Key points of investment

The company released a quick performance report. 24H1 revenue/net profit to mother was 2.08 billion/0.15 billion, respectively, or -1.6%/+2.8% year-on-year, with steady performance.

At the same time, the company issued a repurchase announcement. It plans to use its own funds to repurchase 0.5-1 million shares. The repurchase price will not exceed RMB 9.95 per share, demonstrating confidence in development.

Revenue side performance was in line with expectations, with steady profit performance in the first half of the year

The company released a performance report. 24H1 achieved revenue of 2.08 billion yuan, YOY -1.6%; Q2 alone is expected to achieve revenue of 0.92 billion yuan and YOY -2.1%.

24H1 achieved net profit of 0.147 billion yuan and YOY +2.8%; when split, 24Q1/24Q2 net profit was 0.12 billion/0.03 billion, YOY +13.2%/-23.5%, respectively; 24Q1/24Q2 net profit without return to mother was 0.12 billion/0.02 billion, YOY +12.2%/-23.9%, respectively. We expect the company's profit side performance to be affected by a relatively high share of direct management, and the company's Q2 profit side will be more affected than the revenue side.

Buybacks show confidence in development, and online sales get off to a good start during peak season

Furthermore, the company issued a repurchase announcement. Since the company's stock price continues to be sluggish and lower than the latest net assets per share, based on confidence in the company's future development, in order to maintain investors' interests, boost investor confidence, and correctly guide market expectations, the company's board of directors decided to buy back part of the company's shares through centralized bidding. It plans to use its own funds to repurchase 0.5-1 million shares, with the repurchase price not exceeding RMB 9.95 per share.

In addition, as the company entered the peak sales season, the company's Autumn Academy series paid over 20.27 million GMV in a single day, ranking first among self-broadcast brands for women's clothing, with new models accounting for 95% of sales. With the arrival of the peak sales season, new online products are expected to gradually pick up the company's turnover.

Profit forecasting and valuation

With years of accumulation, the company's brands have established a good brand mentality, accumulated a strong offline sales channel network, and formed a mature online platform style of play. With the continuous improvement of cash flow conditions and the expansion of franchise channels, the company's burden is expected to continue to be reduced and profits are expected to be released.

We expect the company's revenue to be 4.79/5.14/5.52 billion yuan in 24/25/26, +5%/+7%, and we expect the company to achieve net profit of 0.34/0.39/0.45 billion yuan in 24/25/26, +15%/+13%, corresponding to PE7/6/6X, with great potential to maintain the “buy” rating.

Risk warning: macroeconomic fluctuation risk: industry competition risk; financial risk; R&D design risk;