Ping An Good Doctor released the first annual report to the public. The drops in online family doctor's gross profit rate and percentage in revenue composition have made investors worry its short-term profitabilit.
On February 27th, Ping An Good Doctor released its first annual report after being listed. The first China’s healthcare company had not been profitable was listed in Hong Kong Stock Exchange (HKSE) after the new rule installed in April 2018. According to the annual report, Ping An Good Doctor has not made profits for four years since its foundation in 2014.
In 2018, the gross operating profit is HKD 911.9 million (USD 116.17 million) with a YOY 49.0%; the net loss is HKD 913.1 (USD 116.3 million), which is HKD 88.6 million less than 2017’s net loss HKD 1,001.6 million (USD 127.6). Though the loss reduced, Ping An Good Doctor is still facing the question of its profitability voiced from outside. The online doctor service has been a promotion point for Ping An Good Doctor. As an internet-version of the family doctor, the online doctor service failed to elevate the profit margin for Ping An Good Doctor but indicated a decline of 18.7% in the gross profit rate compared to 2017. Instead, the structure change in its income components is drastic as well. In 2017, the share of the online doctor service in total revenue decreased from 2017’s 23.4% to 2018’s 18.1% and health product’s contribution to the revenue increased from 2017’s 17.2% to 2018’s 22.0%.
The family doctor role in China is yet to be formed since current healthcare resources and structures have restricted the development of family doctor profession and caused clinics and hospitals’ comparatively low efficiency. Urgent care and family doctors that based on the internet have attracted ventures and investors since several years ago. Ping An Good Doctor’s performance during the past years did not give a positive answer to questioners. Miaoshou Doctor (妙手医生), as another company providing online clinic service, received series C+ financing in a total of CNY 500 million (USD 72.8 million) in January 2019. Miaoshou Doctor has been exploring possible outcomes based on its internet platform service such as assisting local hospitals and clinics to build internet hospital, online consultation, healthcare monitor and management, and so on.
Based on current Ping An Good Doctor’s performance, the income structure of Miaoshou Doctor might share some in common. The family doctor role is weak in China's healthcare system, but it is necessary to build for improving current healthcare services. Indeed, Ping An Good Doctor’s online doctor business almost doubled the revenue from 2017, which indicated that its family doctor is making progress. Yet from making profits, the family doctor has a long way to go.