Shen Difan, the chief executive at Alibaba Health, attributed the improved financial results to a significant rise in health care product sales and the firm’s e-commerce business, which includes the provision of outsourced and value-added services for the pharmaceutical categories on parent Alibaba’s Tmall retail platform, according to the company’s regulatory filing late on Wednesday.

It estimated an adjusted net profit of 8 million yuan after excluding share-based compensation expenses from its loss for the year to March.

Growing profitability “will enable the group to increase investment in artificial intelligence-related medical fields, as well as the launch and deployment of cutting-edge and innovative products, including intelligent medicine, internet-based medical services and personal health management”, Shen said in the company filing.

That broader commitment to artificial intelligence (AI) further intensifies the development of this field in China, which has made the technology part of national strategies since July last year.

Chinese premier Li Keqiang said in his work report earlier this year that the Chinese government will step up research, development and application of AI, and promote the Internet Plus model, which aims to integrate internet into traditional offline industries including medical care and elderly care.

Alibaba Health last year partnered with three leading mainland hospitals to launch its first AI medical laboratory, as an ageing China looks to advanced technology to alleviate what has become an acute imbalance in medical resources distribution. This project includes setting up a public platform to support smart diagnostics and assist clinical decisions.

China has seen explosive growth of chronic diseases in recent years, with about 110 million Chinese suffering from diabetes, and another 330 million dealing with hypertension, or high blood pressure.

AI has the potential to improve the outcomes of medical treatment by 30 to 40 per cent, and reduce costs by as much as 50 per cent, according to consultancy Frost & Sullivan.

As of March 31, nearly 23,000 medical practitioners, pharmacists and nutritionists had signed up with Alibaba Health to provide online health consultation services, providing an average of more than 50,000 consultation sessions daily. There were 28 million active users on the company’s “My Health” service through parent Alibaba’s Taobao mobile app.

The vaccination platform of Alibaba Health covered more than a thousand service points across more than a hundred cities, where about 200 million people received vaccination education.

As of March 31, more than 7,500 enterprises from the drug, food and nutritional supplement industries had signed up with Alibaba Health to join its Ma Shang Fang Xin platform, which tracks the full life cycle of their products and help fulfil their regulatory compliance obligations.

The number of pharmaceutical manufacturers which had signed up with the company reached 2,865, which made up more than 80 per cent of the total number of such firms in China.

Still, competition in the health care sector has heated up the AI race among Chinese internet giants Baidu, Tencent Holdings and Alibaba, also the parent company of the South China Morning Post.

Tencent launched its first AI-driven medical product Miying in 2017, which is used for speedy endoscopic examinations and disease and cancer detection in more than 100 hospitals across China.

Baidu, China’s largest online search service, uses the capabilities of its Baidu Brain – a compendium of the company’s AI assets and services – in the medical field, where the firm has launched a chatbot that assists doctors in their communication with patients.