SKSHU(603737) China Post Securities·2024-11-01 10:34Investment Rating - The investment rating for the company is "Buy" and is maintained [2] Core Views - The company reported a revenue of 9.146 billion yuan for the first three quarters of 2024, a year-on-year decrease of 2.81%, with a net profit attributable to shareholders of 410 million yuan, down 26.0% year-on-year [4] - The company is optimizing its retail structure, showing enhanced competitiveness in the consumer segment, particularly in the home improvement market [4][5] - The company is expected to achieve revenues of 12.45 billion yuan and 14.07 billion yuan in 2024 and 2025, respectively, with a projected net profit of 540 million yuan and 770 million yuan for the same years [5][7] Financial Performance - The company’s gross margin for Q3 was 28.68%, a decrease of 3.1 percentage points year-on-year, but stable compared to the previous quarter [5] - The company’s operating cash flow for the first three quarters was 916 million yuan, an increase of 53.24% year-on-year [5] - The company’s debt-to-asset ratio stands at 80.9% [4][9] Revenue Breakdown - For the first three quarters of 2024, the revenue from home improvement wall paint was 2.228 billion yuan, up 14.14% year-on-year, while the revenue from engineering wall paint was 2.979 billion yuan, down 12.51% year-on-year [4] - The average price of home improvement paint increased by 10.62% quarter-on-quarter, while the price of engineering paint decreased by 3.32% [4] Earnings Forecast - The company is projected to have an EPS of 1.03 yuan in 2024 and 1.47 yuan in 2025, with corresponding P/E ratios of 43X and 30X [5][7]