Recently, JD Health released its 2024 financial report, which showed impressive performance. According to the financial report, the revenue for 2024 was 58.16 billion yuan, a year-on-year increase of 8.6%, and the net profit under non International Financial Reporting Standards indicators was 4.792 billion yuan, a year-on-year increase of 15.9%. Its annual profit increased from 2.14 billion yuan in 2023 to 4.16 billion yuan, an increase of 102.8%, far exceeding market expectations.
By the end of 2024, JD Health's annual active users in the past 12 months had exceeded 183 million, the number of third-party partners had exceeded 100000, and the average daily consultation of Internet hospitals had exceeded 490000. Commodity revenue accounts for 84%, while service revenue accounts for 16%. The retail pharmacy sector has seen significant growth, with remarkable achievements in new product launches, category expansion, and instant retail. For example, 18 cities have launched the "JD Buy Medicine Instant Delivery" medical insurance payment service, connecting to over 3000 designated medical insurance pharmacies.
JD Health has been operating since 2014, became independent in 2018, and went public in 2020. Our business is mainly focused on online retail, expanding into two major segments: diagnosis and treatment, and consumer healthcare. The proportion of retail pharmacy business remains stable at 84% -88%. Its revenue and profit are stable, with a loss in 2020, a profit in 2022, and a profit of 4.16 billion in 2024. In contrast, traditional pharmacies are facing pressure. According to the third quarter report of 2024, only one of the six major listed chain pharmacies saw a double increase in revenue and profit, while the others saw no increase in revenue or profit, and even incurred losses. The performance forecast of China National Pharmaceutical Group Corporation (Sinopharm) also shows that traditional pharmacies are under pressure, with frequent closures, bankruptcies, and liquidations.
Under policy promotion, pharmaceutical sales have shifted from "in hospital" to "out of hospital". In 2024, the retail pharmacy terminal market share will reach 30.8%, while the sales of drugs in public hospitals will decrease. The differentiation of retail pharmacy channels and the rapid development of the online pharmacy market have increased the importance of instant retail channels.
The development process of JD Health from loss to profit has provided valuable experience for the pharmaceutical industry. As peers, we need to focus on user experience, optimize service processes, and enhance user stickiness. At the same time, we need to increase investment in technological innovation and explore the application of new technologies in drug research and development, production, and sales. In addition, diversified business layout should be carried out, supply chain management should be strengthened, policy opportunities should be seized, brand building should be emphasized, and the company's sustainable and healthy development should be promoted.
