Shares of China’s biggest online healthcare platform yesterday rose 50 percent on their Hong Kong Stock Exchange debut, reflecting investor enthusiasm for the fledgling industry as the nation emerges from the COVID-19 pandemic.
JD Health International Inc (京東健康), an arm of JD.Com Inc (京東), China’s biggest online retailer, sells medications, healthcare packages and provides online health consultations.
Chinese Internet companies increasingly offer health services in a society where hospitals are crowded, and distribution of drugs and medical supplies outside major cities is uneven.
Photo: AFP
Online consulting with Mandarin-speaking physicians is popular with Chinese families who live overseas.
Other competitors include e-commerce giant Alibaba Group Holding Ltd’s (阿里巴巴) Alibaba Health Information Technology Ltd (阿里健康); Baidu Health (百度健康), run by search giant Baidu.com Inc (百度); and WeDoctor (微醫), run by Tencent Holdings Ltd (騰訊), operator of the popular WeChat messaging service.
The pandemic has boosted demand for Chinese online health platforms.
Investors have “high hopes” for these kinds of companies to develop in China, Hong Kong-based Amber Hill Capital Ltd (安山資本) asset management director Jackson Wong (黃志陽) said.
The Chinese government has encouraged the growth of the industry by authorizing online pharmacies to deliver prescription drugs.
During the pandemic, patients switched from going online only for urgent care to staying in touch with doctors about chronic conditions, Bain & Co healthcare analyst Kevin Chang (張凱文) said.
“This new pattern of digital engagements is likely to continue and to increase the frequency of consultations,” Chang said in a report.
Consumer spending and business activity have rebounded after China, where the COVID-19 pandemic began, declared the disease under control in March. Restrictions on travelers coming from abroad still are in place.
JD Health raised about US$3.8 billion by selling 20 percent of the company in an initial public offering.
It was Hong Kong’s second-biggest offering this year behind parent company JD.Com, whose shares trade in New York, when it raised US$4.5 billion in June.
JD Health said that it plans to expand its online pharmacy and develop “smart healthcare solutions” supported by artificial intelligence.
The company says it had 72.5 million active users in June, up 30 percent year-on-year.
The firm might face tougher competition once the pandemic is under control and patients have more offline options, Wong said.
“If vaccines are very effective and people start going out again, the growth of these online service providers might not be as high,” Wong said. “That would be the biggest risk for this kind of company.”
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