"Big Banks" Citigroup: EAST BUY turned a loss into a profit in the first half of the fiscal year, target price 33 yuan, urging "buy"

Citigroup's research report indicates that EAST BUY (01797.HK) will turn a profit in the first half of the 2026 fiscal year, recording a net profit of RMB 239 million, primarily due to a strategic shift in its product mix towards its own products, driving gross margin expansion by 280 basis points to 36.4%.

Although the total gross merchandise volume (GMV) decreased by 14.6% to RMB 4.1 billion due to business spin-offs, core revenue grew by 17% to RMB 2.31 billion after excluding the impact of "Walking with Glory," supported by product mix expansion and strong app performance. Meanwhile, through strict operational control, the number of employees was reduced by 26% and total compensation decreased by 35%, further consolidating profitability. The firm set a target price of HKD 33 for EAST BUY, with a rating of "Buy."