Core Viewpoint - Daiwa has raised its profit forecast for Dongfang Zhenxuan (01797) by 42% to 97% for the next two years, based on better-than-expected gross merchandise volume and gross margin performance [1] Group 1: Financial Performance - Dongfang Zhenxuan reported an adjusted net profit of 257 million RMB for the first half of the 2026 fiscal year, reversing last year's loss [1] - The company achieved a strong gross margin of 36%, with its own brand gross margin expanding from 24% to 29%, driven by economies of scale and contributions from high-margin health, nutrition, and daily consumer products [1] Group 2: Market Outlook - Daiwa has reiterated a "outperform" rating for the stock, raising the 12-month target price from 13.5 HKD to 29 HKD, applying a 32 times price-to-earnings ratio for the average earnings per share over the next two years (previously 23 times) [1] - The firm has turned more positive on the company's outlook, believing it has overcome operational challenges, with significant growth potential from its own brand development, structural reduction in operating costs, and the opening of non-Douyin channels [1]
大和：东方甄选(01797)上半年业绩亮眼 重申跑赢大市评级