It's almost the time. Let's get started. Dear investors, analysts, and friends from the capital market, good morning. Thank you for joining Ping An Healthcare and Technology Company Limited 2026 Interim Results Announcement. I am Wang Chen, host for today's event and General Manager of the Board Office. 2026 marks Ping An service year as the core flagship of Ping An Group's healthcare and elderly care ecosystem. Our company executes the Group's integrated finance and healthcare and elderly care strategy, with focus on delivering high-quality services. In the first half of the year, we further deepened insurance plus healthcare, expanded corporate health management offerings, enhanced our proprietary Four-Access Service System system powered by AI-enabled healthcare services. We steadily advanced the business operations and continuous improvement in operational quality. Now we will walk you through our business overview, operation progress, and financial performance in first half of this year.
First, please allow me to introduce our management team present, Mr. He Mingke, Executive Director and Chief Executive Officer. Chief Financial Officer and Board Secretary, Ms. Xu Qin. This meeting consists of two parts. In part one, Mr. He and Ms. Xu will present our business overview, operation progress, and performance for this reporting period. In part two, Mr. He and Ms. Xu will take your questions. On-site investors and analysts may raise your hands for questions. Online participants, analysts, please press star one on your keypad to raise questions. Next, let's have Mr. He for business overview and operation updates for this reporting period. You now have the floor.
Dear shareholders, investors, analysts, good morning. After half a year, we are meeting again to present the past half year progress and performance. First of all, strategic business overview of our company.
The first one is actually a callback for the strategies. We really want to offer the most cost performance products and services. In our words, we want to offer worry-free, time-saving, and money-saving. Still on two sides. One is the commercial insurance within the Ping An Group company. The second is the highly increasing, growing healthcare and insurance business. This will become two pillars of our business, and we will focus more on this. In terms of services, we offer Four-Access Service System online, in-hospital, at-home, and corporate, and this is the core services system. Next, I will share with you about some cases. What is exactly looking like of our services. For this slide, I'd like to share with you about the synergies with the Ping An Group, and it is a doorway empowerment.
On the left side, that shows the group enablement for the company, which means that the group offers vast customer base with high ability for payment, and even help us to solve the payment issue. As a veteran in digital healthcare, we have long been suffering about the business models because the healthcare is alone divided, and the users' insurance and hospitals, these three parties are divided. So it is difficult to find a business model with a scalable profitability. Ping An Group offered us a huge resources to support the business models. That's a huge enablement by the company. On the right side, that shows the support for Ping An Group by us. In a word, we call it the cubic meter. Push, preserve. Push means to push the frontier sales ability. Pull means for the product teams, including the policies and also products.
And preserve means our solidarity together with the customers, increase our viscosity with the customers. These are all reflected in the highlights of the H1 performance. The first one is actually the steady progress of core business. The core business had 14% year-on-year increase. The core customers increased by 70%, and we are also upgrading the service capabilities. Currently, we have the number of pharmacies with access to Ping An Health Pay. The number of that is around 150,000. AI is also empowering science and technology. AI gross profit contribution ratio is now 4.6% higher than previous year. Next, I'd like to share with you how we are expanding our commercial insurance and healthcare. The first slide shows how are we integrating with the commercial insurance.
Just now, I mentioned about the three P as the key word, push, pull, and preserve. With the insurance and health and senior care membership, we are further empowering it, embodied in two aspects. The first one is the push in multiple scenarios for those users. The conversion rate increased by 20% in multiple scenarios. The medical and healthcare also has the highest conversion ratio in M3 policies. Another one is embodied in pull products, and users who used our family scenario-based products had an over 9x increase. On the next slide, I'd like to share with you about the preserve aspect, the relationship with the customers, and the horizontal slide access shows about the different product metrics, and the vertical axis shows our different customers. For example, An You Hu, the critical insurance plan, et cetera. That's actually a really diversified membership scenario, which further enhanced operation with the customer.
