HTD delivered mixed 1H23 results with upbeat margin. Rev +6.6% YoY, 6.2% below consensus, while adj. net profit +20% YoY, in line with consensus. We modeled rev +12.9% YoY in FY23E, in which 2H23E rev would accelerate to +19.5% YoY. Consumer electronics and vehicles continue to be the main drivers, on supply chain expansion and low product penetration in low-tier cities. Services would bottom out at 10% growth YoY in FY23E, driven by SaaS adjustments with substantially rising paying users, partially offset by lower ARPU. The acquisition of Hosjoy (好享家) would contribute RMB60mn profit in FY23E. We slightly lifted HTD's FY23-25E earnings forecast by 10-14%, to factor in better margin outlook despite macro uncertainty. Our SoTP-based TP is unchanged at HK$55.

Mixed 1H23 results with upbeat margin. 1H23 rev +6.6% YoY, 6.2% below consensus, while adj. net profit reached RMB245mn, 0%/7% above consensus/ our estimates. Commerce biz (+6.8% YoY) was mainly dragged by declining agricultural production/homebuilding/liquor and beverage (- 19.1%/-5.5%/-16.4% YoY), while offset by resilient consumer electronics/vehicles (+24.4%/3.5% YoY). Consumer electronics and vehicles outperformance were attributable to improved supply chain capacity with cooperation with Apple, ZTE, Dell, BYD, etc. Services -5.8% YoY, mainly on merchant solutions adjustments (-27.6% YoY). GPM climbed to 2.3% in 1H23 from 2.2% in 1H22, in which services' GPM surged to 84.4% from 75.4% in 1H22.

Looking into 2H23E recovery. We modeled rev +12.9% YoY in FY23E, in which 2H23E rev would accelerate to +19.5% YoY. Consumer electronics and vehicles continue to be the main drivers mainly on supply chain expansion and low product penetration in low-tier cities. Other verticals such as household appliances/agricultural production/liquor and beverage will sequentially recover in 2H23E, while homebuilding will further decline due to the downturn in real estate and construction industries. Services would bottom out at 10% YoY growth in FY23E, driven by SaaS adjustments with substantially rising paying users, partially offset by lower ARPU. We expect acquisition of Hosjoy to contribute RMB60mn/66mn profit in FY23E/24E.

Maintain BUY. We slightly lifted HTD's FY23-25E earnings forecast by 10- 14%, to factor in better margin outlook despite macro uncertainty. We keep positive on its secular growth (10%/24% topline/bottom line CAGR in FY23- 25E). Our SoTP-based TP is unchanged at HK$55.