JP Morgan: Expects continuous growth in sales on the ALI HEALTH (00241) platform, maintains a "neutral" rating.

JPMorgan released a research report stating that the forecasted revenue and adjusted earnings per share of ALI HEALTH (00241) for 2026 have been raised by 3% and 9% respectively, to reflect better-than-expected performance in the first half of the 2026 fiscal year, and the high synergies brought by Alibaba's instant retail; meanwhile, the forecasted revenue for 2027 has been raised by 3%, but the adjusted earnings per share will remain roughly unchanged. Based on a forecasted enterprise value/revenue multiple of 2.5 for the 2026 fiscal year, the target price for December 2026 has been maintained at HK$6.5, with a "Neutral" rating. JP Morgan believes that although there is uncertainty about the incremental contribution and sustainability of instant retail, they believe that the former factor will continue to drive platform sales growth in the foreseeable future. Looking ahead to the second half of the 2026 fiscal year, JP Morgan recommends that investors pay attention to the fluctuations in subsidies for Taobao's instant retail, potential investment scale, and user attrition after subsidy normalization. JP Morgan also points out that due to the accessibility and limited supply of offline hospital medicines (especially original prescription medicines), and the pharmaceutical companies' increasing preference for a dual online and offline new drug listing model, online medical platforms have achieved rapid sales growth this year. They believe that this trend is largely irreversible and will continue to drive platform sales in the foreseeable future. Given that the government has gradually canceled subsidies for medical devices in the second half of this year, JP Morgan expects some fluctuations in medical device sales in the second half of the 2026 fiscal year; and predicts a 15% year-on-year increase in revenue for the full 2026 fiscal year, with a 14% growth in the second half, a slowdown from the first half where a strong revenue increase of 17% was achieved, mainly benefiting from the structural changes in the China Meheco Group market, strong momentum in original prescription drugs growth, and the comprehensive effects brought by Taobao's instant retail.