Shares of Alibaba Group’s Hong Kong-listed digital healthcare platform Alibaba Health Information Technology jumped 9.7% after the company moved into the black for the first time.
For the six months ending Sept. 30 the company recorded RMB162 million ($22.61 million) in net profits, compared with a loss of RMB231.6 million for the same period last year, while revenue increased by 22.9% year-over-year to RMB11.5 billion.
Alibaba Health combines online and offline diagnostic and pharmaceutical services to provide a one-stop solution for more than 120 million annual active consumers and 27,000 merchants as of Sept. 30.
“Alibaba Health’s pharmaceutical e-commerce platform possesses the most comprehensive product catalog in terms of SKUs [stock keeping units] sold through the safest and the most reliable process,” it said in the earnings report filed with the Hong Kong stock exchange operator on Monday after the close of trading.
Alibaba Health shares closed up 9.71% at HK$6.10 ($0.78) on Nov. 29, 4.47% above the benchmark Hang Seng Index.
Over the reporting period, revenue from the company’s healthcare and digital services business shot up 74.9% year-over-year to about RMB419.3 million.
Platform users can access doctors’ services and receive a range of treatments, with nearly 180,000 licensed physicians, pharmacists and nutritionists contracted to provide consultations and more than 48 million SKUs available for purchase as of Sept. 30.
“We believe Alibaba Health will see relatively fast revenue growth in the next three years driven by online pharmacy amid the healthcare digital shift and leverage from [parent company] Alibaba’s… traffic flow,” research analysts led by Justin Kwok at investment bank Goldman Sachs said in a report dated Nov. 28 to investors.
Pharmaceutical direct sales accounted for around RMB10.1 billion in revenue in the first half of its fiscal year, a 24.7% increase year-over-year, while revenue from the platform’s prescription drugs business rose 46.2% compared with a year earlier.
Alibaba Health has said in its six-month report card that it will double down on this category.
“The group’s direct sales business will further deepen its understanding of user needs, accelerate its cooperation with upstream pharmaceutical companies, and strengthen the connection between users and pharmaceutical companies,” the company noted.
This article has been updated to reflect share price at market close and analyst comments