With a declining gross margin, a three-year loss of CNY2.8 yuan and strong competitors, Dingdang Health launched an IPO application again. Will it succeed this time?
After its first IPO attempt failed, Dingdang Health, a pioneer in China's digital medical services, submitted a prospectus to the Hong Kong Stock Exchange again after a lapse of 9 months, looking to list on the HKEX’s main board.
Founded in 2014 and headquartered in Beijing, Dingdang Health's business area mainly includes fast medicine delivery, online diagnosis and treatment, and chronic disease management. Among them, Dingdang Kuaiyao provides services such as 28-minute home delivery, 24-hour operation around the week, and 24-hour online consultation with professional pharmacists.
According to the financial report, the operating income of Dingdang Health has increased for three consecutive years, but the growth of revenue has slowed significantly , from 118.12% in 2019 to 65.05% in 2021.
Meanwhile, Dingdang Health has posted continued losses. From 2019 to 2021, the company’s losses for the year were CNY274 million (USD 43 million), CNY920 million, and CNY1.599 billion, and the accumulated losses in the past three years amounted to nearly CNY2.8 billion.
During the same period, Dingdang Health recorded a gross profit of CNY470 million, CNY766 million, and CNY1.162 billion, respectively, with gross margins representing 36.8%, 34.4%, and 31.6% of the revenue, respectively.
Dingdang Health's competitors in the Internet medical industry include Ali Health, Meituan, JD Health, Ping An Good Doctor, WeDoctor. In terms of key indicators such as revenue, profit and active users, Dingdang Health lags far behind Ali Health and JD Health. The company is feeling the squeeze amid competition with the giants.
The Internet healthcare is still a hotspot, and its development trajectory is in line with the long-term logic of capital market investment, business news website lanjinger.com quoted an unnamed iiMedia Research analyst as saying.
The analyst also pointed out that if Dingdang were to successfully list to supplement its working capital, it will help the company get out of its predicament and develop further.