GF Securities has issued a research report stating that it expects EEKA Fashion (03709) to post earnings per share of RMB 0.60, RMB 0.66 and RMB 0.72 for 2026-2028, respectively. Referencing the valuations of comparable companies and applying a 10x PE multiple for 2026, the brokerage assigns a fair value of HK$6.95 per share and maintains its "Buy" rating.

According to the company's 2026 interim report, in the first half of 2026, the company recorded operating revenue of RMB 2.727 billion (down 12.1% year on year, mainly due to the sluggish retail environment, the company's proactive optimization of its store structure, and declining sales at existing stores), while net profit attributable to shareholders was RMB 287 million (down 0.1% year on year). This performance was significantly better than the revenue line, mainly driven by cost reduction and efficiency improvements as well as expense ratio optimization, which lifted profit quality.

In the first half of 2026, by brand, revenue for Koradior, La Koradior, ELSEWHERE, CADIDL, FUUNNYFEELLN, NAERSI and NEXY.CO declined 11.8%, 10.6%, 11.2%, 0.2%, 10.7%, 18.6% and 7.5% year on year, respectively. Among them, CADIDL was relatively resilient, while NAERSI posted the steepest decline due to channel adjustments and intensifying competition in the high-end market.

By channel, direct-operated store revenue fell 17.0% year on year, wholesale revenue rose 51.1% year on year, and e-commerce revenue slipped 0.4% year on year. In terms of store count, as of the end of June 2026, the company had 1,673 stores (a net decrease of 66 from the beginning of the year, with 70 openings and 136 closures during the first half); this included 1,276 direct-operated stores and 397 franchise stores. The decline in direct-operated revenue (-17.0%) exceeded the decline in store count, reflecting that falling sales at existing stores was the main drag.

The report noted that in the first half of 2026, the company's profitability rose steadily, period expense ratios improved, and inventory turnover days edged up slightly. According to Wind, in the first half of 2026, the company's gross margin was 76.4% (down 0.03 percentage point year on year); net margin was 10.7% (up 1.4 percentage points year on year, mainly due to a lower selling expense ratio and increased income tax benefits); the selling expense ratio was 55.1% (down 1.2 percentage points year on year); the administrative expense ratio was about 10.7% (up 0.6 percentage point year on year); inventory turnover days stood at 408 days, up 32 days year on year; and accounts receivable turnover days were 39 days, up 1 day year on year.

Looking ahead, the company is expected to continue achieving high-quality development. According to its 2026 interim report, the company will continue to deepen the operation of its multi-brand matrix, strengthen brand power and product strength, optimize its omnichannel layout, implement a strategy of "opening larger stores and improving store efficiency," and accelerate its shift toward shopping malls; online, it will strengthen operations on emerging platforms such as Douyin and WeChat Channels, and push e-commerce toward a model focused on brand expression, member operations and full-price merchandise; it will also advance reforms and upgrades in areas such as supply chain management and AI-empowered business scenarios, driving the company's transition from growth focused on scale to growth focused on quality.