Core Insights - The article discusses the rise and fall of Nanji E-commerce, which initially thrived on a "brand authorization + platform distribution" model but has faced significant challenges as market conditions changed [1][10][12] - The company is attempting to shift its strategy towards "self-operated + light luxury" to improve brand perception and product quality, but early results indicate this transition is costly and not yet effective [1][3][10] Company Overview - Founded in 1998 by Zhang Yuxiang, Nanji E-commerce initially focused on the thermal underwear market and quickly gained market share through aggressive advertising and a dealer network [4][5] - The company transitioned to a light asset model in response to rising manufacturing costs and market pressures, focusing on brand management and authorization rather than production [5][12] Financial Performance - Nanji E-commerce experienced rapid growth from 2015 to 2020, with revenue soaring from 389 million to 4.172 billion yuan and net profit increasing from 172 million to 1.188 billion yuan [8] - However, by 2023, the company reported a net loss of 237 million yuan for 2024, with a projected profit of only 12 to 18 million yuan for the first half of the year, representing a decline of 76.89% to 84.60% year-over-year [1][10] Market Challenges - The company has faced significant quality control issues, with multiple products appearing on quality inspection blacklists since 2018, leading to a decline in brand reputation [12][13] - The shift in consumer perception towards "Nanji" as a low-quality brand has been exacerbated by the rise of new consumer brands that do not rely on traditional brand endorsements [12][13] Strategic Shift - In 2023, the company began investing heavily in self-operated product lines and launched a light luxury series, partnering with media companies to enhance brand visibility [1][3] - Industry experts suggest that a more effective strategy would involve focusing on product quality and reducing product categories to drive factory upgrades [3]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is undergoing a transformation into a national brand, focusing on brand licensing and a diverse product matrix, including various clothing categories and home goods [4][6]. - The rise of "affordable alternatives" is noted, with consumers increasingly valuing cost-performance ratios, leading to a shift towards domestic brands [4][40]. - The company has established a strong national presence and industry experience over two decades, enhancing its brand image through the introduction of a light luxury line [55][50]. Summary by Sections Company Overview - The company, originally known as Nanji E-commerce, transitioned to a brand licensing model in 2008 and has since built a diverse brand portfolio, including well-known names like Nanji Ren and Cardin Crocodile [6][4]. - The company has faced challenges since 2021 due to intensified competition and changes in e-commerce dynamics, impacting its performance [18][4]. Brand Strategy - The core brand matrix includes Nanji Ren, Baijiahao, and Cardin Crocodile, with a focus on providing high-quality, affordable products [28][4]. - The company has shifted its management focus from product-centric to customer-centric, enhancing supply chain control and brand positioning [32][34]. Market Trends - The report highlights the growing trend of "affordable alternatives," with a significant portion of consumers expressing a preference for cost-effective domestic products over international brands [46][40]. - The competitive landscape in the domestic apparel industry is described as intense, with high barriers to entry for new brands [47][40]. Financial Projections - Revenue forecasts for 2024-2026 are projected at 3.23 billion, 4.91 billion, and 6.19 billion yuan, respectively, with expected growth rates of 20%, 52%, and 26% [67]. - The company is anticipated to return to profitability in 2025, with net profits projected at -26 million, 343 million, and 678 million yuan for the years 2024, 2025, and 2026, respectively [67][68].