Core Viewpoint - The company is expected to achieve significant growth in net profit from 2025 to 2027, driven by successful global expansion and improved operational capabilities, leading to a "buy" rating for the stock [1] Revenue Growth - The company anticipates continued revenue growth in both domestic and international markets, with specific growth rates projected for offline and online channels in China and overseas [1][2] - In the first half of 2025, overseas revenue reached 5.59 billion yuan, a year-on-year increase of 439.6%, with significant contributions from the Asia-Pacific, Americas, and Europe regions [2] - Domestic revenue for the same period was 8.28 billion yuan, reflecting a year-on-year growth of 135.2%, with online sales showing particularly strong performance [3] Profitability Improvement - The company's gross margin is expected to improve due to higher pricing in overseas markets and economies of scale, with specific gross margin projections for different channels [1][4] - In the first half of 2025, the gross margin increased by 6.3 percentage points to 70.3%, driven by better pricing strategies and cost management [3] Product Diversification - The company has successfully diversified its IP matrix, with plush products becoming the largest revenue contributor, indicating reduced reliance on a single IP [3] - The first half of 2025 saw plush product revenue increase by 1,276.2% year-on-year, surpassing other categories [3] Supply Chain and Capacity - The company is enhancing its supply chain through lean production and automation, increasing monthly production capacity for plush products to 30 million units [4] - Plans are in place to establish six major production bases globally to improve supply chain flexibility and responsiveness [4] Market Expansion - The company is in a rapid expansion phase for overseas stores, with plans to exceed 200 locations by the end of the year, targeting emerging markets [4] - Strong product innovation capabilities are expected to continue enriching the IP matrix and driving revenue growth [4]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook based on its successful globalization strategy and structural improvement in profitability [5]. Core Insights - The company is expected to achieve significant growth in net profit from 11.17 billion to 22.27 billion RMB from 2025 to 2027, reflecting a year-on-year increase of 257.5%, 56.5%, and 27.3% respectively, with corresponding PE ratios of 35.4, 22.6, and 17.7 [5]. - The report highlights the company's successful expansion in both domestic and international markets, with substantial revenue growth driven by refined operations in China and rapid overseas market penetration [5][8]. - The diversification of the company's IP matrix has reduced reliance on a single IP, with plush toy revenue significantly increasing by 1276.2% year-on-year in the first half of 2025 [5]. Summary by Sections Market Data - The closing price of the stock is 322.2 HKD, with a market capitalization of 432.7 billion HKD and a total share count of 1.34 billion [2]. Financial Projections - Total revenue is projected to grow from 6.3 billion RMB in 2023 to 63.19 billion RMB in 2027, with a compound annual growth rate (CAGR) of 37% [7]. - The gross margin is expected to improve from 61.3% in 2023 to 73.0% in 2027, indicating enhanced profitability [7]. Growth Drivers - The company plans to expand its overseas store count to over 200 by the end of the year, targeting emerging markets in the Middle East, Central Europe, and Central South America [8]. - Innovations in product categories and a strong IP matrix are anticipated to continue driving revenue growth and market share [8]. Supply Chain and Production Capacity - The company has upgraded its supply chain through lean production and automation, increasing monthly production capacity for plush toys to 30 million units [6]. - Strategic plans include establishing six global production bases to enhance supply chain flexibility and responsiveness [6].