JD HEALTH(06618)2024-03-20 10:00Financial Performance - For the fiscal year ending December 31, 2023, JD Health reported revenue of RMB 53,529,941 thousand, a 14.5% increase from RMB 46,736,150 thousand in 2022[3] - The gross profit for the same period was RMB 11,865,336 thousand, reflecting a 20.0% increase from RMB 9,891,508 thousand in the previous year[3] - Operating profit turned positive at RMB 630,848 thousand, compared to an operating loss of RMB 145,120 thousand in 2022[3] - The annual profit reached RMB 2,142,880 thousand, a significant increase of 459.2% from RMB 383,229 thousand in the prior year[3] - Non-IFRS operating profit was RMB 2,478,637 thousand, up 26.5% from RMB 1,959,158 thousand in 2022[3] - JD Health's total revenue for 2023 reached RMB 53.5 billion, representing a year-on-year growth of 14.5%[10] - Revenue from self-operated products was RMB 45.7 billion, showing a year-on-year increase of 13.1%[12] - Service revenue rose by 23.7% from RMB 6.4 billion in 2022 to RMB 7.9 billion in 2023, attributed to increased digital marketing service fees and commission from third-party merchants[21] - Operating costs increased by 13.1% from RMB 36.8 billion in 2022 to RMB 41.7 billion in 2023, primarily due to higher sales of pharmaceutical and health products[22] - Gross profit grew from RMB 9.9 billion in 2022 to RMB 11.9 billion in 2023, with gross margin improving from 21.2% to 22.2%[23] - The annual profit attributable to the company's owners was RMB 2.14 billion in 2023, significantly up from RMB 383.23 million in 2022[42] - The company reported a basic earnings per share of RMB 0.69 for 2023, compared to RMB 0.12 for 2022[42] - The total comprehensive income for the year was RMB 2.82 billion, down from RMB 3.68 billion in 2022, primarily due to foreign currency translation differences[43] User Engagement and Services - The number of annual active users reached 172.3 million, with an average of over 450,000 online consultations per day in 2023[10] - JD Health is focusing on enhancing its supply chain infrastructure and expanding its online health consumption platform to reach a broader base of users[6] - The company is accelerating its omnichannel strategy, including the launch of a 24-hour prescription pickup service and an average delivery time of 28 minutes for online orders in Beijing[7] - JD Health is constructing an integrated online and offline service system, including the establishment of online dermatology hospitals and mental health centers[8] - The company has introduced various proactive health management services tailored for different user groups, enhancing its service offerings[8] - JD Health's instant retail business has expanded to over 480 cities, with more than 120,000 partnered offline pharmacies, providing 24/7 service to meet user demands[14] - JD Health's online mental health center has provided personalized consultations to over hundreds of thousands of users, addressing various psychological needs[16] Strategic Initiatives and Innovations - JD Health aims to become a leading platform for global brand growth in the health sector, leveraging its digital marketing capabilities[6] - The company is expanding its strategic partnerships with leading pharmaceutical companies to enhance product offerings and market reach[12] - JD Health is focusing on AI-driven healthcare solutions, launching the medical model "JD Medical Qianxun" based on health knowledge graphs and big data[9] - The company has developed a medical large model, "Jingyi Qianxun," integrating clinical guidelines and expert knowledge to improve healthcare efficiency[17] - JD Health launched several innovative drugs, including the first global treatment for severe alopecia areata and a domestically approved targeted oral drug for psoriasis[12] - The company plans to continue expanding its "Internet + Healthcare" ecosystem, focusing on innovative healthcare solutions and market promotion services in China[46] Financial Position and Cash Flow - Cash and cash equivalents decreased from RMB 18.7 billion at the end of 2022 to RMB 15.0 billion at the end of 2023[33] - Net cash generated from operating activities was RMB 4.6 billion in 2023, down from RMB 5.9 billion in 2022, primarily due to changes in working capital[34] - In 2023, the net cash used in investing activities was RMB 8 billion, an increase from RMB 4.2 billion in 2022, primarily due to deposits in time deposits of RMB 33.4 billion and purchases of financial assets at fair value of RMB 10.3 billion[36] - The net cash used in financing activities decreased significantly from RMB 925.4 million in 2022 to RMB 117.2 million in 2023, mainly due to a reduction in share repurchase payments[37] - As of December 31, 2023, the company had no outstanding borrowings, indicating a capital debt ratio of 0%[37] Corporate Governance and Social Responsibility - JD Health is committed to social responsibility, organizing various public welfare activities, including support for rare disease patients and health initiatives for rural women[9] - The company has established an audit committee to oversee financial reporting and internal control systems, ensuring compliance with governance standards[56] - JD Health's charitable initiatives have conducted 56 activities, donating over RMB 60 million in cash, materials, and services[18] - The company did not declare any dividends for the year 2023, consistent with the previous year[52] Workforce and Employee Compensation - The total number of employees focused on business operations increased to 3,118 as of December 31, 2023, compared to 2,739 in the previous year[39] - Total employee compensation and benefits expenses amounted to RMB 2.9 billion in 2023, down from RMB 3.1 billion in 2022[39] Assets and Liabilities - Total assets increased to RMB 64,288,300 thousand as of December 31, 2023, compared to RMB 61,277,296 thousand as of December 31, 2022, representing a growth of 4.9%[44] - Current assets decreased to RMB 47,849,891 thousand as of December 31, 2023, from RMB 56,447,159 thousand in 2022, a decline of 15.3%[44] - The total trade payables as of December 31, 2023, were RMB 9,660,450 thousand, a decrease of 8.2% from RMB 10,526,029 thousand as of December 31, 2022[52] - The company reported a decrease in trade receivables to RMB 347,962 thousand in 2023 from RMB 954,958 thousand in 2022, a reduction of 63.6%[44] - The aging analysis of trade receivables shows that receivables within 3 months were RMB 303,507 thousand, down from RMB 519,165 thousand year-over-year, indicating a significant decline in short-term receivables[51] Future Outlook - JD Health aims to continue expanding its business base and strategic new categories in 2024, driven by the "Healthy China" strategy[9] - The company plans to reallocate approximately RMB 7.7 billion from R&D to business expansion, reflecting a strategic shift in resource allocation[58] - As of December 31, 2023, the unutilized net proceeds for business expansion were RMB 7,635 million after the reallocation[59] - The annual results announcement will be published on the Hong Kong Stock Exchange and the company's website on March 20, 2024[60]