UBS Group released a report indicating that ali health (00241.HK) management reiterated the revenue growth target for the fiscal year 2025 to be 10% or more, and the adjusted net profit for the fiscal year 2026 to be between 2.3 to 2.5 billion yuan. According to management, the acceleration of revenue growth starting from the second half of the fiscal year 2025 will mainly benefit from the accelerated growth of pharmaceuticals and the continued growth of non-pharmaceutical categories. The firm believes that the renewed focus on pharmaceuticals reflects the company's pursuit of market share growth, but this may depend on whether it can maintain its current gross profit level.

The firm raised the target price of ali health from 3.3 yuan to 3.75 yuan, equivalent to a projected p/s of 1.7 times for the fiscal year 2026, rating it as 'Neutral'. Considering the weak consumer environment, it adjusted downwards the revenue forecast for non-pharmaceuticals but slightly raised the pharmaceutical growth forecast to reflect strategic adjustments.

UBS Group expects ali health's revenue growth for the fiscal years 2025 to 2027 to be 10.5%, 9.1%, and 10.2% respectively, with the earnings per share forecasts for 2026 and 2027 also being revised down from 0.17 yuan (same below) and 0.2 yuan to 0.15 yuan and 0.17 yuan.