Ping An Good Doctor to Raise $1 Billion for Recruiting Physicians
The company behind China’s largest online medical app Ping An Good Doctor plans to raise HK$7.8 billion ($1 billion) through a stock placement to expand its in-house team of physicians.
Ping An Healthcare & Technology Co. Ltd. intends to sell 80 million new shares at HK$98.20 a share, representing an 8.5% discount from the Hong Kong-listed company’s closing price the previous day, Ping An said Wednesday.
Ping An Good Doctor’s platform provides its 300 million registered users access to doctors in 3,100 hospitals across the country. Each doctor now conducts about 200 online consultations a day, reaching their capacity limit, said Zhao Heng, founder of medical consulting firm Latitude Health.
Ping An Good Doctor has been vigorously building its in-house doctor team. In 2019, the number of its own doctors increased nearly 18% to 1,196 from the previous year. During the first half of 2020, the number further jumped by 30%.
The platform, already China’s largest by registered users, faces fierce competition from rivals backed by deep-pocket tech giants. JD Health, the online health-care unit of China’s e-commerce giant JD.com, Haodaifu Online and WeDoctor, both backed by Tencent Holdings Ltd., are all exploring family doctor products.
After the share placement, the stake of the company’s biggest shareholder, Ping An Group, will be diluted to 38.4% from 41.3%, the company said.
Although the Covid-19 pandemic boosted demand for online medical services, Ping An Good Doctor’s revenue growth dropped dramatically in the first six months, and the business remained more than 200 million yuan ($28.8 million) in the red, though its net loss narrowed by about 20% from the same period last year.
The company recently said it would launch “Ping An Doctor Home,” a sub-brand to provide family doctor services to members. Family doctors can track an entire family from children to adults to the elderly, offering all-round health-care services, the company said.
As members usually have higher requirements for family medical services, it will be difficult to provide a rapid response without a strong team of in-house doctors, Latitude Health’s Zhao said.
Family-doctor services also require business procurement because individuals’ consumption contributes only a very small volume, Zhao said. Ping An Good Doctor had more than 500 enterprise users, according to its mid-year financial results.
JD Health and WeDoctor are eyeing initial public offerings (IPOs) in Hong Kong. JD Health filed for an IPO earlier this week without disclosing any fundraising targets, but a knowledgeable source told Caixin the amount would be between $1 billion and $2 billion. WeDoctor also plans to file a prospectus by October for an IPO that it hopes will raise between $700 million and $900 million.
Data obtained by Caixin suggest that in July, WeDoctor booked 2.6 times more consultations than in the same period last year. Online family doctor services require coordination between online and offline services, which makes it difficult to succeed, a person at WeDoctor told Caixin.
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