Amazon's sales performance changed dramatically, but it still won orders worth over 1 billion!

In the post-epidemic era, the once lucrative medical sales have begun to fade, with revenue and net profit falling sharply. However, surprisingly, Jiuan Medical was able to win a large order of over 1 billion again.

Jiuan Medical won a 1.2 billion yuan order! Its performance in the first half of the year suffered a "Waterloo"

Since July this year , the number of new coronavirus cases and hospitalizations in the United States has been rising.

In September, the US government announced that it would resume the free application program for COVID-19 testing reagents and restart the online ordering service. At the same time, it also spent $600 million to purchase testing kits locally, purchasing test kits from 12 local companies in the United States, requiring them to be made in the United States.

iHealth's US subsidiary, iHealth, became one of the companies that won the bid with a contract value of US$167 million (approximately RMB 1.22 billion), successfully winning a large order of 1.2 billion yuan. The contract execution period is expected to be 18 months.

Starting September 25, American families can apply for free testing reagents on a dedicated website.

iHealth, a best-seller on Amazon , was founded in 1995 and listed on the Shenzhen SME Board in 2010. In the same year, it created its own innovative brand "iHealth" during its transformation to mobile Internet.

The company mainly focuses on the research and development, production and sales of medical products such as thermometers and sphygmomanometers. Its main products include electronic medical equipment such as electronic sphygmomanometers, blood glucose meters, forehead thermometers, blood oximeters, and IVD in vitro diagnostic products.

In 2022, iHealth's performance maintained a high growth trend.

According to the financial report data released by iHealth, the company achieved operating income of approximately RMB 26.315 billion in 2022, an increase of 997.80% over the same period last year; net profit attributable to shareholders of listed companies was approximately RMB 16.030 billion, an increase of 1664.19% over the same period last year.

The main reason for the surge in iHealth's performance was the substantial increase in sales of COVID-19 antigen test kits. Amid the recurring global epidemic, sales of epidemic prevention products have remained high, especially in the United States, where home testing is popular, and demand for COVID-19 antigen test kits has increased significantly.

In its 2022 semi-annual report, iHealth's COVID-19 test kit products contributed 99.08% of the company's revenue in the first half of the year.

Moreover, in 2022, iHealth won several large orders worth hundreds of millions of dollars in succession.

On January 10, 2022, iHealth and the New York State Department of Health signed a $120 million test kit sales contract.

On January 13, 2022, the U.S. Department of Health and Human Services, represented by the ACC, purchased 250 million test kits from iHealth. On January 26, ACC added 104 million.

Subsequently, payments for iHealth's overseas orders were paid one after another.

On April 14, 2022, ACC paid a total of US$411 million, or approximately RMB 2.939 billion, to the company's US subsidiary. At that time, iHealth's US subsidiary had sold a total of 354 million iHealth test kits to ACC, with a total contract price and tax of US$1.775 billion.

On November 22, 2022, iHealth received another large order of US$191 million.

However, in the first half of 2023, affected by changes in market demand, iHealth's performance began to take a sharp turn for the worse.

In the first half of 2023, iHealth achieved operating income of approximately RMB 2.283 billion, a decrease of 90.19% compared with the same period last year ; net profit attributable to shareholders of listed companies was approximately RMB 786 million, a decrease of 94.84% compared with the same period last year; net profit after deducting non-recurring gains and losses was approximately RMB 490 million , a decrease of 96.79% compared with the same period last year .

iHealth said that the main reason for the company's significant changes in performance in the first half of 2023 was the decline in sales of test kits during the reporting period.

At present, iHealth’s operating income mainly comes from two major business areas, one is IVD (in vitro diagnostic products) and the other is Internet medical care.

Among them, iHealth Medical's IVD is the company's key business area, and the iHealth series of products accounts for the highest proportion of sales revenue and profits.

In the first half of 2023, the revenue of iHealth series products was approximately 2.144 billion yuan, a decrease of 90.70% compared with the same period last year.

Jiuan Medical's Internet medical field is mainly "diabetes management/care", and its revenue in the first half of this year was only 15 million yuan, accounting for less than 1% of its revenue. However, its growth rate is quite fast, increasing by 96.14% year-on-year.

Although the sales of iHealth 's main products have dropped significantly, judging from the large order it just signed in September, there is still a huge market demand for test kit products.

In addition, iHealth Medical recently revealed in its interaction with investors that the company 's test kit products are being sold normally on its official website and platforms such as Amazon .

iHealth made a whopping 1.5 billion yuan from its “side business” investments!

It can also be seen from iHealth’s financial report data that the company’s cash flow is quite abundant, and the income from its “side business” investments in the first half of the year was very considerable.

In the first half of 2023, iHealth's investment income reached 217 million yuan, accounting for 27.61% of its parent company's net profit.

In February this year , iHealth issued an announcement stating that the company and its subsidiaries intend to use a maximum total amount of no more than (including) RMB 17 billion or its equivalent in foreign currency of its own funds for entrusted asset management, and intend to use a maximum total amount of no more than (including) RMB 3 billion or its equivalent in foreign currency of its own funds for securities investment.

To this end, the company set up an asset management department and hired personnel with rich experience in the field of asset management. Then the company used its wholly-owned subsidiary, Jiuan Hong Kong Co., Ltd., as a special investment subsidiary to engage in asset management business with its own funds. Moreover, Jiuan Medical has expanded its investment business scope.

In the 2023 semi-annual report, iHealth included asset management business for the first time when making its main business statement.

In the first half of this year, iHealth invested heavily in new energy vehicles, buying shares of Xpeng Motors, Li Auto, and NIO. However, only Li Auto made a profit, while Xpeng Motors and NIO suffered losses. Li Auto made a profit of 12.1347 million yuan, while Xpeng Motors and NIO lost 55.027 million yuan and 35.2493 million yuan respectively.

In addition, Jiuan Medical also holds shares of Xiaomi Group and Quidel, National Trust, and U.S. Treasury bonds. In general, the end-of-period value of securities held by Jiuan Medical reached 2.726 billion yuan.

The overall investment return was quite high, exceeding 126%. Compared with the initial investment cost of 1.204 billion yuan, the profit was 1.522 billion yuan.

iHealth said that the company currently has very good cash reserves, which can help the company create popular products, provide strong support for the implementation of the new "O+O" model of diabetes diagnosis, treatment and care in China and the United States, and enhance the company's ability to resist uncertain market risks.

In general, the market is changing rapidly. For sellers, it is very necessary to seize current opportunities, expand new business lines, and continuously improve their core competitiveness and comprehensive strength.

Amazon Sells Well