From Promise to Fulfillment: Long-termism in Ping An Good Doctor's Q1 Earnings Report

On April 23, after the market close, Ping An Good Doctor released a voluntary Q1 disclosure report of only two pages. Though brief, it contained sufficient information to set the tone.

As of the end of March 2026, the number of paying corporate clients served by Ping An Good Doctor over the past 12 months exceeded 7,500, representing an 89% year-over-year increase. During the same period, the company’s net profit increased by 138.4% year-over-year, with adjusted net profit rising by 45.8%. The quarterly usage of AI doctors surpassed 5.6 million users. After refining its self-sustaining model in 2025, the pace of Q1 fulfillment exceeded market expectations.

The results for Q1 are solid and provide a foundation for longer-term growth stories, which can be traced back to the financial base established in the 2025 annual report. One of the most critical factors is the establishment of the company’s 'self-sustaining' capabilities.

In terms of specific figures, 'self-sustaining' refers to the company's operating profit turning positive for the first time in 2025, surging from a loss of 170 million yuan in 2024 to a profit of 100 million yuan—a positive swing of 270 million yuan. Meanwhile, net operating cash flow amounted to 451 million yuan, up 354% year-over-year.Not only are there profits on the books, but the business itself is also continuously generating real cash.。

Another notable mention is the AI line. The annual report disclosed for the first time that AI contributed 4.5% to the company’s gross profit and committed to long-term tracking. In Q1, the accuracy rate of the AI-assisted MDT (multi-disciplinary consultation) platform solution increased from nearly 90% to approximately 95%. This is the first time AI has entered the financial statements in a quantifiable way, making it one of the few companies in the current H-share medical AI sector to achieve this at the financial level.

These Ping An Good Doctorshas been telling the story of a 'Chinese version of HMO (managed healthcare)', and this story is now in the process of gradual implementation.。

CEO He Mingke once condensed the company’s key words for 2025 into eight characters: 'Model validation, high-value growth.' The rhythm of the Q1 data serves as further confirmation of these eight characters. According to his own explanation, the 'value' in 'high-value growth' reflects more of the company’s financial plus healthcare attributes, with a stronger focus on results. Q1 marks the beginning of this curve, while the following quarters will be the true test of this logic.

01Building self-sustaining capabilities

Behind the several core figures disclosed in the Q1 announcement, there are no details about the fee structure, cash flow, or funding base. The real financial basis that can qualitatively assess the shift from turning losses into sustainable profitability lies in the 2025 annual report released one month earlier (March 24).

1.8%, that small figure easily overlooked in the annual report: the full-year operating profit margin. However, what it represents is much more significant than the phrase 'turning losses into profits'.

Most investors are familiar with the 'turnaround from losses to profits.' The company had already achieved this at the accounting level in the first half of 2024, which included contributions from non-operating items.The turnaround in 2025 occurred at the operating profit level, meaning the profitability of the company's core business itself.。

Looking at the full-year financial report, this distinction becomes even clearer. In 2025, the company’s total revenue reached 5.468 billion yuan, a year-on-year increase of 13.7%; net profit attributable to shareholders was 379.5 million yuan, a year-on-year increase of 366.1%, and adjusted net profit was 414 million yuan, a year-on-year increase of 161.3%. This growth pace ranks among the top tier within the H-share internet healthcare sector.

In other words, although the operating profit margin of 1.8% is slim, the significance of turning 'slightly profitable' is qualitative rather than quantitative: the company's main operations can now generate positive profits, and the sustainability of operations no longer solely depends on financing or one-time gains.

When it comes to the term 'self-sustaining' in business operations, CEO He Mingke has a more vivid description. In external interviews, he summarized the key achievement of 2025 as 'completing the service system in a relatively short period': securing contracts does not equate to operational success; the biggest bottleneck lies in whether the company can deliver on its promised services. Without a complete service system, the money secured upfront remains merely a paper promise that cannot be reflected in the income statement.

In other words, the 270 million yuan positive jump in operating profit in 2025 resulted from completing the service system and converting those paper promises into actual entries on the income statement. On the income statement, this jump came from two sources:The incremental boost from improved gross margins and cost-saving measures reducing various expense ratios. Though these two factors followed different trajectories in 2025, together they represent the most direct financial source of the operating profit turning positive.

