Investment Rating - The report maintains a "Buy" rating for the company [7]. Core Views - In the short term, the company is expected to face pressure on performance due to channel adjustments, gradual retail improvement, and the recovery of franchise gross margins. However, with enhanced cost control, profit growth is anticipated to rebound in the future. In the long term, structural adjustments within the company are expected to significantly improve operational quality and profit elasticity. The company is shifting from profit elasticity driven by high retail growth to a more sustainable and robust profit elasticity driven by internal capabilities. The projected net profits for 2025, 2026, and 2027 are estimated at 200 million, 250 million, and 280 million yuan, respectively, with corresponding PE ratios of 35, 28, and 25 times [2][11]. Financial Performance Summary - For the first half of 2025, the company achieved revenue of 2.9 billion yuan, a year-on-year decrease of 7.9%. The net profit attributable to the parent company was 78 million yuan, down 54.6% year-on-year, while the net profit after deducting non-recurring gains and losses was 14 million yuan, a decline of 78.9% year-on-year. In Q2 alone, revenue was 1.23 billion yuan, a decrease of 8.2% year-on-year, and the net profit turned to a loss of 46 million yuan, a decline of 471.5% year-on-year [5][11]. Brand and Channel Performance - In Q2, most brands experienced revenue declines, with PB women's wear, men's wear, and Le Town down by 7.5%, 8.5%, and 13.8% respectively, while children's wear saw a slight increase of 0.2%. However, gross margins improved for most brands due to discount control. The revenue from franchise and online channels continued to decline year-on-year, while direct sales returned to positive growth with a 5.2% increase year-on-year in Q2 [11]. Cost and Profitability Analysis - The gross margin improved by 2.1 percentage points year-on-year in Q2 due to strict discount control. However, the net profit margin decreased by 4.7 percentage points to -3.8% due to negative operating leverage. The company’s operating cash flow for H1 was -260 million yuan, indicating tight cash flow but an improvement compared to Q1 [11][14].

Company Overview - 大洋集团 is a leading integrated service provider in silicone raw material production and processing, established in 1991 and listed in 2007 [3][4] - The company specializes in the design, research, and manufacturing of silicone products used in consumer electronics, automotive components, and medical devices, with a strong client base including Apple, Huawei, and Philips [4] Financial Performance - For the fiscal year ending December 31, 2024, 大洋集团 reported total revenue of 898 million yuan, a decrease of 20.08% year-on-year [2] - The company recorded a net loss attributable to shareholders of 58.93 million yuan, although this represents a year-on-year increase of 27.72% [2] - The gross profit margin stood at 12.02%, with a high asset-liability ratio of 95.07% [2] Market Position - As of the latest data, 大洋集团's price-to-earnings (P/E) ratio is -1.42, ranking it 184th in the industrial engineering sector, which has an average P/E ratio of 16.69 [3] - The company has experienced a cumulative decline of 21.25% over the past month and 37.79% year-to-date, underperforming the Hang Seng Index by 19.99% [2] Strategic Initiatives - The company is actively pursuing innovation and expansion in its core manufacturing sector, exploring new growth areas in locations such as Beijing and Hainan [3][4] - 大洋集团 is also developing a health and wellness industry project, including a high-end residential and vacation center in Yalong Bay [3] Recent Developments - On July 3, 2025, the company plans to issue 28.66 million new shares, representing 16.66% of the enlarged share capital, at a price of 1.20 HKD per share, reflecting a discount of 90.48% compared to the previous closing price [5]