FLYCO(SH:603868) Xin Lang Cai Jing·2025-08-31 10:40Core Viewpoint - The company reported a decline in revenue for the first half of the year but showed improvement in profitability, with expectations for further operational improvement in the second half due to sales strategy adjustments [1][2]. Financial Performance - In H1, the company achieved revenue of 2.116 billion yuan, a year-over-year decrease of 8.76%, and a net profit attributable to shareholders of 321 million yuan, an increase of 1.77% year-over-year. The net profit excluding non-recurring items was 295 million yuan, up 7.20% year-over-year [1]. - In Q2, revenue was 958 million yuan, down 16.25% year-over-year and 17.17% quarter-over-quarter, while net profit was 140 million yuan, an increase of 3.45% year-over-year but a decrease of 22.56% quarter-over-quarter [1]. Brand and Product Analysis - The BoRui brand saw revenue of 411 million yuan in H1, a decline of 18% year-over-year, while the Feike brand experienced a smaller decline of 6% due to product structure optimization [3]. - Core products like shavers had revenue of 1.418 billion yuan, down 5.66% year-over-year, while hair dryers generated 397 million yuan, down 3.20% year-over-year. New product categories like electric toothbrushes and nose hair trimmers faced larger revenue declines [3]. Profitability Improvement - The company's gross margin for H1 was 57.52%, an increase of 1.91 percentage points year-over-year. The gross margin for hair dryers was 37.81%, up 2.16 percentage points year-over-year. The selling expense ratio was 33.25%, down 1.30 percentage points year-over-year, leading to a gross profit margin of 24.27%, an increase of 3.21 percentage points [4]. - The net profit margin attributable to shareholders for H1 was 15.18%, an increase of 1.57 percentage points year-over-year [4]. Strategic Initiatives - The company is focusing on product development in key personal care categories such as shavers, high-speed hair dryers, and electric toothbrushes, targeting younger consumers born after 1995 and 2000. This includes enhancing product innovation and marketing strategies to improve consumer data analysis and demand understanding [5]. Earnings Forecast and Valuation - The company is expected to see a clear trend of profitability recovery, with projected net profits attributable to shareholders of 664 million yuan, 776 million yuan, and 914 million yuan for 2025-2027, corresponding to EPS of 1.52, 1.78, and 2.10 yuan, representing year-over-year growth of 44.99%, 16.84%, and 17.89% respectively. The target price is set at 41.04 yuan based on a PE ratio of 27 times for 2025 [6].