Core Viewpoint - Daiwa has raised its profit forecast for Dongfang Zhenxuan (01797) by 42% to 9.7 billion RMB, 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 products in health, nutrition, and daily consumer goods [1] Group 2: Market Outlook - Daiwa reiterated its "Outperform" rating and raised 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, up from 23 times [1] - The company believes that operational challenges have been overcome, with positive developments in its own brand, structural reduction in operating costs, and the opening of non-Douyin channels providing significant growth opportunities [1]
大和：东方甄选上半年业绩亮眼 重申跑赢大市评级