The next slide shows about our corporate health management and also the most rapid growth sector from the left side to the right side. The first one is that we are working together with multiple channels under the group and to get the capability of the customers with payability. The second part is the service system and network building and offline service products, and those are consistently growing. The third part is, after we build up the network, we enhanced the conversion via operations. Finally, those efforts are embodied in two highlights. The GMV reached CNY 1.79 billion. It already reaches a certain scale with profitability, with the business growing, and the spillover effect will be further presented. The second, we have already attracted over 7,700 corporate clients. The next part I really want to share with you about the specific services and products.
Internally, we call it a Four- Access Service System. Just now, as I mentioned, the in-hospital, at home, corporate, online, and this is actually an expanded 2.0 network. Two interpretations. One is online to offline, the other is offline to online. So users can enjoy the services online, and the services can also be delivered offline with the payment so that we can finish a service close loop. From the other hand, in the offline, we continue to optimizing to offering constantly upgrading services to the users. These are the four service system. Maybe it sounds quite empty for the Four-Access Service System . I really want to highlight that with several cases. The first case is actually the Ping An solutions. It is actually a growing corporate client satisfaction and the retention also improved.
On one hand, when users are having consumption offline in hospitals, they suffer troublesome procedures of getting reimbursement from the medical care, et cetera. Therefore, around the users 3 km-5 km radius, when the users open the app and by presenting the QR code, the users can directly pay and also enjoy the services. Also in hospital, users can directly realize a one-button reimbursement, creating good and excellent experiences for that. This is what we call the Ping An Circle, the in-hospital and offline service. The second one is a comorbidity management launched at early of this year, and currently, it becomes the most welcome services. We often talk about the three high indicators of the blood parameters, and China had a huge population of that. So it is really widespread in China. Targeting this population, we offered the comorbidity management services for them.
We include chronic disease doctors, nutritionists, and case managers, et cetera, because some medication are really complicated. So we offer them the three values into plus one. By this stringent and continuous management, here we also show some cases to reach a better healthcare health level. The third one is the on-site health event, which means we pay visit to enterprises to offer some services. This case is really interesting, which means the connection between the commercial insurance and also enterprise services. Eli Lilly is a supplier and also partner of our commercial insurance products. Together with Eli Lilly's science-based programs, we went to large scale, private enterprise and SOEs to offer professional and personalized weight management and diet and fitness recommendations, which won good feedback, which vividly demonstrated that there are a lot of synergies potential.
At very last, you may be interested in our internet healthcare, and you are interested in AI. A good news to you all. Previously, the online doctors are really popular, and this year we further upgraded. The doctors not only could offer diagnosis services, but also the AI with physician services to help users to do some physical training. So that means the AI personal trainer could further boost proactive health management. Sometimes we even played a joke by ourselves. Most companies are inputting more in the tokens and also LLMs, and we are helping to get the users to consume more calories, to have more personal health. The result, as I previously mentioned, AI gross profit contribution already reached 4.6% higher than last year. In the future, I believe it will be further increased.
Next, I'd like to give the mic to my colleague, Ms. Qin Xu, to show some financial performance.
Thank you, Mr. He. Thank you, analysts, and also everyone for being here. We would like to take a review of our financial performances in the first half of 2026. Overall, I can summarize our performances in one sentence, just as mentioned by Mr. He. All of these transformations and the business moves are reflected in our financial performances. This has to do with our markets, and this has given our shareholders as well as customers and employees a steady commitment. Let us take an overview of our financial performance. Most importantly, we will share these four things. Firstly, if you look at our business structure, the core business and that contribution of it is improving gradually, and this is in line with our strategy. The second reflection is with our improved revenue mix.
As mentioned earlier, we have managed the company for better, and that means the revenue mix is improved and the corporate health management revenue as a percentage of total revenue is 28.7%. It is an 11.5 percentage year-on-year increase. Another highlight of the first half of this year is a steady growth in gross profit. That gross profit is CNY 960 million, which is a 13.9% year-on-year increase. Lastly, it is our improved business quality. Not only just net profits or other metrics, we are seeing that all the indicators showing we are improving in terms of our business. Let us take a closer look. Firstly, let us look at the revenues and also revenue/gross profit. In terms of revenue, we have seen some improvements.
