Revenue Growth of 69%, Cash Flow Positive for the First Time: How to Interpret WeDoctor's AI Healthcare Report Card?

At the beginning of 2026, the Hong Kong Stock Exchange welcomed a special AI healthcare company. MicroMedicine Holdings Limited has steadily advanced its IPO process after a comprehensive restructuring of its coordinators, currently in the post-listening phase. Once hailed as a “pioneer in internet healthcare,” this company delivered an impressive performance during its third IPO attempt: in the first half of 2025, revenue exceeded 3.08 billion yuan, a 69.4% year-over-year increase, with AI medical services accounting for 92.2% of income, and operating cash flow turning positive for the first time.

However, controversies surrounding MicroMedicine are also significant: China Merchants Securities International withdrew from the coordinator team, the company reported “huge losses” due to fair value changes of preferred shares on its books, a 2 billion yuan dividend arrangement in 2020, and a heavy reliance on a single client. As AI healthcare becomes a global capital hot spot, how should we evaluate this “pioneer” in China’s AI healthcare sector? Beneath the surface of data, a business logic centered on “value-based healthcare” is gradually becoming clear.

Explosive revenue growth, AI business now a “ballast stone”

Reviewing MicroMedicine’s latest prospectus, the most direct change is the fundamental reshaping of its revenue structure. In the first half of 2025, the company achieved revenue of 3.08 billion yuan, a 69.4% increase year-over-year. Among these, the “AI medical services” segment contributed 2.84 billion yuan, a 97.3% increase, accounting for over 90% of total revenue.

This growth is not accidental. Since 2022, MicroMedicine’s core business revenue has grown from 1.368 billion yuan to 5.496 billion yuan in 2024, with an average annual compound growth rate exceeding 100%, demonstrating remarkable growth in digital health. The key driver is “health management membership services”—in the first half of 2025, this segment earned 2.389 billion yuan, up 131.4% year-over-year, serving approximately 1.1 million members.

Notably, this high growth is built on solid medical outcomes. Within the Tianjin AI health ecosystem, where MicroMedicine provides technological empowerment, from June 2024 to June 2025, hypertension blood pressure control rates increased from 70.04% to 79.55%, and blood sugar control rates for diabetics rose from 13.71% to 23.98%. More critically, the overall health management surplus rate for all diseases increased from 3.3% in 2024 to 6.1% in the first half of 2025—indicating that the business model of optimizing diagnosis and treatment processes through AI, and saving medical insurance funds, is gaining traction.

Technical strength certified by authority, “scene-born” AI large models have unique advantages

For a company branded as “AI healthcare,” technological capability is the core focus of market attention. In January 2026, MicroMedicine’s large medical model continued to lead on the Chinese authoritative evaluation platform MedBench 4.0, with its clinical assistance capabilities receiving rigorous validation. Simultaneously, in the “2025 AI Gravity List,” MicroMedicine was ranked alongside DeepSeek, Alibaba Cloud, and Yushutec, earning the title of “Strongest Innovator in AI+.”

MicroMedicine’s technical approach is distinctive. Unlike models trained in laboratory environments, its medical large model is “scene-born and scene-grown”—closely integrated with real-world clinical workflows of offline medical institutions. Through intelligent agents like “AI doctors, AI pharmacists, AI health managers, AI intelligent controllers,” it achieves large-scale application within the AI health ecosystem. This ability, refined in real medical scenarios, forms its core competitive barrier.

In August 2025, MicroMedicine’s self-developed “MicroDoctor AI Health Manager” was registered with the Shanghai Cyberspace Administration, becoming China’s first clinical-grade AI health manager covering the entire process from pre-diagnosis to post-treatment. This marks a key step into the consumer (C-end) service field. Regarding technological independence, while MicroMedicine admits its large model is built on third-party foundational models, its scene-specific applications and continuous optimization have created a data flywheel effect.

From R&D investment, in the first half of 2025, MicroMedicine spent 37.33 million yuan on R&D, accounting for 1.2% of revenue. Although this ratio has decreased compared to previous periods, considering its shift from pure technology development to scaled operations, improving R&D efficiency remains a key focus. For a tech company approaching breakeven, balancing technological investment and commercialization is an ongoing challenge for management.

