Data from Futu Securities showed that as of 13:00 on January 6, Mediwelcome (02159.HK) was overbuying 47.51 times. Futu expects its subscription multiple to exceed 80 times. Judging from this subscription multiple, this stock is a recent hot stock.
Why are there more promising investors in the market?
Mediwelcome is China’s largest provider of integrated medical marketing solutions for cardiovascular and cerebrovascular diseases, and its business layout currently covers three main areas: integrated medical marketing solutions, Internet hospitals, and CRO services. The errth two are the company’s emerging businesses. Mediwelcome has been deeply in the industry for many years and has an industry-leading edge in physician resources, customer relationships, patient resources and professional medical knowledge. These resources can be migrated to the Internet hospital business, showing a unique advantage over a group of Internet medical technology giants.
Currently, Mediwelcome is trading at just 20 times earnings. Some investors believe that this valuation has not yet reflected the company’s integrated medical marketing solutions as an advantage of the business sector, not to mention Internet hospitals. Can the company’s Internet hospital business surprise the market?
First, grasp the golden track of chronic diseases in Internet hospitals
At present, Mediwelcome has built an integrated platform for WeChat public account Mediwelcome Medical Plus (for patients) and mobile application Medical Plus (for doctors) to provide online follow-up consultation and electronic prescription services.
Mediwelcome has excellent medical service genes and has a natural advantage in linking online doctors and offline patients. Therefore, the extension of Mediwelcome to the Internet medical service business is a matter of course. However, the timing of its entry coincided with the explosion of the industry. It has to be said that this is strength meets good luck.
Since 2018, the National Health Commission and other institutions have strongly supported the development of Internet medical care. In August 2019, the State Council proposed for the first time that qualified “Internet +” medical services can be included in the scope of medical insurance reimbursement. The new business of Mediwelcome came into being, and the company began to provide Internet hospital services at the end of 2019.
And entering 2020, the epidemic has spawned an outbreak of Internet medical demand. Affected by the epidemic, outpatient clinics in hospitals have been suspended, and diagnosis and treatment activities such as daily diagnosis and treatment and follow-up for chronic diseases cannot be satisfied offline. Many third-party Internet diagnosis and treatment platforms, such as Ping An Good Doctor, Alibaba Health, Dingxiang Doctor, and WeDoctor, have launched online epidemic consultation services in time to provide free consultations. Many physical medical institutions have also established Internet hospitals in a short period of time by moving in or suggesting opening. The epidemic has accelerated the promotion of Internet medical awareness.
More importantly, favorable policies have appeared frequently. The Health Commission and the State Council have also issued multiple notices requiring medical institutions to vigorously develop Internet diagnosis and treatment services, and some provinces and cities have also accelerated the inclusion of Internet follow-up visits and online drugs into medical insurance.
It can be said that the epidemic has accelerated the ecological evolution of Internet hospitals and advanced the development of the industry at least 3-5 years. In January 2020, the number of new users of Ping An Good Doctor and the number of new user consultations increased by 900% and 800% respectively. The number of online consultations and active users of Dingxiangyuan increase by 135% and 215% respectively. According to iiMedia’s data, China’s mobile medical market is expected to reach 52.08 billion yuan in 2020, an increase of 62.04% from the 32.14 billion yuan in 2019.
Mediwelcome occupies a leading position in the industry. Under the market wind, Mediwelcome is expected to use favorable policies and favorable traffic to transfer its doctor resources, customer relationships and professional medical knowledge to Internet services, and achieve a rapid increase in penetration.
What’s more noteworthy is that chronic disease is the golden track in Internet hospitals and has the most considerable potential. Mediwelcome is China’s largest provider of comprehensive medical marketing solutions for cardiovascular and cerebrovascular diseases and has outstanding advantages in the field of chronic diseases.
What are the opportunities in the chronic disease market?
First of all, the number of patients with chronic diseases is huge, and the unit price per customer is high. According to data disclosed by the National Center for Cardiovascular Diseases, in 2018, there were 290 million people with cardiovascular disease and 250 million people with hypertension in my country. In 2019, the unit price of chronic disease medical insurance stores is about 296 yuan, which is 4.2 times the unit price of non-chronic disease customers.
