Jefferies lowered its price target for Ali Health Information Technology Ltd. (00241.HK) to HKD 5.3 from HKD 6.0, citing uncertainties around the pace of commercializing its new artificial intelligence ventures.
"The broker maintained its 'Buy' rating on the stock, reflecting a positive long-term view despite the near-term investment pressures," the Jefferies report said. The new target still implies significant upside from the current price.
The revision follows Ali Health's launch of the "Hydrogen Ion" app, an AI-powered clinical decision support tool for doctors developed with The BMJ. To support this, management plans to invest RMB 200 million to RMB 300 million in AI annually through fiscal 2029. The company is targeting two million monthly active users for the app within three years, aiming for breakeven in 2029.
For its financial outlook, Ali Health guided for 10 to 15 percent revenue growth in fiscal 2027, but expects adjusted net profit to remain flat as R&D spending ramps up. In a significant move to boost shareholder returns, the company also announced its first-ever dividend payout, a final and special cash dividend totaling approximately RMB 3.15 billion for fiscal 2026.
Jefferies noted that Ali Health's core business remains robust, with its internet hospital workflow being officially authorized and largely insulated from recent regulatory tightening on GLP-1 prescriptions in China.
The new dividend policy, which includes a commitment to a future yield of one to two percent, may attract income-focused investors and provide support for the shares. However, the heavy investment in AI places pressure on near-term profitability. Investors will be watching for user adoption rates of the "Hydrogen Ion" app as a key indicator of the strategy's success.
This article is for informational purposes only and does not constitute investment advice.
