Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced significant net selling from Northbound trading, with a total of HKD 30.47 billion in net sales on July 3, 2023, indicating a bearish sentiment among investors [1]. Group 1: Northbound Trading Activity - Northbound trading saw a net sell of HKD 30.47 billion, with HKD 18.66 billion from Shanghai Stock Connect and HKD 11.81 billion from Shenzhen Stock Connect [1]. - The most bought stocks included Meituan-W (03690), SMIC (00981), and Innovent Biologics (01801) [1]. - The most sold stocks were Alibaba-W (09988), Tencent (00700), and Guotai Junan International (01788) [1]. Group 2: Individual Stock Performance - Alibaba-W (09988) had a net sell of HKD 32.26 billion, with a total trading volume of HKD 71.91 billion, indicating a strong sell-off [2]. - Meituan-W (03690) received a net buy of HKD 9.87 billion, supported by the announcement of a new initiative to invest in 1,200 "Raccoon Canteens" over three years [4]. - SMIC (00981) saw a net buy of HKD 4.78 billion following the U.S. government's lifting of export restrictions on certain chip design software [5]. Group 3: Sector Insights - The healthcare sector, particularly innovative pharmaceuticals, is expected to benefit from new supportive policies from the National Healthcare Security Administration and the National Health Commission [5]. - The social services sector is projected to experience valuation recovery due to favorable government policies aimed at expanding domestic demand [4]. Group 4: Other Notable Stocks - Xiaomi Group-W (01810) had a net buy of HKD 22.71 million, with the CEO addressing order fulfillment priorities [6]. - Multi-point Smart (02586) received a net buy of HKD 61.61 million as it prepares to apply for a stablecoin license in Hong Kong [5].

Investment Rating - The report assigns a "Buy-A" investment rating to the company, with a target price of HKD 13.32 for the next six months [6]. Core Viewpoints - The company is positioned as a leader in the retail digitalization market in China and Asia, leveraging AI and retail SaaS solutions, and collaborating with well-known retail brand Pang Donglai to expand its domestic customer base while steadily pursuing international business growth [4][18]. - The retail digitalization market is vast, with significant growth potential as the current digitalization rate in China's retail sector is notably lower than that of the United States [1][46]. - The company has a strong product matrix focusing on Dmall OS systems and AIoT solutions, covering the entire retail value chain and enhancing customer retention through a sustainable subscription and commission-based SaaS model [2][34]. Summary by Sections 1. Company Overview - The company is recognized as the largest retail digitalization solution provider in China, with a market share of approximately 6.5% in 2023, and a leading position in Asia with a market share of 4.2% [1][19]. - Established in 2015, the company has expanded its operations across various retail formats and into multiple Asian and European markets [19]. 2. Industry Landscape - The retail market is complex and fragmented, with a significant need for digital transformation, presenting both opportunities and challenges for the industry [46][50]. - The global retail market is projected to reach CNY 105.5 trillion in 2024, driven by technological advancements and increasing consumer demand [47]. 3. Competitive Advantages - The company’s comprehensive product offerings and deep industry experience, combined with a unique business model, enhance its competitive edge [2][3]. - The collaboration with Pang Donglai has established a benchmark for retail digital transformation, significantly reducing customer acquisition costs and enhancing brand recognition [17][18]. 4. Growth Drivers - The company has launched several AI Agent solutions tailored for retail scenarios, contributing to substantial profit growth for clients [3][16]. - International business has expanded to nine countries, with a projected revenue growth rate of nearly 30% for 2024 [3][18]. 5. Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are estimated at CNY 2.19 billion, CNY 2.57 billion, and CNY 2.93 billion, respectively, with net profits expected to reach CNY 170 million, CNY 299 million, and CNY 429 million [4][11].

