Morgan Stanley's research report pointed out that PA Gooddoctor (01833.HK) performance and conference calls have given the bank confidence in the sustainability of the company's first-half operating expense ratio decrease, mainly benefiting from streamlining operations and artificial intelligence (AI). The company's management expects that some delayed revenue will be reflected in the second-half accounts, resulting in flat or positive revenue growth for the full year. As for channels, the growth of comprehensive financial customers (F-end) is expected to be faster than the insurance industry or mainland GDP growth, reaching high single digits, while the revenue growth guidance for corporate customers (B-end) this year is high double digits, and next year will be low double digits.

The bank raised the company's revenue forecast for this year by 2%, in line with the positive annual guidance from management. It also raised the revenue forecast for next year and 2026 by 1%. In addition, the bank expects the company's adjusted net profit for this year to reach RMB 0.178 billion, and adjusted net profit forecasts for next year and 2026 were raised by 16% and 5% to RMB 0.234 billion and 0.305 billion, respectively. The bank lowered the company's target price from HKD 14.6 to HKD 12.5 and maintained a rating of "in line with the market". (vc/k)

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