HUAXI Securities·2025-08-15 15:24Investment Rating - The industry rating is "Recommended" [5] Core Insights - On reported record net sales of 749 million Swiss Francs for FY25Q2, a 32% increase (currency neutral +38%), exceeding market expectations, driven by strong DTC performance and growth in the Asia-Pacific region [2][18] - Gross margin improved by 1.6 percentage points to 61.5%, benefiting from a higher DTC share, reduced shipping costs, and a weaker dollar [2][18] - The company incurred a net loss of 41 million Swiss Francs, with a net profit margin declining from 5.4% to -5.5%, primarily due to a 140 million Swiss Franc foreign exchange loss [2][18] - Revenue growth by region: EMEA +42.92%, Americas +16.84%, Asia-Pacific +101.35% [2][18] - DTC revenue increased by 54.3% to 310 million Swiss Francs, with DTC share rising to a historical high of 41.1% [2][18] - The company raised its FY25 revenue growth guidance to 31% (previously 28%) and adjusted gross margin guidance to 60.5%-61% [2][18] Summary by Sections Company Performance - Yu Yuan Group reported H1 2025 revenue of 406 million USD, a 1.1% increase, but net profit decreased by 7.2% [3][19] - 361 Degrees reported H1 2025 revenue of 580 million CNY, an 11% increase, with net profit rising by 8.6% [3][19] - Li Ning reported H1 2025 revenue of 173 million CNY, a 7.9% increase, but net profit fell by 13.4% [4][20] - Bailing Dongfang reported H1 2025 revenue of 359.1 million CNY, a 9.99% decrease, but net profit increased by 67.53% [4][21] Market Trends - The textile and apparel sector underperformed, with the SW textile and apparel index down 1%, lagging behind the Shanghai Composite Index by 2.7% [24] - Cotton prices in China increased by 1.43% this week, with the 3128B index at 15,214 CNY/ton [8][38] - The textile and apparel export for January to July 2025 grew by 0.53%, totaling 170.74 billion USD [55] Consumer Insights - Online sales data from Taobao and Tmall showed improvements in July 2025 for sports and leisure apparel, with notable growth from brands like Baoxini [22][22] - The overall retail sales in China for January to July 2025 increased by 4.8%, with online retail sales growing by 9.2% [22][25]