Investment Rating - The report assigns an "Outperform" rating to the company [4][19]. Core Insights - The company, Multi-Point Intelligence, is a leader in retail digitalization, driven by its core operating system and AIoT solutions, which are opening new market opportunities globally [1][4]. - Revenue projections for 2025-2027 are estimated at RMB 22.37 billion, RMB 26.35 billion, and RMB 30.25 billion, reflecting year-on-year growth rates of 20.3%, 17.8%, and 14.8% respectively. Net profit attributable to shareholders is expected to be RMB 1.01 billion, RMB 1.99 billion, and RMB 3.14 billion, with growth rates of 104.6%, 96.4%, and 58.0% respectively [4][8][19]. Financial Summary - Revenue and profit forecasts indicate a strong growth trajectory, with operating income expected to rise from RMB 18.59 billion in 2024 to RMB 30.25 billion by 2027, alongside a significant recovery in net profit from a loss of RMB 2.195 billion in 2024 to a profit of RMB 314 million by 2027 [3][8][10]. - The company’s gross profit margin is projected to improve from 40.34% in 2025 to 42.30% in 2027, indicating enhanced operational efficiency [3][10]. Business Model and Strategy - Multi-Point Intelligence focuses on two main business segments: the retail operating system (Dmall OS) and AIoT solutions, which are essential for the digital transformation of retail [20][29]. - The Dmall OS system is designed to enhance store operations, financial integration, and human resource management, with a strong emphasis on high-frequency, essential modules that exhibit SaaS characteristics [8][29]. - The AIoT solutions are positioned as a key driver for intelligent upgrades in retail scenarios, integrating AI agents and IoT devices to improve efficiency and reduce costs [9][31]. Market Position and Growth Potential - The retail digitalization market in Asia is projected to reach RMB 94.7 billion by 2029, with a compound annual growth rate (CAGR) of 22.5% from 2024 to 2029, indicating significant growth potential for the company [4][8]. - The company has expanded its international presence, serving clients in 10 countries and regions, with overseas revenue reaching RMB 1.58 billion in 2024, a year-on-year increase of 27.9% [41][42]. Customer Base and Retention - As of 2024, the company serves 591 clients, with a notable retention rate of 114%, showcasing strong customer loyalty and the effectiveness of its solutions [37][41]. - Key clients include major retail players such as Metro AG and 7-Eleven, which enhances the company's credibility and market penetration [37][41].

Core Viewpoint - The release of the white paper titled "Current Status and Trends of Chinese Retail Digitalization Enterprises Going Global" highlights the significant role of Chinese retail digitalization companies in the global retail industry's digital transformation, emphasizing the necessity of digital transformation in the retail sector [1][3]. Group 1: Industry Trends - The white paper analyzes the current state of the retail digitalization industry and the changing demands of retailers for digital transformation, indicating a strong need for digital solutions among retail enterprises [3]. - The market size of the Asian retail digitalization industry is projected to reach 94.7 billion by 2029, with a compound annual growth rate (CAGR) of 22.5% from 2024 to 2029, showcasing substantial growth potential in the sector [3]. Group 2: Company Initiatives - Multi-Point Intelligence, as a representative of Chinese digital technology companies, has actively explored and practiced digital transformation solutions over the past decade, establishing a consensus that "retail digitalization is the future" [3]. - The company aims to leverage AI, cloud computing, and big data technologies to deepen its presence in the Chinese market while expanding globally, accelerating the development of retail digitalization [6].

