Tech Advancement Path of Action-Oriented Ping An Health

With the continuous emergence of innovative models such as artificial intelligence-assisted diagnosis and treatment, remote medical consultations, and online follow-ups for common and chronic diseases, we have witnessed a significant improvement in the accessibility of medical and health services. In this process, Ping An Health is utilizing digital technology with a serious and responsible attitude, continuously exploring and expanding the boundaries of services, using the power of technology to provide a strong extension for human brains and labor, and jointly promoting the continuous improvement of medical service quality.

With the rapid development of artificial intelligence technology, the medical field is undergoing an unprecedented transformation. It has not only changed the way doctors work but also shown great potential in various aspects such as disease diagnosis, treatment, and prevention. Therefore, medical health has become a key focus for capital investment in practical applications. Investment institutions, internet giants, traditional medical giants, and traditional enterprises are all deploying in medical artificial intelligence.

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Among the many players in AI healthcare, Ping An Health is particularly worth noting. Over the past ten years, Ping An Health has been deeply focused on core technology research and control of independent intellectual property rights, continuously building, exploring, and improving medical AI technology and applications. In particular, the "Ping An Yi Botong" multimodal large model, based on five major medical databases, has 200 billion medical domain tokens and 5 million medical domain instruction sets, as well as millions of aligned medical text-image data, enabling the Ping An Yi Botong large model to accurately complete different tasks in medical scenarios.

Perhaps due to the gradual penetration of AI technology in the company's business, as early as September 2023, Ping An Health was included in the Hang Seng Artificial Intelligence Theme Index as a representative enterprise of smart healthcare. It can be said that through AI technology, Ping An Health has not only provided a model for solving the contradiction between supply and demand of medical resources but also injected new momentum into its own development.

Strategizing: Helping Products and Services "Reach New Heights""The healthcare system struggles to provide medical services that are efficient, technologically advanced, and cost-effective all at the same time." This is the medical "impossible triangle" proposed by Yale University professor William Kessick in his book "The Dilemma of Healthcare: Unbounded Demand and Limited Resources."

Over the past decade, internet medical companies have rushed in with hundreds of billions of "hot money," but few have successfully solved the puzzle. At this juncture, the explosion of AI technology has provided a technological "lever" to tackle this industry challenge.

Against this backdrop, medical artificial intelligence has developed rapidly. According to the "White Paper on the Development of China's Medical and Health Industry in 2024," it is estimated that by 2030, the market size of China's AI medical industry is expected to expand to 75.569 billion yuan, with a compound annual growth rate of 39.2%.

However, the complexity and high barriers of the medical industry have also become issues that many internet medical companies must face in the process of deploying medical AI. Only by integrating multiple advantageous resources, considering the needs of all parties, and connecting the medical staff and patient integrated chain can the entire ecological chain be perfected, forming a sustainable development mechanism.

As a "pioneer" in deploying medical AI, Ping An Health, backed by Ping An Group, has been focusing on the research and development and application of AI technology since its inception, continuously building, exploring, and enhancing medical AI technology and applications.

It is understood that in the process of developing medical AI, data is a key factor. Through deep learning of vast medical knowledge bases, medical consultation databases, and electronic medical record databases, Ping An Health has formed five major medical databases, covering 37,000 diseases, 220,000 drug instructions, 2 million classic cases, 30 million medical literature, and 1.42 billion consultations, providing rich and unique professional data.

These vast amounts of data provide abundant nourishment for training AI large models. With the support of these five databases, Ping An Health has launched the "Ping An Medical Family" intelligent doctor's workstation and the "Ping An Medical Bot" multimodal large model.

Among them, the "Ping An Medical Bot" multimodal large model uses the latest Dflow and LPO technologies to provide personalized custom services at a lower training and storage cost. Based on this large model, the company has created a group of 12 business model sequences in four stages: consultation, diagnosis, treatment, and service. Each business model is an intelligent robot, jointly empowering the rapid development of the company's full-process business scenarios.

Of course, launching a powerful model is not the goal. For doctors, the introduction of medical AI provides an effective supplement to the human brain and labor, reducing the rate of missed diagnoses and misdiagnoses, and improving the efficiency of doctors' work. For patients, the support of medical AI means more accurate diagnoses, more personalized treatment plans, shorter waiting times, and a better experience.

For example, Ping An Health's "Ping An Medical Family" intelligent doctor's workstation can quickly organize patient information, absorb various medical document information, deeply analyze abnormal issues, and provide exclusive and effective health management advice.At the same time, the "Ping An Medical Family" intelligent doctor's workstation can provide real-time medical knowledge assistance, continuously monitor and analyze key words in doctor-patient communication, and offer doctors medical knowledge as well as diagnostic and treatment suggestions and assistance, enabling family doctors to provide diagnostic and treatment services more efficiently and with higher quality.

Data is the best proof. With AI empowerment, the service efficiency of Ping An Health has increased by about 30%, and the first-class electronic medical record rate has reached 98.8%.

Only reformers win, and only collaborators go far. Through the construction of medical AI, Ping An Health has achieved comprehensive "empowerment" in terms of service efficiency, service quality, and medical quality control.

