Core Viewpoint - The company reported a decline in revenue and net profit for the first half of the 2026 fiscal year, with a revenue of 12.3 billion RMB, down 5.8% year-on-year, and a net profit of 790 million RMB, down 9.7% year-on-year, while maintaining a high dividend payout ratio of 102.2% [4][5]. Financial Performance - The company achieved total sales of 12.3 billion RMB in the first half of the 2026 fiscal year, reflecting a year-on-year decline of 5.8% in revenue and a net profit of 790 million RMB, down 9.7% [4]. - Earnings per share (EPS) stood at 0.13 RMB, with an interim dividend proposed at 0.13 RMB per share [4]. - The gross profit margin decreased by 0.1 percentage points to 41.0%, while the operating profit margin fell by 0.5 percentage points to 8.1%, and the net profit margin declined by 0.3 percentage points to 6.4% [5]. Revenue Breakdown - Revenue from the main brands (Nike and Adidas) decreased by 4.8%, while other brands saw a decline of 12.2%. The total number of stores decreased by 332 [6]. - The revenue distribution by brand shows that the main brands accounted for 87.9% of total revenue, while other brands contributed 11.5% [6]. - Retail and wholesale revenues declined by 3.0% and 20.3%, respectively, with retail accounting for 86.2% of total revenue [6]. Operational Metrics - The total number of stores decreased to 4,688 as of August 2025, with a total sales area down 14.1% year-on-year, while the average store size increased by 6.5% [6]. - Inventory as of August 2025 decreased by 2.8% quarter-on-quarter to 5.83 billion RMB, down 4.7% year-on-year, with an inventory turnover period of 150 days, an increase of 2 days year-on-year [7]. - Operating net cash flow decreased by 48.2% year-on-year to 1.35 billion RMB [7].