The provider of healthcare data and tools is poised to pass the breakeven point, helped by rising AI uptake, but the outlook for sustained profits remains uncertain
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Key Takeaways:
- The company says it expects to post a net profit ranging from around $6 million to $8 million for its financial year to the end of March
- Yidu Tech’s AI tools are being adopted into medical workflows, with some client hospitals reported to use them nearly 1,000 times a day
For years, medical AI has generated plenty of excitement but has struggled to show it can make money. That situation may be starting to change, as one Chinese provider of healthcare technology prepares to mark an earnings milestone.
Yidu Tech Inc. (2158.HK) announced on April 20 it expects to post the first annual profit in its 11-year history, potentially marking an inflection point for the broader AI-powered healthcare sector.
The supplier of big data and tech solutions for the medical sector projected a net profit of between 41 million yuan and 56 million yuan ($6 million and $8.2 million) for its financial year to the end of March, rebounding from a loss of around 118 million yuan in the previous year.
In explaining the turnaround, the company cited a surge in new orders as it integrates AI into its products, driving higher gross margins, as well as better operating efficiency and economies of scale.
It was clear from Yidu Tech’s half-year earnings that the firm was heading towards breakeven. Revenues for the six months to end-September rose 8.7% to 358 million yuan, reversing a contraction in the year-earlier period. Gross margin rose to 37.4%. from 35.6% while operating losses narrowed …