First, looking at gross profit, the company's gross profit increased across three fronts simultaneously. The largest contribution came from AI: in 2025, AI added approximately 80 million yuan directly to the gross profit, accounting for 4.5% of the annual gross profit of 1.772 billion yuan, primarily saving on doctors' labor costs. Next, there was an increase in the proportion of high-margin platform-type and supplier value-added service revenues, contributing an additional cumulative 6.2% to the gross profit. Lastly, as a payer for commercial insurance and corporate health management, the company benefited from rising procurement scale, negotiating lower prices for goods and services, which also contributed incrementally to the gross profit.

On the expense side, the company’s total expense ratio was 30.6% in 2025, down 4.6% year-on-year, marking the third consecutive year of decline. Sales, general, and R&D expenses each followed different trends: sales expenses actually increased year-on-year, with over 40 million yuan additionally invested in expanding corporate health management clients and services such as on-site enterprise support. However, due to improved channel customer acquisition efficiency and high client renewal rates, the sales expense ratio decreased by 0.7% year-on-year.

Additionally, management expenses fell by 9.1% year-on-year, and the expense ratio dropped by 3.9% year-on-year, driven by deeper digital operational management and AI's transformation of front, middle, and back-office business processes; R&D expenses were 348 million yuan, a year-on-year decrease of 8.6%, with the R&D expense ratio remaining at a relatively high level within the industry.

Sales are increasing investment while management and R&D are pulling back, a cost structure that is not very common among Hong Kong-listed internet companies.。

Supported by multiple financial changes, the improvement on the cash side has been quite remarkable. In 2024, the company's net operating cash inflow was less than 100 million yuan, but in 2025 it jumped directly to 4.51 billion yuan, nearly 4.6 times that of 2024. This means that the company is not only turning positive on paper, but its operations have already started generating real cash consistently.

Moreover, there is still 9.63 billion yuan in available funds (including cash, term deposits, and wealth management allocations) on the books, along with a base of nearly 35 million paying users. The step from 'turning losses into profits' to 'generating cash flow' has been firmly achieved in 2025.

02 The engine of high-value growth

Generating cash flow is a step that has been solidified in 2025, but what will determine the company’s future trajectory are the four words CEO Mingke He set for this year: 'high-value growth.'

In our view, these four words can be explained more directly in terms of operations:The two core businesses—commercial insurance collaboration and corporate health management—both achieved double-digit growth in 2025, further propelled by AI and policy-driven industry-level tailwinds.。

Among the two core businesses, commercial insurance collaboration was established earlier. In 2025, it recorded revenue of 3.296 billion yuan, growing 11.0% year-on-year, roughly in line with Ping An Group's overall financial performance. For an existing business closely tied to the broader financial market, 11% growth is not low. However, what truly determines the company’s future potential lies in the corporate health management business we'll discuss next.

The annual report disclosed three sets of customer stickiness data: Customers entitled to home-based pension benefits saw their average new Ping An Life Insurance policies increase by 5.2 times; customers entitled to medical and health benefits experienced a 1.5-fold increase in average new life insurance policies; among Ping An Life Insurance clients who activated or fulfilled the company's healthcare services, the proportion of new life insurance policies (including new purchases and additional coverage) increased by over 15% within three months. This metric, referred to as the M3 conversion rate in the company’s internal KPI system, reflects data from January to November 2025.

He Mingke summarized this logic of empowering the group with an internal term: 'P Capability Cubed,' where the three Ps stand for Push (sales power), Pull (product strength), and Preserve (customer stickiness and value). Beneath the stable appearance of commercial insurance synergy, a qualitative change has already begun.

The other core business line, corporate health management, operates at a completely different pace.Both in 2025 and Q1, it was the fastest-growing business line within the company.。

Full-year revenue reached 1.306 billion yuan, a year-on-year increase of 40.6%, raising its share of total company revenue from nearly 20% to almost 25% within a year; GMV hit 3.63 billion yuan; the number of paying corporate clients surged to 6,700, marking an 83.1% increase year-on-year. Entering 2026, the growth curve continued to accelerate, with Q1 reports showing that over 7,500 paying corporate clients were served in the past 12 months as of the end of March, representing an 89% year-on-year growth, further amplifying last year's rate.

