Investment Rating - The report maintains a "Buy" rating for the company [1][11]. Core Views - The company's revenue and profit growth for 2024 exceeded Bloomberg consensus expectations, driven by increases in product sales and advertising revenue [7]. - The company has strengthened its self-operated advantages and enhanced the competitiveness of its online platform and instant retail business, achieving complementary advantages across three business models [7]. - The daily average transaction amount reached 1,164.74 million HKD, with over 1.84 million active users by the end of 2024 [7][8]. Financial Performance Summary - For 2024, the company reported revenue of 582 billion RMB, a year-on-year increase of 8.6%, with a gross profit of 133 billion RMB and a gross margin of 22.9% [5][10]. - Adjusted operating profit was 2.6 billion RMB, corresponding to an operating margin of 4.5%, while adjusted net profit reached 4.8 billion RMB, reflecting a year-on-year growth of 15.9% [5][10]. - The company expects revenues of 660 billion RMB in 2025, 741 billion RMB in 2026, and 820 billion RMB in 2027, with adjusted net profits of 4.5 billion RMB, 4.9 billion RMB, and 5.4 billion RMB respectively [9][10]. Market Position and User Engagement - The company has expanded its online medical insurance payment capabilities, significantly enhancing user conversion rates and reducing medication costs for users [7]. - The AI health assistant "KangKang" has served over 30 million users, achieving a problem-solving rate of 70% [8].

Investment Rating - The report maintains a "Buy" rating for JD Health with a target price of HK$55.17, representing a potential upside of 54% from the current price of HK$35.75 [2][15]. Core Insights - JD Health's revenue for 2024 is projected to be RMB 58.16 billion, reflecting an 8.6% year-on-year growth, with a significant profit increase of 94% to RMB 4.16 billion [6][9]. - The company is expected to continue optimizing its product mix, leading to a gross profit increase to RMB 13.31 billion in 2024, up 12.2% [6]. - The report highlights the robust growth in product sales and the optimization of the omnichannel layout, with product sales revenue expected to grow at a compound annual growth rate (CAGR) of 15% from 2025 to 2027 [7]. - JD Health is expanding its healthcare service ecosystem, with service revenue projected to grow at a CAGR of 17% from 2025 to 2027 [8]. Financial Summary - The financial data indicates that JD Health's revenue is expected to reach RMB 67.09 billion in 2025, with a gross profit of RMB 15.86 billion and a net profit of RMB 4.53 billion [9][21]. - The adjusted EPS for 2025 is projected at RMB 1.41, with a growth trajectory leading to RMB 1.97 by 2027 [9][12]. - The report notes a significant increase in operating efficiency, with operating profit expected to rise by 132.9% in 2024 [6][10]. Valuation - The DCF valuation method used in the report results in a target price of HK$55.17, which is based on a WACC of 9.0% and a perpetual growth rate of 3.0% [15][16]. - The target price corresponds to a P/S ratio of 2.4 for 2025, which is below the industry average of 3.1, indicating potential for valuation upside [15][18].

Investment Rating - The report maintains a "Buy" rating for JD Health with a target price of HK$55.17, representing a potential upside of 54% from the current price of HK$35.75 [2][15]. Core Insights - JD Health's revenue for 2024 is projected to be RMB 58.16 billion, reflecting an 8.6% year-on-year growth, with a significant profit increase of 94% to RMB 4.16 billion [6][9]. - The company is expected to continue optimizing its product mix, leading to a gross profit increase to RMB 13.31 billion, a 12.2% rise [6]. - The report highlights the robust growth in service revenue, with expectations of a 17% year-on-year increase from 2025 to 2027 [8]. Financial Summary - **Revenue Projections**: - 2025E: RMB 67.09 billion - 2026E: RMB 77.22 billion - 2027E: RMB 87.60 billion [9][12] - **Gross Profit Projections**: - 2025E: RMB 15.86 billion - 2026E: RMB 18.25 billion - 2027E: RMB 20.79 billion [9][12] - **Net Profit Projections**: - 2025E: RMB 4.53 billion - 2026E: RMB 5.34 billion - 2027E: RMB 6.30 billion [9][12] - **Earnings Per Share (EPS)**: - 2025E: RMB 1.41 - 2026E: RMB 1.67 - 2027E: RMB 1.97 [9][12] Market Comparison - JD Health's target price corresponds to a price-to-sales (P/S) ratio of 2.4 times for 2025, which is below the industry average of 3.1 times for comparable internet healthcare platforms [15][18].

