Financial Performance - In Q3 2024, the company achieved revenue of 1.43 billion CNY, a decrease of 5.24% year-on-year; net profit attributable to shareholders was 284 million CNY, down 25.27% year-on-year; net profit excluding non-recurring gains and losses was 272 million CNY, down 26.23% year-on-year [2] - For the first nine months of 2024, revenue reached 3.77 billion CNY, an increase of 0.71% year-on-year; net profit attributable to shareholders was 624 million CNY, down 28.64% year-on-year; net profit excluding non-recurring gains and losses was 612 million CNY, down 13.80% year-on-year [2] Business Highlights - The company maintained resilient sales revenue, outperforming the overall industry development level [2] - Profitability remained relatively stable, reflecting strong competitiveness [2] - Cash flow remained consistently good, with accounts receivable not increasing significantly [2] Challenges and Future Outlook - There is a significant gap between sales revenue and the targets set at the beginning of the year [2] - The pace of expanding the "Circle of Trust" business and upgrading the business model is slower than expected [2] - The company plans to enhance strategic execution and market expansion efforts, improving management precision and granularity [2] Market Demand and Competition - The market demand is expected to remain weak in Q4 2024 [2] - The retail business is primarily focused on new home renovations, but the proportion of renovations in second-hand homes is gradually increasing [3] - The company has maintained a stable pricing strategy for core retail products, while adjusting prices flexibly in response to market competition [3] Strategic Acquisitions - The acquisition of Zhejiang Kairui aims to leverage its mature business model and product matrix to enhance the company's hidden engineering system and accelerate business model transformation [3] - Integration with Zhejiang Kairui is progressing normally in terms of corporate culture, teams, and business [3] Policy Impact - Recent favorable policies are expected to have a positive impact on the market, but specific business-level implementations will take time [3]

Financial Performance - In Q3 2024, the company achieved operating revenue of 1.43 billion CNY, a decrease of 5.24% compared to the same period last year [1] - Net profit attributable to shareholders was 284 million CNY, down 25.27% year-on-year [1] - For the first nine months of 2024, operating revenue reached 3.773 billion CNY, an increase of 0.71% year-on-year [1] - Net profit attributable to shareholders for the first nine months was 624 million CNY, a decline of 28.64% compared to the previous year [1] Business Highlights - The company maintained a resilient sales revenue despite external demand shrinkage and intensified market competition [2] - Profitability remained relatively stable, reflecting strong competitiveness [2] - Cash flow remained consistently good, with no increase in accounts receivable after excluding the impact of consolidating Zhejiang Kairui [2] Strategic Challenges - There is a significant gap between actual sales revenue and the targets set at the beginning of the year [2] - The pace of expanding the "concentric circle" business and upgrading the business model is slower than expected [2] - The company plans to enhance strategic execution and market expansion efforts to promote sustainable and stable development [2] Sales Composition - The sales revenue ratio of retail to engineering business is approximately 68% to 32% [3] Market Trends - The market demand for the company's various businesses remains relatively weak [3] - The proportion of renovation projects for second-hand houses is gradually increasing, although new house renovations still dominate the market [3] Future Outlook - The company will continue to monitor market demand and adjust products and services accordingly [3] - There is a focus on improving cost control and ensuring that the expense ratio remains at a reasonable level [3] - The company maintains a stable dividend policy and will propose profit distribution plans based on various factors [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 3.773 billion yuan for the first three quarters of 2024, a year-on-year increase of 0.71%, while the net profit attributable to the parent company was 624 million yuan, a year-on-year decrease of 28.64%. In Q3 alone, the revenue was 1.43 billion yuan, down 5.24% year-on-year, and the net profit was 284 million yuan, down 25.27% year-on-year [2] - The revenue pressure in Q3 is attributed to increased industry demand pressure, although the retail-focused PPR business is expected to remain resilient. The decline in revenue is influenced by reduced demand in municipal and construction projects, while the acquisition of Zhejiang Keri Company has impacted the revenue consolidation since October 2023 [2] - The gross profit margin remains stable, with sales expense ratio increasing. The gross profit margins for Q1-Q3 2024 were 41.48%, 42.58%, and 43.11%, with a significant year-on-year decline in Q3 due to competitive pricing pressures in the industry. The sales expense ratio increased by 2% year-on-year, mainly due to the consolidation of Zhejiang Keri [3] - Operating cash flow remains strong, with a net cash inflow from operating activities of 812 million yuan for the first three quarters of 2024, showing slight improvement. In Q3, the net cash inflow was 520 million yuan, an increase of 31% year-on-year, indicating high-quality operational status despite pressure on demand and profitability [3] Financial Forecast and Valuation - The company continues to implement its "dual-wheel drive" strategy, focusing on retail channel expansion and engineering business growth. The net profit forecasts for 2024-2026 have been revised down to 1.107 billion, 1.281 billion, and 1.441 billion yuan respectively, with corresponding P/E ratios of 21X, 19X, and 16X based on the closing price on October 31 [4]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [3] Core Views - The company reported a slight improvement in quarterly performance, with a year-on-year revenue decline of 5.24% in Q3 2024, but a sequential increase compared to Q2 2024. The net profit attributable to shareholders decreased by 25.27% year-on-year, indicating ongoing pressure on profitability despite some recovery in the renovation market [1][3] - The report highlights that the company's gross margin for Q3 2024 was 43.11%, down 4.89 percentage points year-on-year but up 0.54 percentage points sequentially, suggesting a potential recovery in the renovation market [1] - The report anticipates that the company's performance may reach a bottom, with a focus on the pace of recovery in the future [3] Financial Performance Summary - For Q3 2024, the company achieved revenue of 1.43 billion yuan, a year-on-year decrease of 5.24%, and a net profit of 284 million yuan, down 25.27% year-on-year [1][3] - The company's total revenue for the first three quarters of 2024 was 3.77 billion yuan, with a year-on-year growth of 0.71%, while the net profit for the same period was 624 million yuan, reflecting a decline of 28.64% [3] - The report projects net profits for 2024-2026 to be 1.48 billion, 1.71 billion, and 1.94 billion yuan respectively, with corresponding EPS of 0.93, 1.08, and 1.22 yuan [4] Market Outlook - The report suggests that the real estate market is stabilizing, which may lead to a two-phase recovery in the sector. The first phase involves a passive bottoming out due to inflation transmission, while the second phase is driven by a supply-demand gap created by reduced new construction and land acquisition [3] - The report employs a DCF valuation method, estimating the company's implied perpetual growth rate at approximately 4.75%, indicating that the company still holds investment value [3]

Investment Rating - The investment rating for the company is "Accumulate (Maintain)" [5] Core Views - The company reported a slight increase in revenue of 0.71% year-on-year for the first three quarters, totaling 3.773 billion yuan, but a significant decline in net profit attributable to shareholders by 28.64%, amounting to 624 million yuan. The decline in profit is attributed to weak market demand and external pressures [1] - The company maintains a stable pricing system for its core pipeline products, with a gross margin of 43.11% in Q3, a decrease of 4.9 percentage points year-on-year, but a slight increase of 0.53 percentage points quarter-on-quarter. The increase in expense ratio is linked to higher marketing expenditures [2] - The company is expected to see marginal improvements in its fundamentals as favorable policies in the real estate sector are gradually implemented [1][3] Financial Performance Summary - For Q3, the company achieved revenue of 1.43 billion yuan, a decrease of 5.24% year-on-year, and a net profit of 284 million yuan, down 25.27% year-on-year. The net profit after deducting non-recurring gains was 272 million yuan, also down 25.33% year-on-year [1] - The company’s cash flow performance is strong, with a net operating cash flow of 521 million yuan in Q3, reflecting a year-on-year growth of 31.17% and a quarter-on-quarter growth of 11.35% [2] - The company’s revenue and profit forecasts for 2024-2026 are adjusted to 1.02 billion yuan, 1.16 billion yuan, and 1.3 billion yuan respectively, with corresponding P/E ratios of 24x, 21x, and 19x [3][4]

Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 15.26 CNY [5]. Core Views - The company achieved a revenue of 3.773 billion CNY in the first three quarters of 2024, a year-on-year increase of 0.71%, while the net profit attributable to the parent company was 624 million CNY, a decrease of 28.64% year-on-year [1]. - The company continues to invest in marketing, leading to an increase in expense ratios, with total expense ratio for Q1-Q3 2024 at 22.50%, up 2.68 percentage points year-on-year [2]. - The company maintains stable cash flow and high-quality operations, with a net cash flow from operating activities of 521 million CNY in Q3 2024, showing year-on-year and quarter-on-quarter increases [3]. - The company is expected to maintain high-quality development in a challenging market, focusing on retail and marketing investments, with projected net profits for 2024-2026 at 1.05 billion, 1.16 billion, and 1.29 billion CNY respectively [3]. Financial Performance Summary - For Q1-Q3 2024, the company reported a gross margin of 42.49%, down 1.43 percentage points year-on-year, and a net profit margin of 16.80%, down 7.02 percentage points year-on-year [1]. - The company’s revenue for Q3 2024 was 1.430 billion CNY, a decrease of 5.24% year-on-year, with a net profit of 284 million CNY, down 25.27% year-on-year [1]. - The company’s total revenue projections for 2024-2026 are 6.187 billion, 6.496 billion, and 7.146 billion CNY, with corresponding growth rates of -3.0%, 5.0%, and 10.0% [4][6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has maintained revenue growth despite pressure on profitability, with a reported revenue of 3.773 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 0.71%. However, the net profit attributable to shareholders decreased by 13.80% to 624 million yuan [1][2] - The company is actively promoting its "Concentric Circle" and internationalization strategies to seek new avenues for performance growth, focusing on market expansion for waterproofing and water purification products [1][2] Financial Performance Summary - For the first three quarters of 2024, the company achieved a revenue of 3.773 billion yuan, a year-on-year increase of 0.71%, while the net profit attributable to shareholders was 624 million yuan, down 13.80% [1] - In Q3 2024, the company reported a revenue of 1.284 billion yuan, a year-on-year decline, with a net profit of 284 million yuan, down 25.27% year-on-year but up 52.50% quarter-on-quarter [1] - The gross margin for Q3 2024 decreased by 4.9 percentage points compared to the previous year [1] Earnings Forecast - The revenue forecasts for 2024-2026 have been adjusted to 6.086 billion yuan, 6.604 billion yuan, and 7.334 billion yuan, respectively, down from previous estimates [1][2] - The net profit forecasts for the same period are now 1.072 billion yuan, 1.258 billion yuan, and 1.498 billion yuan, also revised down from earlier projections [1][2] Valuation Metrics - The current price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are projected to be 22.3, 19.0, and 16.0, respectively [2][3] - The company is compared to peers with an average P/E of 39.4 for 2024, indicating a relative valuation opportunity given its revenue resilience in a declining demand environment [1][3]

Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [5]. Core Views - The company has shown resilience under market pressure, with a significant improvement in net profit margin quarter-on-quarter [5]. - Despite a decline in market demand, the company has maintained strong profitability due to its brand, service, and channel advantages [5]. - The company is expected to continue expanding its competitiveness in the retail sector through its mid-to-high-end brand positioning and service advantages [5]. Financial Summary - For the first three quarters of 2024, the company achieved a revenue of 3.77 billion yuan, a year-on-year increase of 0.7%, and a net profit of 624 million yuan, a year-on-year decrease of 28.6% [5][6]. - The gross margin for the first three quarters was 42.49%, and the net margin was 16.80%, reflecting a decrease