Core Insights - The company reported stable growth in its performance for the first half of 2025, achieving revenue of 3.113 billion with a year-on-year increase of 22.5% and a net profit attributable to shareholders of 1.182 billion, up 20.2% year-on-year [1] - The company maintains its full-year guidance, expecting a revenue growth rate of 25%-28% and a net profit of 2.5 billion to 2.55 billion, representing a year-on-year increase of 21%-24% [1] Brand Performance - The brand "可复美" generated revenue of 2.542 billion, a year-on-year increase of 22.7%, accounting for 81.7% of total revenue, with disposable products expected to represent 30% and dressings 25% of sales [1] - The brand "可丽金" achieved revenue of 503 million, up 26.9% year-on-year, although there was a slight decline in offline sales due to distributor impacts [1] Product Category Performance - Functional skincare products generated revenue of 2.410 billion, a year-on-year increase of 24.2%, while medical dressings brought in 693 million, up 17.0% year-on-year [1] - The growth in functional skincare revenue is attributed to refined operations across all channels, enhanced brand influence, and the successful launch of key products [1] Channel Performance - Direct sales channels generated revenue of 2.325 billion, a year-on-year increase of 26.5%, with online direct sales particularly strong at 391 million, up 133.6% due to targeted operations on e-commerce platforms [2] - Offline direct sales also saw significant growth, reaching 118 million, up 74.3%, driven by the accelerated layout of brand specialty stores [2] - The DTC store direct sales revenue was 1.816 billion, a year-on-year increase of 13.3%, while the distribution channel revenue was 787 million, up 12.1% [2] Profitability and Cost Structure - The company's gross margin and net margin for the first half of 2025 were 81.7% and 38.0%, respectively, reflecting a year-on-year decrease of 0.7 percentage points and 0.6 percentage points [2] - The decline in gross margin is primarily due to the increased proportion of lower-margin functional skincare products [2] - The sales, management, and R&D expense ratios were 34.0%, 2.7%, and 1.3%, showing a decrease in sales expense ratio due to refined operational management and changes in channel structure [2] Investment Outlook - The company shows a robust growth trend in its mid-year report, with core brands continuing to drive significant growth through the launch of new products and expansion in both online and offline channels [3] - The projected net profits for 2025-2027 are 2.549 billion, 3.092 billion, and 3.673 billion, corresponding to PE ratios of 20, 17, and 14 times, respectively, maintaining an "outperform" rating [3]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The retail sector is experiencing a rise in emotional consumption trends, with leading retail companies actively transforming through quality retail, cross-border trendy play, and co-branding with fashion IPs, which is expected to lead to performance recovery and valuation revaluation in the long term [4][30] - The report highlights the ongoing disclosure of annual and quarterly reports, indicating that high-quality companies in high-prosperity sectors are worth monitoring [4][27] - The retail index has shown a slight increase of 0.07% recently, but has decreased by 5.00% since the beginning of 2025, underperforming the broader market [6][15] Summary by Sections Retail Market Review - The retail index closed at 2127.02 points, with a weekly increase of 0.07%, ranking 24th among 31 primary industries [6][15] - The supermarket sector showed the largest increase this week, while the watch and jewelry sector has led the gains since the beginning of 2025 [18][21] Retail Insights: Focus on Beauty Care, Gold Jewelry, and Traditional Retail - The report emphasizes the performance divergence among companies in the cosmetics, medical beauty, gold jewelry, and traditional retail sectors, with a positive outlook for quality companies in the retail sector due to the recovery of consumer demand [27][30] - Key companies such as Yonghui Supermarket and Aiying Room are highlighted for their proactive transformation and potential for performance recovery [41][42] Key Company Performances - Proya achieved a 28.9% increase in net profit in Q1 2025, supported by a series of new product launches [47] - Yonghui Supermarket reported a revenue of 174.79 billion yuan in Q1 2025, down 19.3% year-on-year, but is undergoing significant store renovations [30][46] - The report suggests focusing on companies with strong growth potential in high-prosperity segments, including Proya, Aiying Room, and gold jewelry brands like Laopu Gold and Chaohongji [44][42]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes the ongoing impact of tariff shocks and suggests focusing on high-quality retail channels and differentiated consumer brands that cater to domestic demand [4][22] - The report highlights the transformation of traditional retail, with Yonghui Supermarket leading the way in adapting to a consumer-centric retail era [4][22] - The rise of domestic brands and the recovery of consumer demand are seen as inevitable trends, with recommendations to focus on quality retail channels and differentiated brands [4][22] Summary by Sections Retail Market Review - The retail industry index rose by 2.88% during the week of April 7 to April 11, outperforming the Shanghai Composite Index, which fell by 3.11% [6][13] - The supermarket sector showed the largest increase, with a weekly rise of 13.54% [14][17] - Notable individual stock performances included Guofang Group (+61.1%), Eurasia Group (+26.3%), and Nanning Department Store (+22.4%) [19][20] Industry Dynamics - Yonghui Supermarket has opened a "green channel" for domestic manufacturers affected by export restrictions, receiving over 100 cooperation requests from various sectors [4][22] - The report discusses the approval of a new collagen product by Jinbo Bio, which is expected to strengthen its leading position in the medical beauty sector [4][23] Investment Recommendations - Investment focus areas include: - Traditional retail: Highlighting companies like Yonghui Supermarket and Aiyingshi that are adapting to consumer trends [7][27] - Gold and jewelry: Recommendations for brands like Laopu Gold and Chaohongji that possess differentiated product capabilities [7][28] - Cosmetics: Emphasizing domestic brands such as Maogeping and Shangmei that are expanding into high-potential segments [7][28] - Medical aesthetics: Focusing on companies like Aimeike and Kedi that are positioned to benefit from the recovery in medical beauty consumption [7][28] Company-Specific Insights - Laopu Gold reported a revenue of 8.506 billion yuan (+167.5%) and a net profit of 1.473 billion yuan (+253.9%) for FY2024, indicating strong growth potential [29] - Yonghui Supermarket's revenue for the first three quarters of 2024 was 54.549 billion yuan (-12.1%), with a net loss of 78 million yuan, but it is undergoing significant transformation [32] - Jinbo Bio's new collagen product is expected to provide both immediate filling effects and stimulate collagen regeneration, enhancing its competitive edge in the market [23][24]