Group 1: Financial Performance - The company's overall gross margin improved by 9.16 percentage points compared to the same period last year, driven by product structure optimization, gold price benefits, and changes in channel structure [4] - Revenue from e-commerce increased significantly in Q3, but gross profit declined due to a shift to an agency model, although channel expenses decreased by 16.55% year-on-year [5] - The company aims for a net profit growth target of 5%-15% for the year, with confidence in continued growth from self-operated and e-commerce channels [8] Group 2: Business Strategy - The company has established a strategic partnership with Wuyou Media to enhance brand value through innovative marketing and content creation [7] - The gold leasing business is managed with a risk strategy to prevent inventory impairment while avoiding excessive leasing that could lead to losses [3] - The company is focusing on improving single-store efficiency and conducting structural adjustments in franchise operations to enhance overall performance [8] Group 3: Market Trends - The embedded product category has stabilized, with growth driven by lightweight and fashionable designs, including gold embedded products [6] - The company is seeing a positive trend in sales performance at the co-branded stores with the National Treasure project, with expectations for some stores to achieve monthly sales exceeding 10 million [7]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's revenue for H1 2025 was 4.597 billion yuan, a year-on-year decrease of 43.9%, while the net profit attributable to the parent company was 594 million yuan, down 1.27% year-on-year. The gross profit margin improved to 30.34%, an increase of 11.96 percentage points year-on-year [1] - The company plans to distribute a cash dividend of 0.25 yuan per share for H1 2025, leading to an annualized dividend of 0.9 yuan per share, resulting in a dividend yield of 6.8% based on the closing price on August 28 [2] - The decline in revenue and gross profit was primarily attributed to pressure on income and margins from franchise channels, with online channel revenue decreasing by 1.9% and offline self-operated channel revenue decreasing by 7.6% [3] Financial Performance Summary - For H1 2025, the company reported revenues of 4.597 billion yuan, with a gross profit margin of 30.34% and a net profit margin of 12.92% [1] - The company experienced a significant decline in franchise channel revenue, which fell by 59.12%, while self-operated channels showed a more stable performance with a revenue decrease of 7.6% [3] - The company’s expense ratio increased to 12.07%, primarily due to the higher proportion of direct sales, impacting overall profitability [4] - The company expects revenues of 11.8 billion yuan in 2025, with a projected net profit of 1.089 billion yuan, reflecting a year-on-year growth of 8% [5]