Investment Rating - The report maintains a "Buy" rating for the company [1]. Core Views - The company is experiencing a turning point despite the impact of one-time expenses, with expectations for greater profit elasticity in 2026 [5]. - The company has faced a decline in revenue and net profit due to strategic investments and a decrease in government subsidies [2]. - The company is focusing on enhancing store efficiency through new offline store formats and leveraging IP resources for growth [5]. Summary by Sections Financial Performance - In Q3 2025, the company reported revenue of 840 million yuan, a year-on-year decrease of 0.55%, and a net profit of 4 million yuan, down 97.17% [2]. - For the first three quarters of 2025, revenue was 2.834 billion yuan, a decline of 3.03% year-on-year, with net profit down 29.4% to 114 million yuan [2]. - The company's gross profit margin for Q3 2025 was 67.8%, down 1.1 percentage points year-on-year, while the net profit margin was 0.05%, down 1.6 percentage points [4]. Brand and Channel Analysis - Revenue growth varied by brand in Q3 2025, with TW, VG, and Yun Jin reporting 6.58 million, 1.42 million, and 0.27 million yuan respectively, with Yun Jin showing a significant year-on-year increase of 59.92% [3]. - Online and offline revenue for Q3 2025 was 315 million and 512 million yuan, respectively, with online growth of 2.1% and offline decline of 2.4% [3]. - The number of TW direct and franchise stores as of Q3 2025 was 662 and 34, respectively, with a net decrease of 24 direct stores during the quarter [3]. Cost and Inventory Management - The company’s inventory at the end of Q3 2025 was 1.305 billion yuan, up 22.3% year-on-year, with inventory turnover days increasing to 354 days [4]. - Accounts payable increased by 18.6% year-on-year to 638 million yuan, with turnover days rising by 42 days [4]. Profit Forecast and Valuation - The report lowers the revenue forecast for 2025-2027 to 4.392 billion, 4.510 billion, and 4.697 billion yuan, respectively, and adjusts net profit estimates to 238 million, 350 million, and 406 million yuan [5]. - The expected earnings per share (EPS) for 2025-2027 are revised to 0.69, 1.01, and 1.17 yuan, with corresponding price-to-earnings (PE) ratios of 13, 9, and 8 times [5].