EAST BUY (01797.HK, stock price HK$36.300, market cap HK$37.985 billion), which has attracted significant market attention, delivered its comprehensive annual results for fiscal year 2025 (June 1, 2024 to May 31, 2025) on the evening of August 22.

In fiscal 2025, EAST BUY's continuing operations (self-owned products and live-streaming e-commerce business) generated total revenue of 4.4 billion yuan, down 32.7% from the previous fiscal year's 6.5 billion yuan. The continuing operations achieved a turnaround from a net loss of 96.5 million yuan in the first half of fiscal 2025 to a net profit of 6.2 million yuan for the full year.

In this financial report, the financial impact of EAST BUY's "breakup fee" with Dong Yuhui has been "concluded." The report shows that excluding one-time expenses and profits related to "Walking with Hui," EAST BUY's adjusted net profit increased 30% year-on-year from 104.2 million yuan to 135.4 million yuan. However, this figure still represents a 46% decline compared to the company's net profit of 250 million yuan in fiscal 2024.

The substantial impact of Dong Yuhui's departure can also be seen in EAST BUY's GMV (Gross Merchandise Value): EAST BUY's total GMV for fiscal 2025 was 8.7 billion yuan, compared to 14.3 billion yuan in the previous fiscal year.

Public opinion controversies have continued to affect EAST BUY, with the company's stock price experiencing volatility. After the growing pains, can EAST BUY find a new path through its bet on self-owned products?

EAST BUY's most significant transformation characteristic in fiscal 2025 was the comprehensive deepening of its self-owned product strategy.

Financial data shows that the self-owned products and live-streaming e-commerce business achieved a full-year GMV of 8.7 billion yuan, with self-owned products accounting for an increased proportion of 43.8%, becoming the company's core business engine.

EAST BUY Chief Financial Officer Yin Qiang stated in the financial report that EAST BUY has continued to deepen the development of self-owned products, having launched a cumulative total of 732 self-owned products (compared to 488 in fiscal 2024). Product categories have expanded from the initial fresh food and snacks to more diversified product series, launching multiple self-owned product lines including nutritional and health foods, pet foods, and apparel.

"Currently, self-owned products have become EAST BUY's main growth driver," Yin Qiang stated.

EAST BUY's emphasis on self-owned products is reflected in a series of measures to strengthen supply chain construction. The company stated that its first self-owned product cold chain warehouse "EAST BUY Central China Warehouse No.1" has been put into operation, effectively shortening logistics transportation time. Meanwhile, by integrating and applying artificial intelligence models and big data platforms, EAST BUY continues to upgrade data management and resource allocation, providing technical support for future sustainable development and innovation.

In June this year, EAST BUY's self-owned products expanded into the equally controversial and high-profile "women's care" sector. According to data released by EAST BUY, within 10 minutes of launch, over 4,000 units of sanitary pads were sold. During the sanitary pad launch event, EAST BUY anchor YOYO further revealed that within 14 hours of launch, EAST BUY sanitary pad sales on the app exceeded 300,000 packages.

Looking ahead, EAST BUY stated it will continuously improve its self-owned product supplier management system, formulate strict internal regulations, build an institutional framework covering access, review, and tiered management, and continuously promote full-process management measures to continuously enhance supply chain compliance and stability. This also reflects the company's strategic intention to build "product quality" as its core brand competitiveness.

Currently, with the overall cooling of live-streaming e-commerce and frequent product safety issues in the market, consumers' attention to and requirements for product quality are increasing.

Renowned economist and member of the Ministry of Industry and Information Technology's Information and Communication Economics Expert Committee Pan Helin believes that EAST BUY has still not escaped the impact of Dong Yuhui's departure, and the market's previous expectations for EAST BUY were too high. Pan Helin further pointed out that product selection is not the key to EAST BUY breaking through its predicament. The product selection strategy is not problematic, but EAST BUY lacks traffic entry points. What reason do users have to come to EAST BUY? Previously there was Dong Yuhui, but what is there now? This is EAST BUY's biggest problem.

