Peacebird(SH:603877) Changjiang Securities·2024-08-26 13:39Investment Rating - The report maintains a "Buy" rating for the company [6][7]. Core Insights - The company reported a revenue of 3.15 billion yuan and a net profit attributable to shareholders of 171 million yuan for the first half of 2024, reflecting year-on-year declines of 12.7% and 31.7% respectively. The second quarter alone saw revenues of 1.34 billion yuan and a net loss of 44 million yuan, with a significant year-on-year decline in net profit of 62.9% [4][5][6]. Summary by Sections Revenue Performance - In Q2, the company's various brands and channels showed weak retail performance, leading to a net closure of stores. Revenue from women's wear, men's wear, and children's wear declined by 6.8%, 8.3%, and 32.4% respectively, while the gross margin improved overall [5][6]. Profitability - The gross margin improved by 1.5 percentage points in Q2 due to strict discount control and a lower proportion of old inventory. However, the sales expense ratio increased by 5.1 percentage points, primarily due to higher advertising costs [5][6]. Inventory and Cash Flow - The company's inventory decreased by 21% year-on-year, indicating effective management of product sales and inventory optimization. However, operating cash flow was under pressure, with a 91.5% decline in Q2 [6][7]. Future Outlook - Short-term expectations suggest that as the company approaches the end of its store closures and improves franchise gross margins, profit growth may rebound if retail conditions improve. Long-term, the company is shifting from a high-growth retail model to a more sustainable internal focus, with projected net profits of 380 million, 416 million, and 478 million yuan for 2024 to 2026 [5][6].