Summary of Jiangnan Buyi Conference Call Company Overview - Jiangnan Buyi has shown improving growth rates from low single-digit to high single-digit growth since the beginning of the year, with an expected annual revenue growth close to 5% and profit growth potentially exceeding previous low expectations [2][4][33]. Key Points Revenue and Profit Guidance - The company anticipates a conservative internal guidance for revenue growth at mid-single digits and profit growth at low single digits for the fiscal year 2025, with potential for better-than-expected performance [2][4]. Inventory Management - Promotional events have limited impact on inventory reduction, relying more on online off-season discounts and offline outlet channels. The sell-through rate for autumn/winter products decreased, leading to increased inventory, but the long product lifecycle maintains profitability [2][7]. Brand Strategy - The LESS brand division operates independently, experimenting with the Classita brand. If successful, this model may be extended to other brands to enhance operational efficiency and brand vitality [2][8]. Membership Growth - The company adds approximately 60,000 new members monthly, with a stable increase in membership. High-repurchase-rate members value unique experiences and privileges, such as exclusive events and stylist services [2][9][11]. Discount Management - Discounts improved year-on-year in the first half of fiscal 2025, with expectations to maintain this trend in the second half. Overall discount management is effective, contributing to healthy retail growth [2][14]. Sales Performance - Sales performance in April and May showed sequential improvement, with April experiencing mid-single-digit growth and May exceeding double-digit growth in the first half, although there was a slowdown in the latter half of May [3][4]. Distribution Strategy - The performance of distribution areas slightly outperformed direct sales areas, with high-tier cities being sensitive to economic fluctuations but showing recent improvements. The transition from direct sales to distribution is stable, with no major changes expected in future strategies [5][17][18]. Brand Performance - Different brands within the company showed varied performance, with women's and children's clothing performing better than men's clothing. This trend is expected to continue into the second half of the year [22]. Product Innovation - The company maintains a balance between classic and innovative designs, with approximately 70-80% of products being classic or safe styles and 20-30% being new designs [23]. Future Plans - Jiangnan Buyi plans to open offline stores, starting with pilot locations near its headquarters, and aims to establish single-brand and children's collection stores [28]. Dividend Policy - The company intends to maintain a stable dividend policy, with an expected payout ratio of 75% for fiscal 2025, signaling a commitment to high dividends [5][32]. Overall Development - Despite the broader economic environment not fully recovering, the company has achieved steady positive growth and maintains high-quality development without resorting to discount promotions [33].

Core Viewpoint - Huamao Technology plans to acquire 100% equity of Shenzhen Fuchuang Youyue Technology Co., Ltd, which is expected to constitute a major asset restructuring, leading to the suspension of its stock trading starting May 21, 2025 [2][3]. Group 1: Acquisition Details - The acquisition involves purchasing 19.4519% equity from Fuchuang Youyue and 100% equity from its shareholders, including Shenzhen Yinrui Technology Co., Ltd and Shenzhen Fuchuang Youyue No.1 Enterprise Management Partnership [3]. - Prior to this transaction, Huamao Technology held 42.1602% equity in Fuchuang Youyue through its wholly-owned subsidiary Huamao (Dongyang) New Materials Co., Ltd [3]. - Upon completion of the transaction, Huamao Technology will directly and indirectly hold 100% equity in Fuchuang Youyue [3]. Group 2: Strategic Importance - The acquisition aligns with Huamao Technology's strategic focus on the semiconductor and computing power manufacturing sectors, which are identified as key growth areas for the company [4][6]. - The company has been increasing its stake in Fuchuang Youyue over the past year, indicating a commitment to integrating and expanding its operations in this sector [5][6]. Group 3: Financial Performance - Huamao Technology has shown steady financial performance, with revenue and net profit increasing year-on-year for three consecutive years from 2022 to 2024 [6]. - In the first quarter of this year, the company reported revenue of 537 million yuan, a 14% increase year-on-year, and a net profit of 86 million yuan, reflecting a 60% growth [6]. - As of May 20, 2025, Huamao Technology's stock price was 41.65 yuan, with a market capitalization of 13.7 billion yuan [7].