Core Insights - The report highlights the accelerating digital transformation among global retail enterprises to enhance operational efficiency and competitiveness, creating significant opportunities for Chinese retail digital enterprises to expand internationally [2][3] - The demand for digital solutions in the global retail market is increasing, allowing Chinese companies to showcase their capabilities on the international stage and diversify their business [2] - Artificial Intelligence (AI) is expected to significantly improve the retail sector by enhancing customer experience, operational methods, and overall efficiency, with generative AI rapidly influencing retail operations [2][3] Industry Trends - The white paper indicates a high demand for digital transformation among retail enterprises due to rising consumer expectations and the need for further development, with the Asian retail digital market projected to reach 94.7 billion RMB by 2029, growing at a compound annual growth rate (CAGR) of 22.5% from 2024 to 2029 [3] - The retail digitalization industry possesses substantial growth potential, with companies like Multi-Point Intelligence actively exploring low-cost, reusable digital transformation solutions for retail businesses [3] Company Initiatives - Multi-Point Intelligence showcased its core product, Dmall OS, at the NRF APAC 2025 event, along with various AI products such as AI smart shopping guides and AI smart inspections, demonstrating the transformative impact of software and hardware integration on retail operations [4] - The company aims to leverage AI, cloud computing, and big data to deepen its presence in the Chinese market while expanding globally, accelerating the digital transformation of retail and supporting sustainable development in the AI era [4]

Financial Performance - Dmall Inc. achieved a revenue of RMB 1,859,002,000 in 2024, representing a 17.2% increase from RMB 1,585,357,000 in 2023[14] - The gross profit for 2024 was RMB 746,376,000, up 34.6% from RMB 554,701,000 in 2023[14] - The company reported a loss for the year of RMB 2,220,276,000, which is a significant increase from a loss of RMB 655,439,000 in 2023[14] - Adjusted profit from continuing operations for 2024 was RMB 29,795,000, compared to a loss of RMB 276,704,000 in 2023[14] - Total assets as of December 31, 2024, were RMB 1,659,186,000, an increase from RMB 1,377,772,000 in 2023[14] - Total liabilities decreased to RMB 1,018,157,000 in 2024 from RMB 8,142,896,000 in 2023[14] - The net assets improved to RMB 641,029,000 in 2024, recovering from net liabilities of RMB 6,765,124,000 in 2023[14] Market Expansion and Strategy - Dmall Inc. was listed on the Stock Exchange of Hong Kong in 2024, marking a significant milestone for the company[15] - Future strategies include continued focus on digital retail solutions and potential market expansion initiatives[15] - The international business accounted for 8.5% of the total revenue in 2024, driven by significant growth in the Southeast Asian market[21] - The Group's dual-engine strategy focuses on both Chinese and international markets, enhancing collaboration with leading retail enterprises[36] - The Group aims to strengthen its leadership position in the Chinese market while promoting globalization strategies in collaboration with industry leaders[113] Customer Engagement and Retention - The number of customers served by the Group reached 591 in 2024, indicating a growing customer base[16] - The Group's dollar-based net retention rate reached 114% in 2024, indicating strong customer retention and loyalty[95] AI and Technology Innovations - The Group launched ten major innovative AI applications in 2024, enhancing the digital intelligence capabilities across the retail chain[24] - The Dmall Solution 3.0 was successfully launched, incorporating AI technology and introducing cutting-edge applications[31] - The Group's AI agent products include AI Clearance, AI Customer Service, and AI Replenishment, with the AI Replenishment System winning an award in 2024[46] - The AI Clearance program was deployed in over 200 Wumart stores, generating annual profit growth exceeding RMB 1 million for Wumei Group through real-time discount recommendations[50] - AI Customer Service achieved an online resolution rate of 80%, significantly