Morgan Stanley: Expects PA GOODDOCTOR to achieve a full-year growth target of 10%, target price HKD 16.3

Morgan Stanley released a research report stating that PA GOODDOCTOR's revenue in the first three quarters of this year increased by 13.6% year-on-year to 3.72 billion yuan (RMB), net profit increased by 72.6% year-on-year to 184 million yuan, and adjusted net profit increased by 45.7% year-on-year to 216 million yuan. Among them, revenue in the third quarter increased by 3% year-on-year, net profit in the third quarter remained roughly flat, with a net profit margin of 4.1% and an adjusted net profit margin of 4.3%. The bank currently sets a target price of HKD 16.3 and a "market perform" rating. Morgan Stanley believes the company can achieve a full-year revenue growth of over 10% and an adjusted net profit margin of 5% to 6%, which will ultimately depend on the pace of AI investment. On a positive note, the AI technology adopted by the company has improved the treatment accuracy of complex diseases to about 90%, compared to about 80% in the first half of the year, and has reduced the cost of family doctor services by approximately 52% year-on-year