New Consumption Overview - Hongxing Erke officially announced the signing of renowned athlete Yu Shi as its first global brand ambassador, aiming to promote Chinese culture globally and resonate with the values of young consumers [3] - Mixue Ice City launched a craft beer hotel brand "Fresh Beer Deer Family," with over 15 SKUs and a minimum price of 6.6 yuan per jin for fresh beer [4] - Xuanma introduced a new zongzi gift box featuring blood glutinous rice and salted egg yolk filling, crafted with premium ingredients [4] - Lipton USA launched a new ready-to-drink tea series "Fusions," combining classic iced tea with lemon juice at a 1:1 ratio and reducing sugar content by 50% [7] - Lucky Coffee collaborated with the Qi Baishi Art Center to launch a lychee-themed product line, including themed merchandise and offline store activities [8] Investment and Financing - Australian Competition and Consumer Commission began informal assessment of Lactalis' acquisition proposal for Fonterra's assets, highlighting potential overlaps in raw milk procurement and dairy processing [11] - Pet food retail brand "Pate Fresh" completed a $25 million angel round financing, aimed at product innovation and supply chain efficiency [12] - JBS announced an investment of approximately 270 million yuan in four factories in Brazil to upgrade operations [12] - Culture Pop Soda secured $15 million in funding, following a previous $21 million B round financing [12] - Beauty brand Wonderskin completed a $50 million Series A financing to accelerate retail expansion and product development [13] Brand Developments - Pomme de Terre launched its 2025 Spring/Summer eco-friendly collection themed "Ocean Guardian," focusing on sustainable materials [14] - Cycling lifestyle brand Rapha appointed Jodie Harrison as Chief Brand Officer [16] - Stuart Weitzman released a limited capsule collection inspired by romantic themes [16] - GM introduced a new sub-brand ATi iSSU, gaining attention from fashion enthusiasts [16] - Xiaohongshu and Taobao Tmall signed a strategic cooperation agreement to enhance integration and drive business growth for merchants [18]

Core Insights - Jiangnan Buyi, a prominent Chinese designer brand, has maintained a unique development strategy over its 31 years, balancing brand integrity with market adaptability to secure its position in the competitive fashion industry [2] - The brand emphasizes art as its core DNA, promoting co-creation among art, culture, and commerce through a diversified brand matrix and cross-industry collaborations [2] - Jiangnan Buyi is committed to social responsibility, exemplified by its "Bu Jin Qi Yong" public welfare project aimed at fabric innovation and the preservation of traditional crafts [2] Brand Development - The brand matrix includes various segments such as women's wear (JNBY), men's wear (Suxie), children's wear (jnby by JNBY, Pengma), home goods (JNBYHOME), sustainable living (RE;RE;RE;LAB), professional children's sportswear (onmygame), and fashion boutique (B1OCK) [8] - Suxie, the only men's wear brand in the matrix, celebrates its 20th anniversary with the "Second Twenty" design theme, focusing on a long-term style that transcends trends [4] - The jnby by JNBY children's brand integrates contemporary art into its designs, launching an "Art Classroom" project in 2024 to connect with families [6] Social Responsibility and Employee Welfare - Jiangnan Buyi has demonstrated strong social responsibility by maintaining employment and salary levels, providing additional insurance for frontline employees, and allowing 100% returns for distributors [8] - These initiatives enhance trust and loyalty among employees and distributors, contributing to stable development amid economic uncertainties [8] Future Outlook - B1OCK plans to unveil its expansion blueprint for 2025, including the opening of a flagship store in Anaya in June and the highly anticipated Martin Margiela exhibition in October [10] - The brand aims to continue its role as a growing fashion concept store, curating high-profile exhibitions annually to blend art and fashion in retail [10] - Jiangnan Buyi's "multi-dimensional symbiosis" ecosystem integrates deeply into the lives of its members, providing a unique design model for the fashion business ecosystem [10]

