Eastern Selection Surges 12% in Early Trading, Cumulative Gain Exceeds 300%

Eastern Selection (01797) surged 12% in early trading, with a high of HK$48.80, hitting a new high in nearly 18 months, and cumulative gain exceeding 300%. As of the time of writing, the stock price had risen by 12.45%, currently reporting HK$48.78, with turnover of HK$16.082 billion.

Eastern Selection is set to release its full-year results for the fiscal year ending May 31, 2025 on August 22 (Friday). Prior to that, New Oriental released its fourth-quarter results for FY25, according to which Eastern Selection's FY25 fourth-quarter revenue was approximately USD 150 million, down around 30% year-on-year, with a decrease in the decline rate; non-GAAP operating profit was approximately RMB 790 million, equivalent to an operating profit rate of around 7%, up from last year.

China Securities said that Eastern Selection's implementation of the "Sam Walton Model" has drawn attention. Against the backdrop of a consumer market characterized by diversification of supply, transparency of information, and rationalization of demand, companies with high-value products and mature membership systems are increasingly gaining competitive advantages. Eastern Selection has recently shown signs of marginal improvement in its operations, with successful expansion into new product categories, growth in self-operated businesses, and quality upgrades. The firm believes that Eastern Selection's marginal improvement is to some extent a confirmation of the growth logic for this type of company.