reducing labor costs while maintaining high user satisfaction[50] Operational Efficiency - The Group's intelligent energy efficiency solutions promote energy conservation and emission reduction, contributing to sustainable retail operations[61] - The Dmall store dashboard product has enabled store managers to access key performance indicators in real-time, resulting in an annual saving of RMB 439,000 in store manager working hours[107] - The transportation management system implemented with Sichuan Hongyuan has improved loading efficiency by 10% and increased handover efficiency by 10% through paperless operations[105] Financial Adjustments and Restructuring - Following the restructuring in April 2024, the Group divested all equity interests in Dmall Fresh (Beijing) and ceased operations of the Dmall APP, focusing on retail core service cloud solutions[109] - The Group recorded a loss for the year from continuing operations of RMB2,453.4 million, an increase from RMB749.0 million in the previous year, representing a 227.5% increase[174][176] - The fair value change of convertible redeemable preferred shares increased to RMB 2,275,701 thousand in 2024 from RMB 476,160 thousand in 2023, reflecting a substantial improvement[191] Revenue Breakdown - Revenue for retail core service cloud grew by 39.3% from RMB 1,298.7 million in 2023 to RMB 1,809.5 million in 2024[39] - The retail core service cloud accounted for 97.3% of total revenue in the Reporting Year, with AIoT solutions contributing 55.0% and operating system revenue at 42.3%[117] - E-commerce service cloud revenue plummeted by 98.6% from RMB300.0 million in 2023 to RMB4.3 million in the Reporting Year, as customers shifted to in-house operations[126] Cost Management - The Group's revenue cost increased by 8.0% from RMB1,030.7 million in 2023 to RMB1,112.6 million in the Reporting Year, primarily due to a rise in outsourcing and labor costs from RMB465.5 million to RMB856.5 million[146] - Selling and marketing expenses decreased by 38.8% from RMB150.9 million for the year ended December 31, 2023 to RMB92.4 million for the Reporting Year[161] - General and administration expenses increased by 18.7% from RMB259.4 million for the year ended December 31, 2023 to RMB308.0 million for the Reporting Year[166] Corporate Social Responsibility - The Group is committed to corporate social responsibility, implementing energy efficiency solutions to reduce carbon emissions in retail operations[25] - The Group's intelligent energy efficiency solutions promote energy conservation and emission reduction, contributing to sustainable retail operations[61]

Investment Rating - The report maintains a "Buy" rating for Dmall Group Co., Ltd. (2586 HK) with a target price raised to HKD 16.00, based on a 6.0x price-to-sales ratio for FY25 [1][10]. Core Insights - Dmall achieved breakeven for FY24, with total revenue increasing by 17% year-on-year to RMB 18.6 billion, and adjusted net profit improving to RMB 298 million from a loss of RMB 2.77 billion in FY23, driven by strong growth in core retail services and operational efficiency [1][2]. - The company is focusing on AI retail to capture new growth opportunities, having launched several AI agent products that are expected to contribute to revenue growth in the long term [1][2]. - For FY25, management anticipates revenue growth of 15-20% and further margin expansion, although revenue forecasts for FY25-26 have been adjusted downward due to slower customer acquisition [1][10]. Financial Performance Summary - FY24 revenue reached RMB 18.6 billion, with a year-on-year growth rate of 17% [4]. - The gross profit margin (GPM) improved from 35.0% in FY23 to 40.1% in FY24, while the adjusted net profit margin rose from -14.7% to 1.6% [3][12]. - The retail core service cloud revenue grew by 39% to RMB 1.81 billion, with AIoT solutions seeing a 65% increase to RMB 1.02 billion [2][4]. Revenue and Profit Forecasts - Revenue projections for FY25 are set at RMB 2.19 billion, with expected growth rates of 17.8% for FY26 and 14.1% for FY27 [4][12]. - Adjusted net profit is forecasted to reach RMB 134.4 million in FY25, with significant growth expected in subsequent years [4][12]. - The report indicates a projected increase in adjusted net profit margins to 6.1% in FY25 and 17.6% in FY27 [10][12].

