On March 17, Ping An Group announced its 2021 results. In 2021, Ping An's overall performance maintained steady growth, achieving a parent-attributable operating profit of RMB147.961 billion, an increase of 6.1% year-on-year, and an operating ROE of 18.9%. Ping An focused on shareholder returns and distributed a full-year dividend of RMB2.38 per share in cash to shareholders, an increase of 8.2% year-on-year.
Among the many business segments, the medical and health ecosystem is obviously an important chapter. A year ago, when releasing the 2020 annual report, Ma Mingzhe, chairman of Ping An Group, said in his speech that "finance is the present tense of Ping An, and medical care is the future of Ping An", which clarified the strategic focus of Ping An's future for the outside world. Now, in his latest speech, Ma Mingzhe, chairman of Ping An Group, once again stressed that Ping An should build a "Chinese version of joint health", innovate and explore a group-managed medical model with "HMO + family doctor + O2O" as the core, open up the closed loop of supply, demand and payment, provide the best cost-effective, full-life cycle medical and health services, and feed back the main financial business.
Judging from the financial report, Ping An's medical and health ecosystem has gradually shown strong growth momentum. In 2021, nearly 63% of Ping An's individual customers used the services provided by the medical and health ecosystem at the same time, with an average number of contracts of 3.3 and an average customer AUM of 40,000 yuan, which was 1.6 times and 3.0 times that of individual customers who did not use the services of the medical and health ecosystem, respectively. By the end of December 2021, Ping An Smart Healthcare continued to lead the world in terms of the number of digital healthcare patent applications, and by the end of December 2021, Ping An Smart Healthcare had served 187 cities, empowered more than 45,000 medical institutions, and benefited about 1.32 million doctors and 10.48 million patients with chronic diseases.
The strategy is established, and Ping An's medical layout tactics are clear: on the one hand, on the basis of the medical ecosystem in previous years, it will continue to make up the territory of offline medical institutions; on the other hand, through the upgrade strategy of "HMO + family doctor membership system + O2O", the integration, synergy and symbiosis between various business sectors will be further strengthened.
For the trillion-dollar financial aircraft carrier, the "future tense" of medical care has long been "ongoing time."
What is the goal of Ping An's medical and healthcare layout?
Two years ago, Ping An co-CEO Chen Xinying said at the Investor Open Day, "The potential of the medical market is huge, but it is also very complex, and it cannot only be aimed at one of them, but must have a long-term all-round strategy to fully penetrate it, and seize the medical demand depends on which place in the ecosystem can create value." ”
So, to create a medical and health ecosystem, what does Ping An do specifically?
In response to this long-standing concern of investors and the public, Ping An gave a clear answer in this annual report - Ping An wants to build a group-managed medical model with "HMO + family doctor + O2O" as the core.
Specifically, "HMO" refers to giving full play to the differentiated advantages of Ping An's medical and health ecology and insurance payment, creating a new model of "insurance + medical and health services", organically combining medical services and insurance, providing high-quality, cost-effective, life-cycle medical and health services for individual and group customers, and opening up the closed loop of supply, demand and payment.
"Family Doctor" is to equip each customer with a dedicated family doctor, as the customer's "doctor + navigator + account manager", to provide consultation, diagnosis, diagnosis and treatment, service of the whole medical health management link.
"O2O service" integrates the resources of ping an and social high-quality medical and health service providers to provide customers with online and offline "worry-free, time-saving and money-saving" services, covering four major scenarios of health management, disease management, chronic disease management, and pension management.
The combination of the three enables Ping An to open up the closed loop of supply, demand and payment, and provide customers with "worry-free, time-saving and money-saving" medical and health services.
On this basis, Ma Mingzhe has outlined a more specific goal for Ping An's medical and health ecosystem – to be China's "joint health".
