Goldman Sachs has revised its target price for A-LIVING (03319) downward from HK$2.60 to HK$2.25, while maintaining a "Neutral" rating on the stock. The company's core net profit for 2025 fell 21% year-on-year to RMB 728 million, slightly below the firm's expectations. This was primarily due to a gross profit margin contraction of 2 percentage points to 13%, which was 1 percentage point lower than the firm's forecast, coupled with slower-than-anticipated optimization of sales and administrative expenses. Although the company returned to profitability with a full-year net profit of RMB 105 million, a significant improvement from the net loss of RMB 3.3 billion in 2024, the result still fell short of the firm's projections. This underperformance was mainly attributed to an impairment of accounts receivable amounting to RMB 538 million during the period. Goldman Sachs has also lowered its average net profit and core earnings forecasts for A-LIVING for 2026 to 2028 by 23% and 10%, respectively. These adjustments primarily reflect the reduced gross margin outlook and the ongoing risk of accounts receivable impairments.