JD HEALTH(06618)2024-08-15 09:33Financial Performance - For the six months ended June 30, 2024, JD Health reported revenue of RMB 28,343,961 thousand, representing a year-on-year increase of 4.6% compared to RMB 27,110,336 thousand in the same period of 2023[3]. - Gross profit for the same period was RMB 6,699,943 thousand, reflecting an 8.0% increase from RMB 6,203,000 thousand in the prior year[3]. - Operating profit increased by 17.7% to RMB 1,035,018 thousand, up from RMB 879,244 thousand year-on-year[3]. - Revenue increased by 4.6% from RMB 271 billion for the six months ended June 30, 2023, to RMB 283 billion for the six months ended June 30, 2024[15]. - Active user growth and increased online penetration in pharmaceutical and health product sales contributed to a 3.2% increase in product revenue from RMB 232 billion to RMB 239 billion[15]. - Service revenue from online platforms and digital marketing rose by 12.5% from RMB 39 billion to RMB 44 billion, driven by an increase in advertisers on the platform[15]. - Gross profit increased from RMB 62 billion to RMB 67 billion, with gross margin improving from 22.9% to 23.6% due to changes in revenue mix[17]. - Period profit increased from RMB 1.56 billion for the six months ended June 30, 2023, to RMB 2.03 billion for the six months ended June 30, 2024[24]. - The net profit attributable to the owners of the company for the six months ended June 30, 2024, was RMB 2.04 billion, up from RMB 1.56 billion in the same period of 2023, indicating a year-over-year increase of approximately 30.8%[37]. - Basic earnings per share for the six months ended June 30, 2024, were RMB 0.65, up from RMB 0.50 in the same period of 2023, representing a growth of 30%[46]. User Engagement and Services - The number of annual active users reached 181 million, with an average of over 480,000 online consultations per day during the first half of 2024[5]. - The online consultation volume for JD Health's internet hospital exceeded 480,000 daily consultations, serving over 15 million patients across various specialties[11]. - JD Health established the largest professional nutritionist online service team in China, with nearly 1,000 nutritionists, achieving a 98% user satisfaction rate[8]. - The company launched a pilot online medical insurance payment service in Beijing, with over 350 retail pharmacies connected to the JD platform by June 30, 2024[9]. - JD Health is expanding its home service offerings, including on-site nursing and home care services, to meet diverse health needs[11]. Strategic Initiatives and Partnerships - The company expanded its partnerships with leading pharmaceutical companies, launching several new specialty drugs on its platform during the reporting period[7]. - JD Health's platform now hosts 80,000 active third-party merchants, indicating significant growth in its marketplace[7]. - Strategic cooperation agreements were signed with over ten medical device brands to enhance product development and marketing efforts[7]. - The company continues to focus on expanding its "Internet + Healthcare" ecosystem, providing a range of medical and health products, internet medical services, and smart healthcare solutions in China[40]. Operational Efficiency - The average delivery time for the "JD Buy Medicine" service improved to 28 minutes, with the fastest delivery at 9 minutes, covering over 490 cities and more than 150,000 partner pharmacies[9]. - The company continues to strengthen its supply chain capabilities and expand its nationwide warehouse network and cold chain delivery services[6]. - JD Health's operating model combines self-operated, online platforms, and instant retail to enhance user experience and maintain competitive pricing[6]. Financial Management - Fulfillment expenses increased by 14.4% from RMB 2.6 billion for the six months ended June 30, 2023, to RMB 2.9 billion for the six months ending June 30, 2024, with fulfillment expenses as a percentage of revenue rising from 9.5% to 10.4%[18]. - Sales and marketing expenses rose by 17.5% from RMB 1.2 billion for the six months ended June 30, 2023, to RMB 1.4 billion for the six months ending June 30, 2024, with expenses as a percentage of revenue increasing from 4.4% to 5.0%[19]. - R&D expenses increased by 4.6% from RMB 616.9 million for the six months ended June 30, 2023, to RMB 645.0 million for the six months ending June 30, 2024, maintaining a stable percentage of revenue at 2.3%[20]. - General and administrative expenses decreased by 21.9% from RMB 876.8 million for the six months ended June 30, 2023, to RMB 685.1 million for the six months ending June 30, 2024, with expenses as a percentage of revenue declining from 3.2% to 2.4%[21]. - Financial income increased by 5.7% from RMB 936.5 million for the six months ended June 30, 2023, to RMB 989.5 million for the six months ending June 30, 2024, primarily due to increased interest income from bank balances and financial products[22]. - Income tax expenses rose by 50.4% from RMB 269.2 million for the six months ended June 30, 2023, to RMB 405.0 million for the six months ending June 30, 2024, mainly due to net growth in deferred tax[23]. Cash Flow and Investments - Operating cash flow for the six months ending June 30, 2024, was RMB 2.23 billion, compared to RMB 368.1 million for the same period in 2023[29]. - Cash and cash equivalents decreased to RMB 8.84 billion as of June 30, 2024, from RMB 11.90 billion as of June 30, 2023[29]. - For the six months ended June 30, 2024, net cash generated from operating activities was RMB 2.2 billion, primarily due to a profit of RMB 2.0 billion, adjusted for a net decrease of RMB 0.4 billion from non-cash and non-operating items[30]. - For the six months ended June 30, 2024, net cash used in investing activities was RMB 8.4 billion, mainly due to net cash payments of RMB 5.7 billion for time deposits and RMB 2.6 billion for financial assets measured at fair value[31]. - For the six months ended June 30, 2024, net cash used in financing activities was RMB 218 million, primarily due to lease payment principal of RMB 178 million[32]. - As of June 30, 2024, the company had no outstanding borrowings, indicating a capital debt ratio of 0%[32]. Corporate Governance - The company has adhered to the Corporate Governance Code and maintained high standards of corporate governance throughout the reporting period[50]. - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2024, ensuring compliance with accounting policies and internal controls[52]. - The company has not engaged in any purchase, sale, or redemption of its listed securities during the six months ended June 30, 2024[53]. - The board currently includes executive and non-executive directors, ensuring a diverse governance structure[59]. Future Plans and Appointments - The company plans to continue utilizing the raised funds for enhancing user growth and brand awareness, as well as for potential investments and acquisitions[55]. - Professor 廖家傑 has been appointed as an independent non-executive director effective from August 15, 2024[56]. - 廖教授 will receive an annual director's fee of RMB 338,000 and equity-based compensation[56]. - The board welcomes 廖教授's appointment, highlighting his extensive experience in gastroenterology and hepatology[57]. - The mid-term financial report for the six months ending June 30, 2024, will be published on the Hong Kong Stock Exchange and the company's website[58].