The company released its 24-year semi-annual report:

24H1's revenue was 1.6 billion (-2%), or 0.004 billion yuan (-96%), or -0.015 billion (-125%) after deduction.

24Q2 revenue was 0.77 billion (+4%), due to -0.01 billion (-125%), or -0.023 billion (-236%) after deduction.

Although revenue increased in Q2, losses were mainly due to fluctuations in the pace of asset impairment and software tax refund confirmation of old products. It is expected that assets will still be impaired in Q3, but Q4 is stable.

Q2 Revenue Splitting: High Growth in Export Sales

① Domestic sales revenue declined by single digits in Q2 (slight increase in Q1), and online performance was superior to offline performance.

② Export sales Q2 +40% (Q1 +8%), Q2 accelerated growth. Among them, Europe +70%, North America +40%, Japan's shortfall in Aladdin's Q2 narrowed to -20%, and Q1 was -50%.

The high increase in export sales has benefited from the expansion of channels. Q2 The company has entered the Best Buy channel on a large scale; Europe has made significant progress in expanding from the German-speaking region to the French-speaking region.

Profit analysis: Despite the company's apparent loss, the actual Q2 gross margin and revenue growth rate improved month-on-month compared to Q1, and the H2 margin is expected to continue to be optimized.

Investment advice: Maintaining a buy rating

① Revenue side: H2's revenue growth is expected to accelerate due to the expansion of export channels and domestic sales trade-in. Among them, export sales are expanding Walmart and Sam's channels. Domestic sales, Jimi offline stores in Sichuan that issue projection vouchers are growing faster than in other regions. According to Aowei, the domestic smart projection industry increased both online volume/value in July by +16%/+42%, respectively. With the implementation of trade-in policies across the country in September, it is expected to boost revenue.

② Profit side: Considering that Play5 was released in mid-Q2, its contribution to Q2 was limited (Q2 gross margin compared to Q1+2pct), it is expected that gross margin will continue to be repaired as the share of new H2 products increases.

We believe the company is still on the left side, and we look forward to further restoration of H2's performance as fundamentals continue. According to the 24-year semi-annual report, revenue is estimated to be 3.6/3.9/4.1 billion for 24/25/26 (4/4.4 billion yuan before 24/25), and profit of 0.05/0.1/0.13 billion (0.2/0.26 billion before 24/25). Maintain a “buy” rating.

Risk warning: Domestic sales sentiment falls short of expectations, overseas growth falls short of expectations, and new business expansion falls short of expectations.