Core Viewpoint - UBS believes JD Health is enhancing user experience and expanding market share through increased reinvestment [1] Revenue Growth Projections - JD Health's revenue compound annual growth rate (CAGR) is expected to be 15% from 2024 to 2026, surpassing peers [1] - UBS has raised JD Health's revenue forecasts for 2025-2027 based on accelerated online drug penetration and market share expansion [1] Target Price and Rating - The target price for JD Health has been increased from HKD 35.2 to HKD 45, with a rating of "Buy" [1]

Investment Rating - The report maintains an "Outperform" rating for JD Health International with a target price of HK$42.90, reflecting a potential upside from the current price of HK$35.75 [2][9]. Core Insights - JD Health's revenue for 2024 slightly exceeded market expectations, achieving RMB 58.2 billion, a year-on-year increase of 8.6%. The adjusted net profit reached RMB 4.8 billion, surpassing expectations by 15.9% due to scale effects, resulting in a net profit margin of 8.2% [3][19]. - The company experienced strong growth across all major product categories in Q4 2024, with revenue of RMB 16.5 billion, marking an 11.3% increase. This performance indicates a recovery and growth trajectory post-pandemic [20][21]. - The number of merchants on the platform has significantly increased, contributing to a robust ecosystem characterized by comprehensive products, low prices, and high quality. The number of merchants grew from over 20,000 in 2022 to over 100,000 in 2024 [21][22]. - JD Health is expanding its offline pharmacy presence, with nearly 60 self-operated O2O stores opened in Beijing by the end of 2024, enhancing its market reach and operational capabilities [22]. - The company is optimistic about the integration of AI in healthcare, with a growing active user base of 180 million and daily online consultations exceeding 490,000. This positions JD Health favorably in the evolving internet healthcare landscape [23][24]. Financial Summary - Revenue projections for 2025 and 2026 are set at RMB 66.6 billion and RMB 75.7 billion, respectively, indicating year-on-year growth of 14.5% and 13.7% [25][26]. - Adjusted net profit for 2025 and 2026 is expected to be RMB 4.4 billion and RMB 5.4 billion, reflecting a year-on-year growth of -7.3% and 20.5% [25][26]. - The report highlights a DCF valuation predicting the company's equity value at HK$136.8 billion, corresponding to a share price of HK$42.90, with a WACC of 9.2% and a perpetual growth rate of 2.0% [26].

Investment Rating - The investment rating for JD Health is maintained as "Buy" with a target price of HKD 42.70 [4][7]. Core Views - JD Health's total revenue for 2H24 is projected to be RMB 29.8 billion, representing a year-on-year increase of 12.9%, which is better than the Visible Alpha consensus estimate of 11.2%. The non-IFRS net profit is expected to be RMB 2.1 billion, with a non-IFRS net profit margin of 7.2%, an increase of 1.9 percentage points year-on-year [1][2]. - For 2025, revenue growth is anticipated to improve to 13.8%, driven by enhancements in instant retail service capabilities and exploration of AI applications in the healthcare sector [1][3]. Summary by Sections Revenue and User Growth - In 2H24, sales revenue from pharmaceuticals and health products increased by 10.7% to RMB 24.9 billion, while platform, advertising, and other service revenues grew by 25.3% to RMB 4.9 billion, primarily due to sustained growth in advertising revenue [2]. - As of the end of 2024, JD Health's annual active user count reached 184 million, with a net increase of approximately 12 million year-on-year [2]. Operational Enhancements - Management plans to enhance fulfillment capabilities in instant retail scenarios in 2025, focusing on optimizing service efficiency and integrating online and offline operations [3]. - JD Health is recognized as a pioneer in the large-scale application of AI models in the internet healthcare sector, with its "Jingyi Qianxun" model being the most widely adopted in the industry [3]. Profitability and Valuation Adjustments - The non-IFRS net profit forecasts for 2025 and 2026 have been adjusted downwards by 6.4% and 7.4% to RMB 4.41 billion and RMB 4.69 billion, respectively, due to increased business investments [4][11]. - The target non-IFRS PE valuation for 2025 is set at 28.0x, which is a premium compared to the average PE of comparable companies at 15.2x, reflecting JD Health's higher operational efficiency and first-mover advantage in AI healthcare [4][13].

