DEHUA TB(SZ:002043) Guohai Securities·2024-08-28 11:00Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1][8]. Core Insights - The company, Tubaobao (兔宝宝), demonstrated strong performance in its core board business while facing challenges in its engineering segment. The revenue from decorative materials and custom home business showed a significant increase, with decorative materials revenue rising by 29.0% year-on-year [2][3]. - The company plans to enhance its mid-term dividend distribution, aiming for a cash dividend of no less than 50% of the distributable profit for the years 2024-2026, with a projected dividend yield of 6.3% based on current price estimates [5][3]. Summary by Sections Financial Performance - In H1 2024, the company achieved operating revenue of 3.91 billion yuan, a year-on-year increase of 19.8%. However, the net profit attributable to shareholders decreased by 15.4% to 240 million yuan [2][3]. - The second quarter of 2024 saw operating revenue of 2.43 billion yuan, with a year-on-year growth of 12.7%, but net profit dropped by 27.3% [2][3]. Business Segments - The revenue from the decorative materials business reached 3.28 billion yuan, up 29.0% year-on-year, while the custom home business revenue fell by 11.4% to 590 million yuan [3]. - The board products segment showed a remarkable growth of 41.5%, contributing significantly to the overall revenue [3]. Market Position and Strategy - The company has established 5,122 specialized stores nationwide, with a focus on expanding into rural markets. This includes 4,322 stores for board products and 800 for custom furniture [3][5]. - The company maintains a strong cash flow and profitability, with a plan to sustain high dividend payouts even during periods of demand downturn [5][3]. Earnings Forecast - The projected operating revenue for 2024-2026 is estimated at 10.15 billion, 11.20 billion, and 12.31 billion yuan, respectively, with net profits expected to be 690 million, 830 million, and 980 million yuan [6][8]. - The earnings per share (EPS) is forecasted to be 0.8, 1.0, and 1.2 yuan for the same period, with corresponding price-to-earnings (P/E) ratios of 11.0, 9.2, and 7.8 [6][8].