Ping An of China (02318)'s high-speed railway connecting healthcare services to the main financial industry is being consolidated at an accelerated pace.

The Zhitong Finance App learned that on April 15, Ping An Health (01833) welcomed another good news. Following the announcement of the launch of the medical insurance online drug purchase service in Dongguan at the end of March, Ping An Health has now also implemented online medical insurance payments in Guangzhou. This time, Guangzhou Medical Insurance Online Drug Purchase also supports co-ordinated accounts and personal accounts, providing users with new payment options, further improving the convenience of online drug purchases, and at the same time reducing the financial burden on citizens.

In recent years, the country has been strongly supporting the development of “Internet+ Healthcare”. Mobile payment for medical insurance is an important measure to promote “Internet+Healthcare” services and further improve the medical treatment and drug purchase experience for insured people. This new payment method not only brings great convenience to patients, but also improves the efficiency of the entire health insurance system.

The person in charge of Ping An Health said that in the future, Ping An Health will also launch online medical insurance drug purchase services in other cities across the country to refine products with ingenuity, create reputation with quality, facilitate the people, and protect the health of the whole nation.

In fact, unlike traditional Internet medical companies that rely on C-side users and suffer from online traffic, Ping An Health's unique competitive advantage comes from F-end payer resources such as financial insurance and financial banking. It is also a high-quality group with strong healthcare needs and strong payment capabilities in the healthcare payer market. According to information released by the company, out of Ping An Group's 230 million personal finance users, Ping An Health's penetration rate is only 11%, and the potential for growth is huge.

On the C-side, the company successfully created a complete closed loop of medical and health O2O services with the rich platform traffic accumulated over many years and the unique competitive advantage of the “Family Doctor Membership System”.

And the closed loop of these O2O services is the key to the Ping An Healthcare and Elderly Care Service System in China. However, in China's Ping An's “4+3” reform, “3” refers to the medical, health, and old-age care service system, which carries the highest priority in the Ping An industrial system.

Ping An of China has launched a “residential consortium” for home care for the elderly. According to reports, Ping An began the construction of home pension services in 2021, launched the home pension service brand “Ping An Butler” in September 2021; in October 2023, it launched a “nursing consortium” for home care, and co-established a home pension and health care service group standard with many parties. Up to now, Ping An Home Care Services have covered 54 cities across the country, and a total of nearly 100,000 people have been eligible for Ping An Butler Service.

At the same time, Ping An Health continues to deepen and improve the construction of a “three to (online, in-store, home)” service network to create a one-stop compliance system. By the end of 2023, Ping An Health had nearly 4,000 cooperative hospitals, 230,000 cooperative pharmacies, and one-hour drug delivery in 271 cities; the total number of cooperative medical service providers was nearly 103,000, and there were more than 2,000 cooperative medical examination suppliers.

Guo Xiaotao, Co-CEO of Ping An of China, said that Ping An of China has achieved coverage of more than 1,700 of the top three hospitals in the country, and its pension institutions have fully penetrated through 650 services in 54 cities. Furthermore, Ping An's online family doctor service in China is beginning to take off. These services can empower comprehensive finance.

As the flagship of the entire Ping An Group healthcare ecosystem and the only online entrance, Ping An Health management also believes that with the gradual success of the business and continuous verification of the business model, Ping An Health's future growth can be expected. Currently, the company's market value is at an all-time low, and the stock price is seriously undervalued. The current market valuation does not truly reflect the long-term value of the company, nor can it reflect the company's business prospects. The company has sufficient cash flow to support future business investment and industry resource integration.

Recently, Ping An Health has been praised by many major international companies. UBS released a research report with a target price of HK$20 for Ping An Good Doctor. The steady progress of Strategy 2.0 has reduced losses rapidly, and the steady growth of the F-side business is compounded by the rapid growth of the B-side business. Damo said that considering the further reduction in the company's adjusted net loss and the smooth progress of “front-end+back-end” expansion, the target price for Ping An Health is HK$21. Dahua Jixian expects revenue to grow at a CAGR of 18% in 2023-25 thanks to continuous strategic upgrading efforts.