Huaxi Securities Co.,Ltd. has issued a research report maintaining its "Buy" rating for JNBY (03306), while raising profit forecasts. The firm maintains its FY26-27 revenue forecasts of 6.004/6.396 billion yuan, adds FY28 revenue forecast of 6.806 billion yuan, raises FY26-27 net profit attributable to shareholders forecasts from 0.909/0.993 billion yuan to 0.971/1.040 billion yuan, adds FY28 net profit forecast of 1.115 billion yuan, raises FY26-27 EPS forecasts from 1.75/1.91 yuan to 1.87/2.01 yuan, and adds FY28 EPS forecast of 2.15 yuan.

The firm's analysis indicates: (1) In the short term, against the backdrop of weak terminal consumption, the company's performance shows certain resilience, mainly due to steady growth of the main brand which accounts for a relatively high proportion, benefiting from online and franchise channel drivers, with attention to inventory and cash flow changes. (2) The company's growth brands and emerging brands still have significant store expansion potential. In the future, with the increase in large store proportions, growth in multi-brand integrated stores, conversion of inefficient directly-operated stores to franchises, and fan economy driving off-store sales, store efficiency still has considerable room for improvement. (3) In the long term, fan loyalty is expected to drive the company's gross margin to remain stable with upward potential, and scale effects are expected to reduce expenses, potentially driving further growth in the company's net profit margin.

For FY2025, the company's revenue/net profit/operating cash flow reached 5.548/0.898/1.133 billion yuan, representing year-over-year growth of 4.6%/6.0%/-29.2%. Cash flow remains higher than net profit, but the cash flow decline was mainly due to inventory preparation, sell-through rates of current season products, and the digestion progress of off-season merchandise. Excluding the impact of government subsidies and impairment reversals, net profit was 0.814 billion yuan, up 3.7% year-over-year (with first and second half performance at -1.7%/16% respectively).

Breaking down by half-year periods, in the first half (September 2024 - February 2025), the company's revenue/net profit was 3.156/0.604 billion yuan, up 5.0%/5.5% year-over-year. In the second half (February - August 2025), revenue/net profit was 2.392/0.289 billion yuan, up 4.2%/5.0% year-over-year.

The company declared a final dividend of HK$0.93, combined with an interim dividend of HK$0.45 per share, resulting in a dividend payout ratio of 75% and a dividend yield of 6.2%. The payout ratio is comparable to recent years, with the decrease from last year due to the inclusion of special dividends in the previous year.