Approaching breakeven: the financial secrets behind positive cash flow

The most attention-grabbing and easily misunderstood aspect of MicroMedicine’s financials is its reported “loss.” According to the prospectus, in the first half of 2025, its core business recorded a net loss of 675 million yuan. However, deeper analysis reveals this mainly stems from accounting standards recognizing fair value changes of preferred shares as unrealized losses. MicroMedicine issued a large amount of preferred shares in multiple financing rounds, and as the company’s valuation increased, the fair value of these shares also rose, being recorded as financial liabilities, resulting in non-cash accounting losses.

This accounting treatment is not unique to MicroMedicine. Companies like Kuaishou, Xiaomi, and Meituan also experienced significant unrealized losses due to preferred share fair value changes before going public—reflecting market recognition of their potential value. Once listed successfully, these preferred shares will automatically convert into common stock, eliminating related liabilities. More importantly, in the first half of 2025, MicroMedicine’s adjusted operating loss rate narrowed from 7.0% in the same period last year to 4.2%, approaching breakeven, with operating cash flow turning positive for the first time. This indicates the company’s self-sustaining capacity is taking shape.

Regarding the 2 billion yuan dividend paid in 2020, the prospectus states it was paid from the premium account, compliant with Cayman Islands law. The founder’s past violations have been mitigated through management adjustments and equity waiver commitments.

Strategic expansion accelerates: Tianjin model poised for nationwide replication

Currently, MicroMedicine’s AI healthcare services are highly concentrated in Tianjin, with revenue from its largest client (Tianjin Medical Insurance Fund) accounting for 77.6% of total in the first half of 2025. This concentration reflects the success of the Tianjin pilot but also poses dependency risks.

However, the company’s strategic expansion is accelerating. The prospectus discloses active negotiations with cities like Chongqing, Yinchuan, Shanghai, Hangzhou, Wenzhou, Nanjing, and Shenzhen. In October 2025, Chongqing Shapingba District signed a strategic cooperation agreement with MicroMedicine to jointly launch the “Digital and Intelligent Health Ecosystem” project. In November, the Hainan Boao Lecheng International Medical Tourism Pilot Zone Administration and the Qionghai municipal government signed strategic agreements with MicroMedicine to develop the “Lecheng International Medical Consortium” and “Qionghai Digital Health Ecosystem,” creating a “super interface” for medical resources supporting Hainan Free Trade Port. A second growth curve outside Tianjin is taking shape.

Looking at shareholder structure, MicroMedicine boasts top-tier investors: Tencent holds 8.79%, Hillhouse 4.13%, Sequoia China 2.29%, along with Yuyuan Capital, Qiming Venture Partners, Goldman Sachs, and others. After the Series G funding in 2022, the company’s valuation reached $6.7 billion. These long-term strategic investors demonstrate confidence through substantial investments in its development path.

China’s long-term practice of value-based healthcare: MicroMedicine’s answer to long-termism

Looking back from 2026, China’s internet healthcare industry has undergone a profound shift from traffic-driven to value-driven models. Against the backdrop of industry reshuffling and capital returning to rationality, MicroMedicine has chosen a challenging but correct path: rooted in serious medical scenarios, empowering primary healthcare with AI, and exploring sustainable paths for medical insurance cost control and health outcome improvement.

The challenges are clear: To G models have long cycles and slow expansion; dependence on single clients takes time to diversify; low gross margins require scale effects to improve. But it is equally clear that MicroMedicine has established a closed-loop business: the Tianjin pilot delivered a “two up, one down” result—improved patient health indicators, enhanced primary care capacity, and reduced growth in medical insurance expenditure; revenue continues to grow rapidly, approaching breakeven; its AI technology has gained authoritative recognition, and scene-specific advantages are increasingly evident.

For capital markets, understanding MicroMedicine’s value requires looking beyond the “book losses” on the surface and recognizing the growth logic behind them. As AI deeply integrates into healthcare, and value-based healthcare focused on health outcomes becomes a key direction of China’s healthcare reform, companies that can truly run a complete business cycle, gain local government trust, and accumulate real medical data will see their long-term value re-evaluated by the market.

MicroMedicine’s IPO journey is not just a corporate capital story but also a showcase of China’s AI healthcare exploration achievements. As the Tianjin model expands nationwide and operational data continues to improve, this AI healthcare pioneer’s value is increasingly recognized.

Source: Jiuzhou Business Observation

Author: Jiuqiu Xiaomei

Disclaimer: This article is for informational sharing only and does not constitute investment advice. Any investment decisions made based on this information are at your own risk.