Core Viewpoint - Huaxi Securities maintains a "Buy" rating for Jiangnan Buyi (03306), forecasting revenue for FY26-28 at 6.004/6.396/6.806 billion yuan, representing year-on-year growth of 8.21%/6.53%/6.41% [1] Financial Performance - For FY2026H1, the company reported revenue/net profit/cash flow from operating activities of 3.376/0.676/0.996 billion yuan, with year-on-year growth of 7.0%/11.9%/21.1% [1] - The company declared an interim dividend of 0.52 HKD per share, resulting in a dividend yield of 5.18% [1] Brand Performance - In FY2026H1, revenue by brand was as follows: JNBY 1.860 billion, Su Xie 0.389 billion, jnby by JNBY 0.495 billion, LESS 0.394 billion, and emerging brands 0.237 billion, with year-on-year growth rates of 5.7%/0.4%/4.1%/16.3%/22.4% respectively [2] - Store count for each brand was 992/297/527/271/54, with year-on-year changes of 3.3%/-6%/1.9%/4.6%/3.8% [2] Channel Performance - For FY2026H1, revenue by channel was 1.180 billion from direct sales, 1.442 billion from distribution, and 0.753 billion from online, with year-on-year growth of 5.7%/0.3%/25.1% [3] - The number of direct and distribution stores was 512 and 1651, with year-on-year growth of 4% and 1% respectively [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 net profit margin for FY2026H1 was 20.0%, reflecting a year-on-year increase of 0.9 percentage points [4] Inventory and Receivables - As of FY2026H1, inventory was 1.02 billion yuan, a year-on-year increase of 9.4% [5] - Accounts receivable stood at 0.220 billion yuan, remaining stable, with a turnover period of 9 days, down by 1 day [5] Future Outlook - The company anticipates continued revenue growth, with significant potential for store openings in its growth and emerging brands [6] - Long-term, the company expects improved gross margins and net profit margins driven by brand loyalty and economies of scale [6]