Core Viewpoint - Ying Tong Holdings (06883) reported a mixed performance in its interim results, with a slight decline in total revenue but an increase in net profit, indicating resilience in a challenging market environment [1] Financial Performance - Total revenue for the period ending September was approximately 1.028 billion RMB, representing a year-on-year decrease of about 3.4% [1] - Net profit reached 133 million RMB, showing a year-on-year increase of approximately 15.3% [1] - The company plans to declare an interim dividend of 4.6 HK cents per share and a special dividend of 3.4 HK cents per share [1] Market Position and Outlook - Ying Tong Holdings is recognized as a leading high-end perfume brand management company in China [1] - Huatai Securities has issued a report suggesting that the company is likely to benefit from the recovery in high-end consumption and the increasing penetration rate of perfumes and fragrances, which will drive demand growth [1] - On the supply side, the company is expanding its multi-brand strategy across various channels, which allows for broad product coverage [1] - There remains potential for growth in markets below first-tier cities [1] - The company plans to continue expanding its brand matrix and strengthen its leading position, with a focus on self-operated retail stores and proprietary brands, which are expected to create new revenue and profit growth points [1]

Core Viewpoint - Ying Tong Holdings (06883) reported a mixed performance in its interim results, with a slight decline in total revenue but an increase in net profit, indicating resilience in a recovering high-end consumer market [1] Financial Performance - Total revenue for the period ending September was approximately 1.028 billion RMB, representing a year-on-year decrease of about 3.4% [1] - Net profit reached 133 million RMB, showing a year-on-year increase of approximately 15.3% [1] - The company plans to declare an interim dividend of 4.6 HK cents per share and a special dividend of 3.4 HK cents per share [1] Market Position and Outlook - Ying Tong Holdings is recognized as a leading high-end perfume brand management company in China [1] - Huatai Securities forecasts that the company will benefit from the recovery in high-end consumption and the increasing penetration of perfumes and fragrances, leading to demand growth [1] - The company is expanding its multi-brand strategy across various channels, with significant growth potential in markets below first-tier cities [1] - Future plans include expanding the brand matrix and focusing on self-operated retail stores and proprietary brands, which are expected to create new revenue and profit growth points [1]

Company Overview - Ying Tong Holdings is a leading high-end perfume brand management company in China, providing distribution and market deployment services for 73 external brands as of FY25 [1] - The company is expected to benefit from the recovery of high-end consumption and the increasing penetration rate of perfumes and fragrances [1][2] - Ying Tong's brand matrix is continuously expanding, with plans to enhance self-operated retail stores and proprietary brands, which are anticipated to create new revenue and profit growth points [1][3] Industry Insights - The Chinese perfume market is projected to reach 26.5 billion yuan in 2024, with a CAGR of 15.1% from 2019 to 2024, significantly higher than the global expected growth rate of 3.5% during the same period [2] - Currently, over 50% of the domestic perfume market is dominated by overseas luxury brands, indicating a substantial opportunity for domestic brands to increase their market share [2] - The demand for perfumes in China has considerable room for growth compared to Europe and the United States, particularly in the extension from perfumes to fragrances, which could enhance market education and expand the "olfactory economy" [2] Competitive Advantages - Ying Tong has established a rich brand matrix ranging from affordable to luxury, covering various categories including skincare, home fragrances, and personal care [2] - The company maintains stable long-term relationships with its top two suppliers, EuroItalia and Yite, which accounted for 59.4% of total procurement in FY25 [2] - Ying Tong has a comprehensive channel layout with 8,302 offline sales points in China as of FY25, alongside steady growth in online channels [2] Growth Opportunities - The company is launching self-operated retail stores, such as the multi-brand perfume and fragrance collection store "Shi Fen Qi He," to enhance customer experience and increase sales [3] - Ying Tong is actively developing its proprietary brand, Santa Monica, which is expanding into eyewear, perfumes, and fragrances, with a projected CAGR of 41% for brand revenue from FY24 to FY25 [3] - The company is also exploring external acquisitions to diversify its brand matrix and deepen its channel layout [3] Market Positioning - There are concerns regarding the sustainability of the brand management model; however, historical analysis of leading overseas perfume management companies suggests that local distributors are essential for rapid market coverage and scale operations [3] - Ying Tong's operational experience and channel resources provide a unique advantage for sustainable development in the domestic market [3] Financial Projections - The company forecasts net profits of 261 million yuan, 327 million yuan, and 412 million yuan for FY26E, FY27E, and FY28E, respectively, with corresponding EPS of 0.19 yuan, 0.24 yuan, and 0.30 yuan [4] - A target price of 2.86 HKD is set, corresponding to a 14X FY26E PE, reflecting the company's growth potential and market positioning [4]