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Ping An Healthcare and Technology Co Ltd (SEHK: 1833) is a one-stop healthcare ecosystem platform in China.
The company caught my attention lately because of its strong price performance in the last 12 months, up by 67%.
Given that the company is a relative newcomer (it only listed on the Hong Kong exchange in May 2018), it might be worth spending time to understand its business. Here are three things that investors should know about the company now.
Significant user base
Source: Ping An Healthcare 2018 Annual Report
To begin with, Ping An Healthcare has a huge registered user base, numbering 265 million. Out of these, 54.7 million are monthly users (as of December 2018).
Putting the above into perspective, about one-fifth of the Chinese population has registered with the company’s services, which is a significant number considering that it has launched its app “Ping An Good Doctor” app for less than four years.
Insiders own significant shares
Though listed, Ping An Healthcare’s stocks are concentrated in the hands of a few insiders.
According to its 2018 annual report, Le Jin Xuan Limited, Glorious Peace Limited and SVF Ping Subco (Singapore) PTE. Ltd. are the three largest shareholders of the Company, holding respectively 39.43%, 39.27% and 6.30% shareholding interest in the Company as at 31 December 2018.
Le Jin Xuan is majority-owned by the directors – Dou Wen Wei, Wang Wen Jun and Law Siu Wah Eddie while Glorious Peace Limited is an entity related to Ping An Insurance Co of China Ltd. (SEHK: 2318). SVF Ping Subco, on the other hand, is owned by Softbank’s Vision Fund.
It’s not profitable yet
Just like many high growth technology companies, Ping An Healthcare is not yet profitable. In the first half of 2019, it reported total revenue of RMB 2.3 billion (US$328.9 million) and a net loss of RMB 274 million.
Though the company is still loss-making, the net loss is significantly lower than that during the same period last year (when it was RMB 444 million).
Moreover, revenue was up by 102% year-on-year during this period. Thus, if the company can continue to grow its top line consistently, it will just be a matter of time before it turns profitable.
In all, Ping An Healthcare is a classic example of your typical tech growth stock – high growth, huge potential but loss-making.
Thus, given the risk involved, investors should carry out their own research prior to investing in the company’s shares.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Lawrence Nga doesn’t own shares in any companies mentioned.