Dear investors and analysts, good morning. Welcome to this JS Global 2016 interim results presentation. I am the moderator today, Poppy. Today our meeting will be conducted in Chinese. If you need English interpretation, please switch to English channel on Zoom interface toolbar. Due to the large number of participants, in order to ensure the order of the meeting during the speaker speech, your line will be muted. In the Q&A session, we will report the Q&A method for you. Please change your name into the format of institute plus your name. Thank you so much for your cooperation. Before we get started, let me make a few reminders. First of all, this conference call will be recorded and it will be published on the company's official website simultaneously. Welcome to consult after the meeting.
Second, in the management speech, there may be expectations for future operation and forward-looking statements which are uncertain and actual results may differ from the statements. Third, we may also mention some non-IFRS metrics to better present the business performance. For relevant definitions and disclosures, refer to the announcements and presentation materials. Now let's get started. Here is today's agenda. We will have the management team to briefly present the interim results and business progress. Then we will come to the Q&A session to discuss with all the investors and analysts. Now let's introduce the company's management attending today's meeting. We have Ms. Han Run, Executive Director, CEO, and CFO of the company, Mr. Liu Ningqing, Chief Operating Officer and Head of Finance, Mr. Miao Minxin, the Secretary of the Board of Directors of Joyoung.
Now let's enter the management presentation session, first speaking by Ms. Han Run. She will present the key points of company's annual business report. Thank you.
Thank you, Poppy. Dear investors, good morning. Welcome you to this JS 2016 interim results presentation, and thank you so much for your continued attention and support for our company. First, let me briefly walk you through the group's overall operating performance for the first half of 2016. In H1 2016, the group recorded revenue of $741 million. Gross profit was $229 million, with a gross margin of 30.9%. On the adjusted basis, revenue from third-party customers reached $711 million. Adjusted net profit was $14.8 million, up 9.6% YOY.
Although revenue and gross margin in the first half were impacted by weaker consumer demand in Mainland China, business transformation in South Korea and intensified competition in certain markets, our group still has recorded a net profit of $13 million, turning from loss to profit compared with the same period last year, with overall profitability improved. By business segment, SharkNinja APAC continued to demonstrate resilience in development. In H1, revenue from third-party customers grew 6.2% YOY. Including the impact of the software business transformation, the growth would be 31.5%. The ANZ market continued to perform well with steady growth in core categories such as cooking, beverage, and cleaning. Japan's market grew at constant currency. We also have made positive progress in emerging markets such as India and Southeast Asia. The South Korea market has also completed our transition to DTC and resumed our sales in the second quarter.
We will also continue to strengthen our local operations and channel development to drive business improvements. From Joyoung perspective, in H1, the domestic small home appliance market continued to face challenges from the weak demand and intensified competition. In response to the market changes, Joyoung continues to drive product innovation and channel optimization around its core categories. Market shares in key categories such as the soy milk maker and blender remained stable, while the share of direct sales channel also further increased. In H2, Joyoung will also continue to launch new products in core categories, continuously enhance product competitiveness and channel operational efficiency, and strive for steady improvements in market share. That is all for my brief introduction. I will hand over to Leon give you further details on the performance of each business and regions. Thank you. Okay.
Thank you, Ms. Han. Next, I will update you about the overall performance of our group in H1. Now let us first look at the overall financial performance. As mentioned by Ms. Han, our H1 revenue was $741 million, YOY decrease by 5.3%, and revenue from third party was $711 million, YOY decrease of 1.2%. Revenue performance was mainly affected by the weak demand of Joyoung business in China and transformation of a business in South Korea. In terms of profitability, the group's gross margin was $229 million, and a YOY decrease of 7.7%. The gross margin was 30.9%, YOY decrease of 1.2%. According to the third-party revenue, the gross profit was also $229 million, YOY decrease of 7.3%. Gross margin was 32.2%, YOY decrease of 1.3%.
