Matters:
Ali Health is about to release financial results for the first half of fiscal year 2024.
Guoxin Internet Opinion: 1) FY24H1, we expect Alibaba Health to achieve revenue of 12.64 billion yuan, +10% year-on-year, and a 2-year CAGR of about 16%.
The revenue growth rate for the current period declined somewhat due to the impact of the high base of the epidemic. The growth rate of self-operated pharmaceutical/pharmaceutical e-commerce platforms/healthcare revenue is expected to be 8%/19%/35% respectively: anti-epidemic related drugs are mainly self-operated models, and the growth rate declined under the high base; pharmaceutical e-commerce platforms and the lower healthcare base growth rate is relatively fast. The expected FY24H1 operating profit margin was 2.2%, up 1.5 pct from the previous year, and the GAAP net interest rate was 2.1%, up 1.2 pct from the previous year. It was mainly affected by the company's fee reduction and efficiency increase, and overall expenses declined steadily. 2) Maintaining shareholding ratings: It is expected that the company's pharmaceutical e-commerce business will continue to grow rapidly after the epidemic is over. We slightly adjusted the company's FY2024-FY2026 revenue forecast to 318/397/46.4 billion yuan. The adjustment margin is +2.7%/+3.4%/4.1%. Currently, the company's stock price corresponds to FY2024 and the adjusted net profit PE is 1.8 times. We have given the company 2.2-2.3 times PS corresponding to FY2024. We lowered the company's target price to HK$5.5-5.8, down by 8%/19% from now There is room for an increase of 23%/28%, maintaining the “increase in holdings” rating.
Commentary:
Overall: Expected FY24H1 revenue +10%, GAAP net interest rate 2% FY24H1. We expect Alibaba Health to achieve revenue of 12.64 billion yuan, +10% year-on-year, and a 2-year CAGR of about 16%. The revenue growth rate for the current period declined somewhat due to the impact of the high base of the epidemic. The growth rate of self-operated pharmaceutical/pharmaceutical e-commerce platforms/healthcare revenue is expected to be 8%/19%/35% respectively: anti-epidemic related drugs are mainly self-operated models, and the growth rate declined under the high base; pharmaceutical e-commerce platforms and the lower healthcare base growth rate is relatively fast.
The expected FY24H1 operating profit margin was 2.2%, up 1.5 pct from the previous year, and the GAAP net interest rate was 2.1%, up 1.2 pct from the previous year. It was mainly affected by the company's fee reduction and efficiency increase, and overall expenses declined steadily.
Investment advice: maintain an “increase holdings” rating
It is expected that the company's pharmaceutical e-commerce business will continue to grow rapidly after the epidemic is over. We slightly adjusted the company's FY2024-FY2026 revenue forecast to 318/397/46.4 billion yuan, with an adjustment margin of +2.7%/+3.4%/4.1%. Currently, the company's stock price corresponds to FY2024 and the adjusted net profit PE is 1.8 times. We have given the company 2.2-2.3 times PS corresponding to FY2024, lowering the company's target price to 5.5-5.8 HKD. The reduction range is 8%/19%, from the current increase of 23%/28%. , maintain the “increase in holdings” rating.
Risk warning
Policy risks, market risks such as increased competition among new entrants, macroeconomic systemic risks, etc.