20251202-招银国际-Profitability_improvement_trend_sustained_7页_1019kb

Summary of Baozun (BZUN US) Analysis

• Company Update: Baozun's profitability improvement continues, with a maintained BUY recommendation and an updated target price of US$3.81 based on 2026 forecast.

• 3Q25 Results: Total revenue reached RMB2.2 billion, a 5% increase YoY. Non-GAAP net loss narrowed to RMB40.2 million from RMB66.8 million in Q3 2024, driven by gross margin expansion and cost optimization.

• Segment Performance: Baozun E-commerce (BEC) revenue increased 2.4% YoY with non-GAAP operating profit of RMB28.1 million, supported by a 300bps gross margin expansion. Baozun Brand Management (BBM) revenue rose 20% YoY, primarily from GAP performance.

• Outlook: BEC expected to grow non-GAAP operating profit to RMB196 million in Q4 2025, with BEC-wide 2024 revenue at RMB9.871 billion. BBM maintains aggressive growth with forecasted revenue increase to 25% in 2025, narrowing full-year loss.

• Valuation: Target price lifted to US$3.81 from US$3.52, based on SOTP valuation including BEC's 5.0x EV/EBIT and BBM's 0.4x EV/sales for 2026.

• Rating: BUY recommended due to sustained profitability trends and improved operational efficiency.