Strategy: Accelerate the implementation of application scenarios

According to the "China Health Management Industry Research Report" released by iResearch, the domestic health management market size has reached 1.8107 trillion yuan in 2023 and is expected to reach 3.2558 trillion yuan by 2028, with a compound annual growth rate of 12.5%.

Faced with this vast "blue ocean," players in the big health industry are continuously expanding their boundaries. Ping An Health is also exploring more possibilities in uncertainty.

It is understood that Ping An Health is committed to the research and development of artificial intelligence technology, providing more knowledge and efficiency empowerment for doctors to carry out medical services with leading technology, and improving user satisfaction.

For example, many people have encountered such a scenario when seeking medical treatment: feeling unwell but not being able to clearly describe where they feel uncomfortable, and not knowing which department to register for. Some patients have also encountered the situation where they registered for a certain department, and after being consulted by a doctor, they were told that they should register for another department.

For such situations, Ping An Health's "Ping An Medical Family" intelligent doctor's workstation automatically organizes patient-authorized information, generates health records, extracts disease history related to this diagnosis and treatment, and creates a medical guide for customers, letting customers know how to see a doctor, what to pay attention to, and what to be aware of. This makes health management more personalized and precise.

When it is recognized that patients have the need for offline medical treatment, this intelligent platform can recommend matching hospitals and doctors based on the patient's condition and the area where they are located.Additionally, the consensus in the current medical field is to prevent diseases before they occur, intervene promptly, and diagnose and treat early. Artificial intelligence and big data models have also provided "tools" for disease early warning.

Ping An Health has innovatively created an AI health manager to customize chronic disease management plans for users, helping them develop good health habits and reduce the risk of disease. With the precise recognition function through photos, the work efficiency of the health manager in commenting on meal health has been significantly improved. Currently, the AI-assisted improvement rate in chronic disease management has reached 90%.

It is worth mentioning that with the significant changes in China's population age structure, the issue of aging has become a challenge that will be faced for a considerable period in the future. Data released by the National Bureau of Statistics shows that by the end of 2023, the population aged 60 and above in China reached 297 million, accounting for 21.1% of the total population. It is expected that by 2035, the elderly population in China will exceed 400 million.

Therefore, how to seek benefits for the "silver-haired group" has become a question that the whole society is thinking about. Faced with this "pain point," Ping An Health has thought of using AI technology advantages as a solution.

For example, Ping An Health has jointly developed a smart speaker with Xiaodu. This product not only meets the daily entertainment and life needs of the elderly but also allows one-click access to life and doctor managers, providing professional and warm elderly support for the elderly.

Reshaping: The Journey of Value "Dimension Ascension"

The two most important dimensions to measure a company's value are current performance and future expectations.

The main directions in the field of internet medical care are "medicine" and "pharmacy," that is, online diagnosis and treatment and pharmaceutical e-commerce.

The pharmaceutical e-commerce model is not complicated and is a source of income for many large health companies, so much so that these companies are jokingly referred to by netizens as "named health, but actually selling medicine."

Unlike other internet medical companies, Ping An Health's model focuses more on online diagnosis and treatment and health management. From the data, the company's drug sales ratio has always remained low among internet medical listed companies, and the gross profit margin of online diagnosis and treatment business is also higher than that of pharmaceutical e-commerce.As Strategic 2.0 deepens, Ping An Health has achieved "resilient" growth. According to the semi-annual report for 2024, Ping An Health's medical and health productivity has grown rapidly, with medical service revenue reaching 1.063 billion yuan, a year-on-year increase of 3%. Elderly care service revenue was 47.31 million yuan, a year-on-year increase of 204.8%.

On the other hand, the company's AI+medical applications and coverage have significantly increased, playing a role in reducing costs and improving efficiency. The company's management expenses were 394.6 million yuan, a year-on-year decrease of 47.8%.

In addition, the company's medical and elderly care ecological products have increased significantly, and customer acquisition costs have been reduced. During the period, Ping An Health's sales and marketing expenses were 366.7 million yuan, a year-on-year decrease of 18.6%.

Affected by this, the company achieved a revenue of 2.09 billion yuan during the reporting period and achieved a profit of over 60 million yuan for the first time, with adjusted net profit approaching 90 million yuan.

In addition to good performance, Ping An Health's exploration in AI technology provides us with a high expectation for the future.

It is understood that the capital market is extremely sensitive, and Ping An Health has been regarded as an "AI concept stock". In September last year, Ping An Health, as a representative enterprise of smart medical care, was included in the Hang Seng Artificial Intelligence Theme Index.

Perhaps due to the gradual penetration of AI technology in the company's business, many securities firms at home and abroad, including Morgan Stanley, Citigroup, UBS, GF, Huatai, Zhongtai, and Guojin, have also issued research reports that are optimistic about Ping An Health.

Among them, Guojin Securities believes that the company has a strong core competitiveness in medical services, and with strong AI capabilities, it will provide higher quality medical and health services, giving Ping An Health an "increase" rating, with a target price of 19.81 Hong Kong dollars in 2024.

Looking to the future, driven by the wave of digitalization, Ping An Health will continue to improve the quality and accessibility of medical services, and its upward valuation space may be opened from this.