ZBOM(SH:603801) Huachuang Securities·2024-09-04 01:14Investment Rating - Strong Buy (Maintained) with a target price of 13.1 RMB [1] Core Views - Overseas business performed well, while domestic retail faced pressure in H1 2024 [1] - The company achieved revenue/attributable net profit/non-GAAP net profit of 2.21/0.15/0.13 billion RMB in H1 2024, down by 3.8%/17.0%/23.7% YoY respectively [1] - Excluding the impact of share-based payment expenses, the profit decline is expected to narrow [1] - In Q2 2024, revenue/attributable net profit/non-GAAP net profit were 1.39/0.10/0.09 billion RMB, down by 6.9%/20.5%/28.6% YoY respectively [1] Business Performance Product Breakdown - Overall cabinet/custom wardrobe/wooden door businesses achieved revenue of 0.97/0.93/0.14 billion RMB in H1 2024, with YoY changes of -3.7%/-5.9%/+6.9% respectively [1] - Gross margins for these products were 38.8%/40.9%/17.2%, with YoY changes of -0.5/+1.8/-0.7 percentage points [1] Channel Breakdown - Direct sales/distributor/bulk/overseas businesses achieved revenue of 0.17/1.17/0.61/0.09 billion RMB in H1 2024, with YoY changes of -8.2%/-10.9%/+8.2%/+42.7% respectively [1] - Gross margins for these channels were 69.3%/36.0%/35.5%/25.2%, with YoY changes of +0.1/-0.3/+2.2/+10.8 percentage points [1] Store Expansion - As of Q2 2024, the company had 1,798/1,993/1,120/20 stores for overall cabinets/custom wardrobes/wooden doors/direct sales, with net increases of +83/+143/+137/-15 stores compared to the beginning of the year [1] Financial Performance Profitability - Gross margin in H1 2024 was 36.7%, down by 0.1 percentage points YoY [1] - Sales/management/financial expense ratios were 16.9%/6.8%/-0.1%, up by 1.8/1.2/0.2 percentage points YoY, mainly due to increased advertising and equity incentive expenses [1] - Net profit margin attributable to shareholders was 6.7%, down by 1.1 percentage points YoY [1] Cash Flow & Operational Efficiency - Operating cash flow in H1 2024 was a net outflow of 0.26 billion RMB [1] - Inventory/accounts receivable/accounts payable turnover days were 176/22/74 days, up by 23/6/8 days YoY respectively [1] Financial Forecast - Revenue is expected to be 6.03/6.49/6.85 billion RMB in 2024E/2025E/2026E, with YoY growth rates of -1.4%/7.5%/5.6% [2] - Net profit attributable to shareholders is expected to be 0.57/0.62/0.66 billion RMB in 2024E/2025E/2026E, with YoY growth rates of -3.9%/8.0%/7.5% [2] - EPS is expected to be 1.31/1.41/1.52 RMB in 2024E/2025E/2026E [2] - P/E ratios are expected to be 7/7/6X in 2024E/2025E/2026E [2] Valuation & Investment Recommendation - The company is valued at 10X P/E for 2024E, corresponding to a target price of 13.1 RMB/share [1] - The company is expected to benefit from the industry trend of integrated home solutions and its multi-category development strategy [1]