Investment Rating - The report maintains a positive outlook on the overseas education sector, particularly highlighting key companies in the education and training industry [1]. Core Insights - The overseas education sector has shown significant improvement in operational efficiency, with a focus on key companies in the education and training industry [1]. - New Oriental (09901.HK) reported a revenue of $1.191 billion for Q2 FY26, a year-on-year increase of 14.7%, with a Non-GAAP net profit of $73 million, reflecting a 68.6% increase [6]. - Oriental Selection (01797.HK) achieved a revenue of 2.31 billion yuan in 1H FY26, up 5.7% year-on-year, and turned a profit with a net profit of 239 million yuan [9]. Summary by Sections 1. Overseas Education - The education index surged by 7.2% in the week of January 23-29, outperforming the Hang Seng Index by 2.2 percentage points [5]. - New Oriental's education business (including cultural tourism) generated $974 million, a 13% increase year-on-year, while other businesses (mainly Oriental Selection) saw a 22.9% revenue growth [6]. - The study abroad business's revenue growth has stabilized, with a 1% increase year-on-year, although it has slowed compared to previous periods [6]. 2. Oriental Selection - The company reported a revenue of 2.31 billion yuan in 1H FY26, marking a 5.7% increase year-on-year, and achieved profitability with a net profit of 239 million yuan [9]. - The gross merchandise volume (GMV) from self-operated products reached 2.16 billion yuan, with a significant improvement in gross margin from 21.5% to 33.7% year-on-year [10]. - The company is expanding its product offerings and enhancing operational efficiency, with a focus on increasing the utilization rate of existing teaching sites [7]. 3. Overseas Pharmaceuticals - The report highlights a strategic R&D collaboration between CSPC Pharmaceutical Group and AstraZeneca, valued at $18.5 billion, focusing on innovative long-acting peptide drugs [3][19]. - The agreement includes a $1.2 billion upfront payment and potential milestone payments totaling up to $13.8 billion, along with sales royalties based on net sales [19]. 4. Overseas Social Services - Macau's gaming revenue maintained double-digit growth, with December's gross gaming revenue reaching 20.9 billion MOP, a 14.8% year-on-year increase [23]. - The total visitor count for Macau in 2025 reached 40.06 million, a 14.7% increase year-on-year, marking a historical high [23].

Core Viewpoint - Dongfang Zhenxuan is accelerating its "de-Donghua" process, showing a significant recovery in its financial performance after the departure of key personnel, with a notable increase in revenue and profit [1][2]. Financial Performance - For the fiscal year 2026, Dongfang Zhenxuan reported total revenue of 2.3 billion yuan, a year-on-year increase of 5.7%, and a 17% increase when excluding revenue from the Huixing Tong live streaming room [1][2]. - The company achieved a net profit of 239 million yuan, compared to a net loss of 96.79 million yuan in the same period of 2024, with gross profit rising by 14.5% to 842 million yuan [1][2]. Cost Management - A significant reduction in non-recurring costs was a key factor in the company's turnaround, with administrative expenses dropping by 78.6% to 83.9 million yuan due to the absence of previous distributions to Huixing Tong [2]. - Salary expenses decreased by 34.9% to 347 million yuan, attributed to workforce optimization, reducing full-time employees from 1,264 to 1,054 [2]. Product Development - Dongfang Zhenxuan has launched 801 self-operated products, a 33% increase from 600 in the previous year, with self-operated products accounting for approximately 52.8% of total GMV [3]. - The company plans to continue expanding its self-operated product line, aiming to exceed 1,000 SKUs and develop individual products with significant sales potential [3]. Challenges and Competition - The company faces challenges in filling the traffic gap and team disruptions caused by the "de-Donghua" process, with notable departures of key personnel [5][6]. - Dongfang Zhenxuan's main account has seen a decline in followers, with competitors like Huixing Tong rapidly gaining traction, surpassing Dongfang Zhenxuan's follower count [6][7]. Strategic Initiatives - The company is diversifying its live streaming strategy by establishing multiple matrix accounts to attract more targeted audiences [6][7]. - Dongfang Zhenxuan is also expanding its offline presence by placing vending machines in educational institutions and planning to open its first offline experience store in Beijing [8].

