Investment Rating - The investment rating for the company is "Outperform the Market" [5][17][21] Core Insights - The company has shown significant improvement from its restructuring efforts, with a revenue of 3.478 billion and a year-on-year growth of 4.75% for the first half of 2025. The net profit attributable to shareholders reached 266 million, reflecting a year-on-year increase of 11.66% [1][7] - In Q2 2025, the company achieved a revenue of 1.775 billion, marking a year-on-year growth of 25.4%, and turned a profit with a net profit of 49 million [1][7] - The domestic business experienced a breakthrough growth, with Q2 revenue increasing by 36.8%, particularly in the beauty segment, which saw a revenue growth of 55.7% [1][7] - The overseas business reported a revenue of 703 million, down 1.8% year-on-year, with a loss of nearly 32 million due to the impact of U.S. tariff policies [1][7] Financial Performance - The gross margin for Q2 2025 was 63.34%, an increase of 5.09 percentage points year-on-year, driven by higher-margin beauty products and an increase in online self-operated channels [2][10] - The company’s operating efficiency improved, leading to a decrease in overall expense ratios, with sales, management, and R&D expense ratios at 47.15%, 8.24%, and 2.69% respectively [2][10] - The cash flow from operating activities for Q2 2025 was 6.7 million, a significant improvement from -8.2 million in the same period last year [3][15] Brand Performance - The brand "Liushen" experienced rapid growth in Q2 due to a misalignment in shipping schedules, while "Bai Cao Ji" achieved a 50% revenue growth driven by its flagship product [8] - The company plans to launch new product lines and strengthen brand positioning, particularly focusing on the integration of traditional Chinese medicine with modern technology [8] Future Projections - The company forecasts net profits for 2025-2027 to be 433 million, 504 million, and 581 million respectively, with corresponding P/E ratios of 40, 34, and 30 [3][17][19]