20250320-招银国际-多点数智-02586.HK-Full-year_breakeven_in_FY24__focus_on_AI_retail_to_drive_long-term_growth_5页_983kb

Dmall Inc (2586 HK) Summary

Core Content and Key Information

Dmall Inc (2586 HK) reported its FY24 financial results, achieving a full-year breakeven with total revenue increasing by 17% YoY to RMB1.86bn, aligning with estimates. Adjusted net profit reached RMB29.8mn, a significant improvement from the adjusted net loss of RMB277mn in FY23, and exceeded previous estimates of an adjusted net loss of RMB105mn. This performance was driven by the strong growth of the retail core service cloud solution and enhanced operating efficiency.

Main Financial Highlights

• Revenue Growth:

  • FY24: RMB1.86bn (+17% YoY)
  • FY25E: Expected to grow 15-20% YoY
  • FY26E: Expected to grow 17.8% YoY
  • FY27E: Expected to grow 14.1% YoY

• Profitability:

  • GPM improved from 35.0% in FY23 to 40.1% in FY24
  • Adjusted net margin increased from -14.7% in FY23 to 1.6% in FY24
  • Expected further margin expansion in FY25E

• Earnings Per Share (EPS):

  • FY24: RMB5.39 (adjusted)
  • FY25E: RMB14.94 (adjusted)
  • FY26E: RMB37.56 (adjusted)
  • FY27E: RMB57.55 (adjusted)

• Valuation Metrics:

  • P/S ratio: 5.9x in FY24, expected to decrease to 4.3x in FY25E and 3.7x in FY27E
  • Target Price: HK$16.00 (up from HK$8.50), based on 6.0x FY25E EV/sales
  • Current Price: HK$13.06
  • Up/Downside: 22.5%

Business Focus and Strategic Initiatives

• AI Retail Focus:

  • Dmall has launched several AI agent products, including AI Clearance, AI Customer Service, and AI Service Quality Inspection.
  • AI Clearance was deployed in over 200 Wumei stores, generating over RMB1mn in incremental annual profit through intelligent analytics for dynamic discount programs.
  • AI Customer Service reduced customer labor costs and maintained a high user satisfaction and online resolution rate of 80%.
  • While AI retail products haven't made significant revenue contributions in FY24, the company is optimistic about their long-term potential.

• Retail Core Service Cloud Growth:

  • Revenue from the retail core service cloud solution grew by 39% YoY to RMB1.81bn.
  • OS revenue increased by 16% YoY to RMB786mn, driven by distributed e-commerce system revenue and overseas expansion.
  • AIoT solutions revenue rose by 65% YoY to RMB1.02bn, fueled by new AIoT offerings such as intelligent delivery and cleaning.
  • The company maintained a net dollar retention rate of 114% in 2024 and acquired key account customers like Better Life Group, Lishui Wanjiahui, and Shuanghui Development.

Business Forecasts and Valuation

• Revenue Forecast:

  • FY25E: RMB2,190mn
  • FY26E: RMB2,572mn
  • FY27E: RMB2,936mn

• Adjusted Net Profit Forecast:

  • FY25E: RMB134.4mn
  • FY26E: RMB337.8mn
  • FY27E: RMB517.5mn

• Valuation Assumptions:

  • Based on 6.0x FY25E EV/sales, the implied EV is RMB13,137mn, leading to an equity value of RMB13,624mn.
  • The valuation multiple is in line with the average EV/sales of global SaaS peers (5.9x).

Shareholding and Stock Data

• Market Cap: HK$11,744.3mn
• Share Performance:
  • 1-month: +96.1% (absolute) / +81.6% (relative)
  • 3-month: +109.3% (absolute) / +66.9% (relative)
• Shareholding Structure:
  • Celestial: 47.8%
  • Vigorous Link: 8.5%

Analyst Recommendations

• Ratings: BUY (Maintain)
• Target Price: HK$16.00
• Previous Target Price: HK$8.50
• Reasoning: The company is expected to benefit from sector rerating and the long-term potential of AI retail.

Analysts

• Saiyi HE, CFA: (852) 3916 1739 | hesaiyi@cmbi.com.hk
• Wentao LU, CFA: luwentao@cmbi.com.hk
• Ye TAO, CFA: franktao@cmbi.com.hk
• Joanna Ma: (852) 3761 8838 | joannama@cmbi.com.hk

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