Citigroup: EASTBUY (01797) turned profit from loss in the first half of the fiscal year, target price of 33 Hong Kong dollars and recommends "buy".

Citibank released a research report stating that EAST BUY (01797) turned a loss into a profit in the first half of fiscal year 2026, recording a net profit of 2.39 billion RMB, mainly due to a strategic shift towards in-house products, driving gross margin expansion by 280 basis points to 36.4%. The bank has set a target price of 33 Hong Kong dollars for EAST BUY with a buy rating. Although the total gross merchandise volume (GMV) decreased by 14.6% to 4.1 billion RMB due to business separation, core revenue increased by 17% to 2.31 billion RMB after excluding the impact of "Shining Together", supported by product portfolio expansion and strong app performance. Meanwhile, through strict operational controls, employee numbers were reduced by 26% and total compensation decreased by 35%, further consolidating profitability.