Goldman Sachs has issued a research report noting ALI HEALTH's (00241) financial results for the second half of the 2026 fiscal year, ending March 31, were mixed. The firm maintains a "Neutral" rating on the stock, while reducing its 12-month target price from HK$4.8 to HK$4.2. This valuation is based on a projected average price-to-earnings ratio of 28 times for the 2027 to 2028 fiscal years.

The report suggests revenue growth is primarily driven by pharmaceuticals, particularly prescription drugs and innovative products. However, intense competition is expected to result in slower growth compared to JD Health (06618). Goldman Sachs forecasts ALI HEALTH's revenue for the 2027 fiscal year ending next March to increase by 13% year-over-year, while JD Health's 2026 revenue growth is projected at 18%.

The investment bank points out that ALI HEALTH faces margin pressure due to fluctuations in gross margin stemming from its revenue mix, coupled with ongoing incremental investments in medical AI and the pharmaceutical ecosystem, including areas like warehousing, cold-chain logistics, and upstream marketing. Furthermore, emerging opportunities such as medical AI applications and innovative data-driven solutions for enterprises remain in early stages, with their financial contributions yet to be substantiated.

In light of slower-than-expected growth in its third-party platform business, gross margin volatility related to revenue composition, and continued investments in AI and innovative drugs, Goldman Sachs has lowered its revenue forecast for ALI HEALTH for the 2027 to 2028 fiscal years by 2%. It has also reduced its adjusted net profit forecast for the same period by 18% and introduced initial projections for the 2029 fiscal year.