Investment Rating - The report maintains a "BUY" rating for Dmall Inc, with a target price raised to HK$16.00 from the previous HK$8.50, indicating a potential upside of 22.5% from the current price of HK$13.06 [1][3]. Core Insights - Dmall achieved full-year breakeven in FY24, with total revenue increasing by 17% YoY to RMB1.86 billion and an adjusted net profit of RMB29.8 million, a significant turnaround from an adjusted net loss of RMB277 million in FY23 [1][2]. - The company is focusing on AI retail to drive long-term growth, having launched several AI agent products that are expected to contribute to revenue in the long term [1][6]. - For FY25E, management anticipates total revenue growth of 15-20% YoY, with further margin expansion expected [1]. Financial Performance - FY24 revenue was RMB1.86 billion, up 17.3% YoY, with adjusted net profit of RMB29.8 million compared to a loss of RMB233 million in FY23 [2][10]. - Revenue from the retail core service cloud solution grew by 39% YoY to RMB1.81 billion, with AIoT solutions revenue increasing by 65% YoY to RMB1.02 billion [6][10]. - Gross profit margin improved from 35.0% in FY23 to 40.1% in FY24, and adjusted net margin rose from -14.7% to 1.6% [6][10]. Revenue Forecasts - Revenue forecasts for FY25E and FY26E have been revised downwards due to a slower customer acquisition pace, with FY25E revenue now expected at RMB2.19 billion, a decrease of 14.6% from previous estimates [7][10]. - The adjusted net profit for FY25E is projected to be RMB134 million, reflecting a growth of 351% YoY [2][10]. Valuation Metrics - The target price of HK$16.00 is based on a valuation multiple of 6.0x FY25E EV/sales, which aligns with the average EV/sales of global SaaS peers [3][8]. - The report highlights a significant improvement in operating profit, projecting RMB121 million for FY25E, compared to a loss in previous years [7][10].

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 1,859,002 thousand, representing a 17.3% increase from RMB 1,585,357 thousand in 2023[6] - Gross profit for the same period was RMB 746,376 thousand, a significant increase of 34.6% compared to RMB 554,701 thousand in 2023[6] - The net loss for the year was RMB 2,220,276 thousand, which is a 238.7% increase from the net loss of RMB 655,439 thousand in 2023[6] - Operating loss decreased to RMB 173,998 thousand from RMB 262,804 thousand in the previous year, indicating improved operational efficiency[9] - The company reported a pre-tax loss from continuing operations of RMB 2,454,388 thousand, compared to RMB 752,308 thousand in 2023[10] - Basic and diluted loss per share for continuing operations was RMB 4.39, compared to RMB 1.31 in the previous year[10] - The total comprehensive loss for the year was RMB 2,220,276 thousand, compared to RMB 655,439 thousand in 2023[10] - The company reported a total comprehensive loss of RMB 2,345,203 thousand for the year, compared to a loss of RMB 763,092 thousand in the previous year, indicating a significant increase in losses[13] - The net loss attributable to equity shareholders for 2024 was RMB 2,195,277 thousand, compared to a loss of RMB 592,361 thousand in 2023, indicating a significant increase in losses[44] - The basic loss per share for continuing operations in 2024 was RMB (4.39), compared to RMB (1.31) in 2023, showing a deterioration in per-share performance[44] Revenue Breakdown - Revenue from major customer A was RMB 1,335,816,000 in 2024, up from RMB 1,139,183,000 in 2023, indicating a growth of about 17.3%[31] - Revenue from the core retail service cloud was RMB 1,809,508,000 in 2024, compared to RMB 1,298,730,000 in 2023, marking an increase of around 39.3%[31] - Revenue from e-commerce service cloud decreased to RMB 4,279,000 in 2024 from RMB 300,006,000 in 2023, a decline of approximately 98.6%[31] - Revenue from overseas customers was RMB 157,626,000 in 2024, up from RMB 123,261,000 in 2023, which is an increase of about 27.8%[34] - The AIoT solutions contributed RMB 1,023.2 million, accounting for 56.6% of the total revenue from the retail core service cloud, up from 47.7% the previous year[99] - Revenue from AIoT solutions in mainland China increased significantly, with total revenue from RMB 1,462.1 million in 2023 to RMB 1,701.4 million in 2024, representing 92.2% and 91.5% of total revenue respectively[104][107] Expenses and Costs - Research and development expenses were RMB 412,751 thousand, while sales and marketing expenses