The Zhitong Finance App learned that Yamato released a research report stating that it gave Dongfang Selection (01797) a “holding” rating, and that market peers continue to believe that there is a downward trend in Dongfang Selection's profit forecast for the 2024 fiscal year.

According to the report, the company's total mid-term live streaming product transaction volume (GMV) rose 18.8% year on year to 5.7 billion yuan, and revenue rose 34.4% year on year to 2.8 billion yuan, in line with the forecast; the adjusted profit record was 509 million yuan, lower than the bank's original forecast of 13%, mainly due to high sales and marketing expenses and subsidies for new sales channels.

The bank said that although the company's profit margin will be diluted with the continuous increase in the portfolio of its own brand products and commission services, the bank has noticed some changes. The first is that the gross margin of its own brand actually increased from 18% in FY2023 to more than 20% in the first half of FY2024; the second is the decline in the mixed commission rate for third-party product sales due to the expansion of categories to cosmetics and electronic products; third, rebates granted on Taobao.