It is understood that United Health is a leading health insurance and health management service group in the United States, and is also widely regarded as a benchmark enterprise in the "insurance + medical health ecology" business model in the industry. As of the end of 2020, United Health Group has 330,000 employees, including 125,000 medical professionals, 48.44 million health insurance business service users, accounting for 13.1% of the U.S. population, covering 50 states and 130 countries around the world, with total assets of $197.3 billion and net assets of $70.5 billion. Over the past decade, the annualized yield of United Health's stock price has been around 35%, which is a well-known bull stock in the US stock market.
As of March 16, 2021, United Health's share price reached $468.8 billion. Why can United Health reach such a high market cap? Analyzing its revenue structure can give the answer: in 2020, United Health's insurance business accounted for 60% of revenue, contributing 55% of operating profits, while the health services business, which accounted for only 40%, contributed 45% of operating profits. From this point of view, health services are more high-growth than traditional single insurance product sales.
Wang Guojun, assistant dean of the School of Insurance of the University of International Business and Economics, pointed out that in addition to United Health, from the ranking of medical institutions in the United States and the ranking of the world's top 500 companies, the top institutions are companies with the "insurance + health management" model. In the context of an aging population, if insurance and health management are not combined, the ranking of both operating income and profit will decline.
It can be said that the innovative business model of "insurance + health management" has opened up a "second growth curve" for companies such as United Health. This may be a major driving force for Ping An to create a "Chinese version of joint health".
What progress has been made in deepening the medical and health ecology?
Ping An, which has always been known for its execution, has also accelerated in the field of medical and health care. The annual report shows that in the past year, "HMO + family doctor + O2O" have made significant progress, and a number of businesses have landed.
In terms of HMO, Ping An focused on the advantages of insurance and medical and health services, with nearly 100 million paid individual customers and about 40,000 paying corporate customers in the Group's medical and health-related services as of the end of December 2021, and the annual health insurance premium income exceeded RMB140 billion in 2021.
Among them, for group customer service, Ping An mainly provides enterprise employee health management service system. As of the end of December 2021, it has covered about 40,000 corporate customers and served 20 million employees. For the wider range of individual customers, Ping An focuses on the creation of "insurance + medical and health services" related products to provide customers with "services with temperature". In 2021, Ping An Life insurance will create the "Ping An Zhen Enjoy RUN" health service plan, providing 12 core health management services in the context of health management, chronic disease management, disease diagnosis and treatment, etc., and by the end of December 2021, Ping An Zhen Enjoy RUN has covered more than 20 million critical illness insurance policy customers of Ping An Life Insurance.
The O2O services segment has also achieved rapid layout in the past year. As of the end of December 2021, in China, the number of Ping An's own doctor teams and external contracted doctors exceeded 40,000, and the number of cooperative hospitals exceeded 10,000, covering 99% of the top 300 hospitals, achieving full coverage of the top 100 hospitals, 96,000 cooperative health management institutions, 202,000 cooperative pharmacies, and about 34% of the national pharmacy coverage rate... These capillary-like medical resources enable Ping An to provide online and offline services of "going to the line, to the store, and going home", thus covering the four major business scenarios of health management, disease management, chronic disease management, and pension management, forming a closed loop of customer service.
So, why can Ping An quickly implement HMO and O2O strategies? In this regard, analysts in the field of medical and health believe that the core lies in the ability to provide quality medical services. To this end, in 2021, Ping An will focus on the expansion of offline medical institutions.
In early May 2021, Ping An announced its participation in the restructuring of Founder Group. By combining Peking University's first-class medical brand and high-quality medical resources, we will further deepen the strategic layout of the medical and health industry.
In addition to participating in the restructuring of Founder, Ping An is also preparing to build a general hospital and health management center. In May 2020, Ping An signed a contract with the Shenzhen Longhua District Government to cooperate in the operation of "Ping An Longhua Hospital", introducing its own medical resources, scientific and technological resources and management capabilities to build Ping An Longhua Hospital into a national top 100 hospital with international influence and a Shenzhen model of public hospital reform. In August 2021, the main body of Ping An Longhua Hospital was basically capped. At the same time, Ping An officially launched the first batch of high-end health management centers in October 2021, and as of the end of December 2021, there were 14 health management centers nationwide.