Core Viewpoint - Oriental Selection has achieved a turnaround in profitability and growth through product category expansion, reporting a total revenue of 2.3 billion yuan and a net profit of 239 million yuan for the first half of the 2025 fiscal year, compared to a loss of 96.5 million yuan in the same period last year [2][3] Group 1: Financial Performance - Total revenue for the first half of the 2025 fiscal year reached 2.3 billion yuan, marking a year-on-year increase of 5.7% [2][3] - The company transitioned from a net loss of 96.5 million yuan in the previous year to a net profit of 239 million yuan [2][3] - Self-operated product revenue increased by 18.1% to 2 billion yuan, contributing to 52.8% of the total GMV [3] Group 2: Management Changes - A new CEO, Sun Jin, has been appointed, with the chairman Yu Minhong praising his problem-solving skills and ability to drive performance [2][6][8] - Sun Jin's rapid integration into the team has reportedly improved operational efficiency significantly [8] Group 3: Strategic Initiatives - Oriental Selection is expanding its offline presence with over 40 vending machines and plans to open a flagship store in Beijing, which will feature a wide range of self-operated and third-party products [4][5] - The company is enhancing its supply chain management and diversifying its product offerings to drive long-term growth [3][9] - Future strategies include expanding the live-streaming team and enhancing the app and membership offerings to attract more customers [9]

Core Viewpoint - The report from Shenwan Hongyuan maintains an "overweight" rating for Dongfang Zhenxuan (01797), citing the company's aggressive multi-live room and multi-anchor strategy, continuous development of high-margin self-operated products, and content advantages in the GEO marketing environment, leading to a strong increase in gross margin for 1HFY26 [1] Financial Performance - In 1HFY26 (from June 2025 to November 2025), Dongfang Zhenxuan reported revenue of 2.31 billion yuan, a year-on-year increase of 5.7%; the net profit attributable to shareholders was 239 million yuan, marking a turnaround from loss to profit. Revenue growth was driven by self-operated product sales, while profit improvement was due to enhanced product gross margins [2] Self-Operated Products and Innovation - The company's GMV for 1HFY26 was 4.1 billion yuan, a year-on-year decline of 14.6%. Within this, self-operated products accounted for 2.16 billion yuan, while third-party product GMV was 1.94 billion yuan. Excluding the GMV from the Huixing live room (which was divested in August 2024), GMV from Douyin's live streaming sales turned positive year-on-year by July 2025 and continued to grow until November 2025. The company developed 801 new self-operated products in 1HFY26, a 9.4% increase from 732 at the end of FY25. The gross margin for self-operated products is expected to rise from 21.5% in 1HFY25 to 33.7% in 1HFY26, a year-on-year increase of 12.3 percentage points. The focus of new product development has shifted from quantity to high repurchase rates, which helps increase procurement scale and reduce material or finished product costs, thereby boosting gross margins [3] Multi-Platform Sales Strategy - Dongfang Zhenxuan continues to open new accounts on Douyin and plans to initiate a long-term recruitment plan for new anchors. The company has also established online stores on various platforms including WeChat Mini Programs, WeChat Stores, Tmall, JD, Pinduoduo, and Xiaohongshu. The first offline experience store is set to open in Beijing's Zhongguancun in 2026, marking another step in the company's channel expansion [4] User Base and Paid Conversion - In 1HFY26, Dongfang Zhenxuan's app is expected to have over 300,000 paid fans, an increase from 264,000 at the end of FY25. The company has a substantial follower base of 42.79 million on Douyin (counting only the main account and six matrix accounts), providing a solid foundation for expanding the number of paid users. Future growth in paid users is expected to drive GMV growth [5]

