Core Viewpoint - The increase in revenue share from smart toilets in the first half of 2025 is a key factor driving product structure optimization and operational efficiency improvement [1] Investment Highlights - The company has adjusted its profit expectations and maintains a "Buy" rating, with an upward revision of earnings per share (EPS) forecasts for 2025-2027 to 0.38/0.41/0.43 yuan, compared to the previous 0.37/0.37 yuan for 2025-2026 [2] - The company’s revenue for the first half of 2025 was 2.837 billion yuan, a year-on-year decrease of 8.12%, while the net profit attributable to shareholders was 28 million yuan, down 25.15% year-on-year [2] - The company plans to focus on R&D innovation, retail upgrades, management optimization, and capital operations in the second half of 2025 to drive revenue and efficiency [2] Product Performance - In the first half of 2025, the company generated revenue of 661 million yuan from smart toilets, a year-on-year increase of 4.20%, accounting for 23.31% of total revenue, an increase of 2.76 percentage points year-on-year [3] - The company’s gross profit margin improved to 29.73% in Q2 2025, an increase of 1.17 percentage points year-on-year, while the net profit margin was 5.68%, a decrease of 0.89 percentage points year-on-year [3] - The company plans to further promote internal management reforms and cost reduction efforts in the second half of 2025 to improve gross margins and reduce expense ratios [3]

Group 1 - The Ministry of Commerce has announced the first batch of pilot cities for national retail innovation, with Hangzhou successfully selected [1] - Hangzhou's retail industry has been expanding, showcasing diverse retail formats and a significant increase in online retail scale, while enhancing the level of open development [1] - The city aims to complete a series of renovations of existing commercial facilities during the two-year pilot period, focusing on improving supply quality and optimizing the consumer environment [1] Group 2 - Hangzhou plans to attract domestic and international well-known commercial enterprises and brand operators, promoting the establishment of various headquarters in the city [2] - The city is focusing on building an international shopping paradise, encouraging businesses to open global, Asian, and national flagship stores [2] - Hangzhou is advancing the integration of "smart commerce + physical commerce" in key business districts and promoting "live streaming +" to empower physical retail [2]