As you can see on the left-hand side, the green graph, that is the commercial insurance enablement. This is more like the same level of last year, but, thanks to the contribution of these insurers, we are seeing some improvement. If you look at this light orange part, this is our corporate supervision business, corporate health management business. As you can see, the number in last year was 17.3%, but in the first half of this year, it has risen to 28.7%. In contrast, our other businesses have a reason for the management to take initiative to reduce. This has two reasons. One is insufficient traffic, and on the other hand, the contribution of the gross net profit contribution is less. We did this active transformation.
As you can see, the business mix has been focusing on the core business. The second thing I would like to share is gross profit. It has improving gradually and steadily, and that is 13.9% year-on-year increase. Behind that, there are two drivers. One is the steady growing gross margin by better business mix. For example, we are focusing on the high margin business, and this has contributed to the overall gross profit. The second reason is in other business segments, there are some low margin and low gross profits. From the perspective of medical healthcare and elderly care, we did some active adjustments. Coupled by these two factors, you see the gross profit has been improving for the first half of this year. Let us look at the overall expense ratio.
From a year-on-year perspective, our expense ratio has increased from 30.1% in the first half of last year to 31.9%. Even though the increase is slight, but considering the first half of this year, our business strategy is more focused and gross profits changed. This is totally acceptable. We break it down to three aspects. One is the selling and the marketing expense ratio. It is more or less the same level of the same period last year, and this is largely because of our commercial insurance enablement. In contrast, the management fee rate has slightly increased from last year's 8.4% to this year's 10.5%, and this is because our company's strategic readjustment. That is why we see the increase of administrative expense ratio, particularly with our vendors and also management readjustment. Certainly, that is the R&D expense ratio.
As you can see, we have managed it really carefully. That number in the first half of 2025 was 6.5%, and this year the number is 5.8%, and this has to do with our better budget control of IT because we use the AI and it has lowered our R&D costs and that boost has been tremendous. Overall, it is a slight increase, but with a better company strategy, all of this is manageable and acceptable. Now let's look at the profitability and the cash flow performances. If you look at the income statement, in the first half of this year, we have achieved some remarkable results. Profit from the operation has been up by 90.3%, and if you look at the past two and a half years, our operating net profit in 2024 was almost CNY -240 million.
In 2025, our operating net profit is CNY 100 million. Then in the first half of this year, we have reached the operating net profit of CNY 160 million. From this point of view, it is very important to highlight. Our adjusted net profit has reached a total of CNY 270 million, which reflects our investment income. It is quite steady. From these two perspectives, things are in line with our strategy and the transformation. Another thing is with our operating cash flow. It is considered at a relatively healthy level. Of course, compared with last year, it is slightly decreased, but this is in sync with our strategic readjustments and looking forward to the whole year, we will do better in terms of managing operating cash flow. Lastly, let's look at the finance and overall development of the company.
This we have been fully committed to ESG. For this, I would like to share one important metric and one important indicator as you can see on the upper left corner of this slide. That is our ESG ratings, particularly MSCI. We have achieved A A ratings for two consecutive years, which is a good result in our industry. We also include our achievements in healthcare, elderly care and, this is in line with our ESG concepts. For example, we mentioned our concepts in the business development and we put this concept in our relationship of our important enterprises clients. From our financial performance, that is pretty much everything. Thank you.
Thank you, Mr. He and Ms. Xu for your wonderful sharing. Now we will move to the second part of today's announcement. That is the Q&A session.
Investors and analysts, if you do have a question, please raise your hands. Also for those calling in, please press star one to ask a question. Thank you. Now, the first question will be with our audience to present here now.
I am Li Chengning from CICC. Thank you for these questions. I am a health analyst. Two questions. Let me start with the first one. At the moment, we have seen that Ping An is focusing on integrated finance plus healthcare and elderly care. Of course, Good Doctor is the core focus of your group. In terms of this strategy, in the first half of 2026, what are the specific strategic implementations? What are the concrete practice and specific measures? Also looking ahead, what can we see?
Thank you, Ms. Li Chengning, for your question. Our strategy has been implemented steadily.