Core Viewpoint - Company maintains "Buy" rating for Dongfang Zhenxuan (01797) due to its aggressive multi-live room and multi-anchor strategy, continuous development of high-margin self-operated products, and content advantages in the GEO marketing environment, resulting in a strong gross margin increase in 1HFY26 [1] Financial Performance - In 1HFY26, Dongfang Zhenxuan reported revenue of 2.31 billion yuan, a year-on-year increase of 5.7%; net profit attributable to shareholders was 239 million yuan, turning from loss to profit. Revenue growth was driven by self-operated product sales, while profit improvement was due to enhanced product gross margins [1] Self-Operated Product Development - The company's GMV in 1HFY26 was 4.1 billion yuan, a year-on-year decrease of 14.6%. Self-operated products contributed 2.16 billion yuan to GMV, while third-party product GMV was 1.94 billion yuan. Excluding the GMV from the Huixing live room (which was divested in August 2024), GMV from Douyin's live streaming turned positive year-on-year by July 2025 and continued to grow until November 2025. The number of new self-operated products reached 801, a 9.4% increase from 732 at the end of FY25. The gross margin for self-operated products is expected to rise from 21.5% in 1HFY25 to 33.7% in 1HFY26, a year-on-year increase of 12.3 percentage points [2] Multi-Platform Sales Strategy - Dongfang Zhenxuan continues to open new accounts on Douyin and plans to initiate a long-term recruitment plan for new anchors. The company has also established online stores on various platforms including WeChat Mini Programs, WeChat Stores, Tmall, JD.com, Pinduoduo, and Xiaohongshu. The first offline experience store is set to open in Beijing's Zhongguancun in 2026, marking another step in the company's channel expansion [3] User Base and Paid Conversion - In 1HFY26, the Dongfang Zhenxuan APP is expected to have over 300,000 paid fans, up from 264,000 at the end of FY25. The company has a substantial fan base of 42.79 million on Douyin (counting only the main account and six matrix accounts), providing a solid foundation for expanding paid user numbers. Future growth in paid users is expected to drive GMV growth [4]

Investment Rating - The report maintains a "Buy" rating for the company [4][5]. Core Insights - The company achieved a revenue of approximately 2.31 billion RMB in FY26H1, representing a year-over-year increase of 5.7%, with adjusted net profit reaching 258 million RMB, a significant improvement from a loss of 2 million RMB in FY25H1 [1][10]. - The company's self-operated products have shown strong performance, with their contribution to total GMV rising to 52.8% in FY26H1, up from 43.8% in FY25, indicating a successful shift towards brand transformation [2][10]. - The company is expanding its multi-channel strategy, with plans to open its first offline experience store in Beijing, enhancing customer engagement through a combination of shopping, leisure, and social experiences [3][10]. Financial Performance - The adjusted net profit forecasts for FY26-28 have been raised to 514 million, 535 million, and 603 million RMB, reflecting increases of 36%, 37%, and 43% respectively compared to previous estimates [4][10]. - The gross margin improved to 36.4% in FY26H1, driven by the healthy development of self-operated products and optimization of personnel costs [10]. Market Positioning - The company has successfully diversified its product categories from fresh food to high-demand areas such as nutritional supplements, pet food, and apparel, which has effectively boosted the gross margin of self-operated products [2][10]. - The membership base has grown to 240,100 in FY26H1, up from 228,300 in FY25H1, indicating a strong and expanding user engagement [3][10].

Group 1 - The core viewpoint of the article highlights that Dongfang Zhenxuan (01797) experienced a significant stock price increase, with a rise of over 4% and a previous day increase of over 14% [1] - The company reported total revenue of 2.312 billion RMB for the six months ending November 30, 2025, representing a year-on-year increase of 5.7% [1] - The profit attributable to the company's owners was 239 million RMB, marking a turnaround from a loss to profit [1] Group 2 - Gross profit for the same period reached 841.6 million RMB, reflecting a year-on-year growth of 14.5%, with the gross margin improving from 33.6% to 36.4% [1] - Citigroup issued a research report giving Dongfang Zhenxuan a target price of 33 HKD and a "Buy" rating, noting that despite a 14.6% decline in Gross Merchandise Volume (GMV) to 4.1 billion RMB due to business restructuring, core revenue grew by 17% to 2.31 billion RMB when excluding the impact of "Hui Tong Xing" [1] - The company's profitability was further strengthened through strict operational controls, including a 26% reduction in employee numbers and a 35% decrease in total compensation [1]