Dong Yuhui's departure also caused EAST BUY's GMV to decline significantly. The company's total GMV decreased 39.2% year-on-year from 14.3 billion yuan in the previous fiscal year to 8.7 billion yuan. The number of paid orders on Douyin also declined significantly, from 180 million orders in fiscal 2024 to 91.6 million orders.

Additionally, affected by the 140 million yuan payment to Dong Yuhui, EAST BUY's administrative expenses for continuing operations in fiscal 2025 increased 22.5% from 395.6 million yuan in fiscal 2024 to 484.8 million yuan.

To escape the influence of top anchors, EAST BUY is not only focusing efforts on self-owned brands but also investing more resources in self-owned platform construction and membership system operations.

The financial report disclosed that EAST BUY App paid membership subscriptions reached 264,300 people. EAST BUY App user satisfaction reached 98.7%, hitting a historical high. To enhance user experience, the EAST BUY App continues to improve its membership system and launch member-exclusive functions. Currently, the EAST BUY App has established community forums and reading clubs, enhancing user stickiness by meeting users' content interaction needs within the platform. On the app, EAST BUY can also directly interact with users on matters such as new product launches and product and service improvements.

During the reporting period, the proportion of GMV from the EAST BUY App increased from 8.4% in fiscal 2024 to 15.7%. Douyin remains EAST BUY's main battleground. While Douyin's massive traffic pool provides soil for EAST BUY's explosive growth, platform competition and platform traffic also bring instability to its long-term operations.

For fiscal 2025, EAST BUY Executive Chairman Yu Minhong stated: "The challenges we experienced in fiscal 2025 further consolidated and strengthened EAST BUY's core business model. We have made comprehensive arrangements with our live-streaming platform for selecting quality products as the center and self-owned products as our long-term positioning." During this financial report conference call, Yu Minhong stated that the business simultaneously connects upstream supply chains and downstream consumers, helping first-tier agricultural product companies and farming households while providing safe, reliable, and quality products to consumers.

Since Dong Yuhui's departure, EAST BUY has been in a critical stage of reshaping its business model and talent system.

On August 19, EAST BUY's stock price experienced a "roller coaster" performance during trading, jumping from a 23% gain to a 20% decline within one hour.

At that time, there were rumors that New Oriental CEO Zhou Chenggang might be under regulatory investigation for related party transactions. That day, EAST BUY issued a statement on Weibo saying that the rumors about Zhou Chenggang were pure speculation, and the claim about "EAST BUY's commission rate being consistently over 30%" was seriously inaccurate, with EAST BUY ensuring high quality and high cost-effectiveness for products sold, with an actual average commission rate of less than 20%.

On August 22, the market again circulated rumors that "former EAST BUY CEO Sun Dongxu has entered vacation status and may resign soon." After the "small essay controversy" at the end of 2023, Sun Dongxu was removed from his positions as executive director and CEO. However, Sun Dongxu did not leave the New Oriental system, and on November 24 last year, he appeared again in EAST BUY's live streaming room.

Regarding this rumor, EAST BUY clarified on Weibo on August 22: "Teacher Sun Dongxu is on vacation and has not resigned. Since December 2023, Teacher Sun Dongxu has been working as an advisor to EAST BUY and Teacher Yu Minhong. Teacher Yu Minhong and Teacher Sun Dongxu have maintained good communication."

Looking at this first annual report card of the "post-Dong Yuhui era," EAST BUY is walking on a transformation path full of contradictions: on one hand, the company is developing its own app ecosystem while maintaining Douyin GMV; on the other hand, the company must also guard the lifeline of product quality while continuously expanding self-owned product categories.

The fluctuating stock price seems to indicate that EAST BUY's value is being reassessed, and the real test lies ahead.