Investment Rating - The investment rating for the company is "Neutral" with a target price of 13.5 CNY [1][7]. Core Views - The company's revenue decline has narrowed, and cost control has improved performance. In the first half of 2025, the company achieved operating revenue of 3.532 billion CNY, a year-on-year decrease of 23.43%, and a net profit attributable to the parent company of 737 million CNY, down 17.34% year-on-year. The second quarter saw a revenue of 1.741 billion CNY, a year-on-year decline of 11.51%, but a significant increase in net profit by 71.44% year-on-year [1][7]. Financial Performance Summary - **2025 Half-Year Report**: - Operating revenue: 3.532 billion CNY, down 23.43% YoY - Net profit: 737 million CNY, down 17.34% YoY - Q2 revenue: 1.741 billion CNY, down 11.51% YoY - Q2 net profit: 282 million CNY, up 71.44% YoY [1][7] - **Financial Projections**: - 2025E total revenue: 6.271 billion CNY, down 8.3% YoY - 2025E net profit: 811 million CNY, up 24.3% YoY - EPS for 2025E: 0.48 CNY [2][7]. Sales and Cost Management - The company has seen a significant reduction in sales expense ratio, which decreased by 11 percentage points to 39.6% in Q2 2025. This improvement is attributed to efficient spending and a shift towards higher-margin products [7][8]. - Gross margin for Q2 2025 was 68.4%, an increase of 1.7 percentage points year-on-year, driven by a higher proportion of premium products and improved online sales channel performance [7][8]. Market Outlook - The company plans to increase investment in the second half of 2025, with expectations for revenue to gradually improve. The strategy includes launching new products in key categories and focusing resources on profitable online channels [7][8]. - Despite a challenging external consumption environment, the company is expected to maintain a rational approach to spending, leading to a modest decline in annual revenue [7][8].