Fangzhou Inc. (Fangzhou Jianke, HKEX: 06086) reported solid first-half 2026 results backed by continued platform expansion and fresh capital for artificial-intelligence initiatives.
Revenue and Profitability • Revenue rose 22.2% year on year to RMB1.82 billion, paced by a 26.8% jump in online retail pharmacy sales to RMB1.09 billion (60.0% of total). • Gross profit inched up 0.1% to RMB268.54 million; gross margin narrowed to 14.7% from 18.0% amid product-mix shifts and lower margins in comprehensive medical services (11.2% vs. 13.3%). • Profit for the period declined to RMB8.91 million from RMB12.48 million due to higher fair-value losses on investment assets and continued AI investment. • Adjusted net profit (non-HKFRS) improved 6.4% to RMB18.71 million, yielding a 1.0% margin (1H 2025: 1.2%).
Segment Performance • Online Retail Pharmacy: Revenue up 26.8% to RMB1.09 billion on user growth and product-mix optimisation. • Comprehensive Medical Services: Revenue up 6.1% to RMB379.07 million; margin pressure from expansion into lower-margin therapeutics. • Wholesale: Revenue surged 37.5% to RMB323.08 million, reflecting stronger supplier partnerships. • Customized Content & Marketing: Revenue fell 27.1% to RMB27.49 million on slower project deliveries.
Operational Metrics • Registered users reached 59.8 million (+13.2%), while average monthly active users climbed 23.1% to 14.7 million. • Physician network expanded to roughly 282,000, with 56.5% from Class III hospitals and 34.9% at associate-chief level or above. • Repeat-purchase rate among paying users held at 89.2%. • Inventory turnover remained lean at 23.1 days.
Cash Flow & Balance Sheet • Operating cash inflow totalled RMB21.07 million; cash and equivalents rose to RMB358.94 million (end-2025: RMB233.49 million). • Net assets nearly doubled to RMB296.46 million, boosted by a HK$144.30 million private placement completed in February 2026 at HK$3.32 per share. • Current ratio improved to 1.4 (end-2025: 1.2); gearing ratio edged down to 0.7 from 0.8.
Cost Discipline • Selling & distribution expenses grew 1.2% to RMB192.98 million but fell to 10.6% of revenue (1H 2025: 12.8%). • Administrative expenses declined 5.7% to RMB62.74 million, now 3.4% of revenue (1H 2025: 4.5%).
Strategic Developments • Completed “XingShi” LLM upgrades; AI now supports patient intake, clinical decision support and supply-chain optimisation. • Proceeds from February’s share placement earmarked mainly for AI R&D and commercial deployment, with 65.2% of funds yet to be utilised as at 30 June. • Expanded social health-insurance integration across Guangdong, enhancing accessibility for chronic-disease patients.
Capital Management & Outlook Initiatives • No interim dividend declared. • Management targets accelerated AI commercialisation, broader MaaS chronic-disease pathways and strengthened pharma, tech and insurer partnerships in the second half.
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