Investment Rating - The report maintains a "Recommended" rating for the e-commerce industry, indicating a positive outlook for the sector's fundamentals and expected performance relative to market benchmarks [3]. Core Insights - The new tax regulation, effective from October 1, 2025, requires internet platform companies to report tax-related information, which is expected to have a significant short-term impact on the profitability of non-compliant merchants while benefiting compliant platforms like JD.com and Tmall in the long run [1][4]. - The implementation of the new tax rules is anticipated to promote fair competition within the e-commerce industry, leading to a more regulated and sustainable market environment [1][4]. Summary by Sections Industry Overview - The e-commerce sector is undergoing regulatory changes with the introduction of the "Internet Platform Enterprises Tax Information Reporting Regulations," which mandates comprehensive tax reporting by platform companies [1]. - As of October 27, 2025, over 6,500 platform enterprises have complied with the new reporting requirements, reflecting a high level of adherence within the industry [1]. Impact Analysis - The new regulations primarily affect the value-added tax (VAT) obligations of non-compliant merchants, particularly those with annual sales exceeding 5 million who have not maintained proper invoicing practices [1]. - Short-term profit margins for certain merchants are expected to decline due to increased tax liabilities, while compliant platforms are likely to benefit from enhanced market positioning [1][4]. Investment Recommendations - The report suggests a favorable outlook for platforms with strong compliance and brand presence, specifically recommending investments in JD.com, Alibaba, and Pinduoduo as the industry adapts to the new regulatory landscape [1][4].