Core Viewpoint - Oriental Selection (01797) has seen a significant stock price increase, with a rise of over 4% recently, following a previous surge of over 14% [1] Financial Performance - For the six months ending November 30, 2025, Oriental Selection reported total revenue of 2.312 billion RMB, representing a year-on-year increase of 5.7% [1] - The company achieved a profit attributable to owners of 239 million RMB, marking a turnaround from a loss [1] - Gross profit reached 841.6 million RMB, up 14.5% year-on-year, with gross margin improving from 33.6% to 36.4% [1] Market Analysis - Citigroup has set a target price of 33 HKD for Oriental Selection, rating it as "Buy" [1] - Despite a 14.6% decline in Gross Merchandise Volume (GMV) to 4.1 billion RMB due to business restructuring, core revenue grew by 17% to 2.31 billion RMB when excluding the impact of "Hui Tong Xing" [1] - The growth in core revenue is supported by an expanded product mix and strong app performance [1] Operational Efficiency - The company has implemented strict operational controls, resulting in a 26% reduction in employee numbers and a 35% decrease in total compensation, further solidifying profitability [1]

Investment Rating - The report assigns a "Buy" rating to the company, with a current price of HKD 25.24 and a fair value of HKD 27.14 [8]. Core Insights - The company has shown significant internal growth, particularly in its self-operated products, which are expected to continue expanding [2]. - The company reported a total revenue of RMB 2.312 billion for FY26H1, representing a year-on-year growth of 5.72%, and a notable 17% growth when excluding revenue from a specific live-streaming partnership [13]. - The gross profit margin increased by 2.8 percentage points to 36.4%, driven by a rise in self-operated product revenue, which grew by 18.1% to RMB 2 billion, accounting for 52.8% of the total GMV [14]. Summary by Sections 1. FY26H1 Performance - The company achieved a total revenue of RMB 2.312 billion, with a year-on-year increase of 5.72%. Excluding the impact of a specific partnership, the revenue growth was 17% [13]. - The net profit reached RMB 239 million, marking a return to profitability [13]. 2. Main Business Tracking - Self-operated products have expanded significantly, with SKU numbers exceeding 800, becoming a major component of GMV [21]. - The self-operated app's revenue increased from RMB 500 million in FY25H1 to RMB 600 million in FY26H1, indicating a growing preference for self-operated products among paid members [31]. - The company is actively expanding its presence on Douyin (TikTok) with multiple specialized accounts to cover various consumer needs [37]. 3. Profit Forecast and Investment Recommendations - The company is projected to achieve revenues of RMB 4.978 billion and adjusted net profits of RMB 492 million for the fiscal year 2026 [43]. - The report suggests a PE valuation of 52X for the company, leading to a fair market value of RMB 255.81 billion, or HKD 27.14 per share, maintaining the "Buy" rating [43].

Core Viewpoint - Oriental Selection reported a revenue of 2.312 billion yuan for the first half of the 2026 fiscal year, marking a 5.7% year-on-year increase, and achieved profitability with a net profit of 239 million yuan, compared to a net loss of 97 million yuan in the previous year [2][3][6] Financial Performance - Total revenue for the period from June 1, 2025, to November 30, 2025, was 2.312 billion yuan, up from 2.187 billion yuan in the same period last year, reflecting a growth of 5.7% [5] - Gross profit reached 841.6 million yuan, a 14.5% increase from 735.1 million yuan year-on-year [5] - The company reported a pre-tax profit of 308.5 million yuan, a significant turnaround from a loss of 72.5 million yuan in the previous year, representing a 525.7% improvement [5] Business Operations - The total GMV (Gross Merchandise Volume) for self-operated and live e-commerce was 4.1 billion yuan, down from 4.8 billion yuan in the previous year [6] - The majority of GMV still comes from Douyin, although the number of paid orders for both third-party and self-operated products on the platform has declined [6][7] - Oriental Selection has launched 801 self-operated products, which account for approximately 52.8% of total GMV, expanding its product range beyond fresh food and snacks [7] Strategic Initiatives - The company is actively pursuing offline expansion, having installed over 40 vending machines in various regions, some of which are already profitable, and plans to open its first offline experience store in Beijing's Zhongguancun [2][9] - The offline store will feature a 439 square meter space designed for a one-stop shopping, leisure, and social experience, showcasing a wide range of self-operated products [9][10] - The company is leveraging AI technology to enhance operational efficiency, including personalized product recommendations and improved quality control [8][9] Leadership and Future Outlook - The new CEO, Sun Jin, has been recognized for his problem-solving skills and is expected to drive operational efficiency within the company [12] - The company plans to adjust its organizational structure to improve operational efficiency, with a focus on enhancing the effectiveness of its offline retail strategy [12]