The latest: Livestreaming e-commerce platform East Buy Holding Ltd. (1797.HK) on Wednesday reported its net profit for the six months through last November fell by 57.4% year-on-year to 249 million yuan ($35.2 million), according to an announcement issued on Wednesday.
Looking up: The company’s revenue rose by 34.4% to 2.8 billion yuan, after it implemented a series of new initiatives to boost its private label products and upgrade its services.
Take Note: The company’s selling, marketing and administrative expenses more than doubled for the period, causing its profit before tax to drop by 49.9% to 378 million yuan.
Digging Deeper: Since ceasing its K-12 online tutoring business last year following a government crackdown, East Buy has transformed into a livestream e-commerce platform. To more clearly delineate its business lines, the company sold its residual tutoring operations to its education-focused parent, New Oriental (EDU.US; 9901.HK), and has focused on selling private-label products and livestreaming. The company’s average daily gross merchandise value (GMV), average daily volume of viewers and comprehensive conversion showed signs of decline last year, prompting it to try to move away from its reliance on short video app Douyu and shift to the Taobao e-commerce marketplace and live broadcasts on its own app.
Market Reaction: East Buy shares plunged on Thursday to close down 11.9% at HK$23.25 by the midday break. They now trade at the lower end of their 52-week range
Translation by A. Au
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