Event: The company released a profit forecast. 24H1's estimated revenue is 3.4-3.6 billion yuan, up 114-127% year on year, and 24H1's net profit is expected to be 0.39-0.41 billion yuan, up 286-306% year on year.

Comment: The results for the first half of the year were realized as scheduled. The increase in revenue and profit was mainly due to the rapid increase in revenue generated by the company's main brand Han Shu through multiple channels and the sharp year-on-year increase in sales performance of the company's second brand, Newpage.

Performance split: Han Shu is expected to more than double, and the one-page performance is impressive. 24H1 expects Han Shu's income to more than double, increase by more than double per page, and the red elephant and leaf leaves are still declining. According to Mother Cicada's data, the 24H1 Han Shu Douyin GMV was +279%, the Ichiyazi Douyin GMV was +18%, the Red Elephant Douyin GMV was +222%, and the one-page Douyin GMV was +209%. Han Shu Douyin's exclusive operating model is a cost-effective package under a strong supply chain, making it difficult to replicate. Chairman Lu is fully motivated. Most of the company's new brands use the method of sharing shares with the founder. Taking New Page as an example, 30% of the shares are held by Zhang Ziyi.

Profit forecast and investment advice: The company implements the “six six six” strategy to drive overall business growth through six competitive areas and six major sector plans. The company's net profit for 24-26 is expected to be 0.905, 1.128, and 1.471 billion yuan, respectively. Referring to comparable companies, the company is given 18 times PE in 24 years, corresponding to a reasonable value of HK$44.80 per share, to maintain a “buy” rating.

Risk warning: The cosmetics industry is declining; market competition is intensifying; brand expansion falls short of expectations.