Core Insights - Jiangnan Buyi hosted a brand experience day event titled "Buyi 'Vision' World, Diverse Coexistence" in Hangzhou, showcasing its new explorations in brand development [1] - The company employs a multi-brand collaborative model, with brands like JNBY, CROQUIS, jnby by JNBY, and LESS targeting different customer segments, enhancing overall market share through differentiated competition [1] - Artistic collaborations are a hallmark of Jiangnan Buyi, integrating art elements into clothing design and store spaces, exemplified by the "Diverse Casting" art installation created with PINWU STUDIO [1] Brand Strategy - The multi-brand strategy allows Jiangnan Buyi to cater to various market segments, including women's fashion, men's fashion, children's clothing, and minimalist women's wear, achieving complementary advantages [1] - The brand experience day served as a concentrated display of Jiangnan Buyi's development model, emphasizing the balance between artistic expression, commercial value, and social responsibility [2] User Co-Creation - The user co-creation model plays a significant role in Jiangnan Buyi's development, as seen with the children's clothing brand jnby by JNBY collaborating with an art museum to create an art capsule series, which was well-received in the market [2] Sustainability Practices - Jiangnan Buyi has made notable achievements in sustainable practices, with the goal of increasing the proportion of sustainable raw materials in total procurement to 30% by the fiscal year 2025 [2] - Initiatives include the "Fabric Utilization" project for traditional fabric research and innovation, and the "Sesame Laboratory" for creative reuse of scattered inventory fabrics [2] - The company is actively exploring sustainable fashion production and consumption paths, as demonstrated by its participation in the "ESG - Sustainable Transformation" themed exhibition with SHOKAY [2]

Core Insights - Jiangnan Buyi, a fashion brand, has expanded its brand matrix to include nine brands, achieving a revenue of 3.156 billion yuan with a year-on-year growth of 5.0% in the first half of the 2025 fiscal year [1][2] - The company faces challenges such as sales pressure and extended payment cycles, while its higher price point products are not considered essential by consumers [2][9] - Jiangnan Buyi is focusing on a complementary brand matrix strategy to mitigate single-brand dependency and enhance growth potential [5][10] Financial Performance - For the six months ending December 31, 2024, Jiangnan Buyi reported a net profit of 604 million yuan, reflecting a year-on-year increase of 5.5% [1] - The revenue from the JNBY brand grew by 3.6% to 1.76 billion yuan, while non-JNBY brand revenue accounted for 44.2% of total revenue, with emerging brands seeing a 147.3% increase [5][7] Membership Strategy - Jiangnan Buyi's core members, approximately 30-40% of the total, contribute to 70-80% of the company's revenue, with 540,000 active members generating over 80% of retail sales [9][10] - The company has implemented a VIP system that allows members to enjoy shared benefits across its nine brands, enhancing customer loyalty [10][11] - Jiangnan Buyi is also exploring SVIP services, offering personalized styling advice to enhance customer engagement and sales opportunities [11][14] Marketing and Brand Development - The company has increased its marketing expenditure by 8.62% to 1.021 billion yuan, representing 32.3% of total revenue, which is seen as a necessary investment for brand enhancement [14] - Jiangnan Buyi is leveraging partnerships with various online platforms to track consumer behavior and optimize advertising strategies, achieving a return of 7 times on advertising spend [11][14]

Core Insights - The "Utilization of Fabrics" project is revitalizing yak cashmere, a unique natural fiber from China, through collaborative innovation with suppliers [1][2] - Jiangnan Buyi is launching the "Yak Cashmere Industry Revitalization Project" in 2024 to establish international sustainability standards and promote ecological restoration in yak habitats [1][2] Group 1: Project Initiatives - Jiangnan Buyi has partnered with SHOKAY to initiate the "Yak Cashmere Industry Revitalization Project," focusing on sustainable practices and ecological restoration [1][2] - The project includes training for herders on animal welfare and certification of pastures, aiming to enhance the entire value chain from raw material collection to market consumption [1][2] Group 2: Environmental Impact - Yak cashmere production has significant ecological value, with low carbon emissions during the yak's lifecycle and natural resource utilization [1] - The "Source from Snowy Regions, Cashmere from Nature" project aims to restore 290 acres of degraded land in the Ruoergai region, addressing grassland desertification that affects yak health and wool quality [2] Group 3: Market Potential - Despite the vast market potential for yak cashmere, the industry faces challenges that the revitalization project aims to address [1] - Jiangnan Buyi plans to share innovative yak cashmere fabric technologies with the industry, enhancing overall competitiveness and consumer access to traceable yak cashmere products [2]

