Core Insights - The number of internet hospitals in China reached 3,756 last year, with a total of 130 million patient visits, indicating significant growth in the sector [1][4] - The integration of AI technology has improved the efficiency of online consultations, allowing doctors to manage their time better and enhance patient care [3][6] - Companies like Ping An Good Doctor and JD Health reported profitability in the first half of this year, reflecting a positive trend in the internet healthcare industry [6] Group 1: Industry Growth - The internet healthcare sector has seen a surge in patient numbers, particularly among chronic disease patients who benefit from online consultations [5][6] - The convenience of internet hospitals allows patients to send medical reports in advance, reducing the need for travel to major cities for consultations [1][3] Group 2: AI Integration - AI technology is being utilized to streamline the online consultation process, with platforms providing "personal AI assistants" to help doctors prepare for patient interactions [3][6] - The use of AI has reportedly increased service efficiency by 33%, saving doctors approximately 60,000 hours of work [3] Group 3: Chronic Disease Management - Chronic disease management is a key focus for internet hospitals, with platforms enhancing patient adherence to treatment through reminders and follow-ups [6][7] - The ability to provide medication delivery services is particularly beneficial for patients in remote areas, improving access to necessary treatments [3][6]

Core Insights - The number of internet users in China has reached 1.123 billion, with an internet penetration rate of 79.7% [1][3] - Significant advancements in digital infrastructure and services have been achieved during the "14th Five-Year Plan" period, including a fivefold increase in 5G base stations and a 34-fold increase in gigabit broadband users [2][3] Digital Infrastructure Development - By June 2025, the total number of 5G base stations is expected to reach 4.55 million, a fivefold increase compared to 2020 [2] - The number of gigabit broadband users has grown to 226 million, marking a 34-fold increase [2] Digital Services and Public Welfare - Digital services are becoming more accessible, with over 1 billion annual services provided by internet hospitals and more than 1.2 billion users of the national medical insurance code [3][4] - The use of electronic social security cards has expanded to 1.07 billion people, covering over 75% of the population [3] Smart Living and Community Services - The digital transformation of 5A-level scenic spots has reached 100%, enhancing the accessibility of cultural heritage through new technologies [3] - Community services have become more intelligent, with features like "one-click" elderly assistance and remote health management improving quality of life [3] Social Governance and Efficiency - The "one-stop" government service model is being deepened, improving the efficiency of public services [4][5] - Urban governance is transitioning from fragmented control to comprehensive collaboration, enhancing smart governance and resilience [5]

Investment Rating - The investment rating for JD Health (06618.HK) is "Buy" with a target price not specified [4]. Core Views - JD Health reported a revenue of 58.16 billion yuan for 2024, representing an 8.6% year-on-year increase from 53.53 billion yuan in 2023. The self-operated product revenue was 48.80 billion yuan, up 6.9%, while service revenue reached 9.36 billion yuan, growing by 18.9% [1][2]. - The company's gross margin increased by 0.7 percentage points to 22.9%, driven by revenue mix optimization. Annual profit reached 4.16 billion yuan, a 94.0% increase year-on-year, with adjusted Non-IFRS net profit at 4.79 billion yuan, up 15.9% from 4.14 billion yuan in 2023 [1][3]. - Active user count reached 184 million by December 31, 2024, an increase of 11.3 million from the previous year, with over 100% growth in the number of third-party merchants exceeding 100,000 [1][2]. Revenue Breakdown - Self-operated product revenue for 2024 was 48.80 billion yuan, reflecting a 6.9% increase, supported by strengthened supply chain capabilities and collaboration with global pharmaceutical companies [2]. - Service revenue for 2024 was 9.36 billion yuan, up 18.9%, primarily due to an increase in the number of advertisers and growth in third-party merchant commissions [2]. Operational Data - The average daily online consultation volume exceeded 490,000 in 2024, indicating enhanced capabilities in medical service delivery through specialized services and AI applications [2][3]. - JD Health expanded online medical insurance payment services in 18 cities, connecting over 3,000 designated pharmacies, covering a population of over 100 million [2]. Profitability Optimization - The gross margin improved to 22.9%, attributed to a higher proportion of high-margin service revenue and product mix optimization. The fulfillment cost ratio increased by 0.5 percentage points to 10.4% due to logistics network expansion [3]. - The selling expense ratio slightly increased by 0.2 percentage points to 5.2%, mainly due to increased marketing investments, while general and administrative expenses improved significantly by 1.3 percentage points to 2.4% [3]. Future Projections - Revenue forecasts for 2025, 2026, and 2027 have been adjusted to 62.7 billion yuan, 71 billion yuan, and 80.9 billion yuan, respectively, with adjusted net profits projected at 4.4 billion yuan, 5.1 billion yuan, and 6 billion yuan [4].