Although we have the pressure on revenue and the gross margin, our net profit still has been achieved at $11 million in H1, turning a profit compared with the same period last year. Our adjusted net profit was 14.8%, increase of 9.6% YOY. Net profit adjusted margin rose from 1.7% - 2%. This mainly reflected our group's effort in expense management, non-operating items changes and business structure adjustments. For the next page, let us look at different segments. In H1 2026, Joyoung's third-party revenue was $467 million, slight decrease compared with the $490 million in the same period of time due to the relatively weak sales of blender, rice cooker, and the electric kettles. It is offset by the decline by the growth of soy milk maker and cookware.
SharkNinja, our third party revenue in Asia Pacific was $244 million with a YOY increase of 6.2%. The apparent growth was also mainly affected by the business transmission in South Korea, affecting the impact of our South Korea business, as Ms. Han mentioned. If we exclude that business revenue in APAC actually increased by 31.5%. The growth was mainly driven by the strong performance cooking and the beverage categories, especially our air fryer Crispi, and our newly launched espresso machine, and thanks to their excellent performance. From the revenue structure as an APAC percentage of the third party revenue has increased from 31.9%- 34.4%. This has already shown there is a continuous increase of our APAC revenue to the group's overall one. In terms of regional distribution, ANZ is a major source of growth driver in H1 this year.
The number has increased from $96 million- $129 million, mainly driven by the strong performance of air fryers. The espresso machine was also launched at the end of 2025. It has brought about an overall positive performance in H1 of this year, and there was also continuous growth in our cordless vacuum cleaners. Japan's market revenue decreased from $66 million- $63 million, mainly due to the depreciation of the Japanese yen. Calculated at constant exchange rate, Japan's market revenue increased by 2.6%, with very good growth in fans and air fryer. Our cordless vacuum cleaner were affected by market competition and price pressure, canceling each other due to this compensation of different developments. South Korea's market revenue dropped from $58 million- $18 million, mainly due to the transition to a direct-to-sales mode. This sale in the first quarter was greatly affected by that.
After the transition to direct sales in the second quarter, sales also improved, but not enough to offset the impact of the first quarter's disruption. Revenue in other regions increased from $17 million- $44 million, reflecting the progress of our emerging market expansion. In the Chinese market, it decreased from $483 million- $457 million. This is mainly due to the weak demand. The next page is our gross margin from the third party revenue in H1 2026. It decreased from $241.6 million- $229 million. The gross margin dropped from 33.5%- 32.2%. When we break them down, we also can see that Joyoung's YOY impact on gross profit was negative $22.2 million, mainly due to the changes in product mix, government subsidy adjustments, and it's also the increase of the transportation fee after the proportion of direct sales increased.
SN APAC continued to contribute $9.5 million in gross profits, mainly due to the launch of new products with higher gross margin and continuous product cost optimization. Generally speaking, group wise, the decline of our gross margin mainly comes from the pressure of Joyoung business, which is partially offset by the improvement of SN APAC. In the future, we will also continue to optimize the product mix and the supply chain improvement, operational efficiency to continuously improve the profit quality. For the next page, for our operational efficiency in H1 2026, our entire inventory days of turnover was 57 days, lower than 59 days in H1 2025. It was slightly higher than the full year level of 2025.
Our receivables and notes receivable turnover days were 101, higher than 97 in H1 2025, and accounts receivable and notes receivable turnover days were 198, relatively stable compared with last year. Overall inventory management remained relatively stable. We will pay continued attention to this for this accounts receivable and the notes receivable with our combination of business and channel structure changes. In the second half of the year and beyond, the group will also continue to stress inventory planning, collaboration and payment collection and the supply chain and support business growth, as well as improving efficiency of our capital use. For the next page, we also can see that the group continuously to maintain a balanced and prudent capital structure. H1 2026, our CapEx was $18 million, lower than $21 million in the same period last year.
