Yiducloud Submitted IPO Application with Its Revenue Grew at A Three-Digit Rate for Three Consecutive Years


Recently, YiduCloud, a leading medical AI company, submitted a listing application to the Hong Kong Stock Exchange. The business system is becoming more mature, and the gross profit index is increasing… The YiduCloud prospectus is like a “magnifying glass”. While showing the bottom of entrepreneurs, it also reflects the current situation of the booming domestic medical AI and big data industries.

The prospectus shows that in the past three fiscal years, YiduCloud’s revenue and gross profit have shown substantial growth; the self-developed data intelligence infrastructure YiduCore “snowball effect” has begun to appear, and the business system based on it has begun to take shape Scale; the monetization ability of big data platforms and solutions has been concentrated in the 2020 fiscal year; at the same time, the life science solutions, health management platforms and solutions that it has cultivated in recent years have gradually shown a trend of increasing profitability.

So, how does YiduCloud build technical barriers and explore business models when facing the cross-border field of “medical + technology”? The arterial network is analyzed in YiduCloud’s prospectus.

 Promoting the marriage of medical and technology under new opportunities

As we all know, with the intensification of population aging, the problem of imbalance in the medical supply chain has become more prominent, and the medical industry is facing greater supply-side restrictions. Public information shows that China may have nearly 400 million elderly people in 2035, and there is also the possibility that many people will become poor due to illness and return to poverty due to illness. Digital technology is widely believed to be the key to breaking the imbalance between medical supply and demand. Not only that, the past ten years has been a period of rapid development of domestic medical informatization, and massive medical data has been generated from this. Under the general trend of precision medicine development, medical data storage is scattered and the degree of structure is low, which has become its value bottleneck.

In this context, the use of cutting-edge technology to mine the scientific research and clinical value of medical data seems urgent. Therefore, with the promotion of artificial intelligence and big data technology in the medical and health field, a group of medical technology companies based on their own technical strength and working with key players in the industry to develop innovative solutions have emerged. In 2014, YiduCloud was established and became an important member of the industry pioneers.

The growth of emerging industries is inseparable from the nourishment of policy soil.

Since the State Council issued the “Guiding Opinions on Promoting and Regulating the Application and Development of Big Data in Health Care” in 2016, the state has repeatedly implemented important policies such as the “Healthy China 2030” Planning Outline and the “13th Five-Year” Health and Health Plan. Mentioned to develop the medical big data industry. In 2018, the National Health and Medical Big Data Standards, Safety and Service Management Measures (Trial) issued by the National Health Commission provides a standard basis for industrial development.

Under the call of the state, various localities have successively introduced corresponding regulations and policies, and cooperated with medical big data companies to promote technology application and development.

Market demand and policy support make the medical AI industry usher in a good time. According to calculations in the Ernst & Young report, the market size of medical big data solutions has grown rapidly at a compound growth rate of 54.2% in the past five years. The market size of the entire market in 2015 was less than 2 billion, and by 2019 it has successfully exceeded the 10 billion mark.

The Ernst & Young report also shows that in 2015, the penetration rate of the big data solution market for hospitals and governments was only 5%, and by 2019 it has exceeded 15%. Ernst & Young predicts that this data will exceed 30% around 2024.

It is under this trend that YiduCloud promotes the marriage of medical and technology, and then realizes its leap from start-up to entering the secondary market.

So, how will the results of the combination of medical treatment and data come to fruition? Artery Network found that YiduCloud has adopted a development path from “data foundation” to “data application”. In the early days of YiduCloud’s establishment, through cooperation with hospitals and the government, with the independent research and development of data intelligence infrastructure YiduCore, the “medical brain”, to consolidate the technical foundation, and then to empower key players in the industry, gradually find application scenarios and conduct business化.