Let me give you some examples to be more specific. For example, our Ping An Home Care and in this June this year, life insurance officially launched the Yùxiǎng 2.0, which has been important way for them to acquire customers. Whether it is pull or push, it is one of the things we can attract. It is a powerful tool for us to attract new users. Compared with other control groups, the first year premium is 9.7% higher. It reflects a large value of push and pull. On our front line, the entire life insurance team is based on the pushing home-based elderly care as important way to acquire customers. Also at the push level, once we acquire these clients, we need to serve them. We need to make sure it is not only the home care, we give them additional services.
For example, this healthcare management, and this has included a lot of active and health measures. For example, personal trainers as well as in-hospital services. Our way has been comprehensive and providing more services. If you look at the numbers, just as mentioned earlier from Ms. Xu, commercial insurance enablement and also the corporate healthcare management contribution are both increasing. That means we are building more core businesses. Another thing is the corporate health management. As you can see, the GMV of this business in the first half of this year is CNY 1.7 billion. This reflects our scale, and also this reflects the sensible profitability. Going ahead, we are going to make this business as big as possible. At the moment, it is relatively small because the larger our scale, the stronger our purchasing power and negotiating powers will be.
At the moment, our payment system has covered 149,000 pharmacies in China, and there is around 6 million pharmacies in China. The proportion may not seem high, but, from the GMV's perspective, we have covered 90% of these pharmacies in China. Where our payment ability is stronger, our offline scenarios will cover more range. For example, hospitals, clinic, and traditional TCM clinics. This will boost our service level and also our profit margin. Thank you. We will continue to do this as well.
Second question, let me ask this really quick. We mentioned profitability earlier, and this has achieved the record high at this group level and also the adjusted net profit margin. For this, can you please elaborate on this one? What are the reasons behind these results?
Thank you for your question.
This is a question of great interest, and also this is a thing of great highlight in the first half of this year. As I touched upon earlier, this has seen some gradual increase, and this has to do with two reasons. One is commercial insurance synergy, and the other is corporate health management. For the first one, this has to do with Ping An Group's insurer and our in-depth synergy. On the other hand, this has to do with our newly introduced services. For example, new genetic testing and also other therapies such as CAR T, and this provide better profits for our insurance company's clients. Also, our core business is also shifted to medical, health, and elderly care, and this will drive the increase of our profit margin. On the other hand, our business mix has been improved.
For the low profit margin things, for example, physical checkup, this will drive things down. The medical insurance will have introduced a lot of new platforms, and this actually has contributed to the profitability. All in all, if you take all the things into consideration, the overall profitability and margin in the first half of this year has been increasing gradually.
Also our core business will continue to develop in the second half of this year, which is steady and also at a relatively high level.
Thank you, Ms. Xu and Mr. He, for your answers. Next, we'd like to see if there's any questions from online. Next, let's have Ms. Yan from Morgan Stanley to raise your questions. Are you offline? Can you hear me?
Yes, I can hear you. Sorry, I was just muted. I have two questions. The first question is regarding industries, and if you look at it by quarter, the second quarter revenue had an 8% decrease. What are the reasons? Second, non-core revenue, 60% decrease in H1. Just now, Mr. He also shared with us about the strategies, so how long will this impact sustain? This is the first question. Second question is regarding AI.
What are your features in AI plus real doctors strategy in the future? Compared with other peer AI applications, what is your feature and advantage, and what are the other specific indicators of the contributions made by AI? Thank you.
I will answer the first question first. Thank you for your questions and the following up about our performance. That's a really detailed watch in Q1 and Q2. Q1 net increase was 9%, and Q2, relatively speaking, it registered a - 8%. The largest reason, as the analyst just pointed out, was mainly driven by that other revenue decrease and focusing on our strategic focus, the management and the company choice. That's the direction.
Actually, for other parts and compared with our own relative advantage, some weak business of us, for example, on the sales in online platforms, e-commerce platforms, and also the low profitability physical examination products, we are actively shrinking that actively by ourselves. Just now, the analyst asked the questions that the impact of this part for the second half and even the whole year. Actually, the healthcare and insurance sector, we focus more on the user's services, client services. So when we reach agreement with a client and to the final fulfillment and the delivery periods are not even, some are long, some are short, and some may last for the whole year, and that means creating impact for the whole year. Some will even last to the early of 2027.
