居然智家：创新融合，智能未来

Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [5][6]. Core Insights - The company is positioned as a leader in the home furnishing retail sector, with a focus on digital transformation and innovative operational models to enhance efficiency and growth potential [3][4][19]. - The company has shown resilience in expanding its market presence, with a significant increase in both direct and franchise stores, and is expected to benefit from a recovery in domestic consumption in 2025 [3][30]. - The digital transformation strategy is highlighted through three main platforms: "洞窝" for digital services, "居然智慧家" for smart home retail, and "居然设计家" for AI design services, which collectively enhance the company's operational capabilities and market reach [4][71]. Summary by Sections Company Overview - The company operates as a leading home furnishing retail chain in China, with a significant market share alongside competitors like 美凯龙, capturing 23.5% of the market for large-scale home furnishing stores [3][19]. - The company has expanded its direct stores from 66 to 86 and franchise stores from 29 to 328 between 2014 and 2023, demonstrating a robust growth strategy [3][30]. Business Highlights - The company has implemented innovative operational models, including a "light asset" leasing strategy for direct stores and a franchise model that expands into lower-tier cities [3][48]. - The digital platform "洞窝" has achieved a GMV of 466 billion yuan in the first half of 2024, reflecting an 11.8% year-on-year growth, and is integral to the company's digital transformation efforts [4][73]. - The company has also launched a new shopping center model, with significant sales growth reported in these locations [64]. Financial Forecast and Investment Recommendations - The projected net profits for 2024, 2025, and 2026 are 1.02 billion yuan, 1.10 billion yuan, and 1.19 billion yuan, respectively, with a slight decline expected in 2024 followed by growth in subsequent years [5][6]. - The current stock price corresponds to a P/E ratio of 19x for 2025, which is slightly above the industry average, justifying the "Buy" rating based on the company's leading position in digital transformation and home retail [5][6].