The consolidation of Ping An Group is beneficial for the implementation of a managed healthcare business model, and Dahua's continued strength is expected to boost the performance of Ping An Health (01833).

As the flagship of Ping An Group's medical and elderly care ecosystem, Ping An Health (01833) is an important part of Ping An Group's management-based medical model. Recently, Ping An Group plans to acquire Ping An Health shares through a share-based cash offer, increasing its stake from 39.41% to 52.74%. Achieving financial consolidation indicates that the future relationship and coordination between Ping An Health and Ping An Group will be closer, and for Ping An Health, this change will be more conducive to the implementation of the management-based medical business model. It is understood that as a sample of China's unique management-based medical model, Ping An Health, with its rich resources in F-end commercial insurance/finance, B-end enterprise and other healthcare services payment resources, extensive service provider network, comprehensive service standards system, and strong Ping An ecosystem resources, represents the payment side, integrates suppliers, and has become a professional, comprehensive, high-quality, one-stop provider of medical, health, and elderly care management services. In the field of medical and health, management-based medical care is an important model for optimizing the allocation of medical resources and controlling the growth of medical expenses, which has received much attention in recent years. As one of the earliest domestic enterprises exploring the localization of management-based medical care in China, Ping An Health has continuously worked hard and achieved significant results in recent years. It is widely believed in the industry that under the management-based medical model, insurance institutions play a role in prevention, diagnosis, chronic disease management, rehabilitation, and other aspects of the lifecycle. This not only reduces the incidence of diseases and insurance payouts but also guides the allocation of healthcare resources to shift from a "disease-centered" approach to a "health-centered" approach. The family doctor membership system has always been the unique core competitiveness of Ping An Health. In June last year, Ping An Insurance announced the official upgrade of the family doctor service brand "Ping An Home Doctor" and launched the 11312 one-stop proactive health management service system. The upgraded "Ping An Home Doctor" further enhances and optimizes its proactive, end-to-end service capabilities, and collaborates efficiently and synergistically with Ping An Group. For example, last year, Ping An Home Doctor and Ping An Life jointly created a good medical-insurance collaborative business model, using a family doctor as a service entry point to provide high-quality medical and health services to the sixth-level customer base of life insurance clients. It is understood that by the first half of 2024, the number of Ping An Health Home Doctor membership rights users has exceeded 14 million, with an average annual utilization frequency exceeding 4 times, an 8% increase from the end of 2023, and a 100% coverage rate of proactive services. As the interaction between medical insurance continues to deepen, the company's agents across the country actively promote home doctor services, leveraging the insurance+service model to drive the main business. The deepening effect of the company's management-based medical care model is expected to be further enhanced. On January 10th, Dahua Jixian released a research report stating that Ping An Group's choice to use shares instead of cash and trigger a mandatory comprehensive tender offer is unlikely to be accepted by investors, but Ping An Insurance's increasing stake will benefit Ping An Health in expanding strategic business and enhancing synergies. Dahua Jixian believes that the distribution of special dividends by the company demonstrates confidence in achieving sustainable profitability in the coming years. They also expect that from 2024 to 2026, the company's revenue and adjusted net profit compound annual growth rates will reach 14.8% and 48.1%, respectively. The long-term possibility of achieving a gross profit margin of 35% and a double-digit net profit margin, coupled with the upgraded strategy, is conducive to long-term growth. In the past month since Ping An Health announced the dividend, the company's stock price has been hovering around 6.2-7 Hong Kong dollars, with the central bottom position almost confirmed, highlighting investment value. With further enhancement of the company's synergies, the release of Ping An Health's future fundamental value is worth looking forward to.