宝尊电商：2Q loss reduction trend better than expectation

Investment Rating - The report assigns a BUY rating to Baozun with a new SOTP-based target price of US$3.20, reflecting a potential upside of 44.1$2.22 [2][3]. Core Insights - Baozun's 2Q24 results exceeded expectations, with total revenue of RMB2.4 billion, a 3% year-over-year increase, driven by a 9% increase in services revenue. The non-GAAP net loss narrowed to RMB3.9 million from RMB4.4 million in 2Q23, significantly better than the consensus estimate of RMB16.6 million [2]. - The company has seen a turnaround in its E-commerce segment, with positive year-over-year growth after ten consecutive quarters of contraction, supported by strong growth in Douyin-related business and exclusive distribution services [2]. - The management anticipates continued improvement in the second half of 2024, despite challenges in offline traffic affecting the Baozun Brand Management segment [2]. Financial Summary - For FY24E, total revenue is expected to grow by 10% for Baozun Brand Management (BBM) and 4.5% for Baozun E-commerce (BEC). The non-GAAP operating loss for BBM is projected to narrow to RMB170 million, while the overall non-GAAP operating loss for Baozun is expected to reduce to RMB2.8 million [2][6]. - The report outlines a financial outlook with revenue projections of RMB9.35 billion for FY24E, reflecting a 6.1% year-over-year growth, and an adjusted net profit forecast of a loss of RMB68.3 million [6][10]. Valuation Metrics - The SOTP valuation includes RMB501 million for BEC based on a 3.0x 2024E EV/EBIT multiple and RMB139 million for BBM based on a 0.1x 2024E EV/sales multiple, along with RMB2.9 billion in net cash [2][7]. - The report applies a 60% holding discount to the group-level valuation, indicating expectations for enhanced shareholder returns to unlock net cash value [2][7].