Guosheng Securities: Maintains "Buy" rating on King's Luck, revenue declined in the first half but market share still increased

Guosheng Securities' research report points out that although King's Luck's revenue will decline in H1 2025, its market share is still expected to increase. The Q2 report shows pressure relief, and advance payments remain stable. Performance outside the province and in central Jiangsu is relatively better. In H1 2025, the revenue from within and outside the province is expected to be 6.3 billion and 600 million yuan, respectively, with year-on-year changes of -6% and +5%; Q2 2025 revenue is expected to decline by -32% and -18% year-on-year. Within the province, the revenue for H1 2025 from Huai'an, Nanjing, Southern Jiangsu, Central Jiangsu, Yancheng, and Huaihai is expected to be 1.2 billion, 1.8 billion, 700 million, 1.1 billion, 800 million, and 700 million yuan, respectively, with year-on-year changes of -4%, -8%, -11%, -0.2%, -6%, and -7%; Q2 2025 revenue is expected to decline by -30%, -34%, -39%, -19%, -39%, and -45% year-on-year. The company has made breakthroughs in sales around Jiangsu in recent years and plans to launch a light and elegant product outside the province. Considering the overall sales pressure, the firm has lowered its earnings forecast for 2025-2027, expecting the company's diluted EPS for 2025-2027 to be 2.43, 2.58, and 2.85 yuan per share, respectively, with the current stock price corresponding to PE ratios of 18, 17, and 16 times, maintaining a "buy" rating