Ecosystem empowered by YiduCore

The key to YiduCloud’s core competitiveness is its self-developed data intelligence infrastructure YiduCore. YiduCore has efficient medical data processing technology capabilities. Authorized medical data is further standardized and structured using YiduCore’s technology so that computers can understand, process, and analyze, that is, make “unusable” medical data “easy.” The prospectus also shows that during the entire data processing process, YiduCloud has also introduced a strict medical data compliance and quality control system to ensure that the final medical data quality control meets national and industry standards.

After the medical data is “easy to use”, the analysis process naturally becomes smoother. YiduCloud continuously generates insights and knowledge in the medical and health industry through statistical tools such as knowledge graphs, symbolic knowledge reasoning models, deep learning, and AI technology. And as customers frequently use YiduCore-enabled solutions, YiduCore can continuously generate these insights and knowledge, which can further empower more customers, making the system form a virtuous circle.

YiduCore technology architecture

After several years of development, YiduCore has formed a complete multi-layer technical architecture, and can provide diversified solutions for each role in the medical and health industry chain, forming a platform and solution based on big data, life science solutions, health A business system with three major sectors as the management platform and solutions. Different business sectors face different roles in the medical and health industry, and the three major sectors have made their own efforts to accelerate the deployment of the medical and health industry chain.

Big data platforms and solutions are the largest branch of YiduCloud, providing services to hospitals and other medical institutions, regulatory agencies and policy makers. The platform conducts in-depth processing and analysis of large-scale multi-source heterogeneous medical data, establishes real-world disease domain models, and helps medical research, medical management, and government public decision-making.

Life science solutions refer to solutions provided to practitioners in the life sciences industry to help these practitioners reduce the time and cost of clinical development, and at the same time increase clinical and market success rates.

The health management platform and solutions are the latest divisions of YiduCloud with huge potential. In this division, YiduCloud operates a research-driven personal health management platform that uses digital means to help doctors better manage patients, while providing patients with personalized care services.

So far, the three major business segments of YiduCloud have successfully covered the six major roles in the medical and health industry, namely the government, hospitals, pharmaceutical companies, insurance institutions, doctors, patients, etc., and gradually build an industrial ecosystem.

In general, YiduCloud starts from the hospital to build the core technical infrastructure, and then uses this as the technical foundation to empower other links in the medical and health field. Is this business model feasible? Let us take a look at YiduCloud’s revenue.

Partial financial data

From the financial data disclosed by YiduCloud, it can be clearly seen that in the 2018-2020 fiscal year, YiduCloud’s revenue has achieved rapid growth, from 22.727 million in fiscal year 2018 to approximately 558 million yuan in fiscal year 2020, a growth rate of up to 3%. In the past three years, the growth rate has reached 348.9% and 447.1% respectively. At the same time, with the gradual maturity of the business system, YiduCloud has got rid of the pressure on gross profit in FY2018 and turned negative to positive. By FY2020, it has achieved a gross profit of approximately 147 million, with a gross profit margin of 26.3%.

At the same time, losses are further narrowing. The adjusted net loss was reduced from 419 million yuan in fiscal year 2019 to 323 million yuan in fiscal year 2020, a decrease of approximately 22.9%.

Obviously, the 2020 fiscal year has made a good start for YiduCloud’s commercial expansion.

Revenue structure

Specific to each business segment, big data platforms and solutions will remain the largest business segment of YiduCloud in fiscal 2020, accounting for 66.6% of total revenue. Although other business segments such as life science solutions, health management platforms and solutions have also achieved rapid growth, compared with their core business volume and market demand, these other business segments have huge development potential.

Gross profit structure

Regarding gross profit margin, YiduCloud also admitted in the prospectus that in the early stages of development, the company focused on consolidating YiduCore. During the period, the business was mainly to build data intelligence infrastructure for the hospital, and the overall gross profit was once under pressure. But in this process, YiduCloud has gained profound insights and knowledge from YiduCore, which are used for solution development in a wider range of application scenarios. With the expansion of the customer base and the maturity of the solutions, the profitability of YiduCloud solutions has been significantly improved.

