Zhitong Financial APP learned that Xiaomo released a research report reiterating Alibaba Health Information Technology's (00241) "neutral" rating and maintaining the forecast of more than 30% compound annual growth rate of income in fiscal year 2022-24, but it is not expected to make a net profit until fiscal year 2024, a year later than the original forecast, because the company's growth mainly comes from sales of prescription drugs with low profit margins. It believes that the company's growth prospects are bleak, coupled with the lack of recent catalyst for the stock price, the target price has been reduced from HK $9 to HK $8.
The company's results in the first half of fiscal 2022 were weak, the report said. The bank is concerned that tighter regulation of the Internet healthcare industry is undermining the potential upside of the company's online medical services and slowing the growth of online prescription drug sales. In addition, the growth outlook for BABA-SW (09988) is weak in the coming quarters, and Alibaba Health Information Technology is expected to suffer from the lack of resources to support its ecommerce platform sales growth.