According to the company's current performance, the total sales volume of baozi company was 985 million yuan, up 9.7% over the reporting period, and net profit was 159 million yuan, down 25.6% from the same period last year.

On that day, its stock price fell 4.1%, and the 31 day plunged, plunging 23.14%, closing at HK $6.11.

The profit decline is mainly due to the increase in inventory provision, according to baozi.

The increase in inventory provision increased the company's other operating expenses from 29 million yuan in the same period in 2011 to 180.1% yuan in the first half of 2012, up 52 million 100 thousand yuan.

It is reported that from 2007 to 2011, the growth rate of baozi's turnover was 9.89%, 3.29%, 11.70% and 15.54% respectively, and the net profit growth rate was 6.30%, 10.90%, 1.07% and -9.09% respectively.

The increase in inventory provision reflects the increase in storage.

The report shows that in the first half of the year, Baozi stock was 698 million yuan, an increase of 10.27% over the end of last year.

"On the one hand, the increase in inventories is a reduction in consumer demand. On the other hand, there is a problem of docking between baozi products and consumers."

At the same time, he believed that the high inventory turnover days of baozi also proved that its products were not well sold.

Le Yaoguang, a luxury marketing expert, told reporters that the positioning of consumer circles and market channels was not clear enough, which led to baozi's competition but many luxuries.

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A long-term concern about baozi's industry told reporters that because of its early positioning as a high-end brand, Baozi's customer base was smaller.

"Things sell very high, cost performance is not high, customer groups are small, so revenue growth in recent years is very slow."

Xue Shengwen, a senior researcher at CIC, told reporters: "although baozi has adopted the method of opening discount stores to digest inventory, a large number of high-end brands are in the same period.

Sales promotion will occupy the market share of baozi, especially in the competition with high-end international brands. "Baozi's core competitiveness is not outstanding."