Summary of Bruco's 2025 Half-Year Earnings Call Company Overview - Company: Bruco - Period: First half of 2025 Financial Performance - Bruco achieved a net profit of 297 million RMB in H1 2025, turning around from a loss of 255 million RMB in H1 2024 [2][3] - Adjusted net profit increased by 9.6% year-on-year to 320 million RMB, with an adjusted net profit margin of 23.9% [2][3] - Total revenue for H1 2025 reached 1.338 billion RMB, representing a 27.9% year-on-year growth [3] - Gross profit increased by 16.9%, with an overall gross margin of 48.4%, down 4.5 percentage points from the previous year due to increased R&D investments [3][7] Product Sales Performance - As of June 30, 2025, Bruco had over 925 SKUs available, with total sales exceeding 110 million units in H1 2025 [2][4] - Products for the 6-16 age group accounted for 82.6% of revenue, while products for those 16 and older increased their revenue contribution from 10% to 15% [2][4] - The 9.9 RMB Starry Edition series attracted new users, contributing 216 million RMB to total revenue, with one-third of buyers being new customers [4][9] Sales Channels and Market Performance - Domestic distributors contributed 1.21 billion RMB to revenue, a 26.5% increase year-on-year, accounting for 90.6% of total revenue [2][6] - Online sales reached 110 million RMB, up 44.6%, representing 8% of total revenue [2][6] - Overseas revenue surged by 900% to 110 million RMB, indicating successful market expansion strategies [2][6] Cost and Expense Management - Gross margin declined due to new product mold investments and rising overseas shipping costs [7] - Selling expenses increased to 13.2% of revenue, while R&D expenses rose to 9.6% due to personnel increases and new IP design investments [7] - Administrative expenses decreased to 3.5% due to the absence of one-time equity compensation from the previous year [7] Inventory and Working Capital Management - Inventory balance reached 294 million RMB, a 5.7% increase year-on-year, with inventory turnover days rising to 79 days [7] - Accounts receivable turnover days increased to 17 days, while accounts payable turnover days rose to 152 days [7] New Product Development and User Acquisition - Bruco launched 270 new products in H1 2025, with 70% being extensions of existing categories [8] - The company aims to enhance user acquisition through innovative products and IP expansions, with a focus on attracting new demographics [9][19] IP Collaboration and Expansion - Bruco renewed contracts with key IPs such as Kamen Rider and Pokémon, extending collaboration with Disney until 2029 [4][16] - The company is actively expanding overseas licensing, with successful sales of IPs like Marvel and Star Wars in North America and Asia [4][16] Brand Promotion and Market Engagement - The BFC competition significantly boosted brand recognition, with over 7,600 events held across 150 cities and participation from over 50,000 players [17] - The company is focusing on converting new users into loyal customers through targeted marketing strategies [25] Future Outlook and Strategic Focus - Bruco plans to continue expanding its product offerings and market presence, particularly in the high-end product segment [34] - The company anticipates a 70% to 80% year-on-year revenue growth in H2 2025, with an overall annual growth target of over 50% [43] Conclusion - Bruco's strong performance in H1 2025 reflects effective product strategies, successful market expansion, and a focus on user acquisition through innovative offerings and IP collaborations. The company is well-positioned for continued growth in the second half of the year.
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