＜Research＞Daiwa Downgrades EAST BUY (01797.HK) to Underperform, Slashes TP to $3.7

　　Daiwa noted in a research report that EAST BUY (01797.HK) -2.880 (-23.226%) Short selling $149.72M; Ratio 24.807% , a subsidiary of NEW ORIENTAL-S (09901.HK) -2.400 (-4.174%) Short selling $34.05M; Ratio 13.125% (EDU.US) , announced yesterday evening (25 July) the departure of renowned anchor Dong Yuhui, to whom it will sell the company containing his live streaming brand Time with Yuhui“ for more than RMB76.58 million. In the future, EAST BUY will continue to operate through its namesake ”East Buy brand and expand its self-operated products and live e-commerce business.

　　Daiwa estimated that the GMV contributed by Time with Yuhui accounted for approximately half of the total GMV of all live channels of EAST BUY in 4FQ24 ended May this year. It is expected that the departure of Dong Yuhui will have a negative impact on EAST BUY's FY25 revenues by 14% to 18%, as well as its earnings by 25% to 40%.

　　Related NewsBOCOMI Expects EAST BUY (01797.HK) FY2025 Profit to Drop 20%+ after Excl. Yuhui Tongxing Contribution

　　Although Daiwa believed EAST BUY would continue to drive growth by expanding its private label products (shopkeeping units, SKUs) and creating quality content, the broker also expected the company's future operations to remain impacted by competition from Time with Yuhui, as well as public opinion pressure, given the unsatisfactory market response. Accordingly, the broker's FY25-FY26 revenue forecast on the company has been lowered by 2% to 4%, and its EPS forecast for the period has been slashed by 54% to 58%.

　　Daiwa downgraded EAST BUY from Hold to Underperform and axed its target price sharply from $29 to $11.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-26 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

　　Related NewsCiti: EAST BUY Reduces Reliance on Star Anchors & Focuses on Realising Sustainable Value Creation From its Own Products

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