Core Viewpoint - The financial performance of Dongfang Zhenxuan (1797.HK) has significantly declined in the 2025 fiscal year, with total revenue dropping by 32.7% to 4.4 billion RMB compared to 6.5 billion RMB in 2024, and net profit plummeting to 6.2 million RMB from 250 million RMB in the previous year [1][3][4]. Financial Performance - In the 2025 fiscal year, the total revenue from ongoing operations (self-operated products and live e-commerce) was 4.4 billion RMB, a decrease of 32.7% from 6.5 billion RMB in 2024 [1][3]. - The net profit for 2025 was 6.2 million RMB, a significant drop from 250 million RMB in 2024 [1][3]. - The gross merchandise volume (GMV) for ongoing operations was 8.7 billion RMB, down 39.1% year-on-year [4][9]. - The adjusted net profit, excluding the financial impact of the separation from Hui Tong, increased by 30% to 1.35 billion RMB compared to 1.04 billion RMB in 2024 [4][9]. Strategic Adjustments - The company has shifted its focus towards self-operated products, achieving a GMV of 3.81 billion RMB from self-operated products, accounting for approximately 43.8% of total GMV [10]. - A total of 732 self-operated products were launched in the 2025 fiscal year, up from 488 in 2024 [10]. - The gross margin for ongoing operations improved from 25.9% in 2024 to 32% in 2025, attributed to the healthy development of self-operated products and live e-commerce [9]. Market Challenges - The departure of key figure Dong Yuhui has led to a significant drop in stock price and market confidence, with a 23% decline on the day of his announcement [7]. - The company faces challenges in replicating the past success driven by star hosts, as the departure of top influencers has weakened the appeal of mid-tier hosts [14]. - The transition to a "Sam's Club" model is still in its infancy, with membership revenue not yet reaching significant levels compared to competitors [14]. Future Outlook - The CEO, Yu Minhong, emphasized the need to develop more self-operated product hits and enhance app engagement and membership numbers [15]. - The company plans to increase offline promotional efforts to raise awareness of its products among potential customers [16]. - The transition from "trust in people" to "trust in products" in the live e-commerce industry will be crucial for the company's long-term success [16].

Core Viewpoint - The departure of Dong Yuhui has significantly impacted Dongfang Zhenxuan's performance, leading to a substantial decline in revenue and profit, highlighting the challenges the company faces in its transformation efforts and reliance on key personnel [4][6][18]. Financial Performance - In the fiscal year 2025, Dongfang Zhenxuan reported a revenue of 4.4 billion yuan, a year-on-year decline of 32.7%, and a GMV of 8.7 billion yuan, down 39% [4][6]. - The net profit from continuing operations was 6.2 million yuan, a staggering drop of 97.5% year-on-year [7][9]. - Employee count decreased by approximately 25%, with 482 fewer employees compared to the previous year [9][18]. Market Position and Competition - Dongfang Zhenxuan's main account has fallen out of the top ten in sales rankings multiple times, with its lowest ranking at 22nd in October last year, while its competitor, "With Hui," has consistently maintained a top-three position [4][11]. - The user base has also declined, with Dongfang Zhenxuan losing approximately 186,200 followers, while "With Hui" gained over 1 million followers [11][12]. Transformation Challenges - The company is attempting to pivot towards an "online Sam's Club" model, focusing on high-quality self-operated products and a robust membership system, but faces significant hurdles in supply chain management and channel dependency [15][16]. - The GMV from the company's own app accounted for 15.7% of total GMV, up from 8.4% the previous year, indicating a shift towards reducing reliance on third-party platforms [16][17]. Membership Growth - The growth of paid membership has slowed, with only 65,700 new members added in the fiscal year 2025, compared to 74,800 in the second half of the previous fiscal year [17][18].

