Healthcare has always been an eternal topic for people's survival and development.

With the deep integration of Internet technology and the rise of artificial intelligence technology in recent years, the out-of-hospital pharmaceutical industry, as an important part of the healthcare field, has ushered in unprecedented changes.

Leading Internet medical companies such as Ali Health, Jingdong Health, Ping An Health, and Pharmacist Bang are also each exploring their own ways to survive and compete to seize market share, quickly attracting capital attention.

Who will be the frontrunner in this fierce competition? Financial data is definitely the most intuitive answer.

Recently, Pharmacist Gang released its first annual report since listing, which not only shows rapid growth in short-term performance, but also reveals the solid logic of long-term value growth.

1. Continuing the high growth trend, the two major highlights cannot be ignored

A good business model is the foundation for a company's continued profitable growth.

Pharmacists help the “platform+self-operated” two-wheel drive business model, on the one hand, enable the company to connect and empower the upstream and downstream of the industrial chain, help pharmaceutical companies and dealers efficiently sell products to many buyers, and allow pharmacies and primary care institutions across the country to choose more suppliers. On the other hand, the company can also analyze the deposition data of online digital platforms, accurately procure high-quality SKUs, achieve a high level of quality control, and provide customers with quality services.

In the short term, the rapid growth of various core indicators of pharmacists has verified the correctness and sustainability of this business model.

Financial reports show that in 2023, Pharmacist Bang's GMV reached 46.9 billion yuan, an increase of 24% over the previous year. It achieved rapid growth for three consecutive years, achieving revenue of 16.972 billion yuan, an increase of 18.9% over the previous year.

In terms of profitability, the company's gross profit reached 1,741 billion yuan, up 21.3% year on year, gross margin increased from 10.1% to 10.3%, annual adjusted net profit of 131 million yuan; operating cash inflow exceeded 451 million yuan.

Behind Pharmacist Help's impressive performance, the author believes there are two key factors that are very important.

First, user stickiness and paying users are growing rapidly.

Financial reports show that in 2023, Pharmacist Help has accumulated more than 647,000 registered buyers, including about 401,000 pharmacies and 246,000 primary medical institutions, which shows the company's extensive layout and deep penetration in the upstream and downstream pharmaceutical industry chain, laying a solid foundation for its business growth.

From a user's perspective, in 2023, the average number of monthly active buyers reached 367,000, up 19.0% year on year, and the average number of monthly paying buyers reached 34.3, up 21.1% year on year; the payment rate rose from 91.7% year on year to 93.3% year on year, and the average number of monthly orders per paying buyer increased 8.7% from 27.3 orders in the same period last year to 29.6 orders.

Users are the most important core resource for Internet companies. A series of digital growth fully demonstrates the continuous attention and high dependence of users on pharmacist help products and services, and the frequency and purchasing power of users is also constantly increasing.

Second, efficient operation and management capabilities.

Currently, Pharmacist Help has successfully integrated the front and back ends of the supply chain to achieve efficient collaboration throughout the procurement, warehousing, and payment processes.

For example, in terms of order processing and delivery speed, the average company only takes about 3 hours to complete the order and ship the goods, which is far faster than the industry average. By the end of 2023, Pharmacist Help had opened more than 100 logistics routes in provincial capitals to achieve half-day and next-day delivery for most main warehouse orders.

At the same time, thanks to refined capital management and efficient inventory turnover strategies, the company's accounts payable turnover days, inventory turnover days, and accounts receivable turnover days all remained low, at 54 days, 30 days, and 2 days, respectively.

This fast turnaround model not only improves operational efficiency and reduces operating costs, but also brings more business opportunities and profit growth points.

Overall, the improvements in the core performance indicators shown in this financial report attracted attention, not only in user stickiness and paying users, but also in improving operational efficiency. The combined effects of these positive factors have significantly improved the company's profitability, and in the long run, also provided flexibility and sustainability for future investments. Whether in strengthening product and service capabilities, marketing or other fields, it has created more opportunities and development space for the company.

2. Insight into demand and explore new growth drivers

In the long run, Pharmacist Gang is also continuously exploring innovative businesses to create new growth momentum, and the growth trajectory is becoming more and more clear.

For example, Pharmacist Help launched“Brand first promotion business”It allows pharmaceutical companies to quickly reach retail customers outside the hospital, respond to market changes, and meet drug usage needs. At present, the company has cooperated and promoted with about 500 pharmaceutical companies, with over 10 million brands and 15 varieties. The brand's first promotion business, GMV, reached 10.94 yuan, an increase of 8.4% over the previous year.

At the same time, the reverse flexible customization model adopted by its own brand “Le Pharmacist” brings large numbers of orders and stronger bargaining power to upstream pharmaceutical companies, and optimizes the supply chain. By the end of 2023, the company had completed spot delivery of 60 varieties, with sales amounts over 10 million for 5 varieties, covering more than 200,000 customers.

For example, beforePharmacist Gang announced plans to use 10 million yuan of its own capital to invest in Ruize HealthIf all investment plans are successfully implemented, Pharmacist Gang will hold 13% of RuizeHealth's shares.

Ruize Health will use Pharmacist Help's platform and service network to enhance the integrity and timeliness of services. Based on RuizeHealth's direct coverage of end consumers and influence on insurance companies' commercial insurance catalogues, Pharmacist Help can also more effectively empower the upstream and downstream industrial side, using reverse flexible customization as a breakthrough to achieve collaboration and win-win situation between upstream and downstream industries.

In an environment where the development of commercial health insurance in China is still immature, pharmacists help explore the “medical insurance” integration model, which can be said to have followed the trend of seizing the opportunity.

Returning to investment logic, in the past year, the capital market was affected by factors such as the global economy, and the performance of Hong Kong stocks was not optimistic. Volatility in the financial market increased the uncertainty of the economic environment, and also made investors more cautious.

However, with the current release of a series of positive signals, the market has shown signs of a reversal at the bottom, such as expectations of US interest rate cuts and increased expectations of continuing interest rate cuts in the domestic market, etc., all of which are expected to inject new liquidity into the market, providing new market opportunities for pharmacists to help such Hong Kong-owned Internet medical companies.

Generally speaking, pharmacists used Internet technology to fundamentally change traditional marketing gameplay in the outpatient market and successfully restructured the traditional “human store” logic, which not only injected strong impetus into their own development, but also provided useful lessons and enlightenment for the entire industry. In addition to the fact that Pharmacist Gang has previously been included in the 10 CCP indices in the Hang Seng Index series, its liquidity will be further enhanced. I believe the value of Pharmacist Help is expected to continue to be recognized by the market. Perhaps we can give them more time and patience, which is worth paying attention to.