Core Insights - The company reported a revenue of 2.593 billion yuan for H1 2025, representing a year-on-year increase of 27%, with a profit attributable to shareholders of 66 million yuan, up 504% [1] - The operating profit at the store level reached 379 million yuan, a 28% increase year-on-year, with a store operating profit margin of 14.6%, up 0.1 percentage points [1] - Adjusted EBITDA and adjusted net profit were 322 million yuan and 91 million yuan, respectively, reflecting increases of 38% and 80% [1] Expansion and Sales Performance - As of H1 2025, the company has entered 48 cities, adding 9 new cities since the end of 2024, with a total of 1,198 stores (all direct-operated), an increase of 190 stores [2] - The company aims to open 300 new stores throughout the year, with 233 stores already opened or under construction as of August 15, 2025 [2] - Same-store sales growth (SSSG) was -1%, but first-tier cities achieved positive same-store sales growth, with overall positive growth in the market prior to December 2022 [2] - The average daily sales per store were 12,900 yuan, down 4.4% year-on-year, primarily due to stabilization of sales in high-performing stores opened after December 2022 [2] - Membership numbers reached 30.1 million, with a net addition of 5.6 million in H1, and membership revenue accounted for 66% of total revenue, up 2.4 percentage points year-on-year [2] Revenue Breakdown - In first-tier cities, there were 515 stores (43% of total), generating 1.085 billion yuan in revenue (41.8% of total), a year-on-year increase of 7.2% [3] - The North China market generated 844 million yuan, up 6% year-on-year, driven by the addition of 8 new stores and positive same-store sales growth [3] - New growth markets achieved revenue of 1.509 billion yuan, a 46.6% year-on-year increase, accounting for 58.2% of total revenue, with 683 stores and 184 new stores opened during H1 2025 [3] Cost Optimization - In H1 2025, the proportion of costs related to raw materials, employee compensation, rent, depreciation, and other expenses decreased year-on-year, indicating significant cost dilution due to successful store expansion and scale effects [4] - The increase in employee proportion at the store level was mainly due to the rise in average employee numbers as a result of store expansion [4] Profit Forecast and Investment Rating - The company adjusted its net profit forecast for 2025-2027 to 151 million, 250 million, and 311 million yuan, reflecting year-on-year growth of 173%, 66%, and 24% respectively [4] - The current price-to-earnings ratios are projected at 66.07, 39.88, and 32.09 times for the respective years, maintaining a "buy" rating [4]