Core Viewpoint - WeDoctor Holdings has submitted an IPO application to the Hong Kong Stock Exchange, aiming to list on the main board, with its business model having evolved significantly since its initial application in 2021, now focusing on cost control in medical insurance as a key revenue driver [1][2]. Business Model - The core business of WeDoctor is health management membership services, which accounted for approximately 78% of its revenue as of mid-2025. The revenue model is based on a profit-sharing arrangement with the health insurance fund, contingent on the number of signed members and the budget set by the insurance bureau [2][5]. - WeDoctor's health management services leverage AI to enhance clinical decision-making and optimize medical processes, aiming to reduce unnecessary medical expenses and improve the surplus rate of health insurance funds [5][7]. Financial Performance - In 2024 and the first half of 2025, WeDoctor reported revenues of 5.496 billion and 3.08 billion RMB, respectively, reflecting year-on-year growth rates of 195% and 69%. The health management membership service has shown strong growth, with a 131% increase in revenue in the first half of 2025 [8][9]. - Despite revenue growth, the profit margins for the core health management service were low, with profit margins of 1.9% and 0.7% for 2024 and the first half of 2025, respectively. The cloud pharmacy business also exhibited low gross margins of 3.8% and 3.3% during the same periods [8][9]. Market Position and Valuation Challenges - WeDoctor's business model shares similarities with U.S. Pharmacy Benefit Managers (PBMs), but operates in a more constrained environment dominated by health insurance funds, limiting revenue elasticity and profitability [10][12]. - The timing of WeDoctor's IPO is critical, as the current market sentiment towards internet healthcare has shifted towards a more rational valuation, making it challenging for the company to achieve the high valuations seen in 2021 [13][14]. - The integration of AI into WeDoctor's services is seen as a potential value driver, but investor skepticism regarding the valuation of AI-driven healthcare companies remains a concern [14].