Core Viewpoint - The company is experiencing a significant impact on its financial performance due to the divestiture of its wholly-owned subsidiary "Yuhui Tongxing," leading to a decline in sustainable revenue and profit for FY2025, but showing signs of recovery in the second half of FY2025. Financial Performance - For FY2025, the company achieved sustainable revenue of 4.39 billion yuan, a decrease of 32.7%, primarily due to the divestiture of "Yuhui Tongxing" [1] - Sustainable net profit for FY2025 was 6.19 million yuan, down 97.5%, but if excluding one-time expenses and profits from the sale, the continuing operating net profit was 135 million yuan, an increase of 30.0% [1] - In FY2025H2, sustainable revenue was 2.21 billion yuan, down 46.4%, while sustainable net profit was 103 million yuan, an increase of 16.1% [1] GMV Analysis - The company's GMV for FY2025 was 8.7 billion yuan, a decrease of 39.2%, also affected by the divestiture [1] - Excluding the impact of "Yuhui Tongxing," the GMV for FY2025H1 and H2 was 3.6 billion yuan and 3.9 billion yuan, respectively, indicating a recovery in e-commerce GMV in H2 [1] Product and Channel Performance - In FY2025, self-operated products achieved GMV of 3.81 billion yuan, accounting for 43.8% of total GMV, showing an increase from approximately 40% in FY2024 [2] - The estimated gross margin for self-operated products was around 23%, improving due to reduced promotional efforts [2] - The sales channels for FY2025 showed that Douyin, self-owned APP, and other channels accounted for 15.7%, 70.0%, and 14.3% of GMV, respectively, with the self-owned APP channel increasing by 7.3 percentage points [2] Profitability and Cost Structure - The gross margin for FY2025 was 32.0%, an increase of 6.0 percentage points, driven by reduced promotional intensity [2] - The net profit margin was 0.1%, down 3.7 percentage points, with H1 and H2 net profit margins at -4.4% and 4.7%, respectively, indicating a recovery in profitability in H2 [2] Membership and Strategic Initiatives - The number of paid members increased from 198,600 to 264,300 in FY2025, with expectations for continued growth through enhanced member benefits and new engagement models [3] - The company is leveraging resources from New Oriental Group, such as setting up vending machines in learning centers, to enhance resource synergy [3] Investment Outlook - The net profit forecast for FY2026 has been revised down to 266 million yuan, with new projections for FY2027 and FY2028 at 572 million yuan and 1.05 billion yuan, respectively [3] - The company is transitioning to a product-oriented and membership-based growth model, which is expected to create new growth momentum through the development of popular products [3]
东方甄选(01797.HK)：下半财年净利润扭亏为盈 期待战略转型效果显现