ORIENTAL YUHONG(002271) Huachuang Securities·2025-05-12 05:42Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 15 CNY per share [2][9]. Core Insights - In 2024, the company reported a revenue of 28.056 billion CNY, a year-on-year decline of 14.52%, and a net profit attributable to shareholders of 108 million CNY, down 95.24% year-on-year. For Q1 2025, revenue was 5.955 billion CNY, a decrease of 16.71% year-on-year, with a net profit of 190 million CNY, down 44.68% year-on-year [2][9]. - The company is experiencing a gradual optimization of its channels and improvement in cash flow, despite the ongoing decline in the real estate sector [2][9]. Financial Performance Summary - 2024 Financials: Total revenue of 28,056 million CNY, with a year-on-year growth rate of -14.5%. Net profit attributable to shareholders was 108 million CNY, with a growth rate of -95.2% [5]. - 2025 Projections: Expected revenue of 29,877 million CNY, with a growth rate of 6.5%. Projected net profit attributable to shareholders is 1,438 million CNY, with a growth rate of 1,229.8% [5]. - Earnings Per Share (EPS): Projected EPS for 2025 is 0.60 CNY, increasing to 0.74 CNY in 2026 and 0.98 CNY in 2027 [5][9]. Business Segment Analysis - Revenue Breakdown: In 2024, retail business revenue was 10.2 billion CNY, accounting for approximately 36.39% of total revenue, with a year-on-year growth of 9.92%. The engineering channel and direct sales generated revenues of 13.4 billion CNY and 4.3 billion CNY, respectively [9]. - Product Performance: Revenue from waterproof membranes, coatings, mortar powder, and engineering construction was 11.8 billion CNY, 8.8 billion CNY, 4.2 billion CNY, and 1.6 billion CNY, respectively, with year-on-year changes of -11.45%, -8.96%, -1.06%, and -51.37% [9]. Cash Flow and Cost Management - Cash Flow Improvement: In Q1 2025, the company reported a net cash flow from operating activities of -0.81 billion CNY, an improvement of 56.98% compared to the previous period. The expense ratio decreased to 17%, down 3.4 percentage points year-on-year [9]. - Cost Structure: The company is optimizing its cost structure, with sales, management, R&D, and financial expense ratios reported at 9.1%, 6.1%, 1.7%, and 0.2%, respectively [9].