M&G(SH:603899) Tianfeng Securities·2025-09-08 11:15Investment Rating - The investment rating for the company is "Buy" with a target price not specified [7] Core Views - The company reported a revenue of 55.6 billion yuan in Q2 2025, which is approximately flat year-on-year, and a net profit attributable to shareholders of 2.4 billion yuan, down 5.6% year-on-year. For the first half of 2025, the revenue was 108.1 billion yuan, a decrease of 2.2% year-on-year, and the net profit was 5.6 billion yuan, down 12.0% year-on-year [1] - The decline in revenue and profit is attributed to external environmental factors and changes in consumer preferences and purchasing habits. The company is focusing on long-term strategies in product development, technological innovation, original design, IP empowerment, green initiatives, digitalization, and globalization to stabilize its core business and grow new businesses [1] - The gross margin for the first half of 2025 was 19.5%, remaining stable year-on-year, while the net profit margin was 5.2%, down 0.6 percentage points year-on-year [1] Product Segment Summary - Writing tools generated revenue of 11.4 billion yuan, down 0.2% year-on-year, with a gross margin of 45.6%, up 2.6 percentage points year-on-year [2] - Student stationery revenue was 14.3 billion yuan, down 8.5% year-on-year, with a gross margin of 36.3%, up 0.9 percentage points year-on-year [2] - Office stationery revenue was 16.1 billion yuan, down 8.5% year-on-year, with a gross margin of 26.0%, up 0.4 percentage points year-on-year [2] Traditional Business Overview - The traditional core business saw a revenue decline of 7% year-on-year after excluding related party transactions, primarily due to external consumption environment and purchasing habits. However, the company’s new channel development, particularly in its technology segment, achieved a revenue of 5.56 billion yuan, growing 15.14% year-on-year [3] - The company is enhancing product capabilities through consumer insights-driven innovation and promotional strategies, focusing on high-quality, functional, and IP-based products. It has established a diversified IP cooperation ecosystem, combining self-developed IP incubation with collaborations with popular domestic and international IPs [3] Overseas Market Development - The company is actively developing overseas markets with a focus on localization strategies, targeting key countries, and refining its overseas business models, channel strategies, and product offerings. The overseas business has shown rapid growth, particularly in Africa and Southeast Asia [4] Retail Store Performance - The revenue from the company's retail stores, including Jiwu Miscellaneous Society, reached 7.79 billion yuan, an increase of 7.0% year-on-year, with Jiwu Miscellaneous Society contributing 7.6 billion yuan, up 9.5% year-on-year. The company operates over 830 retail stores nationwide [6]