Dahua Jixian: AI innovation and national policy drive the mainland internet medical field, optimistic about ALI HEALTH (00241) and PA GOODDOCTOR (01833).

Dahua Jixian released a research report stating that the internet medical field in mainland China is entering a new stage, with driving factors including technology giants accelerating AI innovation and national policy support, such as Beijing's launch of an online initial consultation pilot program. Although facing profitability challenges, leading enterprises are leveraging AI ecosystems and innovative strategies to deploy long-term sustainable growth. In terms of stock selection, the bank is bullish on ALI HEALTH (00241), maintaining a "buy" rating with a target price of 7.8 Hong Kong dollars. It is expected that with the continued growth momentum of innovative drugs and medical health products, deepening synergies with BABA-W (09988), and the increasing popularity of AI applications, ALI HEALTH's revenue and adjusted net profit compound annual growth rates for the fiscal years 2026 to 2028 are projected to reach 13% and 24%, respectively. Furthermore, the bank also has a positive outlook on PA GOODDOCTOR (01833), maintaining a "buy" rating with a target price of 20 Hong Kong dollars. It is expected that with deepening synergies with Ping An Insurance (02318), and the continued empowerment of AI, the company's revenue and adjusted net profit compound annual growth rates for the years 2025 to 2027 are expected to reach 16% and 56%, respectively. At the same time, the bank maintains a "hold" rating on the mainland medical sector, preferring leading innovative drug companies and contract research, development, and manufacturing organizations (CRDMO), while also seeing potential in internet medical enterprises that can effectively use real-world data to optimize AI algorithms and improve service quality. Preferred stocks include BEONE MEDICINES (06160), INNOVENT BIO (01801), HANSOH PHARMA (03692), SINO BIOPHARM (01177), HUTCHMED (00013), WUXI BIO (02269), WuXi AppTec (02359), and ALI HEALTH.