朝着强劲的中期盈利目标稳步前进

profitability target with solidexecution Heading towards strong medium-term Target PriceUS$3.98(Previous TPUS$3.81)Up/Downside82.6%Current PriceUS$2.18 Baozun reported its4Q25 results: revenue reached RMB3.2bn, up 5.9% YoY(3Q25: +4.8% YoY); non-GAAPNPattributable to ordinary shareholders wasRMB159.6mn(vs.RMB45.7mn in 4Q24)driven by a solid improvement inoperating profitability across both Baozun E-commerce (BEC) and BaozunBrand Management (BBM).In 4Q25, BEC recorded revenue of RMB2.6bn, up2.5%YoY,with non-GAAP operating profit(OP)increasing 43%YoY toRMB196mn. Meanwhile, BBM delivered revenue of RMB664mn, up 24% YoY,with non-GAAP OP of RMB1.8mn,vs.a loss of RMB34.2mn in 4Q24.For 2025,Baozun demonstrated a solid improvement in operating profitability. BEC OPgrew 22% YoY, driven by cost optimization and improved operating efficiency,while BBM loss narrowed to RMB93mn (2024:loss ofRMB169mn). Baozun alsounveiled its 2028 non-GAAP OP target of at least RMB550mn, implying a 2025–2028E CAGR of over 64%, supported by margin expansion in BEC, scaling and China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFA(852)3850 5226franktao@cmbi.com.hk Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk The three-year transformation concluded in 2025 with tangible results. BEChas evolved into a stable cash-generating engine with strongeralignmentto BBM, while BBM has reached a profitability inflectionpoint.ForBEC, non-GAAP OPM expanded to 7.6% in 4Q25 (4Q24: 5.5%), supportedby a 760bpsGPMexpansion to 18.4%. This improvement was driven bycontinued category mix optimization and a greater focus on higher-margincategoriessuch as health & nutrition.For BBM, revenue increased 24% YoYto RMB663.7mnin 4Q25,supported by double-digit same-store salesgrowth and store network expansion. GAP opened 7/29 new stores in 2026Eoutlook:continuedprofitabilityimprovementdespiteinvestmentsin new growth opportunities.For 2026E,we forecastrevenue growth of +2.5%/+17.5% YoY for BEC/BBM. We expect BEC tocontinuefocusing on operating efficiency,while BBM should pursuescalable expansion in an effective manner.Leveraging BBM’s operatingcapabilities, the strategy of introducing more brands into BEC under afranchise model should further unlock synergies between the two segments, Source: FactSet Maintain BUYand lift SOTP-basedTPtoUS$3.98.OurupdatedSOTP-based target priceisUS$3.98,on avaluation ofRMB1.63bn (US$233mn)consisting of: 1) RMB1.35bn for BEC, based on 5.0x 2026E EV/EBIT(unchanged);2)RMB759mn for BBM(was RMB739mn),based onunchanged0.4x 2026E EV/sales; and 3) RMB2.0bn in net cash, witha 60% Key changes in forecast and target valuation We have lifted 2026E/2027E revenue forecast by3%/5%to factor inbetter-than-expectedgrowth outlook for BBM business. For 2026E, we cutOP/non-GAAP NP forecast by6%/15% to account for additional investment to supportthe development of niche brandswithin portfoliosuch as Hunter and SweatyBetty.However, wehavelifted2027E OP/non- Our SOTP-based target price is lifted to US$3.98(from US$3.81),on a valuation ofRMB1.63bn(US$233mn)consistingof: 1)RMB1.35bnfor BEC, based on5.0x 2026E EV/EBIT(unchanged); 2)RMB759mn for BBM, based on 0.4x 2026E EV/sales(was RMB739mn based on 0.4x2026EEV/sales. The lift invaluationis driven by better revenue growth outlook); 3)RMB2.0bn in net cash. We have applied a 60% holding discount to group-level valuation, consistent with our priorframework. Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related tothe specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in ortraded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2)willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM Ratings BUY: Stock with potential return of over 15%over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM Important Disclosures There are risks involved in transacting in any securities. The information contained in