As of June 30, 2026, the group's interest-bearing loans amounted to $79 million, of which non-current loans were $44 million, with a loan of $35 million and a debt to equity ratio of 0.15x . It has slightly increased from 0.14x , but it is still basically flat. Overall, it is still at a very low level. The current capital structure is mainly focusing on the group's continued expansion in investment, in product innovation, market expansion, especially in the APAC region and daily operations. We will still continue to strike a balance between business development, capital efficiency and financial stability. Next, we will move on to the APAC business updates. Sorry about it. Each one for different market performances were quite different. ANZ and emerging markets still maintain quite strong growth. Japanese market still maintained a growth under the fixed exchange rate.
After the conversion of the business mode, South Korean market has also seen a rapid advance. Now I will break them down by markets to share with you the new product launches and the second half of the year's product planning. ANZ market, the performance was very strong, and our third-party revenue increased by 34% YOY, exceeded $100 million, reaching $129 million in the context of the overall pressure of the industry. The growth of the business mainly comes from the continuous product innovation and efficient market execution. In terms of categories, Ninja's cooking and beverage have increased by 124% YOY, and Ninja food processing increased by 14%. Shark cleaning increased by 22%. Our beauty and home products grew by 73%. Shark growth are contributed mainly by floor cleaning and beauty products, and the cordless vacuum cleaner maintained a good performance.
We also can see that the Shark CryoGlow with LED light mask has marked our brand entering the hot end market skincare field. Our espresso machine, as well as our blender and Crispi air fryer, have also been a hit, becoming the main growth drivers. We will have more frozen categories, including the ice cream makers, the coffee makers, some cooking products, and the beauty and the haircare products, et cetera. Now, let's take a look at the Japan market. The consumption environment of Japan is more precautious. The consumers pay more attention to the value to money of the product. This is the trend we have observed in the first half of the year. There are ferocious pricing competition of the cordless vacuum. Affected by that, the revenue of the cleaning products have been dropped by 14% year-on-year.
For different price ranges and the consumption demand, our company has been diversifying the portfolio for the cordless vacuums, and we have introduced the differentiated products and the revenue have been improved. In May and June, the revenue had been growing by 20% year-on-year. The categories of the other types had been performing very positively. The Shark beauty and home have been grown by 284%, and Ninja food preparation grew by 4%. In the second half of 2025, we launched the beverage products, and there is no comparable revenue. We have seen a great performance since the launch of this product. At the same time, with the TurboBlade of Shark and the Ninja Crispi and some other new products, we are actively expanding the category coverage in Japan.
We will keep an eye on the improvement of sales of the market and to keep reacting to the changes. These are the emerging markets. Emerging markets had become a new growth point for us in APAC. In the first half of the year, there had been a contribution of $ 35 million with a year-on-year growth of 240%. We accessed the new Singapore, Malaysia, Philippines, Indonesia, Thailand, and Taiwan, China. In the first half of 2026, we also accessed into Hong Kong, China, and India market. Since the launch of the products in India, we have seen a very strong momentum, and the trend of sales in India is outperforming the other emerging markets. As for Hong Kong, China, after the launch of the new products, we also have seen a great performance.
We just got started in June in Hong Kong, China, so we have some pop-up stores offline, and so the online sales are also good. We are still incubating and expanding in the emerging markets, and priority now is to have the pace introduction of new products established and expand to the local channels and to better execute the market so that we can expand the consumer coverage. The efficiency of investment in various markets varies. Based on the operation foundation, we will have a corresponding strategy. Next, I would like to talk about the NPD. New product innovation has become a very important driving point for the APAC expansion. In the first half of this year, we had a series of new product launch. For example, we have the EvoPower, the lightweight cordless vacuum cleaner, covering the growing market segment that is of cost effectiveness.
In terms of the coffee makers, we have the Ninja Luxe Café, which is a high-end all-in-one coffee platform, allowing the consumers to make a coffee at a high standard. The Ninja Crispi is a portable glass air fryer. Integrating the convenience and the versatility continue to be welcomed by the consumers in APAC. The Shark TurboBlade, which is a power fan, a bladeless fan, supports the customization mode and expands the home environmental category. In Japan, Australia, New Zealand, it has been very popular. We also have the Shark CryoGlow, which is the scientific beauty product.