Investment Rating - The investment rating for JD Health (06618.HK) is "Buy" with a target price not specified [4]. Core Views - JD Health reported a revenue of 58.16 billion yuan for 2024, representing an 8.6% year-on-year increase from 53.53 billion yuan in 2023. The self-operated product revenue was 48.80 billion yuan, up 6.9%, while service revenue reached 9.36 billion yuan, growing by 18.9% [1][2]. - The company's gross margin increased by 0.7 percentage points to 22.9%, driven by revenue mix optimization. Annual profit reached 4.16 billion yuan, a 94.0% increase year-on-year, with adjusted Non-IFRS net profit at 4.79 billion yuan, up 15.9% from 4.14 billion yuan in 2023 [1][3]. - Active user count reached 184 million by December 31, 2024, an increase of 11.3 million from the previous year, with over 100% growth in the number of third-party merchants exceeding 100,000 [1][2]. Revenue Breakdown - Self-operated product revenue for 2024 was 48.80 billion yuan, reflecting a 6.9% increase, supported by strengthened supply chain capabilities and collaboration with global pharmaceutical companies [2]. - Service revenue for 2024 was 9.36 billion yuan, up 18.9%, primarily due to an increase in the number of advertisers and growth in third-party merchant commissions [2]. Operational Data - The average daily online consultation volume exceeded 490,000 in 2024, indicating enhanced capabilities in medical service delivery through specialized services and AI applications [2][3]. - JD Health expanded online medical insurance payment services in 18 cities, connecting over 3,000 designated pharmacies, covering a population of over 100 million [2]. Profitability Optimization - The gross margin improved to 22.9%, attributed to a higher proportion of high-margin service revenue and product mix optimization. The fulfillment cost ratio increased by 0.5 percentage points to 10.4% due to logistics network expansion [3]. - The selling expense ratio slightly increased by 0.2 percentage points to 5.2%, mainly due to increased marketing investments, while general and administrative expenses improved significantly by 1.3 percentage points to 2.4% [3]. Future Projections - Revenue forecasts for 2025, 2026, and 2027 have been adjusted to 62.7 billion yuan, 71 billion yuan, and 80.9 billion yuan, respectively, with adjusted net profits projected at 4.4 billion yuan, 5.1 billion yuan, and 6 billion yuan [4].

Investment Rating - The investment rating for JD Health (06618.HK) is "Buy" with a target price not specified [4]. Core Insights - JD Health reported a revenue of 58.16 billion yuan for 2024, representing an 8.6% year-on-year increase from 53.53 billion yuan in 2023. The self-operated product revenue was 48.80 billion yuan, up 6.9%, while service revenue reached 9.36 billion yuan, growing by 18.9% [1][2]. - The company's gross margin increased by 0.7 percentage points to 22.9%, primarily due to revenue mix optimization. Annual profit was 4.16 billion yuan, a 94.0% increase year-on-year, with adjusted Non-IFRS net profit at 4.79 billion yuan, up 15.9% from 4.14 billion yuan in 2023 [1][3]. - Active user count reached 184 million by December 31, 2024, an increase of 11.3 million from 172 million in 2023. The number of third-party merchants exceeded 100,000, doubling year-on-year, and daily online consultations surpassed 490,000 [1][2]. Revenue Breakdown - Self-operated product revenue for 2024 was 48.80 billion yuan, reflecting a 6.9% growth, supported by deepening collaborations with global pharmaceutical companies and expansion in chronic disease management categories [2]. - Service revenue amounted to 9.36 billion yuan, up 18.9%, driven by an increase in advertisers and third-party merchant commissions. The platform's merchant count exceeded 100,000, indicating significant scale effects [2]. Operational Developments - JD Health expanded online medical insurance payment services in 18 cities, connecting with over 3,000 designated pharmacies, covering a population of over 100 million. Innovations in offline pharmacy models and home healthcare services were also introduced [2]. Profitability Enhancement - The gross margin improved to 22.9%, attributed to a higher proportion of high-margin service revenue and product mix optimization. The fulfillment cost ratio increased by 0.5 percentage points to 10.4% due to logistics network expansion, while administrative expenses saw a significant improvement [3]. Future Projections - Revenue forecasts for 2025, 2026, and 2027 have been adjusted to 62.7 billion yuan, 71 billion yuan, and 80.9 billion yuan respectively, with net profit estimates of 4.4 billion yuan, 5.1 billion yuan, and 6 billion yuan [4].

