Ping An Healthcare and Technology reported a more than 300 per cent surge in losses for the first half of this year on Tuesday. The Shanghai-based company, a health care services unit of insurance giant Ping An Insurance and formerly known as Ping An Good Doctor, said strategic investments aimed at growing market share had weighed upon its gross margin. “The development was in line with our blueprint,” Ye Lan, the company’s chief financial officer, said in an earnings call. She added that the strategic investments that weighed on profitability were a result of improvement efforts launched mid last year and that the company’s plan to break-even by around 2024 or 2025 was unchanged. The losses at Ping An Healthcare come amid tighter scrutiny of China’s internet health care market. Just last week, People’s Daily called for increased scrutiny of the sector, which was worth 54.5 billion yuan (US$8.4 billion) and is expected to reach 63.6 billion yuan this year, to ensure patients’ safety. Its loss surged 312.4 per cent year on year to 879.3 million yuan from January to June, while its gross margin declined to 26.8 per cent from 29.9 per cent. Its revenue rose 39 per cent to 3.8 billion yuan. The company also continued to see a strong inflow of new users amid the Covid-19 pandemic. Its registered users had jumped by 15.7 per cent, or about 55 million, to 400 million users as of June 30. As part of strategic improvements, the company has been focusing on growing its corporate clients roster, the establishment of online consultations, the expansion of insurance channel product offerings and the enhancement of health management services, among others. The company has also changed its pricing strategy. It has lowered prices for new users placing first orders, which has weighed on its growth margin, Ye said. In the long term, this move will benefit the company, she added. Hong Kong stocks complete worst month in three years on China risk premium But the company, which has burnt cash for six consecutive years, has raised doubts among investors, which has contributed to a 34.3 per cent drop in its stock price year to date. They are increasingly losing their patience, especially at a time when many need to cut their losses during the volatility of the Hong Kong stock market. Cathie Wood’s Ark fund, for example, had sharply reduced its holdings of Ping An Healthcare, from apeak of 5.7 million shares on July 26 to 7,600 as of Monday, according to the fund’s website. The Hong Kong-listed shares of the company advanced 2.2 per cent to HK$61.75 on Tuesday ahead of its interim results announcement.