Core Viewpoint - The company's 1H25 performance met expectations, with a revenue increase of 3% to 14.8 billion RMB and a net profit decrease of 11% to 1.74 billion RMB, alongside a mid-term dividend declaration of 0.3359 RMB per share, reflecting a payout ratio of approximately 50% [1][2]. Revenue and Product Performance - Revenue from running and training products continued to grow healthily, with running and training categories maintaining a 15% year-on-year growth, accounting for 34% and 16% of total sales respectively [1]. - Revenue from wholesale (excluding Li Ning YOUNG and international business) increased by 5% to 6.5 billion RMB, while direct sales revenue (excluding Li Ning YOUNG) decreased by 4% to 3.2 billion RMB, with a net closure of 19 stores [1][2]. - Online revenue grew by 7% to 4.3 billion RMB [1]. Profitability and Financial Metrics - The gross profit margin decreased by 0.4 percentage points to 50.0%, primarily due to changes in channel structure and increased promotions in direct sales [2]. - The operating profit margin fell by 0.3 percentage points to 16.5%, influenced by a decline in financial income and an increase in impairment losses [2]. - The net profit margin decreased by 1.9 percentage points to 11.7% [2]. Inventory and Receivables Management - Inventory remained at a relatively healthy state, with a low single-digit year-on-year growth and a healthy inventory turnover ratio maintained for four months [2]. - The proportion of new products within six months in the channel inventory was 82%, and accounts receivable turnover days remained at a favorable level of 14 days [2]. Future Outlook - The company expects revenue fluctuations in July and August but remains committed to long-term investments in marketing resources for the Olympics and enhancing multi-category product R&D [2]. - The company aims to improve multi-channel operational efficiency and maintains a positive long-term development outlook [2]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025/26 remains unchanged at 0.92/1.07 RMB, with the current stock price corresponding to 18/15 times the 2025/26 price-to-earnings ratio [3]. - The target price has been raised by 9% to 22.68 HKD, reflecting a 25% upside potential from the current stock price [3].