Investment Rating - The report maintains a "Recommendation" rating for the company with a target price of 33.8 CNY per share [2][8]. Core Insights - The company reported a revenue of 1.764 billion CNY for H1 2025, representing a year-on-year increase of 15.1%, while the net profit attributable to shareholders was 188 million CNY, up 4.6% year-on-year. However, Q2 2025 saw a revenue of 768 million CNY, a slight increase of 0.2% year-on-year, but the net profit dropped by 25.5% to 57 million CNY [2][8]. - The company's product line, particularly in the health sector, continues to show strong growth, with the "Free Point" product line achieving a revenue of 1.687 billion CNY, up 20.5% year-on-year. The health product series is gaining traction, with positive sales feedback for probiotics and organic cotton products [8]. - The e-commerce channel faced challenges, with a 9.4% decline in revenue to 592 million CNY in H1 2025 due to intensified competition and negative public sentiment. However, the company expects a recovery in the fourth quarter as the situation improves [8]. - The offline channel performed well, generating 1.133 billion CNY in revenue, a significant increase of 39.8% year-on-year, with the outer market growing by 124.2% [8]. - The company's gross margin slightly decreased to 53.2%, down 1.2 percentage points year-on-year, while the net profit margin also fell by 1.1 percentage points to 10.7% [8]. - Future projections estimate net profits of 360 million CNY, 480 million CNY, and 620 million CNY for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 36, 26, and 21 [8]. Financial Summary - Total revenue is projected to grow from 3.254 billion CNY in 2024 to 5.912 billion CNY by 2027, with year-on-year growth rates of 51.8%, 23.2%, 23.7%, and 19.2% respectively [4]. - The net profit attributable to shareholders is expected to increase from 288 million CNY in 2024 to 617 million CNY in 2027, with growth rates of 20.7%, 24.0%, 34.9%, and 28.1% [4]. - The company’s total assets are projected to rise from 2.151 billion CNY in 2024 to 3.049 billion CNY in 2027, indicating a healthy growth trajectory [9].

Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 16.1 CNY per share [2][8]. Core Views - The company has optimized its cost structure and accelerated the cultivation of its own brand, leading to significant profit growth. In 2024, the company achieved revenue of 1.08 billion CNY, a slight decrease of 0.3% year-on-year, while the net profit attributable to the parent company increased by 54.4% to 30 million CNY [2][4]. - The first quarter of 2025 showed a revenue of 280 million CNY, a decrease of 1.0% year-on-year, but the net profit attributable to the parent company increased by 1.4% to 20 million CNY [2][4]. Financial Summary - **2024 Financial Performance**: - Total revenue: 1,079 million CNY - Net profit attributable to the parent: 31 million CNY - Earnings per share: 0.11 CNY - Gross margin: 20.8%, up 3.1% year-on-year [4][9]. - **2025-2027 Projections**: - Expected revenue growth: 1,152 million CNY in 2025, 1,256 million CNY in 2026, and 1,393 million CNY in 2027, with year-on-year growth rates of 6.8%, 9.0%, and 10.9% respectively [4][9]. - Projected net profit attributable to the parent: 32 million CNY in 2025, 51 million CNY in 2026, and 68 million CNY in 2027, with growth rates of 3.5%, 59.6%, and 32.1% respectively [4][9]. - **Cost Structure**: - The company has improved its gross margin through increased procurement from joint ventures, leading to a gross margin of 24.3% in Q1 2025, up 3.9 percentage points year-on-year [2][4]. Product Performance - In 2024, the company’s product segments showed varied performance: - Adult incontinence products: Revenue of 558 million CNY, down 1.33% year-on-year - Baby care products: Revenue of 416 million CNY, up 6.82% year-on-year - Pet hygiene products: Revenue of 69 million CNY, down 22.48% year-on-year [2][8]. - The company launched several new products in 2024, generating nearly 40 million CNY in sales, indicating a focus on expanding its product matrix [2][8].