Investment Rating - The investment rating for the company is "Buy" with a 6-month outlook maintained [5]. Core Insights - The company has established itself as a leader in the domestic adult incontinence market, holding the number one market share for several consecutive years, supported by strong brand recognition [2]. - The company is expanding its product categories and optimizing its product structure to meet the evolving consumer demands, particularly focusing on mid-to-high-end products [3]. - The financial performance for the first half of 2025 shows a revenue of 550 million with a year-on-year growth of 5%, and a net profit of 28 million, reflecting a 22% increase [1][4]. Financial Performance Summary - For Q2 2025, the company reported revenue of 270 million, a 13% increase year-on-year, and a net profit of 10 million, which is a 98% increase [1]. - The revenue breakdown for H1 2025 includes adult incontinence products at 290 million (5% growth), baby care products at 210 million (6% growth), and pet hygiene products at 34 million (1% decline) [1]. - The adjusted profit forecast for 2025-2027 estimates net profits of 36 million, 43 million, and 50 million respectively, reflecting a steady growth trajectory [4]. Product Development and Market Strategy - The company is focusing on product innovation to address user pain points, such as odor control and breathability, thereby creating a differentiated competitive advantage [2]. - New product launches include discreet absorbent pads designed for Asian women and specialized men's absorbent products, expanding the product line further [3]. - The company aims to leverage its strong brand effect and cost leadership by enhancing its supply chain and product offerings [2].

Core Insights - The adult incontinence care industry in China is experiencing growth driven by an aging population and the "silver economy" becoming a national strategy [1][7] - Reliable Co., Ltd. (301009.SZ) reported a resilient performance in its latest semi-annual report for 2025, with revenue of 549 million yuan, a year-on-year increase of 5.39%, and a net profit of 28 million yuan, up 21.81% [1][2] Financial Performance - In the first half of 2025, the company achieved a significant increase in operating cash flow, reaching 41 million yuan, a year-on-year growth of 157.71% [1] - The second quarter saw a revenue increase of 12.98% and a net profit surge of 98.42%, indicating improved profitability and operational quality [1] Business Growth Drivers - The adult incontinence care products generated revenue of 287 million yuan, with a gross margin of 24.46%, reflecting a 3.65 percentage point increase year-on-year [2] - The growth is attributed to both market expansion and the company's ongoing product structure upgrades, with a rising proportion of mid-to-high-end products [2] Market Expansion Strategy - The company employs a dual strategy of "own brand + ODM" to enhance its market penetration and channel control, focusing on both e-commerce and offline specialized channels [2][3] - Reliable Co. is actively innovating and building its brand around different user groups and scenarios, enhancing brand recognition and loyalty [3] Innovation and Technology - The adult incontinence care market in China has a penetration rate of less than 10%, indicating significant growth potential compared to mature markets [4] - The company is increasing R&D investments to develop innovative products that meet diverse consumer needs, establishing a technological barrier through differentiated product features [4] Strategic Positioning - Since its strategic shift in 2008, Reliable Co. has transformed from a baby diaper OEM to a provider of proprietary brands and professional solutions, demonstrating foresight in addressing aging trends and market gaps [5] - Despite competitive pressures, the company achieved a net profit growth of 21.81%, driven by innovative product development and effective cost control measures [5][6] Future Outlook - With over 300 million people aged 60 and above in China, the adult incontinence care sector is poised for substantial growth, potentially reaching a market size of hundreds of billions [7] - Reliable Co. aims to become a world-class leader in the health care industry, leveraging its brand strength, innovation capabilities, and robust supply chain management [7]