Core Insights - The company reported a decline in revenue and net profit for the first half of 2025, with total revenue of 863 million yuan, down 8.2% year-on-year, and a net profit of 230 million yuan, down 32.5% [1] - The second quarter of 2025 showed a revenue increase of 5.9% to 562 million yuan, but net profit decreased by 26.7% to 138 million yuan [1] - The company has optimized its product structure and achieved significant results in online channel transformation, with online revenue increasing by 47.1% to 695 million yuan [1][2] Financial Performance - Medical device revenue was 238 million yuan, down 48.1%, with a gross margin of 84.2%, up 2.9 percentage points [1] - Cosmetics revenue reached 625 million yuan, up 30.0%, with a gross margin of 80.4%, down 1.1 percentage points [1] - Overall gross margin for the first half of 2025 was 81.5%, up 0.1 percentage points, while net profit margin was 26.6%, down 9.6 percentage points [1] Expense Analysis - Selling, administrative, and R&D expense ratios were 48.7%, 5.5%, and 2.7%, respectively, with year-on-year increases of 16.6 percentage points, 0.7 percentage points, and 1.0 percentage points [1] - The increase in selling expenses was attributed to higher personnel costs and increased promotional efforts, while financial expenses decreased by 26.06 million yuan due to reduced interest income from funds used for investment [1] R&D and Market Position - The company has made progress in its R&D pipeline, having obtained approvals for various medical devices and completed product design for a new collagen filler [2] - The company is focusing on upstream raw material research, with new innovative peptides and other materials under development, aiming to establish competitive advantages [2] - The company achieved the highest national repurchase rate for efficacy cosmetics in 2024 and has maintained the top sales position for domestic sheet masks for five consecutive years [2] Investment Outlook - The company’s online channel transformation is showing significant results, and it is expected to continue strengthening its R&D capabilities in high-barrier fields [2] - Projected net profits for 2025-2027 are 576 million yuan, 647 million yuan, and 745 million yuan, with corresponding price-to-earnings ratios of 24.5, 21.8, and 19.0 [2]