Investment Rating - The report maintains a "Buy" rating for JD Health International (6618.HK) [1][21]. Core Insights - JD Health's share price has increased by 60% year-to-date, outperforming the Hang Seng Index and peers [1]. - The company is focusing on on-demand initiatives, market share growth, and disciplined capital allocation as key areas of interest [1][20]. - JD Health is expected to achieve 18% year-on-year topline growth for 2Q25, with a stable profit margin despite increased investments [20][24]. Summary by Sections On-Demand Initiatives - JD Health is rapidly expanding its preposition warehouses in tier-1 cities, targeting around 200 warehouses by the end of FY25 [2]. - The competition in the on-demand space remains disciplined, with JD Health focusing on quality and variety rather than aggressive sales volume increases [2][19]. - Higher investments and promotions are anticipated in the second half of FY25 to drive online-to-offline (O2O) growth [2][28]. Market Share and Growth - JD Health is gaining market share in the online drug category, with strong user engagement expected to drive traffic and transactions [3][19]. - The competitive landscape is evolving, with ongoing debates about B2C versus O2O competition in the pharmaceutical sector [3][19]. - The company is projected to outperform peers, with a diverging sales growth trend compared to competitors [21][27]. Financial Projections - Revenue forecasts for JD Health are set at RMB 58,159.9 million for FY24, increasing to RMB 88,638.8 million by FY27 [6][17]. - EBITDA is expected to grow significantly, with projections of RMB 1,684.2 million for FY24 and RMB 3,601.3 million for FY27 [6][17]. - The report anticipates a net profit of RMB 4,161.8 million for FY24, increasing to RMB 6,608.1 million by FY27 [17][39]. Capital Allocation - JD Health has over RMB 50 billion in net cash, representing approximately 50% of its market capitalization, which will be a focus in upcoming results [20][21]. - The company is expected to maintain a disciplined spending pattern while exploring opportunities for investments and shareholder returns [21][39].