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ALIBABA HEALTH INFORMATION TECH LTDALIBABA HEALTH INFORMATION TECH LTDALIBABA HEALTH INFORMATION TECH LTD

ALIBABA HEALTH INFORMATION TECH LTD

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Alibaba Healthcare Units Prepares for Next Battle in HealthcareAffected heavily by recent technological advancements, the sector may soon attract Chinese regulators' attention. Background 2021 turned out to become a positive year for China's healthcare industry, where the gigantic demand stems from the aging population, growing individual wealth, and – more importantly – the COVID-19 crisis' aftermath. The market has grown consistently; in 2020, the growth rate slumped to 7.2% due to the massive lockdowns, although it is expected to rise back to 17.6% in 2021 with a total market size of CNY 8.7 trillion. Despite this, the market remains relatively undeveloped – since 2016, the Chinese authorities have been working on creating a CNY 16 trillion healthcare ecosystem by 2030. Online healthcare is in the limelight The pandemic challenged people's sense of well-being and facilitated their desire and determination to become more active and engaged in managing their health, which also boosted the need for remote medical consultations and online medicine sales. According to Deloitte, the portion of consumers who have used virtual visits rose from 15% to 19% from 2019 to early 2020, then jumped to 28% in April 2020. In fact, consumers plan to continue using the – 80% of the Deloitte survey respondents are likely to keep using other online services even post COVID-19. Jessica Tan, co-CEO of Ping An Group, once said that around 20% to 25% of healthcare services in China could be moved to the online space. This will present new opportunities to the most competitive businesses in this field. Among these, JD Health (6618:HK) and Alibaba Health (0241:HK) are two tech giant-backed companies that have ridden this surging wave quite well. Alibaba (BABA:NASDAQ) is deemed to be the first explorer among Chinese tech giants, having joined the game as early as 1998 by founding Alibaba Health (0241:HK). In fact, it is the first Chinese Internet-healthcare company to go public on the Hong Kong Stock Exchange. Alibaba Health is primarily engaged in the pharmaceutical direct sales business, the pharmaceutical e-commerce platform business, medical and healthcare services platforms and digital infrastructure business and related services, though it wants to take off the 'e-pharmacy' tag for long. How does Alibaba compare in the healthcare endeavors? Financial Performance Alibaba Health finally became fully profitable in its fiscal 2021, when the revenue reached CNY 15.52 billion Among four major businesses, medicine remains the main contributor to its revenue, amounting to CNY 13.21 billion, or about 85% of the total revenue. The rest is contributed by pharmaceutical e-commerce platform business, the medical health service business and digital infrastructure business, with revenues of CNY 1.96 billion, CNY 284 million and CNY 53 million respectively. Benefiting from the improving cost control ability and the emerging economies of scale, the overall expenses of Alibaba Health are far less than that of JD Health for every comparable fiscal year. BABA's backing is the ace card of Alibaba Health As the healthcare business arm of Alibaba Group, the natural traffic comes with related brand benefits; Alibaba Health's core pharmaceutical direct sales and e-commerce platform businesses are thus boosted to a great extent. Three specific edges are worth mentioning. First, brand power drives growth. In 2021, Alibaba has grown its brand value by 32% year-on-year to USD 201.86 billion, with a 2nd ranking domestically and 7th ranking globally. As one of the most valuable brands, consumers are more likely to pay a value premium for the products with this recognizable name, or for the creditability it owns. This is indeed what is going on with Alibaba Health. For the 12 months ended March 31, 2021, the revenue from drugs generated from the pharmaceutical direct sales business under the brand of 'Alibaba Health' increased by 86.1% year-on-year, accounting for 64.8% of the revenue of the business. And the number of annual active users of the direct online stores in the reporting period reached a record high of 81 million. Second, synergistic benefits of Alibaba's ecosystem. The synergy effect is most difficult or even impossible to be imitated by competitors. When looking back at Alibaba's business scope, we could see it has already laid out a lot – Alipay's insurance services and 'Future Hospital' plan, O2O medicine delivery service on takeaway platform and hospital-specialized modules on DingTalk – most major businesses owned by Alibaba have medical-related s. With continuous investment in these business-to-consumer marketplace made by the Group, Alibaba Health is able to enhance health awareness and acquire new customers at relatively low acquisition costs, which lays a strong foundation for future growth. As of March 31, 2021, the number of annual active users had exceeded 280 million on Tmall's Pharmaceutical Platform while Alipay's healthcare channel as a whole reached over 520 million annual active users for the fiscal year. Third, empowerment of big data. As a wholly-owned subsidiary of Alibaba with deep roots in the Internet, Alibaba Health's capabilities and resources are naturally geared towards leveraging the prowess of the Internet, big data and Cloud computing. To further boost its digital infrastructure business, for example, tracking platform 'Ma Shang Fang Xin' and digital health business, Alibaba Health has been working closely with Alibaba Cloud to lead the healthcare area. In addition, it also focuses on digital infrastructure. Based on the Group's internal AI, big data, payment and IT capabilities, Alibaba Health is working on exploring the construction of intelligent medical systems, such as AI-assisted diagnostic decision-making, remote imaging platforms and blockchain data security solutions in major hospitals and regions. Future in the mist The future won't be easy for both Alibaba Health and JD Health, as the competition is intensifying. Except for the 'peer pressure,' some inherent problems exist in the essence of most healthcare services – those are mainly related to professionalism, trust and quality. It is partly because of the particularity of healthcare services and pharmaceutical drugs along with the recent market chaos, the government has tightened supervision increasingly, more than ever before. Rory Green, a China economist at TS Lombard, said that the healthcare sector is the only one not hit by regulatory scrutiny yet but is particularly vulnerable, which may possibly make it the next target. For the full article with the charts, please visit the original link.
HKEX:241
by EqualOcean
Opportunity in Chaos !Read latest article here Some followers are worried about the future of Alibaba and its subsidiaries business with the recent investigation by the Chinese government. Unfortunately, I do not have any insider information to pass on so we have to make do with what we have. 1. Is this drop in share price due to the company's fundamentals ? NO 2. Is this fall in price temporary ? I believe so as it will not be in the Chinese government interest to abolish Alibaba and the other tech giants , after all they are strong Chinese brands that affect the daily lives of millions of people. Think of Taobao - how many business owners are affected if somehow this site is asked to shut down? Wouldn't this create more unemployment problems to the Government ? Also, the government is gaining corporate tax as a source of government revenue too from these big giants. If they are gone, who within this short period of time can replace them ? 3. Cross reference this scenario to the world of Global tech firms like Apple, Facebook, Microsoft, etc. They too have been summoned to court recently as well . Read here , here and here NO government can tolerate any private enterprise to gain too much cloud in their specialised field and create a "perceived threat" to them. The sense of "losing control" over this big tech firms has to be reigned asap and not create problems or obstacles that might affect their political stability. Remember, these are bureaucrats , scholars who had not done businesses so they see things differently and follow a set of rules to comply with. They are the whistle blowers , in some way to ensure that a certain boundary is kept and not being compromised. For Ali Health, you can see the price has now rested nicely on the bullish trend. I see 2 possibilities ahead - 1) it rebounds from here or 2) it continues to fall further to the support line at 17.30 before rebounding. So, monitor the price this week and go to 4H or 1H chart to determine any bullish signals. For those long term investors, you can consider investing in tranches. 25% at current price , 25% at the support and so on......
HKEX:241Long
by dchua1969