Is Yi Stock A Buy?

111 Inc (NASDAQ:Yi) is China’s leading digital healthcare platform. It helps patients access drugs and healthcare services.

The omnichannel platform leverages technology to create a smart supply chain that connects retail terminals, doctors, and insurance companies for a seamless healthcare ecosystem.

Its platform is popularly used by the Chinese, and that has some investors wondering is Yi stock a Buy?

The company’s platforms became vital tools during the pandemic. Every country is working to trace the efficacy of the COVID-19 vaccine, and China needs technology to monitor the success across its population of over 1.44 billion people.

Yi created a two-sided marketplace, where it serves both consumers and businesses. The company has multiple apps to ensure a secure and intuitive connection between pharmacies, hospitals, insurance companies, and patients.

Because of this, it enables a secure and seamless healthcare system that’s technology enabled. This could be the future that companies like Teladoc Health Inc (NYSE:TDOC) are working to create in the U.S.

Is this digital health platform going to product a hot stock for investors or will leave their portfolios sick with a cold?

Yi Built A Marketplace That Is Tough To Copy

111,Inc. was co-founded in 2010 by Gang Yu and Junling Liu. It’s a tech-based marketplace that provides seamless connectivity to a lot of markets. Going to the doctor isn’t a simple process – there needs to be referrals, insurance co-pays, pharmacists, and more involved.

Seeing an opportunity, the company’s founders created various platforms to service the healthcare supply chain. Its main lines of business are 1 Drugstore, an online pharmacy app for patients to connect with pharmacists and 1 Clinic, an online pharmacy app that connects pharmacists to healthcare providers.

Between them and its offline operations, the company can service each connection between medical, pharmaceutical, insurance, and patients.

This online digital ecosystem brings levels of transparency and accountability to healthcare. It also brings together all the disconnected components to make it easier for patients to receive the proper care. But both China and the United States have notoriously bad healthcare.

This has analysts researching whether 111 is a good investment.

Is Yi Stock A Buy?

Yi stock started 2021 with a market capitalization around $450 million before doubling to $900 million in early Q1 2021. The company’s stock price crashed in September 2019, because it’s based in China. It got hit by the crash much earlier.

At that point, its share prices fell to $2.30 before rising back to the $6.00 range. By January 2021, Yi share price traded as high as $10.00 per share in a week when failing businesses were being short squeezed across the market and everything else suffered.

The company earned over $300 million in the third quarter of 2020, and it held about $115 million in cash in its coffers heading into the back half of 2020.

On its most recent earnings call, management touted its full-cycle lung cancer patient program. It’s both an online and offline platform that showcases the full end-to-end solutions the company offers. Over 20 partners signed on from the B2B side.

With this type of impressive growth, some analysts are bullish on the stock. But it does have inherent risks.

Risks Of Buying Yi Stock

111 operates in three volatile markets: technology, healthcare, and China. Each of these poses risks for the average American investor.

Many technology stocks trade at large premiums. Uber Technologies Inc (NYSE:UBER), for example, is worth nearly $100 billion. But the company still hasn’t turned a profit.

And if you want to invest in Amazon.com, Inc (NASDAQ:AMZN), you’ll pay a premium of nearly 100x over earnings.

Healthcare stocks are also volatile, because everything depends on government approval. In the United States, the Food and Drug Administration can make or break a business. Without its approval, a company can’t generate revenue marketing and selling its products.

But Yi isn’t based in the U.S. – it’s based in China.

Chinese stocks are difficult for Americans because information is made less available. Any of the above companies can be easily researched; they operate in this country. But 111 doesn’t, and that makes it hard to react to market changes.

Plus, the company is trading at a high valuation that assumes it will stomp on competitive threats.

Yi Is Riding A Trend That Will Continue For Decades

Yi isn’t the only company working on digital healthcare solutions. In the U.S., the Healthcare Marketplace is a disaster, and companies like Teladoc are on the rise.

The pandemic made virtual healthcare a necessary service. Telemedicine, telehealth, and more services are being offered. The blurred lines between physical and mental health can be difficult to navigate.

On top of this, each state and country have their own laws regulating healthcare and technology. This leaves the doors wide open for tech companies to flood the market with solutions. 

Global healthcare is a huge market, and this Chinese firm may have trouble expanding beyond its geographic borders into new markets. Still, China alone is a massive market that can generate enormous profits if management executes well.

Is Yi Stock A Buy? The Bottom Line

111 (Yi) is a Chinese healthcare technology company with a portfolio of platforms to service a variety of healthcare needs. It’s a risky play that’s paying off as the pandemic makes social distancing a necessity across the globe.

It creates two-sided marketplaces between insurance companies and healthcare providers, along with patients with each of them. This solidifies a tech-focused marketplace for a growing next generation of digital healthcare.

However, it’s competing in a heated market with a lot of other rivals. Companies from Europe, the U.S., and more are in the pipeline and expanding. This could create a tough battle to continue growing. And it’s difficult for American consumers to keep up with a Chinese market, unless they really know what they’re doing.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.