UBS: Maintaining JD Health's (06618) “Buy” Rating and Raising Target Price to HK$45

The Zhitong Finance App learned that UBS released a research report stating that the target price was raised from HK$35.2 to HK$45 while maintaining the JD Health (06618) “buy” rating. The bank raised its 2025-2027 revenue forecast by 3% to 4%, and expects a compound annual revenue growth rate of 15% from 2024 to 2026. The bank believes that the market is ignoring JD Health's revenue growth potential. UBS raised its revenue forecast for 2025 to 2027 by 3% to 4%, reflecting the acceleration of online drug penetration and market share expansion. The bank raised its valuation base from the forecast market sales rate of 1.4 times to 1.7 times (between 2.8 times in the Internet sector and 0.5 times the average for pharmacies).

UBS pointed out that it raised its revenue forecast and target price for JD Health to reflect the accelerated growth of drug sales supported by its supply chain advantage, user experience, and omni-channel (B2C, O2O and offline) strategy. By increasing its reinvestment this year, the bank believes that JD Health hopes to expand its leading edge in user mentality and improve the user experience of healthcare services and drug retail, which should drive market share growth as its offline and online competitors generally shrink. The bank predicts a compound annual revenue growth rate of 15% for JD Health from 2024 to 2026, while the industry's growth rate is in single digits to 10%.