So on all, we have a comprehensive expansion of products, including coffee, cooking, home, and beauty. We plan to continuously promote the product launch in the second half of the year. In drinking products, we have promoted the Ninja BlendBOSS in several markets. It will enhance the small-scale blender market. The Slushi Max and Toaster Twist have expanded to the highly successful Slushi market. The Ninja Crispi Pro, which is a larger machine with higher power and more cooking modes, can meet the needs of family meals, snacks, and side dishes. In terms of beauty products, we have the Shark FacialPro Glow. It will further diversify the Shark beauty line. For cleaning, we will introduce the Shark PowerClean 360 PRO upgrade, which is a cordless vacuum cleaner.
We also have the new upgraded automatic empty dock. All of these products have reflected the expansion of the category and the applications of the company corresponding to the market demand. We will pace ourselves according to the performance, and include the feedback of the consumers and the readiness of the local channels, as well as the varying market environment. We will keep the investors updated. In terms of Joyoung, the demand for small household appliances in Chinese market remained weak, therefore, there have been some headwinds and pressures. Joyoung continued to focus on the core categories, efficiency, and competitiveness, as well as product innovation capabilities to enhance our operation efficiency and maximize the shares of the core categories, the product innovation strategies, and the D2C market channel development.
Despite the pressure on revenue, Joyoung's online market share in multiple core categories remained resilient. For example, the blender increased from 41.4%- 46%, up by 4.6%, and the soy milk maker increased from 38%- 46%, up by eight percentage points. The pressure cooker, 9.8%- 12%, and water purifier up from 2.1%- 3%, and the cooking ware up from 1.5%- 2%. The rice cooker was about 10.9% in market share, dropped slightly to 10%. With the overall weaker demand, Joyoung has maintained its strong competitiveness in several categories, such as the blender and the soy milk maker. We still have three pathways to optimize our innovation. The first is to keep pace with market trends and accelerate the R&D and go-to-market. The second is the expansion of the scenarios.
Targeting on the demands of the consumers, we have optimized the formats and enhanced the daily usage. Number three is the strengthening of the product content and the channels, so we can explore how to create better hit products. With these three methods, we can better meet the demands of the consumers and to improve efficiency of go-to-market and commercialization. In terms of the channels, the four main online channels already have the D2C layouts. Based on the GMV, JD.com accounts for 69% and Tmall 61%, so both of them are over 60%. Douyin's D2C also account for 28%, and PDD Holdings 13%. The D2C operation base for JD.com and Tmall are relatively stable, and the company is penetrating more in Douyin and PDD Holdings.
D2C helps us to better reach out to our consumers and to coordinate between the branding, product content, and the channel operations. It will also bring changes to the fulfillment, freight, and operational investment. Therefore, we will continuously pay attention to quality of channel growth and efficiency of the expansion. This is the basic introduction of the financial and the business performance of the first half of the year. Overall, the revenue had been under pressure, but we started to turn to a profit and adjusted the net profit to maintain the continuous growth. As in APAC, excluding the transformation to South Korea, we have maintained a rapid growth, we have a strong performance in New Zealand and Australian market. With weak demand, Joyoung has maintained competitiveness and market share of the core categories, adjusted the products and the channel mix.
Next, we can have further questions. Thank you, Madam Han and Leon, for your sharing. Next, we will have a Q&A. Let me introduce you how to ask the questions. If you need to ask by voice, please click the Raise Hand button in the bottom toolbar for subtitle interface. If you need to ask a question in text, please type your question in the question area, please limit your question into less than two. Now let's get started. Now let's invite the first investor. Let's welcome Ruilin from CLSA.
Hello, management. Can you hear me?
Hello, Ruilin. We can hear you fine.
