<Daily Summary> HSI Ends at 25,894, Gaining 178 Points; HSTI Finishes at 5,612, Up 66 Points; XIAOMI Surges Over 4%; Market Turnover Increases

The analyst rating for ALI HEALTH (00241.HK) is maintained at Neutral by JPMorgan due to a combination of factors. The company achieved strong revenue growth of 17% in 1HFY2026, primarily driven by the growth of originator drugs and structural changes in China's pharmaceutical market. However, there is uncertainty regarding the sustainability and incremental contribution of Taobao's instant retail, which could affect future sales growth. As a result, while the current momentum is positive, the broker advises caution and highlights the need to monitor fluctuations in instant retail subsidies and potential user churn. The target price is set at $6.5 based on a projected 2.5x EV/revenue multiple for FY2026.

Goldman Sachs maintained a Neutral rating on ALI HEALTH (00241.HK) due to several key factors. The company is benefiting from structural industry tailwinds, such as the shift of original drugs from in-hospital channels and the growth of online drug sales. However, there is a noted divergence in revenue growth between ALI HEALTH and its competitor JD HEALTH, with ALI HEALTH lagging in establishing a comprehensive first-party (1P) business model, particularly in user awareness and supply chain capabilities. Despite this, Goldman Sachs sees potential upside in ALI HEALTH's results guidance for FY2026, driven by strong growth in its 1P platform sales and effective cost control. The target price was raised from $4.7 to $5.2, reflecting a 2027 PE ratio of 28x for its pharmacy and healthcare services projections.

The analyst rating from UBS was downgraded due to a belief that the performance of ALI HEALTH was primarily driven by a structural shift from offline to online pharmaceutical supply, rather than a strategic pivot towards first-party platforms or first-party pharmaceutical sales. Despite the company's first-party platform sales growth surpassing forecasts, UBS maintains a cautious outlook, suggesting that leading peers may benefit more from this structural trend. Consequently, while the target price was raised, the Sell rating remained in place.

The analyst rating for ALI HEALTH (00241.HK) is maintained at "Outperform" due to several key reasons: 1. Strong Financial Performance: The company's 1HFY26 results exceeded expectations, with a revenue increase of 17% year-over-year and a non-GAAP net profit growth of 38.7%. This indicates robust operational performance, particularly in the original prescription drug category. 2. Positive Forecast Adjustments: CICC raised its non-GAAP net profit forecasts for FY2026 and FY2027 by 16%, reflecting confidence in the company's ongoing profitability and growth potential. 3. Strategic Partnerships: The anticipated strengthening of strategic partnerships with upstream enterprises is expected to enhance contributions from areas beyond product sales, indicating a diversified growth strategy. 4. Sector Valuation Uplift: The recent increase in sector valuations has led to a 30% increase in the target price to $7.1, further supporting the positive outlook on the stock. These factors collectively contribute to the analyst's favorable rating and outlook for ALI HEALTH.