Low Leverage And Sizable Equity BaseVery low financial leverage and a substantial equity base provide durable financial flexibility. This balance sheet strength supports the company’s ability to absorb continued operating losses, fund strategic investments (eg. AI), and extend runway without immediate refinancing, helping enable a multi-quarter turnaround if cost discipline holds.
Healthy Gross Margin ProfileA roughly 40% gross margin indicates favorable unit economics in core merchandise and platform services. If management sustains lower S&M and improves mix toward higher-margin technology/advertising services, the company can leverage this gross margin to move toward operating profitability over several quarters.
Strategic AI Investment To Boost PlatformThe RMB0.1bn minority investment in AI infrastructure is a structural strategic move to upgrade recommendation, targeting and content tools. Better AI can enhance KOL-driven engagement, increase conversion rates and advertising yield, and provide a sustainable competitive edge in social commerce if successfully integrated.