ORIENTAL YUHONG(002271) 国信证券·2024-09-02 12:33Investment Rating - The report maintains an "Outperform" rating for Oriental Yuhong (002271 SZ) [1][4][11] Core Views - Revenue and profits are under pressure due to declining demand and ongoing channel transformation [1][5] - Channel transformation continues, with accelerated expansion in non-waterproof products and overseas markets [1][7] - Gross margin increased slightly, while expense ratio rose [8] - Q2 operating cash flow turned positive, but impairment provisions still weighed on performance [10] Financial Performance - 2024H1 revenue was RMB 15 22 billion, down 9 7% YoY, with net profit attributable to shareholders of RMB 940 million, down 29 3% YoY [1][5] - Q2 revenue was RMB 8 07 billion, down 13 8% YoY, with net profit attributable to shareholders of RMB 596 million, down 37 2% YoY [1][5] - 2024H1 gross margin was 29 2%, up 0 3pp YoY, while expense ratio increased by 2 2pp to 18 6% [8] - 2024H1 operating cash flow was -RMB 1 33 billion, an improvement from -RMB 3 94 billion in the same period last year, with Q2 turning positive at RMB 560 million [10] Channel and Product Breakdown - Retail/engineering/direct sales channels contributed RMB 5 44/6 70/2 83 billion, up 7 7%/9 1%/-46 0% YoY, accounting for 35 7%/44 0%/18 6% of total revenue [1][7] - Waterproofing rolls/coatings/mortar powder/engineering construction revenue was RMB 6 05/4 76/2 13/1 26 billion, with mortar powder growing 11 7% YoY [1][7] - Domestic/overseas revenue was RMB 14 81/405 million, down 10 1%/up 6 5% YoY [1][7] Future Projections - 2024-2026 EPS is forecasted at RMB 0 79/1 01/1 21 per share, with PE ratios of 13 8/10 7/9 0x [11] - 2024-2026 revenue is projected at RMB 30 728/33 174/35 960 million, with net profit of RMB 1 925/2 473/2 953 million [2][12] - ROE is expected to be 6 5%/7 9%/8 8% for 2024-2026 [2][12]