Group 1: Market Entry and Expansion - CHAGEE opened its first store in North America at Westfield Century City in Los Angeles, showcasing modern tea drinks and attracting long queues [1] - The new tea beverage industry in China is experiencing rapid growth, with brands like ChaPanda, MIXUE, HEYTEA, and CHAGEE expanding internationally [3] - Several tea companies, including MIXUE, have successfully listed in Hong Kong, indicating a trend of Chinese retail brands going global [4] Group 2: Factors Driving International Expansion - The global expansion of brands is driven by the need for internationalization, competitive domestic markets, and the growing overseas Chinese population [4][5][6] - Establishing physical stores abroad enhances brand visibility and can attract investment, which may lead to better domestic store locations in the future [5] - The increasing number of overseas Chinese consumers creates demand for Chinese products, which are often perceived as cost-effective [4] Group 3: Key Markets for Chinese Brands - Hong Kong is a significant market for brands due to its proximity to mainland China, making it easier for brands with established retail networks in southern China to enter [7] - Southeast Asia, particularly Singapore, is a competitive market for Chinese brands, driven by a large Chinese population [8] - European cities like London and Paris are viewed as essential for brands aiming for international recognition, although cultural differences pose challenges [9] Group 4: Challenges in International Markets - Chinese brands face challenges in gaining local consumer recognition and adapting to cultural differences, particularly in Europe [17] - Supply chain and logistics issues require careful planning before entering new markets [18] - High operational costs in markets like Singapore and Europe necessitate thorough financial planning [18] Group 5: Localization Strategies - Successful market entry requires understanding local consumer habits and preferences, with brands needing to adjust their offerings accordingly [19][20] - Brands should focus on high-traffic areas for store locations to maximize visibility and customer engagement [19] - The importance of local partnerships for smooth market entry and operations is emphasized, as they can help navigate local regulations and consumer preferences [18]

Group 1 - The core initiative "From Snowy Land to Nature" aims to restore 100 acres of degraded land in Sichuan's Aba Prefecture, highlighting the ecological value of yak cashmere and its sustainable production process [1] - The yak, a national protected animal, has 95% of its population in China's Tibetan Plateau, with the Aba region being a crucial habitat facing desertification issues that threaten both yak health and ecological balance [1] - Jiangnan Buyi's project will initiate the first phase of restoring 290 acres of degraded land in May 2024, following the recent ecological restoration efforts [1] Group 2 - Since 2022, Jiangnan Buyi has partnered with the Design Library on a five-year project to innovate and preserve traditional Chinese craftsmanship, focusing on yak cashmere as a key natural fiber [2] - Jiangnan Buyi has launched several yak cashmere products across its brands, including LESS and JNBY, since 2017, indicating a strong commitment to sustainable fabric innovation [2] - The "Yak Cashmere Industry Revitalization Project" aims to establish international sustainability standards, provide training for animal welfare, and promote ecological restoration in yak farming areas [2] Group 3 - The first global sustainable standard for yak farming, titled "Farm Animal Welfare Requirements for Yaks," was released in August 2024, marking a significant milestone for the industry [3] - Training for farmers and certification of farms based on the new standard have begun, with increasing adoption among yak farms [3] - Jiangnan Buyi plans to collaborate with suppliers on innovative yak cashmere fabric technologies, enhancing the overall competitiveness of the yak cashmere industry [3]