But I hope that our analysts can take a comprehensive perspective of the company, because for the insurance and healthcare strategy and also other strategic business, so that the GMV, the revenue and profitability indicators will be more stable. Thank you.
Let me answer the second question regarding AI and compared with other big enterprise. Our differences lie in several aspects. First, we are not a company engaged in building the LLM or not simply doing the agent or application. Because the latter needs to find more clients. On top of the Ping An Group, we already have large number of clients. We just further expand the application in those clients. AI feature is presented in several aspects. First, we have the long-term data of the data, especially for the clients who have long been using our app for physical examination.
So when they come into this AI plus real doctors system, that doesn't mean that we have no knowledge about the user, because we already have the historical records. Just like when you go to a hospital, if you want to make an appointment with a veteran doctor, you also need to answer questions about the hospital records. So in our app, we have the electronic record to help the real doctors to make decisions. So this is the first advantage of data. Second, the unique model of AI plus real doctors. On our platform, we gathered really qualified doctors with huge experience and more values lie on the emotion value, the comfort, and also follow-up management after the treatment. So I think this is also where we can offer better values and services for clients. Third advantage is that we not only have services online.
Many large language models are also having the online services, but it's difficult for them to link it with the offline. Offline, we also have our services, which is actually a companion in hospital. So this is actually a trend. We are also building a unique professional team, which is actually called an offline hospital companionship expert, which is also being broadcasted by the national central television. So we are building a closed loop, connecting both online and offline. Just now, as I presented in my slides, we have diversified applications and based on AI, we also offered AI trainer, shift from passive healthcare to active health, which is quite a popular word. Health and exercise integration, so that we can bring better health benefits to users. Talking about this is actually about the difference in AI. Second, how do we evaluate the AI contribution?
We know that the most profitable AI company is now the model companies like Anthropic, OpenAI. They are spending all money in token. Even the average token by the staff is regarded as an indicator. However, some people just blindly use token. Even though you spend a lot of token, it does not create too much commercial value. We are not simply just trying to use more tokens. What we want more is to help users to consume more calories to preserve a better figure. For us, internal core values, as shown on those slides, we focus more on the AI contribution in gross profit instead of the contribution in revenue, because for some commercial behaviors, the money you spend on token purchasing is way less than the value created by using this token.
We focus more on the gross profit contribution by AI instead of simply looking at the AI consumption amount. I think it is more healthy. Thank you, and a lso everlasting.
Next question, let us come back to the offline.
Mr. Jiang, thank you for this opportunity. I am from Zhongxin Securities. I would like to ask a question about performance in H1. You already reached a good revenue of CNY 1.7 billion. It is growing steadily. What is the driver behind that? What is the gross profit rate? What about the sales expenditure schedule?
Well, thank you for your question. In terms of the corporate health management in the previous PI report, actually, you can see that from last year to this year, notably, we had a growth. I think there are two drivers behind that. First, corporate health management. This sector is promising.
Therefore, the largest driver is that we get to the point. Also, catch this window. Second, from the end of last year to this year, the management team put the focus of the business in corporate health management. Therefore, the gross profit margin are from these two drivers. First, as I say that we caught a good window in the market. Second, our strategic input. In terms of the gross profit margin rate, corporate health management, we focus more on the Four-Access Service System strategies. Once we focus on the healthcare, health, and the elderly care an integrated service system, we will relatively reduce the low-margin products sales. Focus more on services. That will give us greater contribution. In terms of the sales expenditure arrangement, actually, for every business development cycle, salesperson needs to have relative input.
As I just shared with you about the overall ratio trend and breakdown. Actually, for corporate health management, sales expenditure is relatively maintaining at a healthy range. As I summarized in my presentation, the gross profit growth. The sales expenditure is controlled within a reasonable range from a longer-term corporate house management will reach even over 50% contribution. That is a long-term target. Considering about that long-term target and the anticipated gross profit contribution, is also expected to be stable. Thank you.
Next question, let us turn to the online. Jin Lily from Citi.
