Core ideas:

Channel Management drives steady growth of income

The company achieved revenue of 289 million yuan in the first half of the year, an increase of 13.96% over the same period last year, and a net profit of 9.8948 million yuan, an increase of 6.33% over the same period last year. In the first half of the year, the company continues to expand direct channels, enhance store image and increase user experience; try a variety of cooperation models to give more support to franchisees; cooperate with well-known animation IP on the network channel to attract passenger flow; and actively expand group buying business. Through sales channels, the company's revenue side achieved steady growth, of which revenue in the second quarter increased by 29.71% compared with the same period last year.

Gross profit margin has declined under the influence of terminal promotion and product structure adjustment.

The company's profit growth rate was slower than revenue growth mainly because the main gross profit margin fell 4.31 percentage points to 38.01%. The decline in gross profit margin is mainly due to terminal promotion and product structure adjustment. In terms of products, kit products accounted for the highest proportion of revenue, and the revenue growth rate reached 19.52%, but the gross profit margin decreased by 7.74 percentage points, while the revenue of high gross profit products such as core and pillow core declined compared with the same period last year.

IP derivatives business continues to advance and is expected to achieve an explosion of performance in the future.

The company proposed to develop Internet vertical e-commerce business in the first half of the year, one is to launch the HBDIY Internet platform plan, adopt customized production mode, to develop related derivatives based on graphics, and the other is to launch the "well-known IP derivatives" plan, docking stars, music, games, secondary and other IP resources, responsible for the development and operation of derivatives. At present, the HBDIY Internet platform has been in operation during the reporting period, and the company has reached cooperation with some well-known animation IP, and the docking between stars is also being actively promoted, and some cooperation is expected to be landed in the second half of the year.

The results in 16-18 years are 0.38 yuan per share, 0.43 yuan per share and 0.51 yuan per share respectively.

Corresponding to the 16-year PE 117x, considering the huge room for new business development, the related issues are moving forward steadily, and the company's "buy" rating is maintained.

Risk hint

Main business decline risk; piracy risk; Japan and South Korea mature entertainment market competition risk