Investment Rating - The investment rating for the company is maintained as "Buy" [5] Core Views - The company reported a revenue of 1.338 billion yuan for the first half of 2025, representing a year-on-year increase of 27.9%, with an adjusted net profit of 320 million yuan, up 9.6% year-on-year [1] - Domestic revenue grew steadily, while overseas business experienced rapid growth, with overseas revenue reaching 111 million yuan, a staggering increase of 898.6% year-on-year [1] - The company has commercialized 19 IPs and expanded its SKU count to 925, with a more balanced IP structure compared to the previous year [2] - The company has made significant investments in R&D, with R&D expenses increasing by 69.5% year-on-year, indicating a commitment to innovation and product development [3] - The company is expected to see further market penetration and improvement in profit margins as mold investments begin to yield returns [4] Summary by Sections Financial Performance - For the first half of 2025, the company achieved a gross profit margin of 48.4%, although it decreased by 4.3 percentage points year-on-year due to increased mold depreciation [1] - The company’s cash reserves stood at 2.641 billion yuan, indicating a strong liquidity position [3] - The projected adjusted net profits for 2025, 2026, and 2027 are 760 million yuan, 1 billion yuan, and 1.306 billion yuan respectively, with corresponding P/E ratios of 25.6X, 17.1X, and 12.9X [5][7] Market Expansion - The company’s overseas revenue now accounts for 8.3% of total revenue, with significant contributions from markets in the United States and Indonesia [1] - The company has seen a substantial increase in online sales, with a year-on-year growth of 44.6% [1] Product Development - The company’s product lineup includes a diverse range of IPs, with the top four IPs contributing 83.1% of total revenue, indicating a shift towards a more balanced IP portfolio [2] - The introduction of affordable products priced at 9.9 yuan has been successful, generating revenue of 216 million yuan [2] Cost Management - The sales expense ratio increased to 13.2%, primarily due to higher marketing and personnel costs, while the management expense ratio decreased significantly [3]