Thank you. Well, on behalf of our chief analyst to raise two questions. The first question is that through what services to get the group level commercial insurance and clients, and what are the constant upgrading strategies? Are there any quantitative indicators to evaluate the product's sales situation?
Let me get directly to that question. Actually, internally, we have a strict evaluation. In my slides, I already shared, the first one is the M3 clients' conversion rate and 20% higher than the control group. After conversion of the client, the new policy in first year ratio, now we increased by over 9 x. This is a solid statistic. In terms of the word-of-mouth of the sales and statistics, the insurance agents are really willing to bring the clients to offline and online elderly care services. The conversion rate from the perspective M3, the conversion rate is the highest, therefore, that gives us the confidence. The sales expenditure of this sector is also in healthy competition internally. So if that's healthy thrift, it will get more shares of the sales expenditure. So those are the efforts we made.
In terms of products, let me give you some examples. The high-end physical examination. For example, recently we have healthcare physical examination projects, programs, and like gene testing, and those are really popular. Also the home care experience centers, those are also the empowerment for the insurance agents.
Thank you for your answer. My second question is, what are the adjustments? Why there's adjustments of the companies? Because we're seeing that Ms. Xu Qin has rich experience at Ping An Group. So what is the reason for such adjustments?
Thank you for your attention. There are a couple of directions for adjustments. One is we are going to reduce the streamlining of the board members. We have now reduced to two, and this will make decision-making more efficient. In addition, in terms of director independence, the proportion has actually increased compared to before, and we are maintaining three people. The newly independent board member is from Hong Kong of China, and he is a renowned healthcare professional, and this will make our board more diverse. We believe that the support and enablement will be there as usual and our group's strategy will be clear. That is integrated finance plus elderly care, and there is no change in that regard.
Now, let's hand over to the next question to the audience. Are there any questions from the analysts?
Thank you for the opportunities. I am Mr. Cao Zhongming, an analyst from the Internet group at the Huatai Securities. My question is about pharmaceutical companies' collaborations. We are seeing that in the first half of this year, we have seen some corporations with pharmaceutical companies, for example, the Eli Lilly China and also Roche, and this has drawn some market attentions and anticipation. I would like to ask, what is the company's collaboration model with these pharmaceutical companies? What kind of development paths will it likely to follow in the future? Also, what is the partnership methods for integration and synergy of medical insurance?
Thank you for your question. As we know, meditation plus insurance has attracted attentions, particularly in the recent two years. We have been following this as well, and we have been innovating in terms of products, for example, different insurance policies. This is what we call the efficacy insurance and also recurrence insurance. Those are the things we have been innovating about, but this is not like the high-end health insurance in before. This is the direction we have been trying. Also for the pharmaceutical companies, this is something they are looking forward to because this will enrich their payment channels, not just in medical insurance. They also hope to make some breakthroughs in the commercial insurance. Also the second thing I would like to say is particularly for the top pharmaceutical companies.
For example, the Eli Lilly China and also other insurers. For example, in the United States, there is some common practice, for example, providing medical insurance reimbursements to employees. Also, if you look at the trend, we have seen some market trends as well, for example, from these well-known brands and private enterprises and also state-owned enterprises. They want to try these new channels of payment. Also, at the in-store level, mentioned earlier, we have covered 149,000 pharmacies in China, accounting for more than 80% of the entire payment channel. Remember, we mentioned the Ping An Circle selected merchants, and for these scenarios, we have been promoting some drugs, for example, probiotics and some OTC drugs. Those are our innovations.
Thank you, Mr. He, for your response. Now, for the next questions. Any questions from our online audience? Now let's welcome Mr. Liu Shi from UBS.
Thank you for the question host. I am Henry Liu, analyst at the pharmacy industry at UBS. Two questions in total. One is the innovation model. That is the one-click payment, and we would like to see the progress of this promotion. We also want to know what is the empowerment for the commercial insurance enablement.
Thank you for your interest, and I think it is part of our core strategies. We did not mention it that much earlier, but now the value is showing itself. For our enterprises supervision service, it is usually done through one-click payment. Also, at the Ping An Health and the Ping An Good Doctor, we need to display the code and then provide payment methods.
