A research report maintains a "Buy" rating for CHEERWIN GP (06601), forecasting 2025 net profit of 210 million yuan and maintaining a target price of HK$3.00, corresponding to 4.0x price-to-earnings ratio excluding cash. The company continues to advance its multi-brand, multi-category, omni-channel strategy while accelerating its pet business expansion. The company maintains stable cash flow with approximately 2.34 billion yuan in cash and cash equivalents in the first half, representing about 75.5% of total market value, and offers generous dividends with a 6% dividend yield.

Revenue is expected to reach 1.97 billion and 2.23 billion yuan in 2025-2026, representing year-on-year growth of 8.3% and 13.2% respectively. Net profit is projected at 210 million and 240 million yuan, up 3.7% and 14.2% year-on-year.

**Gross Margins Rise Across All Categories**

CHEERWIN GP achieved revenue of 1.34 billion yuan in the first half, up 7.2% year-on-year. Benefiting from increased revenue contribution from pet products and changes in sales channel structure, overall gross margin improved by 2.9 percentage points to 49.3%. Despite a 20.7% increase in operating expenses, operating profit remained flat compared to the same period last year. However, due to the expiration of the company's tax incentives, the effective tax rate temporarily rose to 26.2%, though it is expected to fall back to approximately 20% for the full year. These combined factors resulted in first-half net profit of 170 million yuan, down 3.3% year-on-year.

The company maintains its high dividend policy with an interim dividend of HK$0.057, representing a 40% payout ratio, and plans to maintain an 80% full-year payout ratio.

**Pet Segment Accelerates Growth with Over 100% Revenue Increase**

The pet segment achieved revenue of 96 million yuan in the first half, up 101.4% year-on-year, with its revenue contribution increasing from 3.8% in the same period last year to 7.2%. Benefiting from increasingly diversified products with improved economic benefits and continued offline store expansion, the pet segment's gross margin improved by 8.6 percentage points to 58.1%, with expansion pace exceeding expectations.

The company accumulated approximately 77 offline pet stores in the first half and plans to increase self-operated stores to 200 by 2027. The company also plans to launch a franchise model as early as next year, entering a rapid growth phase.

The company's core household care segment generated revenue of 1.21 billion yuan, up 4.3% year-on-year. Focusing on blockbuster products and advancing continuous upgrades and distribution coverage of household care products, the household care segment's gross margin improved by 2.7 percentage points to 49.1% due to optimized category structure and increased proportion of high-margin products in household cleaning and air care categories.

The company maintains a solid market position in household categories, with its flagship insect repellent products holding the number one market share for 11 consecutive years.

**Multi-Channel Online Focus on Blockbuster Products Addresses Offline Channel Changes**

By channel in the first half: Online revenue increased 27.4% year-on-year to 520 million yuan, with revenue contribution rising to 38.6%. Building on deep cultivation of online sales platforms, the company achieved rapid development in content e-commerce channels, deploying over 800 pieces of content across all domains in the half-year. Superb mosquito repellent care and Cyllan air care products ranked first in market share on Douyin.

Offline revenue declined 2.6% year-on-year. To actively respond to consumer changes in offline channels, the company strengthened distribution volume of high-margin products and quality of distribution networks to enhance market foundation, adopting special display methods such as product image displays for promotion.