SFY(002572) Guoxin Securities·2024-09-02 07:30Investment Rating - The investment rating for the company is "Outperform the Market" [1][3][11] Core Views - The company reported stable operations in Q2 2024, with significant growth in the Milan brand and integrated home solutions, leading to improved profitability [1] - The company is actively capturing the market for bare and renovation projects, with the Milan brand and integrated solutions showing rapid growth [1] - The company has adjusted its profit forecast but maintains a positive outlook on the resilience of its performance under the whole-home strategy [1] Financial Performance Summary - In H1 2024, the company achieved revenue of 49.3 billion (+3.9%) and a net profit attributable to shareholders of 5.6 billion (+13.0%) [1] - Q2 2024 revenue was 28.2 billion (-4.1%), with a net profit of 4.0 billion (+1.0%) [1] - The gross margin improved to 35.8% (+1.0 percentage points) in H1 2024, driven by increased efficiency and scale effects [1] - The company expects net profits for 2024-2026 to be 14.0 billion, 15.8 billion, and 17.8 billion respectively, with year-on-year growth of 11%, 13%, and 13% [1][2] Brand and Market Strategy - The Sofia brand generated revenue of 44.4 billion (+3.9%) in H1 2024, with 2,552 stores [1] - The Milan brand achieved revenue of 2.4 billion (+42.6%) with 553 stores, focusing on integrated customization and expanding into blue ocean markets [1] - The integrated solutions channel saw a revenue increase of 43.6% in H1 2024, with 256 cooperative construction companies across 189 cities [1] Cost and Profitability Metrics - The company maintained stable expense ratios, with sales, management, R&D, and financial expense ratios at 9.9%, 6.2%, 3.7%, and -0.1% respectively [1] - The net profit margin for H1 2024 was 14.9% (+1.0 percentage points) [1] - The company’s cash flow from operating activities decreased by 121.2% year-on-year, primarily due to changes in dealer assessment criteria and increased material procurement costs [1]