In the field of investment, “reversal of difficulties” is often seen as one of the most attractive opportunities. Combined with the current complex market environment, short-term pressure on enterprises has become more common, and such opportunities continue to receive attention. Simply put, the relevant companies have gone through a difficult period, and the stock price also reflects their plight to a considerable extent, but once the stock price is reversed, it is very flexible.

Following this clue, I recently noticed Gome Retail (0493.HK).

In the last two months, Gome retail seems to have become active again. Stock prices have surged several times. For example, Gome retail rose more than 28% on December 20. New signals have also come from the business side, which is expected to improve internal and external resonance. Further discussion on this improvement may be appropriate.

The innovative model has achieved results, forming overall linkage and business collaboration

Looking inward, after transforming the live streaming business, Gome retail created a new business model — a type of franchise. Recently, this model has achieved phased results, achieving a breakthrough from “0” to “1.” Moreover, it opens up more possibilities for development.

Under this model, Gome and franchisees (covering various enterprise types such as physical stores and platform services) work together to set up joint ventures and provide multi-dimensional capabilities to joint ventures to achieve a win-win situation in the fields of open business platforms, brand resources, and supply chains.

The characteristics of co-building and win-win also determine that this model has the potential to accelerate scaling up.

According to market data, the Gome franchise center is in high demand, and in-depth dialogues have been held with more than 300 companies interested in cooperation; by the beginning of November, Gome had signed joint venture agreements with 17 companies, and 55 other companies are in the process of signing contracts, and related cooperative companies are spread all over the country. Meanwhile, on the eve of the eleventh,The joint venture cooperation between China and the US has entered the actual operation stage, and the first batch of related companies have successively landed and achieved a “good start”.

Furthermore, with breakthroughs in the franchise model, it means that the overall recovery of the Gome supply chain is expected to gradually shift to asset-light operations, etc., which is beneficial to relieving its financial pressure, and the other is bringing more flexibility and possibilities to its development.

At the level of possibility, for example, the “Gome supermarket” is expected to accelerate incubation (this business continuation franchise model is operated by Huang Guangyu and a third party, but the market expects that if it progresses smoothly, it may be incorporated into a listed company). The management experience and operating resources of this type of franchise model may be quickly replicated to Gome supermarkets.

Regarding the Gome supermarket, it is also worth noting that the Gome supermarket is not a simple entry into the snack market. It aims to cover ten categories of home textiles, mother and child products, daily necessities, automotive supplies, beauty and skin care, food and drink, clothing, shoes and hats, accessories and gifts, toys and toys, and electrical and kitchenware; the other major shareholder is Jinyi Media, the top ten MCN organization in the country. Jinyi Media's monthly turnover in the Douyin live e-commerce field has reached 300 million yuan.Support can also be provided by the experience and resources that Gome and Jinyi Media have accumulated over a long period of time in the past.

Another example is that Gome is expected to accelerate the live streaming business overseas, including gaining the trust of more suppliers based on phased results based on the franchise model, opening up the market with better products and better services, or possibly reaching more business cooperation with Jinyi Media to accelerate the strategic layout and results in the Douyin live streaming field.

Consumption recovery+policy directioncatalysis,inflictedmoreofdeterministic

towardsLooking at it, the overall consumer market is recovering steadily, and Gome's business development is in line with the policy direction. It is expected to benefit from this and inject more certainty into development.

Take the recent November as an observation window. With the implementation of a series of policies to expand domestic demand and promote consumption, compounded by factors such as a recovery in travel-related demand, the consumer market continued to recover. Excluding price factors, total retail sales of consumer goods actually increased by 11.2%, 2.8 percentage points faster than in October.

Use the Central Economic Work Conference held this month as an observation window. The conference mentioned that next year, efforts should be made to expand domestic demand, stimulate potential consumption, expand effective investment; push consumption from post-epidemic recovery to continuous expansion, and cultivate and expand new types of consumption.Vigorously develop digital consumption, green consumption, and healthy consumption, and actively cultivate smart homes, recreational tourism, sporting events, domestic “trendy products”, etc.New consumption growth points; stabilizing and expanding traditional consumption,Boost bulk consumption of new energy vehicles, electronic products, etc.

Meanwhile, Gome's business involves various aspects such as digital consumption, green consumption, smart homes, trendy domestic products, and new energy vehicles and electronic products.

Intuitively, the underlying logic of Gome's live streaming transformation is the development of new types of consumption and digital consumption.

At the same time, Gome has been deeply involved in the layout of home improvement, electronic products and other fields for many years, and is committed to meeting the quality needs of consumers with United Nations products. An example of the image is that on the eve of the 11th, the first batch of Gome franchise joint ventures opened. Together with national brands such as Haier, Midea, Huawei, and Honor, they brought a shopping spree to consumers in Shencheng. During the event, high-end kitchen appliance brand Fangtai's single-store sales in Tiexi Plaza exceeded 2.93 million, and sales volume of high-end home appliance brand Casadi exceeded 287 orders.

Summarizing the above, it can be seen that Gome did not choose to lie flat, but rather to resolutely seek hope through innovation. With favorable internal and external factors intertwined, Gome is at least one step closer to reversing its difficult situation.