Sinohealth Technology Holdings (2361) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 10.1% YoY to RMB159.531m; operating profit increased 62.1% to RMB20.035m, while reported net profit fell 9.8% to RMB42.348m.

• Excluding foreign-exchange gains and losses, net profit grew 23.2% to RMB40.057m and net margin expanded 2.7 percentage points to 25.1%.

• Corporate customers reached 869, up 3.2% YoY; leading pharmaceutical and medical-device customers’ repurchase sales rate was 99.7%, up 5 percentage points.

Financial highlights

• Revenue increased 10.1% YoY to RMB159.531m; cost of sales rose 1.4% to RMB70.743m and gross profit grew 18.1% to RMB88.788m.

• Profit before tax declined 11.2% to RMB42.544m and reported net profit fell 9.8% to RMB42.348m, mainly reflecting lower foreign-exchange gains.

• Other income and gains decreased 34.5% to RMB23.454m; net FX gains were RMB2.291m versus RMB14.445m in H1 2023.

• Excluding FX gains and losses, net profit increased 23.2% to RMB40.057m; adjusted net margin improved 2.7 percentage points to 25.1%.

• Revenue growth was mainly driven by Smart Retail Cloud and SaaS products; SaaS product revenue rose to RMB36.7m from RMB24.2m.

Outlook and guidance

• Strategy prioritizes To B, To C and To R growth, using data, AI and cloud capabilities to expand digital healthcare services and develop patient-focused, full-life-cycle health management.

• To B plans include expanding all-channel data, predictive models and SaaS tools, growing long-tail customers, and advancing digital solutions for pharmaceutical suppliers and retailers.

• To C plans center on scaling AI-MDT through hospitals and examination institutions, with health follow-up, chronic-disease management and personalized examination services.

• To R plans target biomedical R&D digitization and integrated services; an April 2024 agreement with Lecheng Pilot Zone covers ecosystem development, innovative-drug transformation and real-world studies.