Affected by last year's high base, we expect the company's second-quarter revenue to be basically the same year on year, and profit margins may be better than expected, maintaining the target price of US stocks at $31, maintaining the target price of Hong Kong stocks at HK$122, and maintaining the “hold” rating.

Affected by last year's high base, the company's short-term revenue growth may be under some pressure. By category, after the release of the epidemic in the same period last year, demand for the home appliance category was strongly released, which may have led to a decline in the second quarter of this year; computer digital computers are expected to continue to be affected by weak demand in the industry. As a result, we expect the company to record a certain decline in the electrified category in the second quarter. The daily necessities category is expected to continue its good growth trend, especially the supermarket category.

With the continuous optimization of the company's platform ecosystem, we expect that the number of users and orders will continue to grow rapidly in the second quarter, and the customer unit price may decline due to the category structure. Due to the relative control of the company's subsidy level and optimization of operational efficiency, the profit margin is expected to be better than our previous expectations.

We expect the company's second-quarter revenue to increase 1% year over year to 290.4 billion yuan, adjusted net profit to increase 14% year over year to 9.8 billion yuan, and adjusted net profit margin to improve 0.4 pp to 3.4% year on year.

As the high base recedes, we expect the company's revenue to return to normal growth in the third quarter.

Investment risks: Industry competition intensifies; user growth falls short of expectations; profit margins fall short of expectations.