Core Viewpoint - The company has demonstrated significant recovery in profitability, with a 45.27% year-on-year increase in net profit to 85.05 million yuan in the first half of 2025, driven by a multi-brand strategy and enhanced operational management [1] Group 1: Financial Performance - The company's net profit attributable to shareholders increased by 45.27% to 85.05 million yuan in the first half of 2025 [1] - The combined sales and management expense ratio decreased by 2.1 percentage points, reflecting effective cost control and process optimization [1] Group 2: Operational Strategy - The company is focusing on cost reduction in 2025, emphasizing process optimization and strict budget control across brands [1] - Marketing strategies have been refined to enhance efficiency and quality, with a focus on aligning product effectiveness with marketing efforts [1] Group 3: AI Integration - The company is actively integrating AI technology across its operations, from design to supply chain management, significantly improving design efficiency and precision [1] - AI tools are being utilized for sales diagnostics and analysis, leveraging big data to support store performance [1] Group 4: Brand and Market Strategy - The company is enhancing brand strength and store upgrades while focusing on member experience and brand value [2] - The multi-brand and multi-platform strategy aims to uncover growth potential across different brands, leading to rapid online growth [2] Group 5: International Business Adjustments - The company is strategically closing underperforming stores in its French IRO brand while maintaining strict budget controls, leading to gradual profit improvement [2] - Future adjustments will focus on retaining profitable stores and increasing investment in brand and product design to support the IRO brand's recovery [2] Group 6: Future Outlook - The company anticipates significant growth potential, focusing on high-end markets to meet diverse consumer demands amid a K-shaped consumption trend [2] - The company's refined operational management and understanding of the high-end market position it well for sustained high-quality growth in future market competition [2]

Core Viewpoint - The implementation of the "immediate refund" tax refund policy for outbound tourists in Shenzhen enhances the shopping experience, stimulates cross-border consumption, and contributes to the city's international business environment [1][4][15]. Group 1: Policy Implementation - The "immediate refund" tax refund service allows outbound tourists to receive tax refunds instantly at the point of purchase by providing a credit card pre-authorization guarantee [1][4]. - As of December 11, 2023, the policy was officially launched, with the first refund of 1,458 yuan processed for a tourist from Belarus [1][4]. - Shenzhen has established 1,500 tax refund stores and 12 centralized refund points, with nearly 200 merchants participating in the "immediate refund" service [4][9]. Group 2: Economic Impact - The tax refund service has significantly boosted sales, with a reported 4274 tax refund transactions totaling 405 million yuan in 2024, marking a year-on-year increase of 7.5 times [9]. - In the first seven months of the year, sales of tax refund goods reached 584 million yuan, a 100% increase year-on-year, with "immediate refund" goods sales soaring to 75.04 million yuan, up over 2500% [9]. - The introduction of the "immediate refund" service has led to a 300% increase in sales at DJI stores since they became part of the tax refund program [9]. Group 3: Technological Integration - The collaboration between Ant International's Alipay+ and Guangdong Huaxing Bank has introduced the first electronic wallet tax refund service in China, allowing Hong Kong residents to receive refunds in Hong Kong dollars instantly [10]. - Shenzhen is developing a "cloud service tax refund" system that supports multiple refund methods, including cash, mobile payments, and bank cards, with real-time tracking of refund progress [14]. Group 4: Future Developments - Shenzhen aims to further enhance its tax refund services by increasing the number of tax refund stores and centralized refund points, as well as optimizing the layout of tax refund stores to improve the shopping experience [14]. - The city is actively selecting new tax refund stores, focusing on introducing domestic brands to attract more outbound tourists [14].

Core Insights - The implementation of the "immediate refund" tax policy for outbound tourists in Shenzhen has significantly enhanced the shopping experience for international visitors, promoting cross-border consumption and boosting the local economy [1][3][7] Group 1: Policy Implementation - The "immediate refund" tax policy was officially launched on December 11, 2023, allowing international tourists to receive tax refunds instantly at designated stores by providing a credit card pre-authorization [1][2] - Shenzhen has established six tax refund ports, including major locations like Luohu and Futian, facilitating the immediate refund process for tourists [2][4] Group 2: Market Impact - The number of tax refund stores in Shenzhen has exceeded 1,500, with nearly 200 merchants offering the "immediate refund" service, covering 21 categories and 324 types of personal use goods [2][4] - In 2024, Shenzhen processed 4,274 tax refund transactions, with total sales reaching 405 million yuan, marking a year-on-year increase of 7.5 times [4] Group 3: Technological Integration - The introduction of digital payment options, such as the Hong Kong version of Alipay, allows for real-time refunds in Hong Kong dollars, enhancing the convenience for tourists [5][6] - Shenzhen is developing a "cloud service refund" system that supports multiple refund methods, ensuring real-time tracking of refund progress [6] Group 4: Future Developments - The city plans to further increase the number of tax refund stores and "immediate refund" points, focusing on attracting domestic brands to participate in the tax refund program [6][7] - The ongoing efforts to optimize the international business environment in Shenzhen aim to enhance the city's competitiveness and promote the internationalization of local brands [3][7]

Investment Rating - The report emphasizes the importance of stabilizing the stock and real estate markets to boost consumer spending, indicating a positive outlook for the consumption sector as asset prices stabilize [3][4]. Core Insights - The relationship between asset prices and consumer spending is complex, with asset price increases leading to higher income levels and economic activity, which in turn boosts consumption [3][5]. - The report highlights that real estate assets dominate household wealth in China, making housing price stability crucial for consumer confidence and spending [3][10]. - The impact of asset price fluctuations on discretionary consumption is more pronounced than on essential consumption, with discretionary spending responding more immediately to asset price changes [24][30]. - The report identifies key investment themes in the consumption sector, including smart consumption driven by technological advancements, the preferences of Generation Z, and the aging population's consumption needs [3][32]. Summary by Sections 1. Impact of Asset Prices on Consumption - The report outlines five main effects through which asset prices influence consumption: wealth effect, expectation effect, borrowing effect, savings effect, and cultural effect [5][6]. - It notes that the wealth and expectation effects are dominant, with a growing influence from borrowing and savings effects [6][10]. 2. Differences in Impact Between Housing and Stock Prices - Housing assets significantly outweigh financial assets in Chinese households, leading to a greater impact of housing price changes on consumer behavior compared to stock prices [10][12]. - The report discusses the synchronized movements of housing and stock prices, noting that while they often rise and fall together, their effects on consumption differ [19][20]. 3. Consumption Categories and Asset Price Influence - The report categorizes consumption into essential and discretionary, stating that asset price changes have a more immediate effect on discretionary spending [24][30]. - It emphasizes the need for updated classifications of consumption categories to reflect changing consumer behaviors and preferences [30]. 4. Investment Strategies Based on Asset Price Trends - The report suggests differentiated investment strategies for high-end and mass-market products, indicating that high-end products tend to perform well in strong liquidity environments [32][34]. - It highlights the importance of aligning investment strategies with the current economic cycle and consumer trends [32][34]. 5. Sector-Specific Insights - The report provides insights into specific sectors such as high-end liquor, where the relationship between asset prices and consumption is particularly strong [39][40]. - It also discusses the performance of high-end traditional Chinese medicine products, noting their resilience despite economic fluctuations [55][58].