Hello, management. Thank you for giving me the opportunity to ask the first question. I am from CLSA. I am an analyst, and I have two questions. The first is related to the gross margin, and in APAC, the revenue is slightly growing compared with the same period last year. But according to the industry data, there had been a cost increase of the raw material, but the gross margin of APAC had been growing great. I have calculated it. There had been about a 10% growth of the gross profit margin, and the gross margin also had been growing by 1%-2%. Why is that so? The second question is that in the first half, the group has returned to profit, and the bottom line is also quite satisfying.
The adjusted profit had been grown by 9.6% YOY. Can you split the contribution by segment? That means the contribution from SN APAC and Joyoung separately. Okay, these are my two questions.
Leon, please answer the question.
Thank you, Ruilin. Good question, indeed. The first question is about the gross profit margin, and in 2026 first half, indeed, the cost of the raw material and the components have been growing, and we have faced different pressure. On the one hand, we have seen the impact of the U.S.-Iran war, and there has been impact on the oil price. The plastic parts have been more expensive, and also from some commodity like copper and other metals, there have been some impact as well. But generally speaking, against this backdrop, we maintained a growth of about over one point in gross profit margin. There are several reasons. The first is the introduction of new products with high gross profit margin. In the year-end last year, we have launched some beauty products and coffee makers, the hair care products contributing to higher revenue and gross profit margin.
Air fryers and beverage products like Slushie, CREAMi, have been growing steadily. These categories not only contributed to the revenue, but also diversified our product lines, not only in cordless vacuum and cleaning, cooking products, but also to some new categories such as the beverage and the food preparation. The Shark and Ninja's percentage in revenue have been also growing. The second reason is a more balanced development, especially in Ninja. We have an optimization for cost and have a better sourcing in material and the parts and optimize our product design as well. We have been doing that every year, but this year we have seen a more effective results, and we have the VAVE department, that is optimization of engineering and design.
For the specific work, it is not just by lowering the product standard, but when we are ensuring the consumer experience and product performance, we are actually lowering the unit cost through the VAVE. With the optimization of the products, it has also positively influenced the increase of the raw material price, and it is offsetting the promotional pressure. The third point is when we are expanding our business scale, the efficiency of our supply chain and operation have also been significantly improved as our APAC business scale expands, including the company's procurement and logistics because some of the transportation fee has been calculated as our cost, including storage arrangements and distribution. We all have a better room for bargaining and optimization space. APAC has also picked down to simply expand its scale to the gradual shifting to more refined cost management and efficiency management.
To sum up cost-wise, the same like other company, we are under huge pressure, especially H1 of this year. With our sales and new product launches and the VAVE, including our scale economy, scale effect, and our continuous refined management. The lean management has improved our gross margin in H1 this year. This has also reflected that after three years, after the spin-off, as an APAC's management capability is also maturer. Previously, we have also mentioned in H2 2025 and the important goal of 2026 is in APAC region, except for scale growth. We also hope to have more mature and more refined management. This is also in H1, what we have already seen here. The second point is about net profit. Adjusted net profit, as we mentioned, we have grown by 9.6%.
Group wise, it is last year, it was about $13 million, and this year we have turned from loss to a profit. If we look at the breakdown, the Joyoung segment is still under huge pressure. We have also seen that last Friday, we have already released the interim report. The net profit still decreased by 40%. It is because of the product structure and what we mentioned about the closure of governmental subsidy policy, and the improvement of this DTC has actually increased the transportation cost. These have all added to our overall pressure on profits. In response, Joyoung has controlled our administrative expense and improved operational efficiency. This has somewhat offset the pressure. But overall, we are still under pressure in H1 this year. Milk maker and cookware categories have all achieved growth.