Notably, there is an apparent discrepancy: Q1 revenue grew by only 9.1% year-on-year, vastly diverging from the 89% growth in paying corporate clients. During the earnings call, the CEO likened this dynamic to a waterfall funnel, stating, 'Business growth is like a waterfall funnel—starting with the amount of fund mandates, which represents payment capacity, followed by GMV as sales, and finally profits.' According to him, the realization of corporate health management revenue—from mandate amounts, GMV, revenue to profit—entails natural time lags.

In other words,The accelerated influx of clients is akin to water upstream, while revenue and profit are downstream, requiring time to fill each level progressively.。

In 2026, Ping An Good Doctor's newly expanded offline infrastructure, 'Ping An Circles,' aims to expand the downstream service network: the flagship store in Qingdao opened in January, and currently, 129 circles have been completed, with a target of reaching 500 circles by June, covering 10,000 stores and serving 300 to 400 key enterprises. The rise of corporate health management revenue by 4.6 percentage points signals a clear shift in the company’s business structure—it no longer solely relies on commercial insurance synergy, as corporate health management has grown from a supporting role into the second main pillar.

Beyond the two core businesses, AI also began generating standalone financial results in 2025: AI contributed 4.5% of the company’s gross profit, directly adding nearly 80 million yuan annually—a metric disclosed and committed to long-term tracking for the first time by the company; momentum remained strong in Q1, with quarterly usage of AI doctors surpassing 5.6 million people. In contrast,AI at Ping An Good Doctor is no longer just a PR story but a hard financial item that must enter the books.。

Why can AI achieve efficiency at Ping An Good Doctor that distinguishes it from general AI applications? Behind this lies exclusive data assets enabled by the medical-insurance data loop: the Ping An MedBroadcom healthcare large model, combined with five specialized vertical healthcare models, four major medical databases from the Ping An Group (individual-enterprise information, hospitals-doctors, disease catalogs, pharmaceuticals-medical devices), and the company’s base of nearly 1.5 billion consultations.

He Mingke was more straightforward in the interview: "We're not looking for nails with a hammer; we're looking for opportunities with money in hand." Essentially, it's about securing payment capability first and then developing use cases, rather than creating technology first and then searching for demand—a detour that most general AI applications have taken. The figure of 4.5% may seem small now, but its significance lies not in the number itself but in the fact that the company has proactively given the secondary market a new, trackable valuation anchor.

03Conclusion

For a company deeply involved in China's healthcare system,Policy-related variables are among the most critical external environmental factors.。

AI inclusion in medical insurance is accelerating, with AI-assisted diagnosis being included in insurance coverage for the first time in November 2024. By February 2026, over 15 provinces nationwide had been covered. Online primary diagnosis rights were expanded when Beijing launched its online primary consultation pilot program in January 2026, breaking previous restrictions that allowed only follow-up consultations. On the commercial insurance payment side, the dual-track system of innovative drug lists for commercial insurance and basic medical insurance was implemented simultaneously for the first time in January 2026. Combined with the new health insurance regulations issued by the National Financial Regulatory Authority in September 2025, the expansion path for the entire commercial insurance payment system has become clear.

With policy openings and the company’s business structure adjustments, these two developments together have turned Ping An Good Doctor’s narrative of a 'Chinese version of managed care' from a strategic slogan into quantifiable operational progress. In simple terms, managed care integrates insurance payers and medical service providers within one system, making medical efficiency and cost control both measurable and trackable—this is the core of Ping An Good Doctor’s business model of 'representing payers and integrating suppliers.'

For the secondary market, the only change truly worth tracking is the shift in valuation anchors. Ping An Good Doctor is transitioning from its old identity as an 'internet healthcare stock' to a new identity as a 'managed care plus technology platform.' Within this new framework, three key curves are worth monitoring: AI’s contribution to gross profit margin, the proportion of corporate health management revenue, and operating profit margins. This represents a fundamental revaluation at the coordinate-system level, not just a revision of quarterly data.

The road ahead is long and full of potential. Q1 earnings disclosure is merely the first set of real-time markers within this new coordinate system.。 $PING AN (02318.HK)$$PA GOODDOCTOR (01833.HK)$$Ping An Insurance (601318.SH)$

Disclaimer: This article is intended solely for learning and communication purposes and does not constitute investment advice.

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