Goldman Sachs expects Alibaba Health's stock price to experience short-term fluctuations, maintaining a "Neutral" rating

Goldman Sachs published a research report stating that Alibaba (09988.HK)(BABA.US) announced the issuance of over HKD 12 billion zero-coupon convertible bonds (CB), which can be exchanged for shares of ALI HEALTH (00241.HK), with an initial conversion price equivalent to HKD 6.23 per share of ALI HEALTH, representing a premium of 37.8% over its previous closing price. Goldman Sachs estimates that if fully converted, it would amount to 1.926 billion shares of ALI HEALTH, accounting for approximately 12% of its issued share capital. This bond issuance may lead to short-term fluctuations in the stock price of ALI HEALTH, but it will also increase the liquidity of ALI HEALTH shares.

Goldman Sachs indicated that the business cooperation between ALI HEALTH and Alibaba Group remains unchanged, and it continues to be an important player in driving the "AI + healthcare" industry transformation within the group's ecosystem, maintaining its "Neutral" rating with a target price of HKD 4.1. However, based on the current risk-return level, the firm prefers JD Health (06618.HK) over ALI HEALTH