01797 Should I Buy

The analyst rating for EAST BUY (01797.HK) was upgraded by Daiwa due to the company's return to profitability in 1HFY26, where it recorded an adjusted net profit of RMB257 million. This improvement was attributed to scale leverage and higher-margin products, which contributed to the expansion of gross profit margins (GPM) for its own brands and streamlined cost structures. Daiwa expressed increased optimism about EAST BUY's operational status, indicating that the company is "out of the woods" and that its profitability exceeded expectations. Consequently, the target price was raised from HKD13.5 to HKD29, and earnings forecasts for 2026-27 were increased by 42-97%, leading to the reaffirmation of the Outperform rating.