索菲亚：整装成长，静待政策催化

Investment Rating - The investment rating for the company is "Buy" with a target price set above the current price of 18.91 yuan, maintaining the rating for the next six months [6]. Core Views - The company reported a revenue of 2.73 billion yuan in Q3 2024, a year-on-year decrease of 21.1%, and a net profit attributable to the parent company of 360 million yuan, also down 21.2% year-on-year. The first three quarters of 2024 saw a total revenue of 7.66 billion yuan, down 6.6% year-on-year, and a net profit of 920 million yuan, down 3.2% year-on-year [1]. - The decline in Q3 revenue is attributed to a challenging operating environment and weak real estate sales. The company is actively responding to national home renovation subsidy policies, offering a combination of government and group subsidies to stimulate demand [1]. - The company has adjusted its profit forecasts for 2024-2026, expecting net profits of 1.24 billion, 1.36 billion, and 1.53 billion yuan respectively, with corresponding P/E ratios of 15, 13, and 12 times [3]. Financial Performance - For the first three quarters of 2024, the company's revenue by brand includes: - Sophia: 6.89 billion yuan, down 6.84% - Milan: 367 million yuan, up 14.9% - Simi: 156 dealers and 161 specialty stores, focusing on a multi-brand strategy to enhance customer value - Huahai: 282 stores, with plans to recruit quality dealers and expand new channels [2]. - The gross margin for Q3 2024 was 35.9%, a decrease of 0.9 percentage points year-on-year, while the net profit margin was 13.8%, an increase of 0.02 percentage points year-on-year [2]. Strategic Initiatives - The company is focusing on a multi-brand, full-category, and all-channel strategy, with an emphasis on whole-house solutions to enhance customer value. The integrated decoration channel has seen a revenue increase of 26.34% year-on-year [4]. - The company has established strategic partnerships with several top 100 real estate clients and is expanding its overseas presence with 31 overseas dealers covering multiple countries [4]. Adjusted Profit Forecasts - The adjusted profit forecasts reflect the current weak domestic demand and real estate sales, with expected net profits for 2024-2026 being lower than previous estimates [3].