Now the value is showing itself, and when it comes to the promotion of this one, I mentioned earlier, we cover now more than 90% of Chinese pharmacies in terms of GMV, and the remaining ones are relatively long-tail single pharmacies. For example, for the top 10 pharmacies in China, we have worked with them, partnered with them. So we do have these ERP-level partnerships. Going ahead, we are going to gradually expand into more pharmacies. For example, some clinics as well as some wellness sports healthcare centers. By doing this, we are going to build a more comprehensive payment system. Another thing with our commercial insurance is the connection with public hospitals. This is what we call the HIS connection. That means when the users are at the hospital, their medical records as well as their medical policies will be directly connected.
That is how we achieved for the reimbursements. At the international level, we are seeing some corporations before, but at the domestic levels, the procedures will be slightly longer. We believe that once we cover the top hospitals, more experience will be provided, and this also represents some of our strategic work going ahead. Henry, you mentioned you had two questions, right?
The second question is about the finance. Now we have seen the cash flow and also the cash reserve is relatively sufficient as a company. So we would like to know more about this future capital planning of the company. Do we consider dividends as well as mergers and acquisitions?
Thank you, Henry, for this important question, particularly for shareholders and the capital market.
Our cash reserve for this period is the same as the previous period, and that is close to CNY 9.6 billion, and it mainly consists of low risk or risk-free assets. In terms of our current cash flow, we will support two things in the future. One is our business development. As mentioned earlier, we are focusing on the collaboration between commercial insurance and health insurance. At our company level, whether it is introduction of these vendors or our service network, we are building this service network, for example, the Four-Access Service System ecosystem. Also, our cash flow will be used for the upgrade of our services and networks. For the business development, this require our continuous investment. From a different perspective, we mentioned AI plus real doctors, and this has represented our strategic direction.
So for this aspect, this will represent our very important investments in the future, because healthcare and the senior care in China is a popular industry in China. If we do see a suitable target, we will be open-minded. Also for the dividends, just as briefed earlier, compared with 2024, we have achieved profits and that profit is a significant increase. But considering we are an industry that is vital, home care and elderly care, and this is concerning people's livelihood, and it requires continuous investment. So in recent time, we will prioritize more cash flow into our business development. So in the short term, we don't have any plans for dividends.
Thank you, analyst. We have three more minutes. Any more questions from the floor here?
Thank you, management, for this opportunity. I'm Shen Xingxi, a pharmaceutical analyst at China Securities. So two questions.
Firstly, we look at this offsite service usage rate in the first half of the year has been improving. So I want to know what are the main drivers behind this, and also what is the target for this? The second question is about the Ping An Circle, and that is mainly for the Ping An's employees, and this has to do with the health centers and also other select merchants. Mr. He, please, can you elaborate more on the Ping An Circle and what specific services are we providing to our employees and what are the progress?
As you can see, this proportion of out-of-hospital care is consistently increasing this year. So that means outside of the hospital or inside of the hospital, there are tremendous business opportunities.
In the past, we couldn't achieve much business value on this side, but now we're building our new payment system. So that means our employees, our customers, they can make the payment through this system-level payment code. By that, we can achieve now claims settlements by just one click. It provides better services, it provides better experience. By doing this, our vendors are seeing greater value from those. So that's why we are putting more efforts into those services and products. So we hope we can cover more places, more scenarios, for example, clinics and the hospitals and health centers. So it is at the first level. That is the level of this recognition. So we're providing these services to our employees, and I've talked with many analyst friends, but they didn't really know there are services for them.
Internally at our company, we've done a lot of events to make sure employees are aware of such things. This is what we call awareness services. So going into the future, we're going to combine all these efforts. We'll not only be focusing on the in-hospital services but also out-of-the-hospital services, and also we'll make sure these services are aware to our employees. Also we need to make sure all these services, these Four- Access Service System are improved and it is connected online and offline so that we can provide a more seamless and smooth experience. It's very much like the AMEX payment system we're trying to build. Thank you.
That brings today's Q&A session to a close. Thank you for your question to those who is dialing in and those who's with us today, and also thank management team for their detailed answers.
For more information, please contact our IR colleagues. Thank you.