Morgan Stanley published a research report that lowered the target price of Alibaba Health Information Technology (0241.HK) from HK $18 to HK $13 and maintained its "outperform" rating.

According to the report, Alibaba Health Information Technology's semi-annual sales rose 31%, in line with the bank's expectations, and the adjusted loss was dragged down by lower gross profit margins and expenses. In terms of products, pharmaceutical and non-drug sales increased by 40% and 26% respectively. Gross margin fell 6 percentage points to 20 per cent, due to more mixed transfers of drug sales, especially prescription drugs, but gross margins are expected to rise by 1 percentage point on a half-yearly basis in the second half of the year.

The bank expects Alibaba Health Information Technology's annual revenue to grow by about 30 per cent and direct sales to grow by more than 30 per cent, of which the platform will grow by about 10 per cent; the platform is expected to grow better in 2023, ranging from 10 to 15 per cent, taking into account the impact of the upcoming online prescription guidelines. Online drug sales growth remains at a healthy level of about 30 per cent. Finally, Alibaba Health Information Technology said that he was negotiating with the parent company to adopt a higher interest rate allocation, but there was no specific timetable.

Morgan Stanley cut its revenue forecasts for 2022 and 23 by 2%, lowered gross profit margins and raised operating expense assumptions, and is expected to break even by 2024.