The core categories like soy milk maker, rice cooker, pressure cooker, and water purifier, as we mentioned, their market shares have all increased. Although the market has not fully stabilized. From our perspective, we think our core products are still having a strong competitive edge from a market perspective. The current focus is still having the result of these market practices and new products to be fully translated into our advantage of our product mix. Later on our profit performance. The profit margin in APAC has also been continuously improving. First of all, the gross profit, as mentioned before, this growth including the increase of the gross margin, could be translated into our good improvement of the net profit.
Additionally, for SN South Asia, by improving our market efficiency, including our investment in marketing in relatively material markets such as the ANZ, Australia and New Zealand, the market perception of our brands are already quite high. Our marketing efficiency, marketing control are also more in place, leading to a better ROI. All these measures have already made our business maintain a very high growth, and our expense have also been under good control. Gross profit has also been improved, making the net profit of APAC being on the right track, contributing to the overall group. That is all for the answers of the two questions. Thank you.
Okay, thank you so much. Very clear. No more question from me.
Okay, thank you, Leon. Thank you, Ruilin. Now let us connect to the second panelist. Now let us invite Deng Yue from Huaxing Securities. Hello.
Hello. I am having two questions. First of all, Joyoung, YOY speaking. You can also see that the H2 last year was actually having a relatively low base. As mentioned before, we are continuing to launch new products in H2 and optimize channel efficiency. I would like to ask that in H2, would Joyoung have an opportunity to narrow the revenue gap? The second thing is about APAC, as we mentioned before, like blenders and coffee machines. We also can see that the SharkNinja in North America and Europe, we have gradually seen the out of stock experience. I would like to say that if APAC region, if these new big hits also would have this out of stock crisis, how do we plan for that? Or if there is out of stock situation, how do we make it up?
The first question about Joyoung, we will invite Mr. Miao Minxin to make the answer. He is the Secretary of the Board of Directors of Joyoung.
Hello, Deng Yue. I would like to answer this question. First of all, domestic small household appliances. Indeed, we have seen throughout H1, the demand is relatively weak. But the demand is also differentiated. The channel structure is changing rapidly and the competition is also intensifying. This is the objective market that we have already experienced. While YOY's, our domestic sales has also declined by 11%. As I have already mentioned, this is subject to the lowered sale of blender and rice cooker, et cetera. But as YOY said, the blender, we do have a very good market share, which is being increased.
We can see that when we are seeing this relatively poor data environment, we are still working hard to improve our capabilities so that our core categories can achieve some growth. For example, soy milk maker and cookware have also achieved quite good growth. At the same time, we have also made changes to our product mix, increased the proportion of DTC. It will increase our transportation cost, influence our gross margin. You can see that in H1, our gross margin has also been under some pressure in H1. However, Joyoung, we will still continue to focus on soy milk maker, blender, rice cooker, pressure cooker, and the water purifier. These core categories with strong brand foundation and our core competitiveness will still maintain our advantage in these categories.
In H1, with the backdrop of increasing market share in multiple categories, we still think there are some improvements. But we think overall, due to the environmental problem or because of the demand being weakened, we are still having relatively weak performance. Revenue is under a short-term pressure, but market share-wise, we still hope to grow the share continuously. From the retail perspective and market share perspective, we hope to achieve the growth of Joyoung as a brand. This is for H1 or the direction for H2. Channel-wise, in JD.com, Tmall, Douyin, and Pinduoduo, our DTC shares have also been relatively high. As what Leon introduced in the previous slides, we can also see the same data. With DTC, it could help us to better understand the consumer data, including prices, inventory, and other market dynamics.
It will also make further improvements and lay a solid foundation for the improvement of the efficiency of subsequent channels. In H2 this year, Joyoung will still focus on the core categories to restore the declining categories and maximize the key categories volume for the categories with a small scale but a beautiful promise. We will create some new hits and further improve our channel efficiency. Product-wise, we will also continue the strengthening of the features such as health materials, lightness, convenience, cleanliness, smart control, and low noise. It will make our future users intuitively feel the improvements of the product value. We will also make efforts from this perspective to make our success rate of our core categories launches and the conversion efficiency, and then it will actually make our ROI of investment to be better and improve gradually.
