Summary of the Conference Call for 莱绅通灵 Company Overview - **Company**: 莱绅通灵 - **Industry**: Jewelry Retail Key Points and Arguments Financial Performance - The company achieved a net profit of between 50 million to 80 million in the first half of the year, aligning with management's assessment goals [2] - The second quarter saw a quarter-on-quarter growth compared to the first quarter, despite a challenging market environment [2][5] - The company’s full-year net profit forecast remains at 50 million to 80 million, which is lower than previous market expectations [2][4] Sales and Product Strategy - Significant improvements in both direct and franchise store sales efficiency were noted, with franchise store efficiency increasing by over 300% year-on-year [3] - The company plans to adjust its online sales product mix by reducing the focus on heavy gold sales and increasing high-margin non-gold products such as platinum, K gold, pearls, and silver jewelry to attract younger consumers [2][6] - The company aims to activate its 5 million+ member base, which currently has a low activation rate, through various initiatives in the second half of the year [12] Expansion Plans - The company is focusing on expanding its franchise business, including signing provincial agency agreements and opening new stores to compensate for the expected retail downturn in the third quarter [2][7][16] - As of late May, 43 direct and franchise stores have reached the target of 10 million in sales, with no adjustments to this target planned [3] New Product Development - A new intellectual property product is expected to launch in September, with the existing "转运星轮" series accounting for 14% of gold sales [9] - The company is actively developing new products aimed at younger demographics and male consumers [8][14] Online Business Development - Online sales currently account for about 10% of total sales, with expectations not to exceed 30% for the year [22] - The company will focus on low-cost, high-margin non-gold products for online sales to better cater to younger consumers [10][22] Market Response and Challenges - The market reacted strongly to the company's earnings forecast, with some analysts projecting net profits significantly higher than the company's guidance, leading to confusion [4] - The company acknowledged that the online business faced challenges during the 618 shopping festival, impacting overall gross margins [3][6] Customer Engagement and Marketing - The company is implementing strategies to enhance customer engagement, including VIP member events and collaborations with other businesses to expand its membership base [25] - Marketing efforts will be adjusted to appeal to younger consumers, including the introduction of new products that align with their preferences [14] Cost Management - Overall expenses are being controlled, with a focus on managing marketing and administrative costs while allowing flexibility in sales expenses to incentivize store staff [15] Channel Strategy - The company is optimizing its channel strategy, particularly in high-end shopping areas, and is making significant progress in key markets like Beijing [13][26] Franchise Management - The company employs a comprehensive management system for franchisees, requiring a minimum of 60% of sales to come from proprietary IP products [23] Additional Important Information - The company is actively working to improve its brand recognition in lower awareness markets, particularly in northern regions [26] - The pricing strategy for gold-inlaid products aligns with industry standards, ensuring competitive pricing [18][19]