Northeast Securities issued a research report stating that EAST BUY (01797) is a key livestream e-commerce brand developed by the New Oriental Group. Leveraging the group's resources, the company boasts a sufficient leadership team and talent pool, with offline resources from the group's education business being fully integrable. The firm forecasts earnings per share (EPS) for fiscal years 2026-2028 to be RMB 0.41, RMB 0.42, and RMB 0.81, respectively, corresponding to price-to-earnings (P/E) ratios of 58x, 56x, and 29x, leading to an upgrade to a "Buy" rating.
Northeast Securities' primary views are as follows: New Oriental founder Yu Minhong holds absolute decision-making power and is deeply involved in the company's operations. The leadership team has long-term backgrounds with the New Oriental Group, which has ample internal executive reserves. Sun Jin took over as CEO of EAST BUY in December 2025, bringing expertise in standardized operations and team management. The education business's rich pool of teaching staff can provide EAST BUY with a steady supply of high-quality live streamers.
The company is vigorously developing brand retail with fresh agricultural products at its core. In the first half of fiscal 2026, gross merchandise volume (GMV) from self-operated products exceeded 50%, while the user base on its dedicated app and its membership system continue to expand. EAST BUY has gradually become a well-known online platform for selling high-quality, cost-effective agricultural and other products, consistently creating hit items such as grilled sausages and lutein soft candies. By the end of November 2025, its stock keeping units (SKUs) had grown to 801. The paid membership system built around its proprietary app is continuously expanding, enhancing user retention, repurchase rates, and overall stickiness.
The company is advancing supply chain improvements through upstream vertical integration and upgrades to warehousing and logistics. It plans to achieve instant retail capabilities through the deployment of offline flagship stores. Upstream efforts involve direct sourcing of raw materials and deep integration with production, forming a three-tier system of "joint venture partnerships + top-tier OEMs + specialized collaborations" to ensure rigorous selection and continuous optimization. Over the past two years, the company has been making relentless efforts to strengthen its delivery service system, progressively establishing central warehouses and forward distribution centers. It currently operates Central Warehouses No. 1 and No. 2 in Central China, with No. 3 and No. 4 in the process of being implemented. The company also plans to build same-day delivery capabilities in the top 10 cities by order volume in China and has initiated new pilot programs for instant retail fulfillment in Beijing, Shanghai, and Guangzhou.
The company's first offline flagship store is set to open in Beijing. The flagship store will serve dual functions as an "offline shopping experience center + forward warehouse for instant retail," marking the company's move towards omnichannel operations and the complete transition from a livestream e-commerce entity to a full-fledged omnichannel brand retailer.
EAST BUY's evolution from livestream commerce to building a self-operated product system involves enriching its SKUs under the "EAST BUY" brand while creating best-selling products. Hot-selling products drive the integration of upstream resources. The launch of its own app and a paid membership system, coupled with large-scale construction of forward warehouses and the initial layout of offline stores, indicates the company is using the branding of fresh agricultural products as an entry point to gradually build a new retail model of omnichannel operations. Livestreaming platforms like Douyin serve as core online customer acquisition channels, while offline stores act as physical customer touchpoints and forward warehouses for instant retail, handling both引流 (traffic acquisition) and fulfillment tasks. The proprietary app and membership system are designed to lock in consumers, increase repurchase rates, and enhance loyalty.
The institution believes that while the company's offline layout is not yet complete, once the Beijing flagship store model proves successful, online and offline operations are integrated internally (distinct from reliance on other platforms), and self-sustaining capability is achieved (without requiring continuous cash burn), the number of offline stores could rapidly expand in a short period, driving swift growth in performance.
Risk warnings include intensifying industry competition, food safety risks, and slower-than-expected progress in offline business operations.