Core Viewpoint - The chairman of the company, Xia Guoxin, stated that the inventory impairment will be fully accounted for within two years, alleviating concerns about potential risks [2][4]. Group 1: Financial Performance - The company has experienced a consistent increase in revenue over the past decade, but its market value has not kept pace, leading to questions from shareholders [4]. - The company faced a significant decline in profitability due to the underperformance of the acquired French brand IRO, resulting in substantial asset impairment [5]. - As of the end of the 2024 fiscal year, the company's inventory impairment provision stood at 440 million yuan, with finished goods accounting for 351 million yuan [5][6]. Group 2: Strategic Direction - The company aims to become a globally competitive high-end fashion brand group, a goal established in 2015 that remains unchanged [7]. - The company focuses on high-end fashion rather than luxury brands, believing that the overall development of Chinese fashion is progressing positively [7]. - The company is committed to balancing online and offline sales, with offline sales currently accounting for 80% of total revenue, while online sales are growing at a faster rate [8]. Group 3: Brand Portfolio - The company has expanded its brand portfolio to include six brands, with some already in the harvest phase while others are still being nurtured [5][8]. - The brands under the company include ELLASSAY, Laurèl, Ed Hardy, IRO, self-portrait, and nobus, showcasing a diverse range of high-end fashion offerings [8]. Group 4: Market Trends - The company recognizes a K-shaped structure in consumer behavior, with both consumption upgrades and downgrades occurring simultaneously [7]. - The company believes that high-end consumption will continue to expand, driven by emotional value and brand premium [7].

Core Viewpoint - The company is currently experiencing a situation of increasing revenue but not increasing profit, primarily due to the underperformance of the acquired French brand IRO, which has led to significant asset impairment [5][6]. Group 1: Financial Performance - The company has maintained a growth trend in operating revenue over the past ten years, but its market value has not increased and has even declined [5]. - The acquisition of IRO in 2019 has not met expectations, resulting in a large impairment of goodwill due to performance issues exacerbated by the pandemic and geopolitical conflicts [5][6]. - As of the end of 2024, the company's inventory impairment provision stands at 440 million yuan, with finished goods accounting for 351 million yuan [6][7]. Group 2: Brand Strategy and Market Position - The company has expanded its brand portfolio from a single brand to six brands, with some already entering a harvest phase while others are still in cultivation [6]. - The long-term goal of the company is to become an internationally competitive high-end fashion brand group, focusing on high-end and fashion elements [8][9]. - The company believes that high-end consumption will continue to expand, despite the presence of both upward and downward trends in consumer behavior [8][9]. Group 3: Online and Offline Sales Strategy - Currently, offline sales account for over 80% of total sales, but the company is increasing its online investment as online growth is significantly faster [9][10]. - The company plans to continue expanding its offline presence but will be more selective about store locations and sizes to ensure better performance [9].

Core Insights - The company reported a revenue increase in 2024 but faced significant challenges in overseas operations, resulting in a net loss [1][2] Financial Performance - In 2024, the company achieved an operating revenue of 3.036 billion yuan, a year-on-year increase of 4.14% [1] - The net profit attributable to shareholders was -310 million yuan, a decline of 392.99% year-on-year [1] - The basic earnings per share were -0.85 yuan, compared to 0.29 yuan in the same period last year [1] - The gross profit margin for 2024 was 67.36%, a decrease of 0.42 percentage points year-on-year [3] - The net profit margin was -8.42%, down 13.98 percentage points year-on-year [3] Brand Performance - The main brand, ELLASSAY, saw comprehensive development in both online and offline channels, with online sales growing by 55% year-on-year [2] - The German brand Laurèl increased its store count to 94 and achieved a revenue growth of 19% [2] - The UK brand self-portrait experienced a 21% increase in sales revenue, surpassing 500 million yuan [2] - The French brand IRO had a good performance in China, with revenue growth of 17% [2] Strategic Adjustments - The company transferred 50% of its stake in the subsidiary Dongming International, which holds the Ed Hardy brand, in December 2024, meaning Ed Hardy will not be included in the consolidated financial statements from 2025 [1] - The company is implementing cost reduction and efficiency improvement measures for its underperforming overseas operations [2] Market Trends - In Q1 2025, the company reported an operating revenue of 690 million yuan, a decline of 7.82% year-on-year, primarily due to the exclusion of Ed Hardy from the consolidated financials [4] - On a comparable basis, domestic market revenue grew by 8.1% year-on-year [4] Investment Outlook - The company has established a diverse brand matrix covering various market segments, including high-end fashion brands [5] - The projected earnings per share (EPS) for 2025-2027 are 0.51 yuan, 0.68 yuan, and 0.83 yuan, with corresponding price-to-earnings (PE) ratios of 14.0X, 10.5X, and 8.7X [5]