Investment Rating - The report assigns a "Neutral" rating to the company, Dongfang Zhenxuan (1797 HK), with a target price of 13.40 HKD, reflecting an 8.1% upside from the closing price of 12.40 HKD [3]. Core Insights - Dongfang Zhenxuan announced the sale of its subsidiary, Yuhui Tongxing, to its former employee, Dong Yuhui, which is expected to impact the company's profits by over 20% for the fiscal year 2025. The sale price was 76.59 million RMB, equal to the net asset value of Yuhui Tongxing, resulting in no gain or loss from the transaction [1]. - The financial performance of Yuhui Tongxing for the first half of 2024 showed a Gross Merchandise Value (GMV) of approximately 3.5 billion RMB, contributing around 410 million RMB in revenue and 140 million RMB in profit, with a profit margin of 33% [1]. - Following the sale, the company plans to reallocate resources to strengthen its own brand and expand its self-operated products and live-streaming e-commerce business, aiming to better meet consumer demands [1]. Summary by Sections Company Overview - Dongfang Zhenxuan is transitioning its business strategy by divesting from Yuhui Tongxing, which was previously wholly owned and contributed significantly to its revenue [1]. Financial Impact - The divestment is projected to lead to a reduction in GMV, revenue, and profit forecasts for fiscal year 2025 by 34%, 9%, and over 20% respectively, while also potentially reducing public relations risks [1]. Strategic Direction - The company intends to focus on its self-operated strategies and multi-platform development post-divestment, which may lead to more stable operations in the long term [1].
东方甄选：出售与辉同行，预计对2025财年利润影响20%