Yidu Earnings: Still Yet To See Robust Growth After Another Lackluster Set of Results

We keep our fair value estimate at HKD 5.20 for Yidu after its lackluster fiscal second-half 2023 revenue of CNY 330 million, down 55% year over year. While the company increased the number of clients and users for its main Big Data and platform solutions segment, the growth was overshadowed by a 56% decline in average revenue per client to CNY 1.8 million. Yidu attributed the revenue decline to continuing headwinds from the pandemic, as hospitals were just beginning to focus on other services than COVID-related in March and April, and a lag in resuming normalized operations. Management remains optimistic that revenue growth can return to its previous forecast of 40%-50% per year starting in 2025, but its fiscal 2024 forecast is likely to be conservative as hospitals slowly transition into their clinical trials and services again. We forecast for overall 20% revenue growth year over year in fiscal 2024.