Overview of Ping An Healthcare and Technology Company (PAGD)
Ping An Healthcare and Technology Company (PAGD), listed under 1833 HK, is a leading online healthcare service provider in China. The company operates a mobile platform that offers online consultations, hospital referrals, appointment services, health management, and wellness interactions. Despite a challenging performance in 2024, PAGD is well-positioned for strategic growth in the coming years, leveraging its synergies with Ping An Group.
Special Dividend and Mandatory General Offer
PAGD has proposed a special dividend of HK\$9.70 per share with a scrip option priced at HK\$6.12 per share. This dividend distribution, expected to be dispatched on 24 January 2025, will result in Ping An Group increasing its stake in PAGD from 39.41% to 52.74%. This triggers a mandatory general offer at HK\$6.12 per share. However, no plans for privatization have been announced, indicating Ping An’s confidence in PAGD’s long-term business prospects.
Financial Consolidation with Ping An Group
Upon completion of the scrip dividend issuance, PAGD will issue 1,042.6 million new shares, bringing its total share count to 2,161.4 million. As a result, PAGD will become an indirect non-wholly-owned subsidiary of Ping An Group. This consolidation will enable PAGD’s financial results to integrate into Ping An’s statements, reflecting a robust partnership and strategic alignment.
Stock Performance and Valuation
The mandatory general offer price of HK\$6.12 per share represents no premium over the scrip dividend option and a 2% discount to PAGD’s latest closing price. This offer is deemed unattractive for investors, as it mirrors a similar approach Ping An took with Lufax in 2024. Few investors accepted the Lufax offer, and Ping An’s stake in Lufax remained at 56.82%. For PAGD, the stake is expected to stabilize near 52.74%, with the company continuing to remain listed on the Hong Kong Stock Exchange.
Key Financial Highlights
| Year |
Net Turnover (RMBm) |
EBITDA (RMBm) |
Net Profit (RMBm) |
EPS (Fen) |
PE (x) |
| 2023 |
6,205.1 |
(1,007.3) |
(639.6) |
(81.1) |
N/A |
| 2024 |
4,673.6 |
(647.4) |
(334.9) |
(29.2) |
N/A |
| 2025F |
4,692.9 |
(76.0) |
145.6 |
19.6 |
30.0 |
| 2026F |
5,407.3 |
74.2 |
238.8 |
14.6 |
40.3 |
| 2027F |
6,186.5 |
252.0 |
378.1 |
21.6 |
27.3 |
Strategic Business Growth
PAGD’s strategic businesses, particularly in healthcare and senior care services, experienced a 19.7% year-on-year revenue growth in 1H24. However, the penetration rates for financial customers and corporate clients within Ping An’s ecosystem remain low at 11% and 3%, respectively. The proposed consolidation with Ping An is expected to accelerate penetration rates, driving a projected revenue CAGR of 17% between 2024 and 2026.
Profitability Outlook
After achieving its first net profit in 1H24, PAGD anticipates sustainable profitability and margin improvements in 2H24 and 2025. This is attributed to a growing contribution from high-margin businesses, maturation of new initiatives, and operational efficiencies driven by AI and other technologies. By 2026, PAGD aims to achieve a 35% gross margin and a double-digit net margin.
Risks and Recommendations
The key risks include sector policy changes, intensifying competition, economic uncertainties, and connected party transaction risks. Despite these challenges, UOB Kay Hian maintains a “BUY” recommendation for PAGD with a target price of HK\$8.50, reflecting a significant upside of 36%. The valuation is based on 3.1x 2025F P/S and 52.9x 2025F PE, supported by strong strategic growth momentum.