Investment Rating - The investment rating for JD Health (06618.HK) is "Outperform the Market" [1][3][12] Core Views - In H2 2024, JD Health achieved a revenue of 29.8 billion yuan, representing a year-on-year increase of 13%. The growth was driven by an increase in active user numbers and a wider range of product categories [1][8] - The company's non-IFRS net profit margin improved from 6.4% in the previous year to 7.2%, with operating profit margin rising from -1% to 2%, primarily due to improvements in gross margin and administrative expense ratios [2][8] - For 2025, the management plans to increase long-term strategic investments to capitalize on structural changes in the healthcare market, expecting significant revenue and profit improvements over the next three years [2][8] Revenue and Profit Forecast - Revenue forecasts for 2025 and 2026 are set at 65.7 billion yuan and 73.5 billion yuan, respectively, with adjustments of 2.9% and 3.7% upwards due to increased consumer online purchasing behavior [3][12] - Adjusted net profit for 2025 and 2026 is projected at 4.4 billion yuan and 4.9 billion yuan, with downward adjustments of 7.9% and 3.2% due to increased investments in front warehouses and AI [3][12] Operational Data - As of H2 2024, JD Health had 184 million annual active users, a 7% year-on-year increase, indicating a user penetration rate of 27% with significant growth potential [2][9] - The average transaction value decreased year-on-year, but this was offset by an increase in shopping frequency among users [9]

Summary of JD Health Conference Call Company Overview - **Company**: JD Health - **Year**: 2024 Key Points and Arguments User Growth and Engagement - JD Health achieved 183 million active user accounts in 2024, with an average of over 498,000 online consultations per day, maintaining this level for four consecutive years [2][3] - Direct sales revenue reached 48.8 billion RMB, a year-on-year increase of over 6.9%, with strong performance in surgical services and electric scissors [2][3] Market Position and Innovations - JD Health maintains its leadership in the pharmaceutical e-commerce sector, accelerating online channel development to meet growing user demand for flu medications and personal treatment [2][5] - The company innovated in internet medical services, providing a full process from online consultation to home check-ups and prescriptions, enhancing convenience [2][5] - JD Health is the first online healthcare platform to apply large language models (LLM) on a large scale, improving doctor communication and research efficiency [2][5][6] Financial Performance - Service revenue exceeded 9.36 billion RMB in 2024, a year-on-year increase of 18.9%, accounting for 16.1% of total revenue [2][10] - The gross margin increased by 17 basis points to 22.9%, reflecting supply chain optimization efforts [10][11] Retail and Insurance Services - JD Health launched online drug purchase services using personal medical insurance accounts in 80 cities, covering over 100 million people [3][12] - The company plans to expand online medical insurance payment services in 2025, enhancing user experience and recognition [23] Technological Advancements - JD Health introduced AI solutions to support hospital applications, optimizing patient care processes and clinical research [2][6] - The company is committed to AI technology development, with top-tier AI language models available for hospitals, medical institutions, and patients [20][21] Future Strategies - In 2025, JD Health will focus on strengthening B2C direct sales, online markets, and on-demand retail operations to solidify its position as a leading online healthcare platform [8][18] - The company aims to deepen hospital service skills and enhance home service models, while investing in technology applications to create real value for the healthcare industry [8][18] Industry Trends and Responses - The Chinese healthcare market is rapidly expanding, driven by an aging population and increasing health awareness among younger generations [22] - JD Health plans to address these changes by enriching product lines, optimizing channel experiences, and integrating online and offline resources [22] Competitive Landscape - JD Health will leverage insights into user needs to optimize its business model and enhance supply chain capabilities, ensuring sustainable competitive advantages [16] Collaboration and Partnerships - The company has engaged in innovative collaborations with firms like October, MSC Helium, and Pfizer in supply chain services, patient services, and academic marketing [9][19] Customer Experience and Trust - JD Health is focused on enhancing customer trust through competitive pricing strategies and comprehensive service offerings, including free prescription drug change services and 24/7 support [19] Additional Important Content - JD Health's commitment to continuous investment in AI and big data technologies aims to maintain its leadership position in the digital health sector [14][15] - The company is exploring new growth opportunities in the specialty drug market and enhancing its academic marketing platform to attract more medical companies [19]