Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][33] Core Views - The company experienced a slight revenue decline of 3.6% in the first half of 2025, with total revenue reaching 2.39 billion yuan. The gross margin improved by 0.1 percentage points to 67.1%. However, net profit decreased significantly by 42.7% to 200 million yuan due to increased fixed costs and asset impairment losses [1][4][33] - The company is expected to face short-term revenue and cost pressures, but maintains a stable gross margin. The long-term growth prospects remain positive, driven by the outdoor brand Le Fei Ye and the steady growth of the Haggis brand [4][33] Summary by Sections Financial Performance - In the first half of 2025, the company's revenue decreased by 3.6% to 2.39 billion yuan, while the net profit fell by 42.7% to 200 million yuan, resulting in a net profit margin decline of 5.6 percentage points to 8.2% [1][4] - The second quarter continued the downward trend with a revenue drop of 3.5% to 1.09 billion yuan and a net profit decline of 71.4% to 30 million yuan [2] Brand Performance - The main brand, Baoxini, saw a revenue decline of 9.6%, while Haggis experienced an 8.4% increase in revenue. The outdoor brand Le Fei Ye grew by 20.5% [3][4] - The company’s direct sales and online channels showed growth, while franchise and group purchase channels faced declines [3] Profitability and Cost Structure - The sales expense ratio increased by 3.7 percentage points to 44.2%, and the management expense ratio rose by 2.3 percentage points to 9.4% due to increased consulting and transaction costs [1][4] - The company anticipates a decrease in net profit for 2025-2026, with projections of 410 million yuan and 450 million yuan respectively, down from previous estimates of 630 million yuan and 690 million yuan [4][33] Future Outlook - The company expects to maintain a stable gross margin of around 65% over the next few years, despite the anticipated increase in sales and management expense ratios [27][28] - The long-term growth potential is supported by the favorable market conditions for the outdoor segment and the ongoing expansion of the Haggis brand [4][33]

Group 1 - The company's revenue in the first half of 2025 decreased by 3.6% year-on-year to 2.39 billion yuan, while the gross margin increased by 0.1 percentage points to 67.1% [1] - Sales expense ratio increased by 3.7 percentage points to 44.2%, primarily due to revenue decline, increased brand promotion costs, and an increase in the number of direct-operated stores [1] - Net profit attributable to shareholders fell by 42.7% year-on-year to 200 million yuan, with a net profit margin decrease of 5.6 percentage points to 8.2% [1] Group 2 - The second quarter continued the downward trend, with revenue declining by 3.5% year-on-year to 1.09 billion yuan and net profit down 71.4% to 30 million yuan [1] - The main brand reported a revenue decline of 9.6%, with a decrease in single-store revenue of 10.4% and a net reduction of 4 stores to 817 [2] - The outdoor brand Le Fei Ye experienced steady growth in sales, increasing by 20.5% [2] Group 3 - Online channels showed strong growth, with an increase of 17.6%, while direct sales and franchise channels saw mixed results [2] - The company adjusted its profit forecast for 2025-2026, expecting net profits of 410 million yuan, 450 million yuan, and 480 million yuan for 2025-2027, reflecting a year-on-year decline of 17.4% for 2025 [4] - The company maintains a positive long-term growth outlook despite short-term revenue and expense pressures [4]