JD Health: Key takes from investor meetings; market concern may be overdone; reiterate Buy

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JD Health: Key takes from investor meetings; market concern may be overdone; reiterate Buy

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JD Health

Key takes from investor meetings; market

concern may be overdone; reiterate Buy

Reiterate Rating: BUY | PO: 68.00 HKD | Price: 40.38 HKD

Confident in profitability, build services for L.T. growth 21 May 2026

JD Health reported a beat 1Q result and we hosted its management for investor Equity

meetings post result. We turn more optimistic about Co.’s profitability: 1) Every

category’s margin has been improving. The drug category’s profitability may inflect this Miranda Zhuang, CFA >>

year and has a long runway. 2) Variables for profit this year are AI investment and Research Analyst

nutritional supplements category. The recent regulatory scrutiny over the cross-border Merrill+852 3508Lynch2879(Hong Kong)

health supplements industry’s irregularities may impact Co. in near-term. But it should miranda.zhuang@bofa.com

be positive in the long run as Co. can gain market share. 3) The slow NP growth (vs. fast Joanna Du >>

OP growth) this year is due to YoY decline in interest income and fair value change of ResearchMerrill LynchAnalyst(Hong Kong)

investments. We become more optimistic about Co.’s long-term growth: it is building joanna.du@bofa.com

service infrastructure and capability, which can deepen its moat and bring visible Alex Liu >>

benefits incl.: drive high-price product sales, lower product return, gain brands’ budget. ResearchMerrill LynchAnalyst(Hong Kong)

alex.liu3@bofa.com

Market concern about GLP-1 sales may be overdone Joyce Ju >>

JD Health stock price underperformed recently, likely due to market concern over policy Research Analyst Merrill Lynch (Hong Kong)

tightening about GLP-1 drugs’ online sales.