Investment Rating - The report maintains a "Buy" rating for the company [7][2]. Core Views - The company's profit adjustments due to negative factors such as retail pressure, rising expense ratios, and unclear subsidy expectations are gradually being digested, indicating potential defensive value at the current position. Anticipation exists for profit elasticity driven by future retail improvements. The projected net profit for the company from 2025 to 2027 is estimated at 360 million, 430 million, and 480 million yuan, with corresponding PE ratios of 16, 13, and 12 times [2][5]. Financial Performance Summary - For the first half of 2025, the company reported revenues, net profit attributable to the parent company, and net profit excluding non-recurring items of 2.39 billion, 197 million, and 162 million yuan, respectively, reflecting year-on-year changes of -3.6%, -42.7%, and -46.6%. In Q2 alone, revenues, net profit attributable to the parent company, and net profit excluding non-recurring items were 1.09 billion, 27 million, and -1 million yuan, with year-on-year changes of -3.5%, -71.4%, and -102.0% [5][2]. Revenue and Profitability Analysis - The company's revenue in H1 was pressured primarily by the main brand and group purchases, with a year-on-year decline of 9.6%. The H1 performance of the main brand was negatively impacted by a decrease in same-store traffic, leading to a year-on-year decline in single-store annual efficiency of 11%. The company also experienced a net closure of 4 stores compared to the end of 2024 [11][5]. - In terms of profitability, Q2 maintained a gross margin of 66.0% year-on-year, attributed to effective discount control across channels. However, the net profit margin was pressured by high operating expenses, resulting in a year-on-year decline of 5.9 percentage points to 2.5% [11][5].

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company is experiencing short-term pressure on performance due to increased investment in brand promotion and channel development, with a projected decline in net profit for 2025 [4] - The company is a leading domestic mid-to-high-end menswear group, with expectations for revenue stability and profit recovery in the coming years [4] Financial Performance Summary - For the first half of 2025, the company reported revenue of 2.39 billion yuan, a year-on-year decrease of 4%, and a net profit attributable to shareholders of 200 million yuan, down 43% [1] - In Q2 2025, revenue was 1.09 billion yuan, a decline of 3% year-on-year, with net profit dropping significantly by 71% to 30 million yuan [2] - The gross profit margin for H1 2025 was 67.1%, slightly up by 0.1 percentage points year-on-year, while the net profit margin decreased by 5.8 percentage points to 8.4% [1] Brand Performance Summary - By brand, HAZZYS showed healthy growth with revenue of 930 million yuan in H1 2025, up 8% year-on-year, while the main brand Baoxini experienced a revenue decline of 10% to 700 million yuan [3] - The company’s online sales increased by 18% to 450 million yuan, while direct sales grew by 2% to 1.03 billion yuan, but franchise and group purchase sales saw declines of 17% and 21%, respectively [3] Operational Insights - The company has been cautious in asset impairment provisions, with inventory increasing by 5.9% year-on-year to 1.14 billion yuan, and inventory turnover days rising by 24.1 days to 282.4 days [4] - The company anticipates a steady recovery in profitability from 2026 to 2027, driven by channel optimization and improved sales performance [4] Financial Projections - The company’s projected net profits for 2025, 2026, and 2027 are 322 million yuan, 399 million yuan, and 476 million yuan, respectively, with a corresponding P/E ratio of 17.5 for 2025 [4][6]