The company's 24H1 revenue was 3.72 billion yuan, +40.7% year over year; gross profit margin was 34.9%, -1.5pct year on year; net profit to mother 0.17 billion yuan, -7.7% year on year; net profit to mother was 4.6%, -2.4 pct year on year. The company's 24Q2 revenue was 1.88 billion yuan, +36.5% year over year; gross profit margin was 33.9%, -2.2 pct year on year; net profit to mother 0.07 billion yuan, -27.9% year on year; net profit to mother was 3.8%, -3.4 pct year on year.

24H1's revenue continues to rise. Drivers include increasing efforts to launch new products, continuing to release sub-new products, the company's adoption of market acquisition strategies, and increasing marketing and promotion efforts. Revenue by product, furniture/home/pet/sports outdoor was 19/1.33/0.31/0.13 billion yuan, or 39.4%/+50.2%/+37.3%/+3.4%; by subregion, Europe/North America revenue was 2.28/1.34 billion yuan, +41.2%/41.1% year over year; by channel, Amazon/OTTO/independent site revenue was 2.75/0.19/0.11 billion yuan, YoY +39.3%/+97.1%/+91.3%.

The fee rate increased slightly. 24H1's sales/management/R&D/ finance expense ratio was 24.7%/3.6%/0.9%/0.8%, compared with +1.8/-0.5/-0.3/+2.5pct. The increase in the sales expense ratio was mainly due to increased marketing and promotion, and the increase in financial expenses ratio was mainly due to the year-on-year decline in exchange earnings.

The decline in gross margin was mainly affected by rising shipping costs and the increase in last-end storage costs. The 24Q2 comprehensive sea freight forward/Europe/American/Western/US East price index rose 53%/81%/59%/39% year on year, and the Company General Cooperation locked in prices to offset part of the impact. In terms of final warehousing costs, building your own overseas warehouses during the reporting period had a short-term impact on gross margin. Furthermore, we expect lower procurement costs+better profit margins on the new platform to contribute positively to gross margin.

Continue to improve the layout of the warehouse network. The global proprietary warehouse area reached 0.355 million flat compared to +0.075 million square at the end of 23. The Europe/US self-delivery ratio increased by 3.5/7.2pct to 67.4%/15.7% in June '24 compared to January. Actively plan supply chain migration to resist tariff risks. Explore the resources of suppliers in Vietnam, Cambodia, Thailand, etc., and it is expected that Q4 shipments to the US will reach 20%.

Investment advice: The company is a leader in cross-border e-commerce for own-brand home furnishings. It has the ability to operate the entire cross-border e-commerce chain. The strategy for subsequent market promotion is clear, and it is expected to maintain rapid growth in the future. We expect the company's net profit to be 0.429/0.578/0.753 billion yuan in 24-26, +3.9%/+34.8%/+30.2% year-on-year, maintaining the “gain” rating.

Risk warning: rising sea freight rates, exchange rate fluctuations, international trade frictions, increased industry competition, etc.