Core Viewpoint - The departure of Dong Yuhui has significantly impacted Dongfang Zhenxuan's financial performance, leading to a notable decline in revenue and profit, but the company is making adjustments to its business model and focusing on self-operated products and live-streaming e-commerce for long-term growth [2][3][4]. Financial Performance - For the fiscal year 2025, Dongfang Zhenxuan reported total revenue of 4.4 billion yuan, a decrease of 32.7% from 6.5 billion yuan in fiscal year 2024 [2][4]. - The net profit for fiscal year 2025 was 6.2 million yuan, a significant drop from 250 million yuan in the previous year [2][4]. - In the first half of fiscal year 2025, the company experienced a net loss of 96.5 million yuan, but by the end of the fiscal year, it turned a profit of 6.2 million yuan [3][4]. Business Strategy - Dongfang Zhenxuan is shifting its focus from reliance on individual influencers to building supply chain capabilities, which is seen as essential for long-term development [3][4][7]. - The company aims to enhance its self-operated product offerings, with a total GMV of 8.7 billion yuan for fiscal year 2025, where self-operated products accounted for approximately 43.8% of total GMV [3][5]. Product Development - The company has launched 732 self-operated products in fiscal year 2025, up from 488 in the previous year, indicating a strong commitment to product development [5][6]. - Notable product successes include a cotton sanitary napkin that sold 180,000 units in two days and a frozen shrimp product that generated over 21 million yuan in sales [6]. Market Challenges - Despite progress in self-operated products, Dongfang Zhenxuan faces challenges in replicating the success of past star influencers, as the current mid-tier influencers lack the same level of audience engagement [7][8]. - The company is also working to develop its app and increase user engagement, with app-generated GMV at 1.37 billion yuan, accounting for 15.7% of total GMV [8][9]. Future Outlook - The company plans to enhance its marketing efforts, particularly offline, to increase brand awareness and customer acquisition, as many potential customers are still unaware of its product offerings [9]. - Dongfang Zhenxuan's transition to a model akin to "online Sam's Club" is still in development, and its success will depend on building a strong product and brand foundation [8][9].

Core Viewpoint - The departure of Dong Yuhui has significantly impacted Dongfang Zhenxuan's financial performance, leading to a notable decline in revenue and profit, but the company is making adjustments to its business model and focusing on self-operated products and live-streaming e-commerce as a long-term strategy [1][3][9]. Financial Performance - For the fiscal year 2025, Dongfang Zhenxuan reported total revenue of 4.4 billion yuan, a decrease of 32.7% from 6.5 billion yuan in fiscal year 2024 [1][3]. - The net profit for fiscal year 2025 was 6.2 million yuan, a significant drop from 250 million yuan in the previous year [1][3]. - In the first half of fiscal year 2025, the company experienced a net loss of 96.5 million yuan, but by the end of the fiscal year, it achieved profitability [1][3]. Business Strategy - Dongfang Zhenxuan is shifting from reliance on individual influencers to building supply chain capabilities, which is seen as essential for long-term growth [2][9]. - The company has focused on self-operated products, achieving a GMV of 3.81 billion yuan for self-operated products in fiscal year 2025, accounting for approximately 43.8% of total GMV [5][6]. - The number of self-operated products launched increased to 732 in fiscal year 2025, up from 488 in the previous year [5][6]. Market Challenges - The company faces challenges in replicating the success of past star influencers, as the current mid-tier influencers do not have the same level of audience engagement [7][9]. - Dongfang Zhenxuan's membership revenue is still low compared to competitors like Sam's Club, which relies heavily on membership fees for profitability [7][9]. - The company continues to depend on public traffic from platforms like Douyin, with only 1.37 billion yuan in GMV generated from its app, representing 15.7% of total GMV [8]. Future Outlook - The company plans to enhance its app's user engagement and membership numbers, recognizing the importance of building a loyal customer base [8]. - Dongfang Zhenxuan aims to strengthen its brand and product offerings to create a sustainable competitive advantage in the evolving live-streaming e-commerce landscape [9][10].