WEIXING(SZ:002003) Xin Lang Cai Jing·2025-08-25 06:35Core Viewpoint - The company reported a decline in revenue and net profit for Q2 2025, but continues to see improvements in gross margins for buttons and zippers, with long-term growth prospects supported by the ramp-up of its Vietnam factory and global expansion efforts [1][4]. Financial Performance - For H1 2025, the company achieved revenue of 2.338 billion yuan, a year-on-year increase of 1.80%, while net profit was 369 million yuan, a decrease of 11.19% [1]. - In Q2 2025, revenue was 1.359 billion yuan, down 9.18% year-on-year, and net profit was 269 million yuan, down 20.40% [1]. - The company plans to distribute a cash dividend of 1 yuan per 10 shares, accounting for 31.64% of the interim profit [1]. Product and Regional Performance - In H1 2025, zipper revenue increased by 2.68% to 1.293 billion yuan, while button revenue decreased by 0.17% to 926 million yuan, and other apparel accessories revenue rose by 11.20% to 85 million yuan [2]. - Domestic revenue in H1 2025 fell by 4.09% to 1.474 billion yuan, while international revenue grew by 13.72% to 864 million yuan, indicating better overseas performance [2]. Margin and Cost Analysis - For H1 2025, the overall gross margin improved by 1.09 percentage points to 42.89%, with button gross margin at 43.48% and zipper gross margin at 43.32% [3]. - The expense ratio increased by 3.48 percentage points to 23.54%, primarily due to higher financial expenses related to exchange losses [3]. - In Q2 2025, the gross margin rose by 1.93 percentage points to 45.80%, while the expense ratio increased by 5.89 percentage points to 22.50% [3]. Cash Flow and Inventory Management - Operating cash flow for H1 2025 increased by 10.44% to 430 million yuan, indicating stable cash flow management [3]. - As of June 2025, inventory turnover days increased by 2 days to 95 days, while accounts receivable turnover days decreased by 2 days to 43 days [3]. Profit Forecast and Investment Recommendation - The company forecasts revenues of 4.84 billion yuan, 5.32 billion yuan, and 6.12 billion yuan for 2025-2027, with year-on-year growth rates of 4%, 10%, and 15% respectively [4]. - Projected net profits for the same period are 700 million yuan, 770 million yuan, and 890 million yuan, with growth rates of 0%, 10%, and 15% respectively [4]. - The current market capitalization corresponds to a PE ratio of 19X for 2025 and 17X for 2026, maintaining a strong buy recommendation [4].