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Against the backdrop of a slight decline in revenue, Ping An Health (01833.HK, stock name "Ping An Good Doctor") turned a profit in its semi-annual report. This is the first time the company has made a profit since its establishment. Is such profit sustainable?

This issue attracted attention at Ping An Health’s interim results conference held at noon on August 21.

Ping An Health’s semiannual report shows that the company achieved revenue of 2.093 billion yuan in the first half of this year, a year-on-year decrease of 5.8%; net profit during the period was 60.629 million yuan, and adjusted net profit was 89.739 million yuan.

A major reason behind the company's profitability is the significant reduction in administrative and sales expenses.

In the first half of this year, the company's overall expenses decreased by 36.9% year-on-year, and the expense rate decreased by 17.9 percentage points year-on-year. Among them, management expenses were 395 million yuan, a year-on-year decrease of 47.8%; sales and marketing expenses were 370 million yuan, a year-on-year decrease of 18.6%.

At the performance conference, Ping An Health CFO Zang Luoqi said that the company's revenue decline was mainly due to the delay in revenue recognition caused by changes in some business models in the first half of 2024, and the high base of revenue in the first half of 2023. In the first half of 2023, the company's low strategic synergy business was still in the adjustment stage, and one-off factors led to the concentrated performance of some businesses. The company achieved profitability. On the one hand, the strategic business revenue of the F end (comprehensive financial channels) and the B end (enterprise clients) increased by 19.7% year-on-year; on the other hand, by continuously optimizing resources and personnel allocation, strengthening production control, and continuously improving operational efficiency through informatization, digitalization and AI empowerment, the company's expense investment has dropped significantly.