ALI HEALTH(00241)2023-07-13 09:01User Growth and Platform Performance - Annual active consumers on Tmall Health platform reached nearly 300 million, serving over 28,000 merchants as of March 31, 2023[4] - Online self-operated stores' annual active consumers exceeded 130 million, an increase of over 20 million compared to 110 million as of March 31, 2022[4] - Self-operated user membership reached 75 million, a year-on-year increase of 47.4%[4] - Annual active consumers on the company's online self-operated stores exceeded 130 million, an increase of over 20 million compared to the previous year[12] - The number of pharmaceutical self-operated user members reached 75 million, a year-on-year increase of 47.4%[12] - Annual active users on the Tmall Health platform reached nearly 300 million[13] - Tmall Health platform served over 28,000 merchants, an increase of more than 2,000 compared to the previous year[10] Healthcare Services and Consultation - Nearly 200,000 licensed physicians, pharmacists, and nutritionists provided online health consultation services, an increase of over 40,000 compared to the previous fiscal year[5] - Daily online consultations exceeded 400,000 during the reporting period[5] - The company served nearly 9 million chronic disease patients, a year-on-year increase of 35.2%[5] - The number of licensed physicians, pharmacists, and nutritionists providing online health consultation services reached nearly 200,000, an increase of over 40,000 compared to the previous year[10] - Daily online consultation service volume exceeded 400,000 times[10] - The number of licensed physicians, pharmacists, and nutritionists providing online health consultation services increased by nearly 40,000 to nearly 200,000 as of March 31, 2023[15] - Daily online consultation service volume exceeded 400,000 as of March 31, 2023[15] - The number of chronic disease users served reached nearly 9 million, a year-on-year increase of 35%[16] Logistics and Operational Efficiency - The company's logistics network expanded to 39 warehouses across 22 locations, significantly improving operational efficiency[4] - The company has established a distribution network with 39 warehouses in 22 locations, significantly improving operational efficiency through intelligent tools[12] Medical Terminology and Drug Coverage - The Chinese clinical terminology set released by the company includes nearly 600,000 medical terms and 2.2 million semantic relationships[5] - The Chinese drug terminology set covers nearly 30,000 clinical drugs[5] Revenue and Financial Performance - Total revenue reached RMB 26,763.0 million, a year-on-year increase of 30.1%[10] - Revenue from the company's pharmaceutical self-operated business reached RMB 23,591.6 million, up 31.7% year-on-year[10] - The company's healthcare and digital services business revenue reached RMB 933.5 million, a year-on-year increase of 45.7%[15] - Revenue increased by 30.1% to RMB 26,763,016,000 in 2023, driven by rapid growth in the pharmaceutical self-operated business and healthcare and digital services[24] - Gross profit rose by 38.8% to RMB 5,701,334,000, with gross margin improving to 21.3% from 20.0% due to operational efficiency and pricing power[28] - Pharmaceutical self-operated business revenue grew by 31.7% to RMB 23,591,577,000, supported by expanded product categories and enhanced user experience[25] - Healthcare and digital services revenue surged by 45.7% to RMB 933,486,000, driven by diversified healthcare services and the development of the "Code Assurance" traceability platform[27] Expenses and Profitability - Fulfillment expenses increased by 38.6% to RMB 2,907,137,000, accounting for 12.3% of pharmaceutical self-operated business revenue, up from 11.7% due to pandemic-related costs[30] - Sales and marketing expenses decreased by 10.7% to RMB 1,768,675,000, reflecting optimized advertising strategies[31] - Product development expenses dropped by 7.0% to RMB 677,822,000 due to cost control and R&D strategy optimization[33] - Adjusted net profit turned positive at RMB 751,369,000, compared to a loss of RMB 394,259,000 in the previous year, driven by user growth and operational efficiency[36] - Adjusted net profit for the year ended March 31, 2023, was RMB 751.369 million, compared to a net loss of RMB 394.259 million in 2022[38] Cash Flow and Financial Position - Cash and cash equivalents as of March 31, 2023, were RMB 10.917 billion, up from RMB 10.548 billion in 2022[39] - Net cash generated from operating activities for 2023 was RMB 255.690 million, a decrease from RMB 424.363 million in 2022[40] - Net cash used in investing activities for 2023 was RMB 532.436 million, primarily due to increased term deposits and acquisition activities[42] - Net cash used in financing activities for 2023 was RMB 111.278 million, mainly for lease principal payments and share repurchases[43] - The company had no borrowings as of March 31, 2023, resulting in a capital gearing ratio of zero[44] Employee and Workforce Metrics - Total employee costs for 2023 were RMB 1.223 billion, down from RMB 1.303 billion in 2022[47] - The company had 1,560 full-time employees as of March 31, 2023, compared to 1,870 in 2022[47] - The company had 1,560 full-time employees as of March 31, 2023, compared to 1,870 in the previous year[55] Shareholder and