In other words, in the early stage of development, YiduCloud provided solutions for hospitals and the government in a cost-effective manner, with the aim of polishing its YiduCore products and cultivating the market. The profitability breakthrough achieved in fiscal year 2020 is an inevitable result of the maturity of YiduCloud’s solution.

In other business sectors, life science solutions are expected to achieve better gross profit performance. In the early stage, the company’s reputation needs to be cultivated, and its value has not yet been verified. Coupled with the expenditure of team training, gross profit performance will be temporarily under pressure; but as the company’s advantages in artificial intelligence and big data are further highlighted, the reputation is gradually improved and value is gained It is verified that the gross profit situation will gradually improve. The data in the prospectus has already reflected: In fiscal year 2020, the gross profit margin of this solution has risen from 2.1% in 2018 to 13.4%. Therefore, Artery Network believes that the future gross profit level of life science solutions will continue to rise as its solutions become more mature.

For the future changes in the revenue structure of YiduCloud’s various sectors, it can be analyzed from both short-term and long-term perspectives.

In the short term, the current domestic medical big data industry is still in the early stages of development. Although it has a certain penetration rate in hospitals and governments, there is still huge room for improvement. Therefore, it is expected that the development focus of YiduCloud in the next few years will continue to focus on hospitals and government customers, until the penetration rate of the medical big data industry reaches the threshold between the two.

In the long run, the market scale of other solutions such as life science solutions and health management platforms guarantees YiduCloud’s future market potential. At the same time, YiduCloud’s penetration rate in hospitals and government customers also guarantees YiduCloud’s competitiveness in medical data and solutions.

The next strategy should be “internal and external”

Medical care is a special undertaking that is related to people’s livelihood. We must adhere to a long-term development strategy. From top designers to key players in the industry, we must promote the progress of the industry. The main purpose of YiduCloud’s application for listing this time is to obtain more funds to support its next stage of development-strengthening technology and building an ecosystem.

In the next stage of development, YiduCloud plans to “consolidate internally and externally” to continuously consolidate technical barriers internally and around infrastructure, strengthen external marketing, and conduct investment and mergers and acquisitions.

Future direction

Specifically, financing funds will be mainly allocated to three aspects, namely: enhancing the company’s core capabilities, further business expansion and enriching the ecosystem. Its strategic measures will also be developed around these three points.

In terms of enhancing core capabilities, YiduCloud will continue to strengthen its data processing capabilities and increase continuous investment in YiduCore infrastructure and technical iterations.

For example, continue to strengthen team strength, attract and retain top talents in the field of artificial intelligence and data science; actively cooperate with the world’s leading technology companies, universities and research institutions to accelerate technological innovation.

YiduCloud also plans to continue to cooperate with top researchers in universities and hospitals to deepen its understanding of various disease fields and enrich use cases. This improvement in understanding and use cases will also further expand YiduCloud’s competitive advantage and promote the profit growth of its solutions.

In terms of business expansion, after a clear business model, YiduCloud needs to expand its “competitive results”, while grasping the existing customer base, retaining more customers with high-quality solutions, and continuing to improve its ability to connect with customers. , Expand the coverage of customer groups. YiduCloud will also enter the international market, and it is expected that the first stage of internationalization will be the Southeast Asian market.

In terms of enriching the ecosystem, YiduCloud will continue to enrich its ecosystem by looking for ways of strategic partnerships, investments, alliances, mergers and acquisitions as a supplement to its endogenous growth strategy.

2020, for YiduCloud, is obviously a memorable year. During this year, YiduCloud achieved business expansion, market expansion, and more importantly, achieved a breakthrough in revenue and profit. If the listing is successful this time, it will also bring about expansion in the capital market.

The application and development of medical big data is an important part of the “Healthy China 2030” strategy, and policy support will continue to play a key role. However, there is no standard template for medical big data applications, and more practical explorations are needed for both technological research and development or commercialization. As a pathfinder, YiduCloud’s progress in product research and development, market promotion and capital market performance has naturally attracted the attention of the industry. Success in any link can also enhance industry confidence.


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