SKSHU(SH:603737) Great Wall Securities·2024-07-29 06:31Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company's performance is impacted by increased expenses and provisions, while its channel structure continues to optimize [1][6] - Revenue for the first half of 2024 reached 5.76 billion yuan, a year-on-year increase of 0.42%, while net profit attributable to shareholders decreased by 32.38% [1] - The company is actively expanding its channels, with main product sales driving slight revenue growth [1][6] Financial Summary - Revenue (in million yuan): 2022A: 11,338, 2023A: 12,476, 2024E: 13,163, 2025E: 14,379, 2026E: 15,782 [1] - Net profit (in million yuan): 2022A: 330, 2023A: 174, 2024E: 601, 2025E: 795, 2026E: 1,030 [1] - ROE (%): 2022A: 12.5, 2023A: 6.6, 2024E: 18.2, 2025E: 19.7, 2026E: 20.7 [1] - EPS (latest diluted, in yuan): 2022A: 0.63, 2023A: 0.33, 2024E: 1.14, 2025E: 1.51, 2026E: 1.95 [1] - P/E (times): 2022A: 55.4, 2023A: 105.2, 2024E: 30.4, 2025E: 23.0, 2026E: 17.7 [1] Product Performance - The company reported sales volumes for various products in the first half of 2024: - Home decoration wall paint: 252,300 tons (+24.04%) - Engineering wall paint: 501,700 tons (-0.95%) - Adhesives: 34,200 tons (+28.02%) - Base materials and auxiliary materials: 1,077,000 tons (+34.81%) - Waterproof membranes: 4,350,880 square meters (+22.92%) [1] - Revenue from these products showed varied growth rates, with home decoration wall paint revenue increasing by 20.12% [1] Cost and Margin Analysis - The average prices of most products decreased, with home decoration wall paint down by 3.03% and engineering wall paint down by 9.85% [2] - The company's gross margin and net margin were 28.64% and 3.61%, respectively, both showing year-on-year declines [2] - Operating cash flow for the first half of 2024 was negative 42 million yuan, a decline of 121.41% year-on-year [2] Strategic Developments - The company is focusing on high-end retail strategies and optimizing its channel structure, with significant growth in retail business [6] - The company is expanding its presence in e-commerce platforms and enhancing its online retail capabilities [6]