Donghua Software (002065): Approved for Internet Hospital License, Important Progress in Internet Medical Business

Event: The company announced on December 9 that its wholly-owned subsidiary, Health Le, received two “Medical Institution Practice Licenses” submitted by the Hainan Provincial Health and Health Committee, namely Internet Hospital and Remote Diagnosis and Treatment Center.

Opinion: Important progress has been made in the Internet medical service.

The forthcoming company obtains an Internet hospital license and a telemedicine center practice license, marking that the company has become one of the few HIS vendors with self-built and self-operated Internet hospitals and has obtained license qualifications. The company’s “Internet + medical health” platform business capabilities have continued to improveThe service ecology of patients, medical care, medicine, and medical insurance is more complete. The company has completed the remote diagnosis and treatment capabilities of offline physical medical institutions for outpatient consultations and remote consultations, remote clinics, remote ECG, remote pathology, remote color ultrasound, etc.Ability for online consultation and Internet diagnosis and treatment of patients with chronic diseases and common diseases.

Policy dividends are being released intensively, and the innovative business model of Internet healthcare is worth looking forward to.

The company’s health music Internet hospital and remote diagnosis and treatment center will take the health music platform as the entrance to provide online consultation, electronic medical records, electronic prescriptions, drug distribution, health management and other core services for returning patients.

At the same time, through cooperation with pharmaceutical companies and insurance companies, the health care “medicine, disease, medicine, insurance” supply chain system and ecological closed-loop will be improved to bring new profit points for the company.

In the previous industry tracking report “Revisiting the Spring breeze of policy, closed-loop Internet medical treatment”, we clearly stated that since September 2018, driven by the policy dividends of the national categories of the Internet medical industry, 南京桑拿网 Internet medical treatment-purchasing-The closed-loop payment for medical treatment (medical insurance reimbursement) has been completely opened.

Driven by the policy dividend, the development of the company’s Internet medical business is worth looking forward to.

The company’s medical information business has a deep accumulation and is undervalued by the market.

The company’s medical information business ranks first in the country.

Fudan University Hospital Management Institute recently released the “China’s Hospital Rankings 2018” in the Top 100 Hospitals. 33 of the hospitals are customers of the company, and 26 of the hospital’s core business systems use company products such as HIS, electronic medical records, Information platform, data center, etc.

The close cooperation with domestic top hospitals shows the company’s strong strength in the field of medical informatization.

Autonomous controllability is underestimated.

The company’s self-controllable integration capabilities are in the leading position internally, and it has a solid customer base and technical reserves in the fields of finance, power, energy and other fields. It has a good history of cooperation with the localized pioneer Huawei, and is expected to obtainImportant progress in the overall deepening of the industry.

Investment suggestion: The company is an excellent representative of domestic IT companies. While the main business maintains rapid growth, innovative businesses represented by Internet medical services have blossomed.

We are optimistic about the company’s future development prospects. It is expected that EPS in 2019 and 2020 will be 0.

38, 0.

44 yuan, maintain Buy-A rating, 6-month target price of 13 yuan.

Risk reminder: the risk of goodwill impairment; the progress of innovation exceeds expectations; the progress of cooperation with Huawei is lower than expected.