Core Viewpoint - HLA (海澜之家) is facing significant challenges in maintaining growth and profitability as it prepares for its IPO on the Hong Kong Stock Exchange, following a period of fluctuating performance and increased inventory issues [3][16]. Group 1: Financial Performance - HLA's revenue and net profit have shown significant volatility, with revenue reaching 185.6 billion yuan in 2022, 215.3 billion yuan in 2023, and dropping to 209.6 billion yuan in 2024. Net profit peaked at 34.55 billion yuan in 2018 but fell to 21.59 billion yuan in 2024, lower than the 23.75 billion yuan recorded in 2014 [3][4]. - The company has experienced a phenomenon of "increased revenue without increased profit," attributed to challenges in selling inventory, leading to a stockpile of unsold goods [4][8]. Group 2: Inventory Issues - HLA's inventory reached nearly 12 billion yuan in 2024, accounting for 35.86% of total assets, with an inventory turnover period of 330 days, which increased by 48 days from 2023 [8][9]. - The efficiency of inventory turnover indicates that products take approximately 11 months to sell, highlighting significant operational challenges [9]. Group 3: Strategic Transformation - Under the leadership of the new chairman, Zhou Licheng, HLA is shifting its brand strategy from "Men's Wardrobe" to "Family Wardrobe," aiming to create a multi-brand, all-category business matrix [10][11]. - The company is expanding its brand portfolio through acquisitions and new product lines, including women's wear and children's clothing, to diversify its offerings and target a broader market [11][15]. Group 4: International Expansion - HLA has submitted its IPO application to the Hong Kong Stock Exchange, aiming to enhance its global presence and raise funds for international expansion, digital upgrades, and debt repayment [16][17]. - Despite having over 7,200 stores globally, with 111 located overseas, international revenue contribution remains below 2%, indicating that HLA's global strategy is still in its early stages [17][19]. Group 5: Market Challenges - HLA holds a 2.1% global market share, ranking as the second-largest men's apparel brand, but faces challenges in converting its scale into competitive advantage in international markets due to cultural differences and local competition [19]. - The upcoming IPO is seen as a potential opportunity for increased international visibility, but concerns remain regarding high inventory levels and declining profitability impacting valuation [19][20].

Core Insights - The company reported a revenue of 11.566 billion yuan for the first half of 2025, representing a year-on-year growth of 1.73% [1] - The net profit attributable to shareholders after deducting non-recurring items was 1.566 billion yuan, with a year-on-year increase of 3.83% [1] - The new strategic direction for 2025 focuses on "focusing on brands, embracing the global market, and enhancing quality of life" [1] Revenue Breakdown - The main brand, Haieranzhijia, has shown a steady increase in gross margin due to network expansion over the past three years [1] - The Haieranzhijia group purchase custom series and other brands maintain a gross margin of over 40% [1] - Overall, the improvement in gross margin is driven by channel structure optimization and product mix adjustments [1] Brand Performance - The corporate clothing segment, Haieranzhijia group purchase, achieved a revenue of 1.343 billion yuan, growing by 23.70% year-on-year [2] - The women's brand OVV contributed significant growth through high-end fabric series [2] - The children's brand YeeHoO enhanced its high-end positioning, leading to increased member repurchase rates [2] - The sportswear segment opened over 400 stores in lower-tier cities, focusing on cost-effective products [2] - The collaboration with JD.com to create the "JD Outlet" model has integrated online and offline resources, with 23 new stores opened in the first half of the year [2] - Other brands collectively generated a revenue of 1.500 billion yuan, marking a year-on-year growth of 65.57% [2]