By laying out these high-quality offline medical resources, Ping An has filled an important part of the medical ecosystem. Ping An pointed out in its annual report that in the future, Ping An will further deepen the strategic layout of the medical and health industry by closely integrating the high-quality resources under Peking University Medical with Ping An's comprehensive finance and medical technology, and focus on building a north-south flagship institution around Peking University International Hospital and Shenzhen Longhua District General Hospital to provide customers with "warm services".
Let's look at the "Family Doctor" service. According to the annual report, Ping An relies on a self-built team of nearly 2,000 full-time doctors and the powerful medical service capabilities brought about by the self-developed AI-assisted diagnosis and treatment system, connecting online and offline, with the health file platform as the main starting point, creating a full-process management link from entrance to payment, providing group customers and individual customers with 7×24 hours of all-round, multi-level and one-stop medical and health services.
It is understood that this service can be traced back to 2019, and Ping An Health took the lead in proposing the service concept of "private doctor". In 2021, Ping An Health launched the "Family Doctor Membership System" in an effort to bridge the gap between HMO payers and O2O suppliers. Wei Hao, chairman of the board of directors and CEO of Ping An Health, said that in the future, he hopes to connect the payer and the supplier through the membership system of family doctors. "The definition of a family doctor service is no longer a simple light consultation, but a navigator of the patient, who can help connect online and offline services and solve the breakpoints in the service, starting with the family doctor and ending with the family doctor."
Invest in Shionoyoshi, a high-quality target with strategic foresight
If "family doctor + HMO + O2O" is to build Ping An's intrinsic ecology, then foreign investment in Japanese pharmaceutical giant Yoshino reflects Ping An's forward-looking vision of finding high-quality medical investment targets and its determination to promote the healthy development of China's pharmaceutical industry.
According to relevant reports, Yoshinori Shiono has submitted approvals to Japan's Ministry of Health, Labor and Welfare for the manufacture and sale of oral drugs for the new crown virus. If approved, it would be the first COVID-19 oral treatment for a japanese pharmaceutical company.
It is reported that behind the accelerated research and development of Yanye Yoshinori New Drug, there are multiple supports such as Ping An's capital, business and technology. In March 2020, Ping An Life, a subsidiary of Ping An, invested in Yoshishi Shiono Pharmaceutical and became an important strategic shareholder. Subsequently, two joint venture companies, "Ping An Shionoyoshi Co., Ltd." and "Ping An Shionoyoshi (Hong Kong) Co., Ltd.", were established in Shanghai and Hong Kong respectively. It is understood that combining the advantages of Shiono Yoshi pharmaceutical and Ping An's analysis technology in big data and artificial intelligence, the two sides will deeply cultivate the AI drug research and development platform, and then efficiently manufacture and provide high-value-added innovative drugs and medical and health services, and provide customers with tailor-made solutions.
Today, Yoshino's progress in the new crown oral medicine fully demonstrates Ping An's forward-looking investment vision.
From improving the "HMO + family doctor + O2O" model internally to extending the medical investment map externally, it is clear that the medical and health ecosystem has become a breakthrough in ping An's strategic transformation in recent years, and its importance even matches Ping An's comprehensive financial business. Ma Mingzhe once said that exploring the strategic upgrading of "comprehensive finance + medical health", realizing the synergy of comprehensive financial chart and medical health, and finally feeding back medical and health is an important development main line in the fourth decade of Ping An of China.
Now it seems that this main line of development has gradually become clear. Relying on years of experience in operation and management in the insurance and medical industries, Ping An is fulfilling its goals step by step.
Reporter: Pantene
(This article does not constitute any investment advice, and the content of information disclosure is subject to the company's announcement.) Investors operate accordingly at their own risk. ）
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