FAST NEWS: Dingdang Health forecasts 70% narrowing of book loss

The latest: Digital retail pharmacy Dingdang Health Technology Group Ltd. (9886.HK) said Wednesday it expects its net loss for the first half of this year to narrow by more than 70%, compared with 586 million yuan ($81.3 million) in the same period last year.

Looking up: Dingdang’s performance may surprise investors as several companies listed within a year have recently reported a turnaround in profits to losses or widening of losses.

Take Note: The main reasons for the narrowing of the loss were the discontinuation of the inclusion of preference shares in the fair-value loss, the absence of listing fees and a reduction in share-based payments, which had little relevance to actual operations.

Digging Deeper: Founded in 2014 and listed on the Hong Kong Stock Exchange in September last year, Dingdang’s main business is to provide instant medical and healthcare products or services to users through integrated online and offline operations. It ranked third in the industry in 2021, trailing only rivals JD Health (6618.HK) and Alibaba Health (0241.HK), which are both backed by China’s top two e-commerce giants. But the company is quite distant in its third-place position, with only 1% of the market, far behind the 10% and 6.5%, respectively, for the other two. Over the past five years, while its revenue has risen rapidly, it has failed to make a profit like most healthcare platforms, with losses increasing incrementally from 103 million yuan in 2018 to 2.83 billion yuan last year.

Market Reaction: Dingdang’s shares rose – and then fell – on Thursday morning, closing down 0.4% at HK$2.78 by the midday break. The stock has lost 76.8% of its value from its IPO price of HK$12.

Translation by A. Au

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