PA GOODDOCTOR's dramatic stock surge reflects market optimism about policy benefits and improving performance. However, despite enhanced profitability, the earnings model's reliance on cost optimization remains fragile. Revenue recovery still needs further strengthening, particularly given the company's heavy dependence on Ping An Group for user traffic, which undermines its independent growth potential.

Recently, Ping An Healthcare and Technology Company Limited (Stock Name: PA GOODDOCTOR, Stock Code: 01833.HK) released its unaudited interim results for 2025. The announcement showed operating revenue of 25.02 billion yuan, up 19.5% year-on-year, and net profit attributable to shareholders of 135 million yuan, surging 136.8% year-on-year.

Despite the encouraging financial results, PA GOODDOCTOR's stock price opened significantly lower the day after the announcement (August 20), falling 5.33% with intraday losses exceeding 10%. The stock ultimately closed at HK$15.74, down 6.81%, indicating market disagreement over the company's performance as some investors took profits.

However, PA GOODDOCTOR's stock demonstrated strong recovery momentum. On August 21, the stock price rose another 11.37%, reaching a three-year high. Since the stage low on September 9, 2024, PA GOODDOCTOR's stock has gained 4.71 times. Currently, the company's price-to-earnings ratio (PE, TTM) stands at 217.40, significantly higher than the Hong Kong stock market's industry median of 3.84 times.

**Cost Reduction Drives Profitability Improvement**

PA GOODDOCTOR serves as a core internet healthcare platform under China Ping An Group, registered in Hong Kong in 2017 and successfully listed on the Hong Kong Stock Exchange main board in 2018. The company is committed to building a comprehensive healthcare service ecosystem, with business covering online and offline medical services, health management, pharmaceutical delivery, and other areas.

From a revenue perspective, PA GOODDOCTOR's overall revenue has been in a volatile downward trend but has recently begun recovering. The company reached its revenue peak of 73.34 billion yuan in 2021, but subsequently declined for two consecutive years, dropping to 46.74 billion yuan in 2023, down 24.13% year-on-year. In 2024, revenue slightly recovered to 48.08 billion yuan, up 2.88% year-on-year. In the first half of 2025, revenue growth further expanded to 19.52%, indicating the company's revenue is gradually recovering, with signs of recovery becoming increasingly evident after the adjustment period.

Regarding profitability, PA GOODDOCTOR experienced continuous losses from 2020 to 2023, though the loss amounts decreased annually. In 2024, the company successfully turned profitable, achieving net profit attributable to shareholders of 81 million yuan, up 125.24% year-on-year. In the first half of 2025, net profit attributable to shareholders further increased to 134 million yuan, up 136.84% year-on-year, showing continued improvement in profitability.

However, the company's profitability improvement mainly relies on cost compression. From an expense perspective, the company's period expense ratio has shown an overall declining trend. Management expense ratio fluctuated most significantly, reaching a peak of 31.69% in 2023, but due to staff optimization and reduced personnel-related expenses in 2024, the management expense ratio dropped significantly to 19.34% and further decreased to 14.86% in the first half of 2025, with organizational efficiency continuously improving. Sales expense ratio has been declining since reaching a peak of 23.95% in 2021, dropping to 15.23% in the first half of 2025. Financial expense ratio has remained stable at around -3%, steadily contributing to profitability improvement.

Regarding personnel structure, PA GOODDOCTOR's total employee count has decreased dramatically, from 4,226 people in 2020 to 1,563 people in 2024, a decline of 63.01%. During the same period, average compensation per employee in 2024 was 563,100 yuan, down nearly 30% from 802,300 yuan in 2023. However, average executive compensation increased significantly, reaching 3.5547 million yuan in 2024, up 67.26% year-on-year. Clearly, while conducting large-scale staff optimization, the company has maintained incentives for senior management.

**Business Revenue Dependent on Parent Company Traffic**

Meanwhile, the company's ownership structure has also been changing, with Ping An Group further strengthening its control over PA GOODDOCTOR. On November 14, 2024, PA GOODDOCTOR announced it would distribute a special dividend of HK$9.7 per share to all shareholders through share premium, totaling HK$10.85 billion, while the company's market value was only HK$16.38 billion at the time, with dividend amounts exceeding 60% of market value. According to the dividend scheme, investors could choose cash dividends or scrip dividends.

In February 2025, Ping An Group increased its shareholding from 39.41% to 53.71% through scrip dividends, achieving absolute control of the company at zero cash cost and incorporating PA GOODDOCTOR into its financial statements. This move was essentially internal capital allocation within the group, but it also resulted in minority shareholders passively bearing the risk of equity dilution without receiving cash returns.

In terms of user structure, PA GOODDOCTOR's paying users mainly depend on Ping An Group's F-end customers (comprehensive financial customers). In 2024, the company had 31.4 million paying users, down 2.9% year-on-year. Among these, F-end users numbered 24.8 million, accounting for 81.42%. Although F-end user numbers decreased by 5.7% year-on-year due to business model adjustments, revenue from these channels still grew to 2.417 billion yuan, up 9.6% year-on-year, relying on group channels. In the first half of 2025, with deepening collaboration between medical insurance and insurance, F-end users recovered to 24 million, surging 35.1% year-on-year. In contrast, B-end users (corporate customers) remain relatively small in scale. Although growth rates are faster, the limited base means revenue growth sustainability remains uncertain.

Additionally, on July 10, 2025, PA GOODDOCTOR underwent executive changes. Wu Jun resigned as President and Executive Director, with Ms. Zang Luoqi taking over as Executive Director. Zang Luoqi has served as the company's CFO and Executive Vice President since 2022, possessing extensive financial management and operational experience. Her professional background spans multinational companies and internet firms including PwC, Deloitte, InterContinental Hotels Group, Caocao Mobility, and Didi Chuxing. This senior management adjustment coincides with a critical period of company transformation.

Overall, PA GOODDOCTOR's significant stock price surge reflects market optimism about policy benefits and performance improvements. However, despite improved profitability, the earnings model's reliance on cost optimization remains fragile. The foundation for revenue recovery needs further strengthening, particularly given the company's heavy dependence on Ping An Group for traffic, which undermines its independent growth potential. Looking ahead, whether the company can develop new growth curves through B-end expansion and proprietary traffic cultivation will be key to determining its long-term growth and valuation potential.