Furthermore, due to the imperfect family doctor system of the domestic medical and health system, basic medical services for residents are lacking to a certain extent, providing a third-party chronic disease management platform with deep cultivation and germinating soil. As an intermediary platform, the Chronic Disease Internet Hospital can achieve hierarchical diagnosis and treatment, improve patient compliance, provide secondary diagnosis and treatment and medication adjustment services, and prevent complications. Chronic diseases require long-term follow-up treatment, so it can solve the “low frequency” pain points of the Internet platform.
In addition, the implementation of the medical insurance payment policy has directly promoted the Internet chronic disease medical market. In March this year, the National Medical Insurance Administration and the National Health Commission jointly issued the “Guiding Opinions on Promoting the Development of “Internet +” Medical Insurance Services During the Period of New Coronary Pneumonia Epidemic Prevention and Control”, it is clear that online follow-up services for common and chronic diseases provided by Internet medical institutions that meet the requirements for insured persons can be included in the medical insurance fund payment scope in accordance with regulations. In November, the National Medical Security Administration officially listed its “Guiding Opinions on Actively Promoting “Internet +” Medical Services and Medical Insurance Payments” on its official website. The “Guiding Opinions” proposed to gradually expand the coverage of “Internet +” medical services paid by medical insurance for common and chronic diseases.
The development of the Internet chronic disease business is broad. Mediwelcome has formed a multi-point coverage of diseases that focus on cardiovascular and cerebrovascular diseases, diabetes, respiratory diseases, and many other chronic diseases. It has leading and first-mover advantages and is expected to be the first to benefit from the opportunity of Internet chronic disease medical treatment.
Second, Mediwelcome’s differentiation advantage
How to evaluate the potential of an Internet hospital?
Looking at the panorama of the Internet medical track, the common strategy of all core players is to open up the connection between doctors and patients to form a one-stop closed loop of medical and health services. Doctors are the root of the attractiveness of Internet hospitals, and patients are the source of traffic for Internet hospitals and the basis for monetization. Whether doctors and hospitals have a strong relationship and a large user base of doctors and patients is of utmost importance to the operation of Internet hospitals.
Every head player builds an Internet hospital around this basic logic. Ping An Good Doctor attracts a large number of doctors to enter, starting from health consultation into Internet medical treatment, providing users with one-stop medical and health services. JD Health and Alibaba Health use the advantages of e-commerce traffic to enter the field of medical e-commerce from patients, and gradually extend to the medical service link, providing online consultation, health management and other functions.
Unlike these Internet technology giants, Mediwelcome has been rooted in the medical track since its establishment, so it has unique advantages in resources and business formats.
As China’s largest provider of comprehensive medical marketing solutions for cardiovascular and cerebrovascular diseases, Mediwelcome has been on the track for nearly 20 years. The resources accumulated in “medicine” are outstanding, which is conducive to brand building. As of the first half of 2020, the company has established a network of approximately 24,000 cardiovascular and cerebrovascular disease doctors, of which more than 70% work in tertiary hospitals in China. These doctors are all doctors who have worked with the company.
In addition, Mediwelcome has worked with some of China’s most authoritative medical organizations, including the Only Association of Cardiovascular Diseases accredited by the China Association of Science and Technology (or the Chinese Association of Science and Technology), the official body of China’s national professional science and technology bodies, and has established a Medical Advisory Board (including four doctors with affected and recognized cardiovascular and cerebrovascular diseases).
The original business of Mediwelcome includes patient education meetings and disease risk self-test projects, so it reserves a large number of chronic disease patients with high viscosity. The disease risk self-test project can accurately identify patients; patient education will help Mediwelcome reach out to potential users of Internet hospital services on a large scale. Patients with chronic diseases (such as patients with cardiovascular and cerebrovascular diseases) must treat and control the disease for life, and must consult a doctor who is familiar with the condition and trusts. Internet hospital services have become a natural extension of the face-to-face consultation between Mediwelcome patients and doctors, and have a high degree of collaboration with the original business.
Relying on the accumulation of original business, Mediwelcome can integrate doctor resources, professional knowledge, medical company resources and patient groups on the Internet hospital platform, thereby forming a complete Internet medical business closed loop. Mediwelcome’s differentiated advantages give it the potential to break through among a group of high-tech Internet medical giants.
At the end of 2020, the benefits of relevant new policies and the listing of JD Health have once again pushed the Internet medical market attention to a climax. Both market demand and policy attitude indicate that the next few years will become a golden window for the outbreak of Internet healthcare.
Mediwelcome’s listing at this time may give investors an opportunity to share the industry development feast.