Investment Rating - The report maintains an "Outperform" rating for JD Health International with a target price of HKD 68.14, reflecting a significant upward revision of 58.8% from previous estimates [2][21]. Core Insights - JD Health's revenue for H1 2025 reached RMB 35.29 billion, representing a year-on-year growth of 24.5%, driven by strong demand for pharmaceutical and health products [3][14]. - The company's gross margin improved to 25.2%, with operating profit increasing by 105.5% to RMB 2.13 billion, indicating robust profitability growth [4][15]. - The deployment of AI technology is enhancing operational efficiency and long-term competitiveness, with over 500 AI agents launched in JD Internet Hospital [4][16]. Financial Performance Summary - Revenue projections for FY25 and FY26 are set at RMB 70.4 billion and RMB 81.2 billion, respectively, with expected growth rates of 21.0% and 15.4% [5][18]. - Adjusted net profit is forecasted to be RMB 5.6 billion for FY25, reflecting a 15.9% increase year-on-year [7][20]. - The company anticipates a continued strong performance in H2 2025, with pharmaceutical sales expected to grow by 25% [5][18]. Valuation and Forecast - A DCF valuation approach estimates the company's equity value at HKD 218.0 billion, leading to a target share price of HKD 68.14 [8][21]. - The report highlights the advantages JD Health holds in both supply and demand sides of the market, positioning it as a leader in the integrated online-offline healthcare sector [5][17].