Core ideas:
Event: JD Health released 23H1 results. 23H1, the company achieved revenue of 27.11 billion yuan, an increase of 34.0% over the same period last year. Among them, the revenue of pharmaceutical and health products sales business (pharmaceutical e-commerce self-owned business) was 23.17 billion yuan, an increase of 32.5% over the same period last year, mainly due to the growth of the number of active users and the improvement of user repurchase, as well as the enrichment of sku; revenue from platform, advertising and other services was 3.94 billion yuan, up 43.7% from the same period last year, mainly due to the increase in the number of advertisers and the increase in 3P sales. The net profit was eye-catching, with a net profit of 1.56 billion yuan, a substantial increase of 600.6% over the same period last year, and a net interest rate of 5.8%, 2.44 billion yuan, and a year-on-year increase of 101.2%, 9%. The improvement in overall profitability, on the one hand, comes from the continuous release of economies of scale on the purchasing side and the improvement of bargaining power, on the other hand, it comes from the increase in interest income.
The quantity and quality of 23H1 and JD Health users have been improved. According to the company's financial report, the number of annual active users reached 169 million in the 12 months to 2023-6-30, a net increase of 37.3 million over the same period last year. The repurchase of proprietary business users and the retention of new users continue to improve. As for the platform business, as of 2023-6-30, more than 36000 third-party merchants have settled in. In terms of Internet hospital business, as of 2023-6-30, the average daily consultation volume exceeded 440000. At the same time, the company accelerates the omni-channel business layout, focuses on local real-time retail services, and completes the operational integration of JD.com 's pharmaceutical and health product category business. As of 2023-6-30, the omni-channel layout has covered more than 400 cities across the country, with more than 1200 cooperative chain brands and more than 100000 cooperative stores, of which more than 60% are cooperative stores in third-tier cities and below.
Profit forecast and investment advice: assuming that the company's YAU in 23 years increased by 16% to 179 million, while per capita expenditure decreased due to scale growth and low-price strategy, the company's income in 23 / 24 is expected to be 53.66 billion yuan and 65.42 billion yuan, respectively. Comparable companies include Alibaba Health Information Technology and Ping An Healthcare And Technology. With reference to the valuation hub of the comparable company and the current market environment, the company is valued at 3 times PS in 2024, with a reasonable value of HK $67.08 per share and a "buy" rating.
Risk hint. The direction of policy development is uncertain; market competition is higher than expected; the development of new categories and services do not achieve the expected effectiveness; platform and O2O business face risks related to third-party merchants.