Core Viewpoint - Bosideng reported a 1.4% year-on-year increase in revenue and a 5.3% increase in net profit for the first half of FY26, with a declared interim dividend of 6.3 HK cents per share, indicating healthy growth despite a challenging market environment [1] Financial Performance - For the first half of FY26, Bosideng's revenue reached 8.928 billion yuan, up 1.4% year-on-year, while net profit attributable to shareholders was 1.189 billion yuan, up 5.3% year-on-year, with a gross margin increase of 0.1 percentage points to 50.0% [1] - The brand's down jacket business saw revenue grow by 8.3% to 6.568 billion yuan, although gross margin declined by 2.0 percentage points to 59.1% [2] Brand Performance - The main brand recorded revenue of 5.719 billion yuan, an increase of 8.3% year-on-year, with new product lines introduced to enhance consumer choice, but the gross margin fell by 1.5 percentage points to 64.8% due to faster growth in distribution channels compared to self-operated channels [2] - The Snow Flying brand focused on high cost-performance strategies, with revenue declining by 3.2% to 378 million yuan and a gross margin decrease of 2.2 percentage points to 47.9% [2] - The Ice Cleansing brand underwent brand repositioning and inventory clearance, resulting in a revenue drop of 26% to 15 million yuan and a significant gross margin decline of 82.5 percentage points to -63.4% [2] OEM Business - The OEM business faced challenges from tariff policies, geopolitical issues, and weak overseas consumer demand, leading to an 11.7% revenue decline to 2.044 billion yuan, but gross margin improved by 0.4 percentage points to 20.5% due to enhanced supply chain management [2] Women's Wear Business - The women's wear segment experienced a decline in revenue by 18.6% to 251 million yuan, with a gross margin decrease of 1.9 percentage points to 59.9% due to a persistently weak market environment [3] Diversification Efforts - Revenue from diversified businesses fell by 45.3% to 64 million yuan, while gross margin improved by 0.2 percentage points to 27.8%, primarily due to a decrease in school uniform revenue by 49.3% [3] Channel Optimization - The company is focusing on optimizing channel quality and enhancing single-store operations, with a net increase of 88 stores in the down jacket business, bringing the total to 3,558 stores [3] Investment Outlook - The company is expected to perform well in the upcoming peak season, with projected EPS for FY26-28 at 0.35, 0.38, and 0.43 yuan respectively, and a target price of 6.0 HK dollars, maintaining a "buy" rating [3]

Group 1: Market Overview - The Hong Kong stock market continues to show weakness, with the Hang Seng Index experiencing a decline for six out of the last seven trading days, closing at 23,887 points, down 28 points or 0.12% [2][3] - The market is currently characterized by a cautious atmosphere as investors await developments in the trade war, leading to a significant decrease in trading volume, with a total turnover of 193.8 billion HKD, down 27.6% from the previous day [2][3] - Northbound capital has seen a net inflow of nearly 12.1 billion HKD, marking an increase of 80.5% from the previous day, indicating strong interest from mainland investors [2][3] Group 2: Sector Performance - Among the 12 Hang Seng Composite Industry Indices, five sectors rose while seven fell, with the leading sectors being Consumer Discretionary, Utilities, Real Estate & Construction, and Information Technology, showing gains of 0.42% to 0.31% [3] - The sectors that experienced the largest declines include Materials, Healthcare, Consumer Staples, Conglomerates, Industrial Products, and Energy, with losses ranging from 2.92% to 0.54% [3] Group 3: Company Analysis - Bosideng (3998.HK) - Bosideng reported a revenue of 25.902 billion HKD for the fiscal year ending March 31, 2025, representing a year-on-year increase of 11.6%, with net profit rising 14.3% to 3.514 billion HKD [6][7] - The company's main down jacket business saw revenue growth of 11.0% to 21.668 billion HKD, although the gross margin decreased by 1.6 percentage points to 63.4% [6][7] - The OEM business also performed well, with a revenue increase of 26.4% to 3.373 billion HKD, despite a slight decline in gross margin [7] Group 4: Investment Outlook - The company is expected to maintain its focus on core brands and innovate product offerings to drive growth, with projected EPS for fiscal years 2026-2028 at 0.34, 0.38, and 0.42 HKD respectively [8] - A target price of 5.6 HKD is set for the stock, with a "Buy" rating maintained based on the anticipated performance [8]

Investment Rating - The report maintains a "Buy" rating for Bosideng with a target price of HKD 5.6 [1][4][7] Core Insights - Bosideng reported a revenue increase of 11.6% year-on-year to RMB 25.902 billion and a net profit increase of 14.3% to RMB 3.514 billion for FY25, with a high dividend payout ratio of 84.1% [1][2][4] - The company continues to focus on its main brand and product innovation to drive growth, with projected EPS for 2026-2028 at RMB 0.34, 0.38, and 0.42 respectively [1][4] Revenue and Profit Growth - For the fiscal year ending March 31, 2025, the group achieved a revenue of RMB 25.902 billion, up 11.6% year-on-year, and a net profit of RMB 3.514 billion, up 14.3% year-on-year, despite a slight decline in gross margin [2][5] - The main brand's revenue grew by 10.1% to RMB 18.481 billion, while the OEM business saw a significant increase of 26.4% to RMB 3.373 billion [2][3] Business Segment Performance - The down jacket business generated revenue of RMB 21.668 billion, with a gross margin decrease of 1.6 percentage points to 63.4% [2] - The women's wear segment faced challenges, with a revenue decline of 20.6% to RMB 0.651 billion and a gross margin drop of 4.3 percentage points to 63.2% [3] - The diversified business segment reported a revenue increase of 2.8% to RMB 0.209 billion, with the school uniform business growing by 3.0% [3] Financial Projections - The report forecasts revenue growth rates of 10.1% for FY26, 10.7% for FY27, and 10.2% for FY28, with net profit growth rates of 10.9%, 11.2%, and 11.1% respectively [5][10] - The projected gross margin is expected to stabilize around 57.3% for FY26 and beyond [5][11]