Investment Rating - The investment rating for the company is "Accumulate" [4] Core Views - The company experienced pressure on its performance in the first half of 2025, with a decline in net profit due to increased expense ratios, despite maintaining mid-single-digit growth in retail [1][2] - The company is focusing on retail transformation and expanding its overseas business, emphasizing consumer-centric strategies and brand health management [3] Financial Summary - **Revenue**: The company reported revenue of 13,661 million in 2023, with projections of 15,248 million in 2025 and 16,923 million in 2027, reflecting a growth rate of 2.5% in 2023 and an estimated 4.3% in 2025 [1] - **Net Profit**: The net profit for 2023 was 1,122 million, expected to decline to 926 million in 2025, with a significant drop of 18.6% year-on-year [1] - **Gross Margin**: The gross margin for the first half of 2025 was 46.70%, showing a slight increase of 0.59 percentage points year-on-year [2] - **Net Margin**: The net margin for the first half of 2025 was 5.19%, down by 4.05 percentage points year-on-year due to increased expense ratios [2] - **Store Count**: The company opened 540 stores and closed 629 in the first half of 2025, resulting in a total of 8,236 stores by mid-2025 [2] Business Strategy - The company is committed to a consumer-centric approach, focusing on retail transformation and enhancing operational efficiency through improved supply chain capabilities and product development [3] - The company is expanding its overseas presence, with multiple brands entering emerging markets and achieving growth in both online and offline retail channels [3] Valuation Metrics - The projected EPS for 2025 is 0.34, with corresponding P/E ratios of 16.4 for 2025, 13.3 for 2026, and 11.4 for 2027 [8]

Core Insights - The report from Tianfeng Securities indicates that Semir Apparel's net profit attributable to shareholders for the first half of 2025 is 330 million, a year-on-year decrease of 41%, with the second quarter showing a net profit of 110 million, down 46% year-on-year [1] - The increase in new store openings, rising online advertising expenses, and increased stock option costs have put short-term pressure on profitability, resulting in a net profit margin of 5.3%, a decline of 4 percentage points year-on-year [1] - As of the end of the first half of 2025, the company's inventory stands at 3.699 billion, an increase of 340 million year-on-year, reflecting a 10.1% rise; 75% of the inventory consists of goods with a one-year turnover, indicating a relatively healthy and stable inventory structure [1] - In the first half of 2025, the overall retail sales across all channels, including online and offline, direct sales, and franchises, experienced single-digit growth year-on-year; however, sales have shown improvement in July and August, achieving double-digit growth in retail sales for the month [1] - The company remains focused on consumer-centric strategies and maximizing long-term benefits, emphasizing retail transformation, refined brand management, overseas business expansion, and deep integration of AICG technology to drive high-quality development [1]