were RMB 92,439 thousand, reflecting a focus on innovation and market presence[9] - Total operating costs increased by 8.0% from RMB 1,030.7 million to RMB 1,112.6 million, primarily due to outsourcing and labor costs rising from RMB 465.5 million to RMB 856.5 million[110] - Sales and marketing expenses decreased by 38.8% from RMB 150.9 million in 2023 to RMB 92.4 million in the reporting year, primarily due to reduced promotional incentives[118] - General and administrative expenses increased by 18.7% from RMB 259.4 million in 2023 to RMB 308.0 million in the reporting year, driven by increased outsourcing and professional service fees[119] - Research and development expenses decreased by 20.8% from RMB 520.9 million in 2023 to RMB 412.8 million in the reporting year, attributed to cost control measures and improved technical capabilities[120] Assets and Liabilities - The company's non-current assets decreased from RMB 533,589 thousand in 2023 to RMB 375,652 thousand in 2024, reflecting a decline of approximately 29.6%[15] - Current assets increased from RMB 844,183 thousand in 2023 to RMB 1,283,534 thousand in 2024, representing a growth of about 51.9%[15] - Cash and cash equivalents rose significantly from RMB 533,171 thousand in 2023 to RMB 801,046 thousand in 2024, an increase of approximately 50.2%[15] - The company's total liabilities decreased from RMB 7,793,601 thousand in 2023 to RMB 918,265 thousand in 2024, a reduction of about 88.2%[16] - The company's current assets as of December 31, 2024, were RMB 1,283.5 million, a 52.0% increase from RMB 844.2 million in 2023[140] - Trade receivables rose from RMB 165.1 million as of December 31, 2023, to RMB 248.2 million as of December 31, 2024, driven by additional revenue from customized digital solutions and business expansion in smart delivery and cleaning services[156] Strategic Initiatives and Market Focus - The company plans to continue focusing on expanding its market presence and enhancing its product offerings in the upcoming year[9] - The company is primarily engaged in providing retail digital solutions for local retailers in China, indicating a focus on market expansion in this region[18] - The company has focused on AI and robotics collaboration to drive innovation in the retail sector[60] - The company aims to leverage AI technology to enhance retail operations and drive revenue growth through innovative applications across the retail value chain[92] - The company plans to focus on strengthening its leadership in the Chinese market while advancing its globalization strategy in collaboration with industry leaders[93] Partnerships and Collaborations - The company has established partnerships with major retail players, including DFI Retail Group and SM Investments Corporation, to enhance international market expansion[58] - The group has expanded its business operations to 10 countries and regions, including Singapore, Malaysia, and Indonesia, contributing to significant growth in international markets[81] - The strategic upgrade in collaboration with "China's retail industry innovation benchmark" Pang Dong Lai, which successfully launched the Dmall OS system in October 2024[88] - Partnership with "retail leader" Bubugao Group to advance the digital transformation of the retail industry, marking a significant shift from self-research to open collaboration[88] Corporate Governance and Compliance - The company has maintained compliance with all applicable corporate governance codes since its listing date until December 31, 2024[173] - The board has established an ESG committee to oversee the company's ESG policies and practices, effective from March 18, 2025[176] - The audit committee has reviewed the audited consolidated financial statements for the reporting year and confirmed compliance with applicable accounting standards and regulations[177] - The company's auditor, KPMG, has agreed that the financial data disclosed in the performance announcement is consistent with the audited financial statements for the year ending December 31, 2024[178] Future Outlook - The company plans to fund future capital expenditures through existing cash balances and operating cash flows[146] - The company is committed to continuous product development and expanding service offerings to existing clients while acquiring new customers[97] - The company aims to deepen cooperation with existing customers while actively seeking new customer types to drive mutual growth[85]