2 China Telehealth Stocks to Consider for Your Portfolio

Mountain View, CA, USA - Feb. 21, 2015: Western Digital Corp. Western Digital is a leading provider of best-selling internal & external hard drives and award-winning media player & network drives.

The Covid-19 pandemic has resulted in the increased usage of telehealth services worldwide.

With many countries in lockdown, if an individual wants to consult a doctor about a medical issue, telehealth is a good option.

So, I’ll have a look at two telehealth stocks listed in Hong Kong which have bucked the larger downtrend in the market and are trading higher.

Company 1

Ping An Healthcare and Technology Co Ltd (SEHK: 1833) is an online healthcare services provider better known as “Ping An Good Doctor”.

Having listed on the Hong Kong Stock Exchange in 2018, Ping An Good Doctor’s services span health mall, consumer healthcare, online medical services, and health management.

For 2019, Ping An Good Doctor saw revenue grow by 52% year-on-year to RMB 5.06 billion (US$714.7 million).

In particular, Ping An Good Doctor recorded revenue growth of 109% year-on-year from its Online Medical Services division.

Over the past five years (2015-2019), Ping An Good Doctor has delivered revenue growth at an annualised rate of 106%.

The strong financials reported by the company above are for 2019 only. This was before the worst of the Covid-19 pandemic outbreak.

With a surge in interest seen for its online medical services consultation business in the first quarter of 2020 due to the lockdown in China, Ping An Good Doctor should see strong revenue growth in 2020 as well.

While the telehealth service provider is not profitable yet, its future looks bright.

Company 2

Alibaba Health Information Technology Ltd (SEHK: 241) also known as “Ali Health” is a leading online pharmaceutical platform and provides online consultation services.

Similar to Ping An Good Doctor, Ali Health has seen strong growth with revenue up 119.1% for the first half of FY 2019.

The best-performing business segment for Ali Health was its Consumer Healthcare business which recorded revenue growth of 274.4% in the first half of FY 2019.

Ali Health is relatively new to the online consultation business. It provided the following commentary in its interim 2019 report:

As at the end of September 2019, over 27,000 medical practitioners, pharmacists, and nutritionists had signed up with the Group to provide online health consultation services, of which more than 18,000 attended, were assistant chief or chief physicians.”

While Ali Health’s online consultation business is still in its infancy, like Ping An Good Doctor, it probably saw increased usage of its platform due to the Covid-19 outbreak.

Ali Health is also on the brink of breaking even in its operations. It reported net losses of only RMB 1.1 million in the first half of FY 2019 compared to an RMB 84.1 million loss in 2018.

All said, Ali Health with various business segments should have a bright future ahead as healthcare moves online.

Foolish conclusion

Ping An Good Doctor and Ali Health have both seen their share prices surge recently. Both companies have likely been beneficiaries of the “stay-home” trend due to Covid-19.

Apart from the pandemic which will come to an end, both companies have fast-growing platforms that provide critical online healthcare services.

As healthcare moves online, these platforms will likely to enjoy accelerated growth in the future.

分享給你的朋友