SFY(002572) 华创证券·2024-09-16 09:38Investment Rating - Strong Buy (Maintained) with a target price of 19.04 CNY, compared to the current price of 12.52 CNY [1] Core Views - The company achieved steady revenue growth and improved profitability in H1 2024, with revenue/ net profit/ adjusted net profit of 4.93/0.56/0.53 billion CNY, up 3.9%/13.0%/13.4% YoY respectively [1] - Q2 2024 revenue/net profit/adjusted net profit were 2.82/0.40/0.38 billion CNY, down 4.1% but up 1.0%/down 0.9% YoY respectively [1] - The company's multi-brand, full-category, and full-channel strategy provides strong operational leverage, with potential for continued efficiency improvements [1] Brand Performance - Sophia brand achieved revenue of 4.44 billion CNY in H1 2024, up 3.9% YoY, with 2,552 stores (down 216 YoY, down 175 from the beginning of the year) and an average customer spending of 23,679 CNY, up 27.0% YoY [1] - Milan brand revenue grew 42.6% YoY to 240 million CNY in H1 2024, with 553 stores (up 90 YoY, up 39 from the beginning of the year) and average customer spending of 14,283 CNY, up 4.6% YoY [1] - Simi brand has 171 stores (down 87 YoY, down 78 from the beginning of the year), with ongoing transformation to whole-home stores driving higher customer spending [1] - Huahe brand revenue increased 3.8% YoY to 70 million CNY in H1 2024, with 281 stores (up 90 YoY, up 39 from the beginning of the year) and 276 dealers (flat from the beginning of the year) [1] Channel Performance - Distribution/direct sales/bulk channels achieved revenue of 3.91/0.16/0.73 billion CNY in H1 2024, up 1.2%/37.4%/14.7% YoY respectively [1] - The company optimized its bulk business customer structure, strengthened cooperation with high-quality real estate customers, and accelerated expansion into non-real estate customers and overseas markets [1] - The whole-home channel achieved 43.6% YoY revenue growth in H1 2024, with 256 cooperative home improvement companies (up 35 from the beginning of the year) covering 189 regions [1] Profitability and Cost Control - H1 2024 gross margin improved to 35.8%, up 1.0 ppts YoY, driven by higher sales of high-margin customized products, improved board utilization, and production efficiency [1] - Sales/management/financial expense ratios were 10.0%/7.0%/-0.03% in H1 2024, down 0.1/up 0.02/down 0.6 ppts YoY respectively, with net profit margin improving to 11.5%, up 0.9 ppts YoY [1] - Q2 2024 gross margin was 38.1%, up 2.4 ppts YoY and 5.5 ppts QoQ, with net profit margin of 14.2%, up 0.7 ppts YoY [1] Financial Forecasts - Revenue is expected to grow to 11.97/12.87/13.77 billion CNY in 2024E/2025E/2026E, up 2.6%/7.5%/7.0% YoY respectively [1] - Net profit is forecasted to reach 1.41/1.54/1.68 billion CNY in 2024E/2025E/2026E, up 11.8%/9.2%/8.9% YoY respectively [1] - EPS is projected to be 1.46/1.60/1.74 CNY in 2024E/2025E/2026E, with P/E ratios of 9/8/7X respectively [1] Valuation - The company is valued at 13X 2024E P/E, implying a target price of 19.04 CNY [1] - The current market cap is 12.06 billion CNY, with a circulating market cap of 8.16 billion CNY [2] - The stock has a 12-month high/low of 21.54/12.52 CNY [2]