrators record travel information. Within only seven days, this Alipay-based Health-rating application has fast spread to more than 100 cities, fully covering Zhejiang, Szechuan and Hainan provinces. As the prolonged Spring Festival Holiday ended, millions of Chinese set out on the journey back to work amid the continued spread of the coronavirus. The purpose of the self-reporting smartphone-based system is to minimize contact and facilitate travel documentation by replacing manual intervention. Just a few days ago, on February 15, the E-government Office under China’s State Council authorized Ali Cloud and Alipay to accelerate the development of a nationwide health-rating system. The idea of the Health-rating system, or ‘Health Code,’ was originally a digital solution requested by the Yuhang District Administration (in Hangzhou Zhejiang). This is the most severely affected area in Hangzhou, representing 39 out of 169 identified cases as of today. When the district introduced closed management for all neighborhoods on February 3, allowing one family member to purchase vital goods every two days with a paper pass, they expected a digital solution to eliminate paper checks and allow data updates in real time.  With flocks of returners thrusting into cities for work restart, the newest Health Code helps to contain further spreading by classifying people into three categories – green, yellow and red – through verifying self-reported information with the government’s back-end database. Another social-media titan, Tencent, also launched a similar digital system in the form of a mini-program on WeChat in Shenzhen, a southern Chinese city. For example, when a newcomer wants to touch down in Beijing, he or she must register on a mini-program, Beijing Heart Helps, specially designed for the city, and input the travel information. Then the traveler has to register at the community and be quarantined for two weeks. During the following 14 days, he or she can only freely roam within the neighborhood and must daily self-report their body temperature and occurrence of suspicious symptoms via the mini-program.  The widespread application of the rating system may be a prelude of a digital economy and a more profound social deployment. The anti-virus war galvanizes every citizen to engage in an online network, such as remote healthcare (Miaoshou.com), remote education (Yuanfudao) and online retail (Freshhema), amid the suspension of the school campus and office building. What’s behind this rumbling tussle is that tech bellwethers are competing to construct digital industry infrastructures. Alibaba’s other product, DingTalk, a remote office app, has struck another blow in the education and online-office markets. As of February 10, DingTalk’s online class application has covered schools in more than 300 cities, supported over 600 thousand teachers with their tutorials and 50 million students worldwide. The health-rating system exposes Alibaba’s ambition in conquering e-government affairs and digitized social governance. On the other hand, personal data usage has put the public on alert, as reported by the Wall Street Journal. When the government collects piles of personal data from a commercial app, the media and public should be concerned about how the officials will deal with it; how the relationship with commercial companies will be after the fade of the coronavirus is a case in point. Apart from personal data security, it remains to be seen if such tweaks will fundamentally change our habits and lead to a sustainable digital era. Time will reveal if it is a long-term investment for all humankind – or just part of an anti-virus war.

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Feb 14, 2020 09:34 am ·

Ping An Good Doctor: Online Care Thriving as Epidemic Continues

On February 11, Ping An Good Doctor (1833: HK) released its 2019 financial report, announcing revenue of CNY 5.1 billion, a 51.8 % year-on-year growth, that resulted its 2015 - 2019 CAGR at 106%, far exceeding the market CAGR of 44.26% in the same period. Compared to its revenue in 2018 and 2017 (CNY 3.3 billion and CNY 1.9 billion), the firm generated around 5.1 billion revenue in 2019, including CNY 8.6 million from online services. Meanwhile, it suffered a lower net loss of around CNY 747 million this year, compared to CNY 913 million in 2018. From the operation perspective, the report highlights a total of 315 million registered users, with a 50-million increase in 2019. Following the issuance of the pricing details of Internet-based medical services by the National Healthcare Security Administration, Chinese Internet healthcare has embraced its coming ‘Spring.’ Based on the reseach conducted by China International Capital Corporation (CICC), the market size is expected to reach CNY 94 billion in 2020, with a year-on-year growth rate of 38%. Since launching the App in 2015, Ping An Good Doctor has provided online services, covering 7/24 online inquiry, prescriptions, 1-hour pharmacy delivery, and other conveniences. Based on its self-owned national medical team and self-developed AI assistance systems, it is growing fast. In 2016 it surpassed ChunYu Doctor, an early player established in 2011. Passing through the high time of the new coronavirus outbreak, Ping An Good Doctor has recorded 1.11 billion visits, a tenfold increase in the growth of new users registered, a ninefold increase in daily inquiries from new users and 98 million video plays. “We believe, even though this coronavirus inevitably impacts China’s economy, it would be an important opportunity for Internet healthcare in the middle/long term,” said Wang Tao (王涛), Chair and CEO. “People are more aware of online medical services, which is a great benefit for us,” he added. In 2019 Ping An Good Doctor saw the fastest growth in Online Inquiry services, a 130% increase in this operating profit, followed by 22.7% in Heath Management & Interaction Consumption, 16.9% in Online Shopping, -4.2% in Consumption Medicals. By the end of 2019, it had cooperated with 94,000 pharmacies in 32 provinces and 375 cities. Miao Shou Doctor, another same-aged mobile health company, has established an online medical system covering 23 provinces and 66 cities nationwide, connecting more than 200 pharmacies. In this increasingly fierce arena, online healthcare brands such as Ali Health (00241:HK), ChunYu Doctor, DingXiang Doctor, and WeDoctor are fighting for bigger share of this market. The outbreak of the coronavirus may be a catalyst for long-term boosting in the Internet-based healthcare industry, speeding up the public education process by changing consumption behavior. Many mobile healthcare businesses will be able to seize this timing to attract new end users and stimulate individual consumption potential. For instance, Ali Health experienced more than 10 million visits on its app and 930 thousand online inquiries as of February 8. Driven by the enormous demand for online inquiry, and accelerated by the construction of the medical platform, 2020 is expected to see a significant boom in Internet healthcare.

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