Core Viewpoint - The traditional bicycle brand "Yongjiu" faces significant challenges from international market pressures and rising internal costs, leading to a decline in profitability despite a revenue increase. Financial Performance - In the first half of 2025, the company reported total revenue of 574 million yuan, a year-on-year increase of 10.66%, but incurred a net loss of 8.31 million yuan, a dramatic decline of 4% [2] - The company's gross margin decreased from 15.53% in the same period last year to 14.93%, while the net margin fell from -0.10% to -1.89% [2] - In Q2, revenue was 324 million yuan, with a modest growth of 1.91%, but the net loss increased to 5.08 million yuan, a year-on-year decline of 162.24% [2] Cost Structure - Management expenses surged to 51.92 million yuan, a 51.09% increase year-on-year, primarily due to increased intermediary service fees from cross-border equity investments [3] - Sales expenses reached 31.67 million yuan, up 7.38%, driven by costs associated with new product launches; financial expenses were 1.00 million yuan, a 24.24% increase [3] - Total period expenses amounted to 95.53 million yuan, an increase of 19.34 million yuan year-on-year, with a period expense ratio of 16.65%, up 1.95 percentage points [3] Market Environment - The bicycle industry is facing severe impacts from tariff policies, with the U.S. imposing a 53% tariff on general bicycles and 42% on e-bikes, significantly affecting demand [4] - The U.S. market accounts for 33% of Taiwan's bicycle exports, making it the second-largest market after the EU, but demand remains weak due to tariffs and uncertainty [4] - Southeast Asia shows resilience and potential for growth, but it remains uncertain whether it can compensate for losses in the U.S. and European markets [4] Strategic Initiatives - The company is pursuing high-end and diversified strategies to overcome operational challenges, including acquiring a stake in the high-end bicycle brand Factor [5] - Factor specializes in high-performance carbon fiber road bicycles, aiming to penetrate the high-end market [5] - The company is also investing in high-altitude wind energy technology in collaboration with Tsinghua University, indicating a diversification strategy [5] Financial Health - As of the end of Q2, the company's net assets were 570 million yuan, a 3.2% decrease from the previous year, with a net asset value per share of 1.77 yuan, down 6.72% [6] - The company's median ROIC over the past decade is only 3.27%, indicating challenges in capital efficiency [6] - The global bicycle market is undergoing structural adjustments, and the company's ability to adapt will be crucial for its future success [6]

Group 1 - The 2025 China International Bicycle Exhibition in Shanghai attracted nearly 1,600 domestic and international exhibitors, marking a record scale for the event [1] - Notable participating companies included Ji Qi Co., Ltd., Zhonglu Co., Ltd., Ananda, Tuobang Co., Ltd., and Shanghai Phoenix [1] - Zhonglu Co., Ltd.'s subsidiary, Shanghai Forever Bicycle Co., Ltd., showcased its high-end sub-brand "Dragon Brand," which utilizes advanced materials and technologies to enter the high-end market [1] Group 2 - The "Dragon Brand" series includes two original products, "Yinglong" and "Qinglong," set to launch in 2024, with the "Yinglong" winning a gold medal at the China Electric Bicycle Design Competition [1] - The series features a frame valued over 10,000 yuan, breaking the traditional price barrier of around 1,000 yuan for Forever bicycles, showcasing the brand's high-end innovation [1] - Forever Bicycle primarily targets the domestic market through a multi-channel approach, creating a brand matrix across different price ranges to cater to various consumer needs [2] Group 3 - Zhonglu Co., Ltd. announced plans to acquire a 52.87% stake in the well-known bicycle brand Factor, which specializes in high-performance carbon fiber road bicycles [2] - This acquisition aims to enhance Forever Bicycle's brand strength and market competitiveness by leveraging Factor's strong R&D capabilities and established sales network [2] - The company plans to focus on the bicycle industry chain's development, integrating resources to build top-tier carbon fiber bicycle technology and expand high-end models into overseas markets [3] Group 4 - Forever Bicycle aims to cover a full product line for all life stages, including children's bikes, commuting bikes, mountain bikes, and electric motorcycles, while maintaining a competitive price-performance ratio [3] - The company intends to uphold its status as a traditional Chinese brand by meeting consumer demands for quality and service, adapting to market changes [3]