Corporate Governance - The company did not recommend paying a final dividend for the reporting period[58] - A trustee of the share incentive plan purchased 25,258,000 shares of the company for a total consideration of HKD 90,000,000 (RMB 81,582,000) in October 2022[59] - The company completed a share placement in August 2020, issuing 498,753,118 new shares at HKD 20.05 per share, raising a net amount of HKD 9,964.2 million[60] - The total gross proceeds from the placement were approximately HKD 10,000.0 million, with net proceeds (after deducting commissions and expenses) amounting to approximately HKD 9,964.2 million, equivalent to a net issue price of approximately HKD 19.98 per share[61] - As of March 31, 2023, the company has utilized HKD 2,413.2 million of the net proceeds for the development of its pharmaceutical and healthcare products omnichannel business, with an additional HKD 1,536.9 million used during the reporting period, leaving HKD 4,021.3 million to HKD 5,017.7 million unused, expected to be fully utilized by March 31, 2027[62] - The company has utilized HKD 655.1 million of the net proceeds for the further development of its digital infrastructure and innovation business, with an additional HKD 237.4 million used during the reporting period, leaving HKD 103.9 million to HKD 1,100.3 million unused, expected to be fully utilized by March 31, 2027[62] - The company has no distributable reserves as of the end of the reporting period, but it has a share premium account of approximately RMB 43,734,076,000 that can be distributed as fully paid bonus shares[65] - The sales to the top five customers accounted for less than 30% of the total sales for the year, and the purchases from the top five suppliers accounted for less than 30% of the total purchases for the year[65] - The company has engaged external consultants to identify significant environmental, social, and governance (ESG) issues and assist in reporting the company's performance in line with its ESG management policies, strategies, priorities, and targets[66] - Li Faguang resigned as a non-executive director effective May 15, 2023, and Huang Jiaojiao was appointed as a non-executive director on the same date[67] - Luo Tong and Huang Jing'an, independent non-executive directors, have decided not to seek re-election at the 2023 Annual General Meeting and will retire after the meeting[67] - The company has three independent non-executive directors, constituting at least one-third of the board, and the composition of the board, audit committee, and remuneration committee fully complies with the relevant listing rules[68] - Directors are eligible to receive share awards under the Share Award Scheme, with details provided in the consolidated financial statements[70] - The company's share incentive plan, adopted on November 24, 2014, is valid for ten years until November 23, 2024, aiming to reward and retain key personnel contributing to the group's development[71] - The total number of shares involved in unexercised share awards as of March 31, 2023, is 116,561,925, distributed across various special authorizations from 2015 to 2022[73] - As of March 31, 2023, and the report date, a total of 399,112,399 shares (approximately 2.95% of the total issued shares) remain available for issuance under the 2022 special authorization[73] - The share incentive plan allows for the issuance of shares up to 3% of the total issued shares at the adoption date or the new approval date for updating the plan authorization limit[72] - The vesting period for share awards and restricted share units under the share incentive plan ranges from one to six years[72] - The company granted 2,900,000 share options on June 15, 2020, with a vesting period of six years[75] - A total of 1,290,125 share options were granted on June 15, 2022, with an exercise price of 4.920[75] - The company issued 500,000 restricted share units on June 15, 2020, with a vesting period of six years[75] - 516,050 restricted share units were granted on June 15, 2022, with a vesting period of six years[75] - The total number of share options granted to the top three highest-paid directors is 1,469,875, with an exercise price of 4.920[75] - The company issued 537,000 restricted share units on December 15, 2020, with a vesting period of four years[75] - 947,311 restricted share units were granted on September 15, 2022, with a vesting period of one year[75] - The total number of restricted share units granted to the top three highest-paid directors is 1,535,261[75] - 508,000 shares were granted on September 7, 2015, with an exercise price of 5.184 HKD per share[77] - 1,838,000 shares were granted on July 29, 2016, with an exercise price of 2.228 HKD per share[77] - 2,020,250 shares were granted on October 10, 2017, with an exercise price of 4.400 HKD per share[77] - 689,500 shares were granted on February 1, 2018, with an exercise price of 4.144 HKD per share[77] - 966,750 shares were granted on June 15, 2020, with an exercise price of 19.54 HKD per share[77] - 119,000 shares were granted on September 15, 2020, with an exercise price of 18.660 HKD per share[77] - 838,000 shares were granted on June 15, 2021, with an exercise price of 18.212 HKD per share[77] - 100,000 shares were granted on December 15, 2021, with an exercise price of 7.438 HKD per share[77] - 