Brand Portfolio and Market Strategy - As of December 31, 2024, the brand portfolio includes the mature brand JNBY, three younger brands (CROQUIS, jnby by JNBY, LESS), and various emerging brands such as POMME DE TERRE, JNBYHOME, onmygame, and B1OCK[4] - The company targets middle- and upper-income customers, providing a broad range of products that create a lifestyle ecosystem, resulting in a large and loyal customer base[5] - The company has expanded its brand portfolio through acquisitions, adding onmygame and B1OCK in 2024, enhancing product diversification and segmentation[5] - The company emphasizes a "JNBY Fans Economy" system, focusing on building a community of fans driven by lifestyle affinity[6] - The company continues to innovate in product offerings and marketing strategies to adapt to changing consumer preferences and market conditions[5] - The Chinese clothing market continues to show diversified consumption trends, with increasing demand for personalized and sustainable products[97] - The company aims to enhance its retail networks and optimize its omni-channel marketing platform through strategic investments in technology and social e-commerce[100] - The company has observed a competitive trend in the designer brand market, with a shift towards leading brands as consumers prefer trustworthy brands that provide quality experiences[99] - The company plans to attract new fans by optimizing its designer brand portfolio through self-incubation or mergers, enhancing design and R&D capabilities[100] Financial Performance - Total revenue for the first half of fiscal year 2025 reached RMB 3,156.4 million, a 5.0% increase from RMB 3,005.9 million in the same period of fiscal year 2024[18] - Gross profit for the same period was RMB 2,056.2 million, reflecting a 5.0% increase compared to RMB 1,959.2 million in the previous year[16] - Net profit for the first half of fiscal year 2025 was RMB 603.98 million, up 5.5% from RMB 572.59 million in the same period last year[16] - Basic earnings per share increased to RMB 1.17, a rise of 3.5% from RMB 1.13 in the previous year[16] - The net profit margin improved from 19.0% in the first half of fiscal year 2024 to 19.1% in the first half of fiscal year 2025[62] - Total revenue for the first half of fiscal year 2025 was RMB 3,156.4 million, an increase of 5.0% from RMB 3,005.9 million in the first half of fiscal year 2024[45] - Revenue from the mature brand JNBY increased by 3.6% to RMB 1,760.2 million, while revenue from younger brands decreased by 2.1% to RMB 1,202.4 million[37] - Revenue from emerging brands amounted to RMB 193.8 million, representing 6.1% of total revenue, with a significant increase of 147.3% compared to the previous year[37] - Revenue from offline channels decreased by 7.7% in self-operated stores but increased by 14.2% in distributor-operated stores, while online channels saw an increase of 11.9%[40][42] Operational Efficiency - The number of standalone retail stores increased from 2,025 as of June 30, 2024, to 2,126 as of December 31, 2024, expanding the sales network across all provinces in Mainland China and eight other countries[19] - Same store sales growth for offline retail shops was recorded at 0.1% in the first half of fiscal year 2025, despite fluctuating customer traffic[27] - Active membership accounts slightly decreased to 540,000 in 2024 from over 550,000 in 2023, with members contributing over 80% of total retail sales[29][31] - Membership accounts with annual purchases over RMB 5,000 increased to over 330,000, generating retail sales of RMB 4.68 billion, up from RMB 4.33 billion in 2023[30][31] - The incremental retail sales generated by the inventory sharing and allocation system reached RMB 648.7 million, an increase of 8.7% compared to RMB 596.8 million in the first half of fiscal year 2024[28] - The Group continues to leverage digital and smart retail channels, which positively impacted same-store sales growth[28] Financial Health and Governance - The company is committed to corporate governance practices, ensuring transparency and accountability in its operations[3] - The asset-liability ratio as of December 31, 2024, was 51.8%, compared to 50.6% a year earlier[16] - The company has no significant contingent liabilities as of December 31, 2024[93] - The company has no bank borrowings secured by assets as of December 31, 2024[92] - The Company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules and has complied with all applicable provisions during the reporting period[113] - The Audit Committee's primary duties include reviewing and supervising the financial reporting procedures and internal controls of the Company[110][116] Cash Flow and Investments - Cash and cash equivalents as of December 31, 2024, were RMB 739.7 million, up from RMB 699.2 million as of June 30, 2024[67] - Net cash inflow from operating activities decreased by 22.2% to RMB 822.6 million compared to RMB 1,057.4 million in the first half of fiscal year 2024[67] - The company incurred net cash used in investing activities of RMB 316,674,000, contrasting with a net cash generated of RMB 48,795,000 in the same period last year[175] - The company reported a significant increase in the purchase of property, plant, and equipment, totaling RMB 96,386,000, compared to RMB 46,583,000 in the previous year[175] Employee and Shareholder Information - As of December 31, 2024, the total number of employees increased to 1,678, with total employee costs for the first half of fiscal 2025 amounting to RMB 276.9 million, representing 8.8% of revenue[91] - The company has adopted a restricted share plan to incentivize senior management, designers, and key employees, with a total of 70,000,000 shares allocated, representing 13.5% of the issued shares, valid until June 30, 2029[138] - A total of 9,520,000 RSUs were granted during the six months ended December 31, 2024, with 140,000 RSUs forfeited or cancelled, resulting in 24,706,300 RSUs outstanding as of December 31, 2024[146] - The weighted average closing price of shares before RSU exercises during the six months ended December 31, 2024, was approximately HK$14.41[150] Interim Financial Information - The report includes a review of interim financial information, which is crucial for assessing the company's financial health and operational efficiency[3] - The interim financial information is prepared in accordance with Hong Kong Accounting Standards and should be read in conjunction with the annual financial statements as of June 30, 2024[184] - There are no new accounting standards or amendments expected to have a material impact on the Group for the interim period beginning July 1, 2024[189] - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk[198] - There have been no changes in the risk management policies since June 30, 2024[200]