King's Luck(SH:603369) Xin Lang Cai Jing·2025-08-26 06:33Core Viewpoint - The company reported a significant decline in revenue and profit for Q2 2025, with a year-on-year decrease of 30% and 37% respectively, indicating a need for channel adjustments and a reflection of sales performance [1][3] Financial Performance - For the first half of 2025, the company achieved revenue and net profit attributable to the parent company of 6.95 billion and 2.23 billion respectively, representing a year-on-year decline of 4.8% and 9.5% [1] - In Q2 2025, the company recorded revenue and net profit of 1.85 billion and 580 million respectively, with year-on-year decreases of 29.7% and 37.1% [1] - Cash collection for Q2 was 2.02 billion, down 19.0% year-on-year, leading to a negative operating cash flow of -352 million [1] Product Performance - The performance of different product categories showed mixed results, with Special A+ and Special A categories being relatively stable, while the Opening category faced slight pressure [2] - For H1 2025, revenue by product category was as follows: Special A+ 4.31 billion, Special A 2.23 billion, A 230 million, B 80 million, and CD 30 million, with year-on-year changes of -7%, +1%, -10%, -6%, and -39% respectively [2] - In Q2 2025, the year-on-year performance for product categories was: Special A+ -32%, Special A -28%, A -40%, B -13%, and CD -42% [2] Regional Performance - In Q2 2025, revenue from domestic and foreign markets was 1.61 billion and 190 million respectively, with year-on-year declines of 32% and 18% [2] - Specific regions such as Huai'an, Nanjing, and Suzhou experienced significant year-on-year declines, with Suzhou showing a slight improvement in market share [2] Profitability Metrics - The gross margin for Q2 2025 was 72.8%, a slight decrease of 0.2 percentage points year-on-year, while the net profit margin was 31.6%, down 3.7 percentage points [3] - The increase in sales and management expense ratios contributed to the decline in profitability, with sales expense ratio at 19.0% and management expense ratio at 5.6% [3] Future Outlook - The company is expected to see a narrowing of the decline in performance and sales in the second half of the year, particularly during the peak seasons [1][3] - The company has slightly adjusted its EPS forecasts for 2025-2027 to 2.37, 2.54, and 2.73 yuan, maintaining a strong recommendation for investment [3]