750,000 shares were granted on March 15, 2022, with an exercise price of 4.240 HKD per share[77] - 3,237,750 shares were granted on June 15, 2022, with an exercise price of 4.920 HKD per share[77] - The company's share price on the Hong Kong Stock Exchange was HKD 20.65 on June 12, 2020, HKD 17.90 on June 11, 2021, and HKD 4.74 on June 14, 2022[78] - The weighted average closing price of shares before the exercise of employee stock options was HKD 6.20 per share, with the number of shares issuable under the stock incentive plan representing 0.05% of the weighted average number of issued shares during the reporting period[78] - The company's top five highest-paid employees include Zhu Shunyan, who holds 6,695,925 shares (0.05% of the company's equity), Shen Difan with 3,020,300 shares (0.02%), and Tu Yanwu with 1,361,203 shares (0.01%)[81] - Zhu Shunyan holds 3,109,392 shares in Alibaba Group (0.02% of the issued shares), while Shen Difan holds 177,480 shares and Tu Yanwu holds 12,400 shares[83] - The company uses a binomial model to estimate the fair value of stock options, which involves subjective and uncertain estimates of inputs such as expected volatility, dividend yield, exercise multiple, risk-free rate, and expected forfeiture rate[79] - Alibaba Group Holding Limited holds a 57.05% stake in the company, representing 7,713,318,533 shares[88] - Perfect Advance Holding Limited holds a 22.95% stake, representing 3,103,816,661 shares[88] - Ali JK Nutritional Products Holding Limited holds a 33.73% stake, representing 4,560,785,407 shares[88] Service Agreements and Fees - The total service fees under the 2023 Cloud Computing Services Framework Agreement amounted to approximately RMB 107.0 million, compared to RMB 139.6 million in the same period last year[91] - The annual cap for service fees under the 2024 Cloud Computing Services Framework Agreement is set at RMB 160 million[92] - The total service fees received under the 2023 Entrusted Services Framework Agreement amounted to approximately RMB 105.9 million, compared to RMB 103.7 million in the same period last year[93] - The annual cap for service fees under the 2024 Entrusted Services Framework Agreement is set at RMB 200 million[93] - The annual service fee cap under the 2023 Platform Service Framework Agreement was RMB 560 million, with actual service fees incurred amounting to approximately RMB 267.0 million (compared to RMB 282.5 million in the same period last year)[95] - The annual service fee cap under the 2024 Platform Service Framework Agreement is set at RMB 600 million[95] - The annual incentive fee cap under the 2023 Agency Agreement was RMB 25 million, with actual incentive fees received being zero (compared to RMB 3.5 million in the same period last year)[96] - The annual incentive fee cap under the 2024 Agency Agreement remains at RMB 25 million[96] - The annual service fee cap under the 2023 Logistics Service Framework Agreement was RMB 450 million, with actual service fees incurred amounting to approximately RMB 225.2 million (compared to RMB 301.2 million in the same period last year)[97] - The annual service fee cap under the 2024 Logistics Service Framework Agreement is set at RMB 420 million[97] - The 2023 Shared Services Agreement with Alibaba Group has an annual cap of RMB 500 million for services provided to the company and RMB 50 million for services provided to Alibaba Group[98] - The total service fees incurred under the 2023 Shared Services Agreement were RMB 246.7 million for services provided to the company and zero for services provided to Alibaba Group[98] - The 2024 Shared Services Agreement has an annual cap of RMB 549.5 million for services provided to the company and RMB 162 million for services provided to Alibaba Group[98] - The 2021-2023 Framework Technical Services Agreement had annual caps of RMB 100 million, RMB 130 million, and RMB 170 million for the fiscal years ending March 31, 2021, 2022, and 2023, respectively[100] - The total service fees incurred under the 2021-2023 Framework Technical Services Agreement were approximately RMB 74.2 million[100] - The 2023 Framework Technical Services Agreement has an annual cap of RMB 1,100 million, with total service fees incurred of approximately RMB 820.4 million[101] - The 2024 Framework Technical Services Agreement has an annual cap of RMB 1,400 million[101] - The annual service fee under the 2020-2023 Taobao Framework Technical Service Agreement was RMB 262 million, RMB 464 million, and RMB 799 million for the fiscal years ending March 31, 2021, 2022, and 2023, respectively[103] - The service fee incurred under the 2020-2023 Taobao Framework Technical Service Agreement during the reporting period was approximately RMB 320.8 million (same period: approximately RMB 259.8 million)[103] - The renewed 2024 Taobao Framework Technical Service Agreement has an annual cap of RMB 620 million for the period from April 1, 2023, to March 31, 2024[103] - The service fee under the 2023 Payment Service Framework Agreement had an annual cap of RMB 137 million, with the actual service fee incurred during the reporting period being approximately RMB 78.8 million (same period: approximately RMB 65.2 million)[105] - The renewed 2024 Payment Service Framework Agreement also has an annual cap of RMB 137 million for the period from April 1