Core Viewpoint - The company reported a strong performance in the first half of 2025, with revenue and net profit growth aligning with expectations, driven by a recovery in the Hong Kong market and strategic channel expansions [1][2]. Financial Performance - Revenue for 1H25 reached HKD 762 million, a year-on-year increase of 14.6% - Net profit attributable to shareholders was HKD 235 million, corresponding to earnings per share of HKD 0.28, up 6.9% year-on-year [1] - The gross profit margin stood at 60.8%, a decrease of 7.2 percentage points year-on-year [2] Market Trends - The Hong Kong market showed a robust recovery, with revenue of HKD 430 million, up 30.3% year-on-year, attributed to an increase in store count and product sales [1] - The mainland China market generated HKD 120 million in revenue, reflecting a modest growth of 1.4% year-on-year [1] - Overseas market revenue was HKD 210 million, down 2.6% year-on-year, primarily due to currency fluctuations [1] Cost Management - The sales expense ratio decreased to 13.5%, down 5.9 percentage points year-on-year, due to reduced retail terminal costs and marketing activities [2] - The management expense ratio increased slightly to 11.6%, up 0.4 percentage points year-on-year [2] Operational Metrics - Accounts receivable turnover days increased by 14 days to 173 days [2] - Inventory turnover days rose by 54 days to 923 days, attributed to strategic raw material reserves [2] - Accounts payable turnover days decreased by 37 days to 35 days [2] Strategic Initiatives - The company is actively promoting its traditional Chinese medicine products and culture, engaging in various cultural promotion activities [2] - There is a focus on deepening R&D innovation and expanding the product line to create new growth engines [2] Profit Forecast and Valuation - The net profit forecasts for 2025 and 2026 have been revised down by 5.2% to HKD 535 million and HKD 589 million, respectively, with expected growth rates of 7.0% and 10.0% [2] - The current stock price corresponds to a P/E ratio of 14.9x for 2025 and 13.5x for 2026, with a target price of HKD 10.50, indicating a potential upside of 10.3% [2]