In a report released yesterday, Saiyi He from CMB International Securities maintained a Buy rating on Dmall Inc. (2586 – Research Report), with a price target of HK$16.00.
Saiyi He has given his Buy rating due to a combination of factors that highlight Dmall Inc.’s strong financial performance and strategic focus on AI retail. The company reported a significant turnaround in its financials, achieving a full-year breakeven in FY24 with a notable increase in total revenue and a shift from a net loss to a net profit. This improvement is attributed to the robust growth in their retail core service cloud, particularly in the operating system and AIoT solutions, which have shown impressive year-over-year growth.
Looking forward, Dmall Inc. is strategically positioning itself in the AI retail sector, launching several AI agent products that are expected to drive long-term growth. Although these AI products have not yet made a significant revenue impact, their potential is promising. Additionally, the company has improved its gross profit margin by optimizing its operations and discontinuing low-margin services, which is expected to further enhance profitability in the coming years. These factors, combined with a positive outlook for revenue growth and margin expansion, underpin Saiyi He’s Buy rating for Dmall Inc.
He covers the Communication Services sector, focusing on stocks such as Baidu, Tencent Holdings Limited, and Iqiyi. According to TipRanks, He has an average return of 19.0% and a 62.50% success rate on recommended stocks.