Breo(SH:688793) Xin Lang Cai Jing·2025-08-23 00:28Core Viewpoint - The company reported a significant decline in revenue and net profit for the first half of 2025, primarily due to a drop in online sales channels [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 380 million, a year-on-year decrease of 36.2% [1] - The net profit attributable to shareholders was -40 million, a year-on-year decline of 238.2% [1] - The adjusted net profit was also -40 million, reflecting a year-on-year decrease of 253.6% [1] - For Q2 2025, revenue was 190 million, down 39.4% year-on-year [1] - The net profit attributable to shareholders for Q2 was -30 million, a decline of 425.8% year-on-year [1] - The adjusted net profit for Q2 was -30 million, down 507.9% year-on-year [1] Profitability Metrics - Gross margin improved, with H1 2025 gross margin at 62.6%, up 0.8 percentage points year-on-year, and Q2 2025 gross margin at 64.1%, up 3.2 percentage points year-on-year [2] - The increase in gross margin is attributed to a higher proportion of high-margin offline service businesses and new product launches [2] - Sales expense ratio increased significantly, with H1 2025 sales expense ratio at 56.0%, up 7.0 percentage points year-on-year, and Q2 2025 at 13.8 percentage points increase [2] - Net profit margin for H1 2025 was -9.4%, down 13.7 percentage points year-on-year, and for Q2 2025 it was -18.2%, down 21.6 percentage points year-on-year [2] Business Model Development - The company has begun to accelerate the rollout of its "technology products + quick-effect massage" business model, transitioning from merely selling products to offering both products and services in its offline stores [2] - As of June 30, 2025, the company operated 125 direct stores, 6 "Easy Moment" stores, and 77 franchise stores [2] Profit Forecast and Investment Recommendation - Given the pressure on revenue performance in H1 2025, the company forecasts net profits for 2025-2027 to be 5 million, 22 million, and 44 million respectively, reflecting a year-on-year change of -51%, +347.8%, and +94.5% [3] - The investment rating is maintained at "Accumulate" [3]