of 1.44 percentage points and 7.02 percentage points year-on-year, respectively [5]. - The company expects revenues of 6.57 billion yuan, 7.13 billion yuan, and 7.95 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 1.27 billion yuan, 1.42 billion yuan, and 1.65 billion yuan [5][6]. Market Context - The real estate sector has faced challenges, with a 24.4% year-on-year decline in completed construction area in the first three quarters of 2024 [5]. - The company’s retail business is impacted by new housing completions, but there is potential for growth from renovation and second-hand housing transactions as the housing stock ages [5]. Future Outlook - The company is expected to see revenue growth of 3.0%, 8.5%, and 11.6% in 2024, 2025, and 2026, respectively [6]. - The report highlights the company's strategic shift from "product + service" to "system integration + service," which is anticipated to enhance customer value and mitigate market demand pressures [5].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][2]. Core Views - The company has shown stable revenue growth, with a reported revenue of 3.773 billion yuan for the first three quarters of 2024, reflecting a year-on-year increase of 0.71%. However, the net profit attributable to shareholders decreased by 28.64% to 624 million yuan [1][2]. - The company is actively expanding its retail channels and new product categories, which is expected to support its ongoing development despite the current industry downturn [1][3]. Financial Performance Summary - For Q3 2024, the company achieved a revenue of 1.430 billion yuan, a quarter-on-quarter increase of 6.17%, and a net profit of 284 million yuan, up 52.50% from the previous quarter [1][2]. - The gross margin for the first three quarters of 2024 was 42.5%, with a slight year-on-year decrease of 1.4 percentage points. The total expense ratio increased by 2.7 percentage points to 22.5% [2]. - The company has maintained a high cash collection ratio of 110.7% and a low debt level, with a debt-to-asset ratio of 24.04% [2]. Future Earnings Forecast - The earnings forecast for 2024-2026 has been adjusted, with expected net profits of 1.0 billion, 1.33 billion, and 1.51 billion yuan respectively, reflecting a year-on-year decrease of 30.2% in 2024, followed by increases of 32.8% and 13.9% in the subsequent years [1][2]. - The expected earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 0.63, 0.83, and 0.95 yuan respectively [1][2]. Business Development Strategy - The company is focusing on enhancing its market share through improved channel construction and expanding its product categories, particularly in indoor waterproofing and whole-house water purification [3]. - The company has over 1,000 primary distributors and more than 31,000 terminal marketing outlets, indicating a stable distribution network [3].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [5][13]. Core Insights - The company achieved a revenue of 3.773 billion in the first three quarters of 2024, a year-on-year increase of 0.71%, while the net profit attributable to shareholders was 624 million, a decrease of 28.64% year-on-year [2]. - The gross margin for Q3 improved sequentially, with a gross margin of 43.11%, showing a quarter-on-quarter increase of 0.53% despite a year-on-year decline of 4.89% [3]. - The company is focusing on its core pipeline business while expanding its diversified "concentric circle" business strategy, particularly in Southeast Asia, with significant progress in Thailand and Singapore [5]. Financial Performance Summary - For Q3 2024, the company reported a revenue of 1.430 billion, a year-on-year decrease of 5.24%, and a net profit of 284 million, down 25.27% year-on-year [2]. - The comprehensive gross margin for the first three quarters of 2024 was 42.49%, a decrease of 1.43 percentage points year-on-year [3]. - The company’s cash flow from operations for the first three quarters was 812 million, reflecting a slight increase of 0.09 million year-on-year, indicating strong cash flow performance [4]. Financial Data and Valuation - The projected net profit attributable to shareholders for 2024-2026 is estimated at 1.147 billion, 1.282 billion, and 1.438 billion respectively, with corresponding P/E ratios of 21.2, 19.0, and 16.9 [5][6]. - The company’s total revenue for 2024 is projected to be 6.441 billion, with a growth rate of 0.99% [6]. - The net profit margin for the first three quarters of 2024 was 16.80%, a decrease of 7.02 percentage points year-on-year [4].