Core Viewpoint - The company reported a slight revenue miss but a significant net profit beat for 1HFY26, driven by improved operational efficiency [1] Group 1: Financial Performance - Total revenue for 1HFY26 reached 2.31 billion, a year-on-year increase of 5.7%, slightly below expectations; adjusted net profit was 258 million, exceeding expectations by 68% [1] - Excluding revenue from the Huixing live broadcast room, year-on-year growth was 17.0% [1] - Gross margin for 1HFY26 was 36.4%, an increase of 2.8 percentage points year-on-year; adjusted net profit margin was 11.1%, up 11.2 percentage points year-on-year [2] Group 2: Growth and Development Trends - The company achieved resilient growth with a total revenue of 2.31 billion for 1HFY26, reflecting a 5.7% year-on-year increase [1] - The proportion of self-operated product GMV in total GMV increased to 52.8%, up 15.8 percentage points year-on-year; SKU count rose from 600 in 1HFY25 to 801 [1] - The management team has been strengthened, with Sun Jin appointed as Executive President in December 2025 to oversee daily management and strategic implementation [1] Group 3: Strategic Initiatives - The company is enhancing its online presence by solidifying its position on Douyin and accelerating the development of its own app, which contributed 18.5% to GMV, up 4.9 percentage points year-on-year; as of November 30, 2025, app membership reached 240,000 [2] - Offline, the company has deployed over 40 vending machines leveraging the New Oriental learning center network, achieving profitability in some cities [2] - The management plans to strengthen collaboration with New Oriental Group to facilitate member conversion [2] Group 4: Earnings Forecast and Valuation - Revenue forecasts for FY26 and FY27 have been raised by 3.1% and 4.8% to 5.19 billion and 5.90 billion, respectively; adjusted net profit estimates have been increased by 80.2% and 32.1% to 437 million and 410 million [2] - The target price has been raised by 25% to 30 HKD, based on a more optimistic profit release expectation; the FY26 P/GMV multiple has been adjusted from 2.5x to 2.9x, corresponding to a 5.5x FY26 price-to-sales ratio [2]