[ET Net News Agency, 12 January 2021] Goldman Sachs initiated coverage on JD Health
International (06618) with a "neutral" rating and a target price of HK$139.
The research house sees JD Health as well-positioned to benefit from (1) China's
healthcare e-commerce (34% CAGR) and online services (51% CAGR) growth in FY2020-25, (2)
parentco JD Group's e-commerce position and logistics capabilities, and (3) its leading 1P
online pharmacy position, the growing pool of doctors, and widening range of service
offerings.
Goldman forecast revenues/gross profit to grow at +55%/+53% CAGR (FY2019-22), outpacing
its non-IFRS net profit CAGR (+5%), as JDH aims to reinvest profits to improve its
competitive position (i.e. to grow its user base, raise sales per customer, increase range
of online healthcare services, and enhance its solutions), which would temporarily depress
margins. (KL)