Main points of investment

The company publishes its semi-annual report for 2023. In the first half of 2023, the company realized operating income / return net profit / deducted non-net profit of 1096max 0.37 million yuan, respectively, compared with the same period last year. ① achieved operating income / return net profit / deducted non-net profit of RMB 0.470.37 million, respectively, compared with the same period last year. ② 2023Q2 realized operating income / return net profit / deducted non-net profit of 0.15 billion yuan in one quarter, which was-8.54%, 29.06% and 63.99%, respectively, compared with the same period last year.

From a sub-channel point of view, the company's online revenue has increased compared with the same period last year, online and offline gross profit margins have increased, the scale of direct channels has expanded, the revenue margin of direct stores has increased significantly, and the optimization of omni-channel marketing network system has achieved initial results.

The company insists on the fine operation of online business, and at the same time, through upgrading the software and hardware of the existing stores with a good foundation, create a brand experience store and upgrade the layout of offline channels. The online / offline income of 23H1 Company is RMB 265,000,000, and the gross profit of yoy+5.91%/-1.18%, is 51.2%, 34.26% and 0.09pct, respectively. Offline stores, HOdo menswear stores / join joint venture stores in the first half of the net opening-1 big, and another 16 joined joint venture stores into direct stores.

The operating income of the directly operated store / joining joint venture store is RMB 235 million, respectively, and the gross profit of yoy+15.3%/-11.44%, is 60.33% and 25.14% respectively.

As the pioneer of comfortable menswear track, the comfortable menswear product "Hongdou 0 comfortable shirt" has quickly become a popular style and has been recognized by many countries. The product update iteration leads the national brand comfortable menswear new trend. In March 2023, the company launched an upgraded version of "0 comfort shirt", which improved the functional fiber ratio between China and Austria, greatly increased the lightness and softness of the shirt, and brought consumers a comfortable experience of "lighter, softer and more breathable". In the first half of 2023, the company's HOdo men's wear / OEM processed clothing realized business income of 767 million yuan, respectively, and yoy-2.42%/+11.34%, achieved a gross profit margin of 47.5%, 11.12% and 4.77pct, respectively, on Merry 7.73pct.

The company actively carries on the brand construction, enhances the company overall competitive strength and the anti-risk ability, pursues the sustainable development. In the first half of 2023, the company is committed to the construction of brand e-commerce center and brand design R & D center, striving to expand the breadth and depth of the integration of the company's business and e-commerce, optimize the company's R & D conditions, and enhance the company's business operation capacity and design R & D strength. to strengthen the company's strength and improve operation quality to drive performance growth. In the first half of 2023, the company's net interest rate was basically stable. ① 2023H1 realized gross profit margin / net homing rate / deducted non-homing net profit rate of 37.2%, 4.28%, 3.38%, respectively, compared with the same period last year + 1.31pct/-0.31pct/-0.66pct. The sales expense rate, management expense rate, R & D expense rate and financial expense rate of ② in the first half of 2023 were 26.26% 8.17% 1.20% 1.29%, respectively, compared with the same period last year + 1.08pct/+0.08pct/+0.32pct/+0.40pct. ③ 2023Q2 realized gross profit margin / net return rate / deducted non-return net profit rate of 37.10% 3.51% and 1.75% respectively compared with the same period last year, which is + 1.75pct/-1.01pct/-2.70pct. The sales expense rate, management expense rate, R & D expense rate and financial expense rate of ④ 2023Q2 in a single quarter are 31.56% 8.11% 1.32% 1.69%, respectively, compared with the same period last year + 3.95pct/-1.02pct/+0.52pct/+1.27pct.

Profit forecast: the company continues to iterate in product optimization, enhance brand influence, and lead the national brand comfortable men's wear trend. On the channel side, the company actively upgrades the layout of offline channels and optimizes offline direct stores. The estimated return net profit of the company from 2023 to 2025 is RMB 0.91 million, respectively, which is + 505.0%, 26.1% and 28.1%, respectively, compared with the same period last year. Corresponding to the closing price on August 31, 2023, the PE is 76.3X/60.6X/47.3X respectively, maintaining the "overweight" rating.

Risk hint: the recovery of consumer environment is not as expected, and the epidemic repeatedly affects terminal retail.