China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

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China/Asia TMT

Shawn Yang

Equity Bottom-Up

JD Health International  / Equity Bottom-Up

<ul>
<li>JDHealth (JDH) reported C2H22 top line, non-IFRS operating profit and IFRS net profit 9.2%, (25%) and (54%) versus our estimates, Annual active customers beat our estimate by 6.5%; </li>
<li>Gross margin, however, continued to deteriorate, mainly due to another all-time low (the 5th consecutive interim) of product gross margin. </li>
<li>The company however, showed strong ability in OPEX and working capital control; We raise TP from HK$39 to HK$44 and maintain SELL.</li>
</ul>


JDHealth (JDH) reported C2H22 top line, non-IFRS operating profit and IFRS net profit 9.2%, (25%) and (54%) versus our estimates, Annual active customers beat our estimate by 6.5%; 
Gross margin, however, continued to deteriorate, mainly due to another all-time low (the 5th consecutive interim) of product gross margin. 
The company however, showed strong ability in OPEX and working capital control; We raise TP from HK$39 to HK$44 and maintain SELL.


[JD Health (6618 HK) Target Price Change]: Strong Execution but Industry Glass Ceiling Remains