Puyin International issued a research report stating that given HUITONGDA NET's (09878) business strategy adjustment has shown initial success and profit margin indicators have reached historical highs, the firm expects the company's revenue to recover rapidly in the second half of the year with 35% year-over-year growth. The firm assigns a FY26E 20x P/E valuation, resulting in a target price of HK$18, maintaining a "Buy" rating.
The company's 1H25 revenue reached RMB 24.3 billion, with gross margin improving by 1.16 percentage points year-over-year to 4.64%. Net profit was RMB 140 million, up 11% year-over-year, while adjusted net profit margin increased to 0.57%, setting a new historical high.
The company's revenue structure continues to optimize, with member retail store revenue proportion rising to 47.4%. HUITONGDA NET continues to enhance its supply chain capabilities, including: 1) deepening partnerships with leading brands; 2) building its own brand portfolio; 3) expanding into new categories and channels. The company's own brands and overseas expansion are expected to become new growth drivers in the future.
The company is advancing AI+SaaS intelligent upgrades, with store SaaS+ subscription revenue growing 23% quarter-over-quarter, demonstrating initial transformation success. In April, the company launched the "Qiancheng AI Super Store Manager" APP, fully integrating AI Agent functional modules that can automatically complete 60% of daily store management tasks, significantly reducing operational costs for small and medium-sized retail stores.
AI+SaaS products were officially commercialized in May, with AI-related revenue currently accounting for approximately 20% of total service revenue. Additionally, the company has reached comprehensive full-stack AI cooperation with Alibaba Cloud to enhance marketing customer acquisition and intelligent sales capabilities in lower-tier markets, continuously expanding commercialization scenarios.
The company will focus on driving AI+SaaS service revenue growth, improving paid conversion rates, and achieving high-quality sustainable growth.
Investment risks include intensifying industry competition and transaction business growth falling short of expectations.