No Material Impact Expected From Tariffs In Event of Trump Election Win; Revenue Mostly Domestic

In the case of a Donald Trump presidency, we do not expect any material impact on Alibaba Health or JD Health even if new tariffs are imposed on China, given that their distribution customers are mostly within China. Based on their 2023 annual reports, JD Health and Alibaba Health have close to 100% and 95% of their respective revenue exposed to China. Both companies also indicated that most of their assets and operations are located within China as well, which reaffirms our belief that neither company will be materially affected by the potential of increased tariffs. We maintain our respective earnings forecasts and fair value estimates of HKD 4 and HKD 45 per share for Alibaba Health and JD Health. For investors who wish to have exposure to Chinese companies with a high market share, we still prefer JD Health and Alibaba Health, given their narrow moats due to their distribution network and capabilities. We recommend entry should there be a knee-jerk pullback reaction to a Trump win and its tariff-related risks.