We will also be on different platforms to make some product combination, as well as resource input. For example, we will enhance our content e-commerce live streaming, matrix of the cell broadcasting, including the instant retail and the synergy between traditional shelf e-commerce and the optimized of the efficiency of DTC as a whole. We also are very confident to increase the overall revenue, the performance in H2, and improve the year-round development. We will also pay attention to the changes of the profit side. Okay, thank you.
Thank you, Max, for the answer regarding the Joyoung part. For the second question, proposed by Deng Yue, is about the SN APAC products layout and the launches, as well as the direction. We will invite Leon to help answer the question.
Okay, thank you, Deng Yue, for the question. This is a very good observation. We have already seen that in H1, as the U.S. has already announced the report saying that the growth is quite considerable. We have some hits, indeed. We have seen some limitations of the manufacturing capacity. What I would like to report to you is since H1 this year, we have been actively coordinating the manufacturing capacity. In the last few months of Q2 this year, we have added some new suppliers, including what Deng Yue mentioned about the coffee machine, the coffee maker. Indeed, supplier side, we have seen some changes, including some new production lines. It will help us to guarantee the manufacturing capacity as much as possible. Indeed, there will be some pressure, but indeed, we are quite different from some competitors.
Indeed, we are short of manufacturing capacity, except for the improvement of the manufacturing capacity and the supplier side tooling manufacturing line. We are also actively exploring in APAC perspective. We also need to invest more in the functions, except for marketing. We are also increasing the function of engineering. Maybe later, we will gradually invest in the tooling of the hero products, of the heat products, to make sure that the APAC heat products could have the continuous supply. For essence, overall manufacturing capacity, we also have the designated production lines just for APAC. This is the second measure. The third, for product matrix, we will actively explore two aspects. One is as in Europe and America, for the existing products.
On the basis of the existing products, we will also dig out some hits suitable for APAC as well. Compared with America, the categories that we have already answered to are still quite limited. So we still have big opportunities here. Second level is APAC. We will have this APAC first, or new strategy for APAC region. We will have some APAC exclusive SN products. For example, in the last few days on Instagram, we have already done the preview. On August 25th, that is tomorrow, we will have the premiere of the Ninja products for as in APAC. Here, I would like to give a little spoiler. You can see this is more like a soup maker. It is more like a heating and blending blender, I have to say. We could understand it like that. It will be first launched in Japan.
In the second half of the year, we will also have some more APAC-first products. They could also be called APAC exclusive products. For APAC new product functionality, we are also expanding this continuously. In the future, I believe, let's just wait and see. We will definitely see some product enhancements. I believe that through local development and the local R&D products, they will also better adjust to the very diversified, very unique APAC market demand. Thank you so much.
Okay, got it. Thank you so much for the management team's answers. Thank you so much. That's all from me.
Thank you, Leon. Thank you, Deng Yue. Next, let us invite Wang Wencong from CITIC Securities. Please go ahead.
Hello, management. Can you hear me?
Yes.
Okay. Thank you very much. Let me ask. I am Wang Wencong, analyst from CITIC Securities, and I would like to focus on two questions about the marketing in Japan and South Korea, because according to the data, we have observed two things. The first is the Japanese market has ferocious competition. I would like to ask what will be the countermeasures of the competition in Japan? The second is what will be the growth momentums in Japan? The second question is about the South Korea transformation in the first to second, and it had hindered some growth. You have mentioned that we have finished with stock digestion in April. So I would like to ask the management what is your expectations of the Korean market in the second half of the year?
Okay. About the Japan and South Korea market, I would like to invite Leon to answer the question.
