UBS: Maintains "Buy" rating on JD Health (06618) and raises target price to 45 Hong Kong dollars.

UBS released a research report stating that it maintains a "buy" rating for JD Health (06618), with the target price raised from 35.2 Hong Kong dollars to 45 Hong Kong dollars. The bank raised its revenue forecasts for 2025 to 2027 by 3% to 4%, expecting a compound annual revenue growth rate of 15% from 2024 to 2026. The bank believes that the market is overlooking JD Health's revenue growth potential. UBS raised its revenue forecasts for 2025 to 2027 by 3% to 4%, reflecting accelerated online drug penetration and market share expansion. The bank raised its valuation basis for JD Health from a forecasted 2026 market sales ratio of 1.4 times to 1.7 times (average of 2.8 times in the internet sector, and 0.5 times in pharmacy sector). UBS stated that it has increased its revenue forecasts and target price for JD Health to reflect the acceleration of drug sales supported by its supply chain advantages, user experience, and comprehensive channel strategy (B2C, O2O, and offline). Through increased reinvestment this year, the bank believes that JD Health aims to expand its leading position in the minds of users and improve the user experience of healthcare services and drug retail, which should drive market share growth while its offline and online competitors are generally contracting. The bank predicts a compound annual revenue growth rate of 15% for JD Health from 2024 to 2026, while the industry growth rate is in the single digits to 10%.