HK Stock Market Move | EAST BUY (01797) rises over 3%, the pain caused by the separation of the live broadcast room is showing the initial effect of the company's business adjustment.

EAST BUY (01797) rose more than 3%, as of press time, up 3.72% to HK$17.28, with a turnover of HK$65.9085 million. Shenwan Hongyuan Group released a research report stating that it is expected that EAST BUY's 1HFY25 revenue will be approximately RMB 2.4 billion, a year-on-year decrease of 14.1%; adjusted net profit attributable to shareholders is RMB 0.64 billion, a year-on-year decrease of 87.3%. The negative growth in revenue and profit is mainly attributed to the separation of the "With Hui Tongxing" live broadcast room. The separation of the live broadcast room not only affects sales revenue, but also significantly reduces profit year-on-year due to one-time expenses such as Dong Yuhui's bonus incentives. The report pointed out that on July 25th, the company announced the sale of the With Hui Tongxing live broadcast room and the resignation of Dong Yuhui. Since the launch of the With Hui Tongxing live broadcast room, as of July 19, 24, the cumulative GMV of the live broadcast room was RMB 43.8 billion, accounting for 54% of total EAST BUY GMV during the same period (total EAST BUY GMV of RMB 81.7 billion). Despite still consolidating the sales revenue of the With Hui Tongxing live broadcast room in the first half of FY25, business adjustments have led to a year-on-year decline in GMV of nearly 5.1% to RMB 54.1 billion. After the separation of the With Hui Tongxing live broadcast room, the company has streamlined its business development strategy, promoted a multi-live broadcast room, multi-host development model, added live broadcast rooms for clothing, fresh produce, among others, trained new hosts, and refined fan demands.