GOLDEN SUN SECURITIES·2024-11-27 02:47Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company experienced a 20% year-on-year decline in revenue for FY2025H1, totaling HKD 39.408 billion, and a 44.4% drop in net profit attributable to shareholders, amounting to HKD 2.53 billion [2] - Despite the decline in sales, the company improved its gross margin by 6.5 percentage points to 31.4% and operating profit margin by 4 percentage points to 17.2% due to product structure optimization and rising gold prices [2] - The company plans to use up to HKD 2 billion for share buybacks and declared an interim dividend of HKD 0.2 per share, with a payout ratio of 78.9% [2] Summary by Sections Revenue Performance - The company's revenue in mainland China decreased by 18.8% to HKD 33.031 billion, with retail and wholesale channels declining by 21.9% and 16.4% respectively [2] - The company closed 239 stores in the first half of FY2025, focusing on single-store operations and improving product offerings [2] Product Strategy - The company significantly increased sales of gold jewelry and products by 117.9%, raising its revenue share by 7.6 percentage points to 12% [2] - The revenue from gold jewelry by weight fell by 29.7%, decreasing its share by 8.3 percentage points to 67.4% [2] Market Expansion - Revenue from Hong Kong, Macau, and other regions dropped by 27.9% to HKD 6.377 billion due to macroeconomic fluctuations and changing consumer preferences [2] - The company strategically opened 3 new stores outside Hong Kong and Macau during the first half of FY2025 [2] Future Outlook - The company expects a 16% decline in revenue and a 10% decrease in net profit for FY2025, with a potential narrowing of revenue decline in the second half of the fiscal year [2] - Forecasted net profits for FY2025-2027 are HKD 5.844 billion, HKD 6.337 billion, and HKD 6.913 billion respectively, with a PE ratio of 12 times for FY2025 [2]