Macquarie: Raises JD HEALTH target price to HKD 74.57, maintains "Outperform" rating
Macquarie raised the target price for JD HEALTH by 20% to HKD 74.57, maintaining an "Outperform" rating. It is expected that revenue will grow by 22% year-on-year in the third quarter of 2025, and the adjusted net profit margin in the second half of the year will reach 8.1%, an increase of 90 basis points year-on-year. Macquarie believes that the company's position in the main healthcare product distribution channels will continue to strengthen, benefiting from the launch of new drugs and increased advertising spending, with an overall gross profit margin expected to expand by 1.5 percentage points year-on-year to 23.7%
According to the Zhitong Finance APP, Macquarie has released a research report stating that it has raised the target price for JD HEALTH (06618) by 20%, from HKD 62.14 to HKD 74.57, maintaining an "outperform" investment rating. Macquarie has kept its earnings forecast for the company unchanged. Macquarie expects that JD HEALTH will show a good trend in the third quarter of 2025, with a year-on-year revenue growth of 22% in the second half of the year. It is anticipated that under the weak performance of offline pharmacies, the company will continue to consolidate its position in the main healthcare product distribution channels, further increasing market share and integrating the market.
Macquarie expects the company to maintain strong growth momentum in the second half of the year, benefiting from the direct launch of more new drugs and stronger advertising spending from merchants. Macquarie predicts that the enhanced contribution from drug sales will impact the overall gross margin, believing that the growth rates of related categories (drugs > supplements > devices) will not show significant changes. It is believed that the company's supply chain capabilities and faster-growing market revenues can offset this drag and drive the group's gross margin to expand by 1.5 percentage points year-on-year to 23.7% in the second half of the year.
Considering the company's cautious approach to expanding offline stores and the increased spending during the promotional period in the fourth quarter, Macquarie expects the adjusted net profit margin in the second half of the year to reach 8.1%, a year-on-year increase of 90 basis points
