Core Viewpoint - Huaxi Securities maintains a "Buy" rating for Jiangnan Buyi, forecasting revenue and net profit growth for FY26-28, with projected revenues of 60.04 billion, 63.96 billion, and 68.06 billion yuan, and net profits of 9.71 billion, 10.40 billion, and 11.15 billion yuan respectively [1] Financial Performance - For FY2026H1, the company reported revenues, net profits, and operating cash flow of 3.376 billion, 676 million, and 996 million yuan, representing year-on-year growth of 7.0%, 11.9%, and 21.1% respectively [1] - The company declared an interim dividend of 0.52 HKD per share, yielding a dividend rate of 5.18% [1] Brand Performance - Revenue growth varied by brand in FY2026H1, with JNBY, Su Xie, jnby by JNBY, LESS, and emerging brands generating revenues of 1.860 billion, 389 million, 495 million, 394 million, and 237 million yuan respectively, with growth rates of 5.7%, 0.4%, 4.1%, 16.3%, and 22.4% [2] - Store count for these brands was 992, 297, 527, 271, and 54 respectively, with growth rates of 3.3%, -6%, 1.9%, 4.6%, and 3.8% [2] Channel Performance - Revenue from direct sales, distribution, and online channels in FY2026H1 was 1.180 billion, 1.442 billion, and 753 million yuan, with year-on-year growth of 5.7%, 0.3%, and 25.1% respectively [3] - The number of direct and distribution stores was 512 and 1651, with growth rates of 4% and 1% [3] Profitability Metrics - Gross margin and net profit margin increased by 1.4 and 0.9 percentage points, with FY2026H1 gross margin at 66.5% [4] - The gross margins for JNBY, Su Xie, jnby by JNBY, LESS, and emerging brands were 69.4%, 67.5%, 60.2%, 70.5%, and 48.8% respectively [4] Inventory and Receivables - As of FY2026H1, inventory was 1.02 billion yuan, up 9.4% year-on-year, with accounts receivable at 220 million yuan, remaining stable [5] - Accounts payable increased by 29.2% to 308 million yuan, with accounts payable turnover days decreasing by 12 days to 44 days [5] Future Outlook - The company anticipates continued revenue growth, with significant potential for store openings in its growth and emerging brands [6] - Long-term expectations include improved gross margins and net profit margins driven by brand loyalty and economies of scale [6]