HK Stock Market Move | DMALL (02586) rose more than 8% against the market trend, and the company was included in the Hang Seng Index. It is expected that the overall gross profit margin will increase within three years driven by the AloT business.

DMALL (02586) rose by over 8% against the market trend. As of the time of writing, it was up 7.96% to 9.9 Hong Kong dollars, with a transaction amount of 16.6151 million Hong Kong dollars. In terms of news, on February 21, 2025, Hang Seng Index Company announced that DMALL and other companies were adjusted to enter the Hang Seng Composite Index component stocks, effective from March 10, 2025. According to the company's prospectus, 24H1 company achieved revenue of 940 million RMB, a year-on-year increase of 22.9%. The proportion of retail core service cloud revenue accounted for 99.4%, with the operating system and AIoT solution revenue accounting for 44.7% and 54.7% respectively. The gross profit margin of 24H1 company was 38.3%, with the operating system gross profit margin reaching 76.8% and the AIoT business gross profit margin at only 9% due to high labor costs in the early stage. The company expects that with the maturity of AIoT solutions, the cost of AIoT business will stabilize at a low level within three years, driving the overall gross profit margin of the company to increase. EB SECURITIES released a research report stating that DMALL has a high gross profit margin operating system business as its cornerstone, expanding its customer base through cooperation with related parties such as Wumart Group and Metro Supply Chain Group. The rapid decline in outsourcing costs of AIoT is expected to drive the company to turn losses into profits. Considering the sluggish domestic macroeconomy and low willingness of enterprises to pay for IT, the company's overseas business may achieve higher commission rates and profit margins, accelerating the company's profitability. At the same time, digital transformation is also beneficial for retailers to break free from the dilemma of high labor costs and low operating efficiency, optimistic about the continuous improvement of the penetration rate of AI digital solutions in retail sector scenarios, and recommend continuing to pay attention.