Okay. Thank you, Wencong. Great question. Indeed, these two markets have caught our attention. Indeed, we have faced big competition pressure in Japan, and there are several countermeasures. Actually, in the first half of the year, we had been observing the market development, and we have seen some competitors continuously dropping their prices. They have lowered the price to a very low level. We have seen some local Japanese brands launching AEDs, the automatic debris collection products. Reacting to that in Q2, we have launched more cost-effective products. If you go to market, you will observe some new ones, but the prices are more affordable, more competitive. At the same time, we also launched a new product. In July, we have launched the Generation 3 Light Weight EvoPower product.
All of these products can help us to consolidate our position in Japan in the cordless vacuum category. We have mentioned that starting from the second half of Q2 till today, the cordless vacuum market share have been growing. We are also expanding the categories actively. In the past few years, we have been mentioning that in Japan, as our core APAC market, is a very good starting point to roll out our cordless vacuum category and the Ninja product. Last year, we launched the Crispi product, and we have seen very positive reactions. We have a great breakthrough in the online sales. If you have studied the Japanese market, you would know that the offline market is huge, and consumers like to go to the chain stores or the large electronic stores.
Contrary, we would like to invest more on the social media platforms to promote the online sales. In the second half of the year, we will also continue to expand the Ninja product. The soup maker I have just mentioned now will also be first launched in Japan. The second strategy is to promote more Ninja products. Also I have mentioned that in the first half of the year, we have launched the bladeless fan. The TurboBlade tower fan has also received great feedback in Japan. These are some of the changes, and we're confident to continuously leverage on these strategies to make progress.
Number three, in Japan, based on the SN product, we would have some changes of the size and the weight and the portability. For example, the hit products like Crispi would be customized to the Japanese market. We will have the modification of the classic model to meet the needs in Japan. With these methods, we can further expand the product categories and to reduce the dependence on the cordless vacuum cleaner and to have a more balanced market portfolio, especially with the introduction of the Ninja product.
This is my answer to our strategies in Japan. I believe that you will see the changes in the second half of the year, whether from the performance of the market share or some other financial indicators. In South Korea, indeed, we have made the transition, and I'd say that the transition has been very efficient since the second half of last year. From the perspective of distributors, there might be some problems in operation. At the board level, at the management level, we have made a decision to explore the possibilities of D2C. After we've made the transition decision, we have very quickly made an adjustment in less than half a year. For the online business, the sales had been completely switched to D2C model. After the switch in April, there had been some inventory at the distributor side to be digested.
What I can share with you is that in the second half of the year, we already started to have the high year-on-year growth. We're very confident to hit the annual goal. We believe that we can be at least better than the annual sales last year. Of course, it takes time to recover. If you have some understanding of the South Korean market, you would realize that its synergy with other APAC markets is relatively small, mainly from the market level. The online retailers are mainly Coupang and Naver. Amazon is not present in South Korea, and this is a very local feature. About the offline business, for example, the department stores or the chained electronic stores, all of these are very special channels in South Korea. Right now, we have done a very good job in the channel development.
We are very positive and bullish about South Korea's annual performance this year. Thank you.
Thank you, Wencong, for your question and Leon for your answer. That is the end of the Q&A session. Finally, let's invite Madam Han to give us a closing remark.
Overall, in H1 2026, the group proactively pushed ahead with the business adjustment amid a complicated market landscape and achieved improved profitability as APAC remained resilient. Joyoung. Just now, Leon mentioned about the adjustment in South Korea. According to the sales results in July, it's quite encouraging. Joyoung continued its efforts in product innovation and channel optimization. Looking ahead to the second half of the year, the group will remain product innovation driven, deepen its footprint in key markets including Australia, New Zealand, Japan, and South Korea, and expand steadily into India, South Asia, Southeast Asia, and to other Asia-Pacific markets.
We will also strengthen management over product mix, supply chain, expenses, and operation efficiency, and strike a balance between business scale, profitability, and capital efficiency, and pursue higher quality and sustainable growth of the group. Thank you again for your attention and support. Thank you.
Thank you, Madam Han. If you have further questions, we welcome you to contact the IR team of the company. Thank you again for your attention and support to JS Global Lifestyle. That is the end of this meeting. Thank you.