Group 1 - Morgan Stanley reports that Alibaba Health's stock price has increased by approximately 27% since the announcement of its fiscal year 2025 results, outperforming peers by 8 percentage points [1] - The increase in stock price is attributed to positive investor reactions to recent updates in online retail sales policies for prescription drugs, leading to a target price adjustment from HKD 5 to HKD 6.5, reflecting a projected price-to-sales ratio of 2.5 times for the current fiscal year [1] - The report suggests that the impact of the policy update is more emotional than substantive, as it does not differ significantly from existing policies [1] Group 2 - The synergy with Taobao's fast e-commerce is expected to be a key focus for the first half of the current fiscal year ending in September, particularly in terms of user and order growth, potential investment scale, and user retention post-subsidy normalization [1] - Revenue forecasts for Alibaba Health for the current and next fiscal years have been raised by 4%, reflecting the collaborative effects with Taobao's fast e-commerce on user traffic and overall transaction volume [1] - Adjusted earnings per share forecasts for the current and next fiscal years have been increased by 3% and 4% respectively, due to savings from market promotion costs associated with high subsidies from Taobao, partially offset by investment from business collaboration [1]

Core Viewpoint - Morgan Stanley's report indicates that Alibaba Health's stock price has outperformed its peers since the announcement of its fiscal year 2025 results in May, primarily due to investor optimism regarding recent updates to online prescription drug retail sales policies, despite these updates being largely similar to existing policies [1] Group 1: Financial Performance - Morgan Stanley has raised its revenue forecasts for Alibaba Health by 4% for both the current fiscal year and the next fiscal year, based on the synergistic effects with Taobao's fast e-commerce in terms of user traffic and total transaction volume [1] - The adjusted earnings per share forecasts for the current fiscal year and the next fiscal year have been increased by 3% and 4%, respectively, considering the marketing savings from Taobao's high subsidies for fast e-commerce [1] Group 2: Market Positioning - The report emphasizes that the synergy with Taobao's fast e-commerce will be a key focus for the first half of the current fiscal year, including growth in user and order volume, potential investment scale and forms, and user retention post-subsidy normalization [1] - Morgan Stanley has raised the target price for Alibaba Health from HKD 5 to HKD 6.5 while maintaining a "Neutral" rating [1]