SKSHU(603737) 国投证券·2024-11-03 10:23Investment Rating - The investment rating for the company is "Buy-A" with a 12-month target price of 57.15 CNY, compared to the current stock price of 45.41 CNY [4]. Core Views - The company reported a revenue of 9.146 billion CNY for the first three quarters of 2024, a year-over-year decrease of 2.81%, and a net profit of 410 million CNY, down 26.00% year-over-year [1][2]. - The decline in revenue is attributed to weak demand in the real estate sector, particularly affecting the engineering paint segment, while retail business showed strong growth [2][3]. - The company has maintained a good growth momentum in retail, with home decoration wall paint revenue increasing by 14.14% year-over-year [2]. Summary by Sections Financial Performance - For Q3 2024, the company achieved a revenue of 3.385 billion CNY, a decrease of 7.87% year-over-year, and a net profit of 200 million CNY, down 17.89% year-over-year [1][2]. - The overall gross margin for the first three quarters was 28.66%, a decline of 2.67 percentage points year-over-year, primarily due to rising raw material costs and falling prices for engineering paints [3]. - Operating cash flow for the period increased significantly by 53.24% year-over-year, reaching 916 million CNY [6]. Revenue Breakdown - The revenue from home decoration wall paint was 2.228 billion CNY, with a year-over-year increase of 14.14%, while engineering wall paint revenue was 2.979 billion CNY, down 12.51% year-over-year [2]. - Adhesives revenue grew by 16.17% year-over-year to 651 million CNY, and waterproof materials revenue increased by 13.02% year-over-year to 1.002 billion CNY [2]. Future Outlook - The company is expected to see revenue growth in the coming years, with projected revenues of 13.127 billion CNY, 14.422 billion CNY, and 15.797 billion CNY for 2024, 2025, and 2026, respectively, representing year-over-year growth rates of 5.22%, 9.87%, and 9.54% [6]. - Net profit forecasts for the same years are 582 million CNY, 669 million CNY, and 816 million CNY, with significant growth anticipated in 2024 at 235.61% year-over-year [6].