Core Viewpoint - After the departure of key anchor Dong Yuhui, Dongfang Zhenxuan (01797.HK) reported a decline in both revenue and net profit, indicating challenges in replacing the traffic effect brought by top anchors [1][2]. Financial Performance - For the fiscal year 2025 (June 2024 - May 2025), the revenue from continuing operations (self-operated products and live e-commerce) was 4.4 billion RMB, a year-on-year decrease of 32.7% [2]. - The net profit from continuing operations was 6.19 million RMB, down 97.5% year-on-year [2]. - Total GMV for the company was 8.7 billion RMB, a decline of 39% compared to 14.3 billion RMB in the previous fiscal year [3]. - The number of paid orders on Douyin fell to 91.6 million, a decrease of 49% from 181.1 million [3]. Business Strategy and Challenges - The company is attempting to shift its strategy from a traffic-driven model to a family needs-oriented approach, aiming to create an online supermarket similar to Sam's Club [6]. - Despite increasing investment in its own app, the growth in GMV from the app only rose from 8.4% to 15.7% of total GMV, indicating limited impact on overall performance [2][3]. - The company has faced challenges with its self-operated products, including issues related to counterfeit products, which have affected brand credibility [6]. Organizational Changes - Following Dong Yuhui's departure, the company has initiated layoffs, reducing the total number of employees in its self-operated products and live e-commerce team by 25.6% [5]. - Administrative expenses for the fiscal year 2025 increased by 22.5% to 485 million RMB, primarily due to the distribution of remaining profits from a subsidiary [4]. Market Sentiment and Stock Performance - Recent rumors regarding executive departures and alleged misconduct have led to significant stock price volatility, with a drop of over 20% following the spread of these rumors [7]. - Despite clarifications from the company regarding executive statuses, market sentiment remains low, with a further decline of over 12% in stock price after the earnings report [7].
董宇辉出走阴霾未散，东方甄选净利跌超九成，“线上山姆”故事难讲