ORIENTAL YUHONG(SZ:002271) Guotou Securities·2025-08-01 08:31Investment Rating - The report maintains an investment rating of "Buy-A" with a 6-month target price of 13.77 CNY, compared to the current stock price of 12.03 CNY [4]. Core Views - The company reported a revenue of 13.569 billion CNY in the first half of 2025, a year-on-year decrease of 10.84%, and a net profit attributable to shareholders of 564 million CNY, down 40.16% year-on-year. The decline is attributed to market demand downturn and intense price competition [1][2]. - The company is experiencing a continuous optimization of its channel structure, with retail and engineering channels accounting for 84% of total revenue in H1 2025. Retail channel revenue share increased by 1.54 percentage points [2]. - The company is actively responding to industry price competition by raising prices on certain waterproof products, which is expected to improve profitability in the second half of 2025 [8]. Revenue Performance - In H1 2025, the company achieved revenue of 135.69 billion CNY, with a quarterly breakdown showing Q1 and Q2 revenues down 16.71% and 5.64% year-on-year, respectively. The decline in Q2 was less severe compared to Q1 [1]. - Revenue from retail, engineering, and direct sales channels in H1 2025 was 50.59 billion CNY, 63.47 billion CNY, and 20.36 billion CNY, with respective year-on-year growth rates of -6.98%, -5.26%, and -28.01% [2]. Product and Regional Analysis - In H1 2025, revenue from waterproof membranes, coatings, mortar, and engineering construction was 5.513 billion CNY, 3.946 billion CNY, 1.996 billion CNY, and 849 million CNY, with respective growth rates of -8.84%, -17.11%, -6.24%, and -32.34% [3]. - The company achieved overseas revenue of 576 million CNY in H1 2025, representing a year-on-year increase of 42.16%, with ongoing construction of overseas bases and plans to acquire a 100% stake in Chilean building materials supermarket Construmart S.A. [3]. Profitability and Cash Flow - The overall gross margin for H1 2025 was 25.40%, a decrease of 3.82 percentage points year-on-year. The gross margin for Q2 2025 was 26.71%, an increase of 2.97 percentage points from Q1 [4]. - The company reported a net cash outflow from operating activities of 396 million CNY in H1 2025, which was an improvement compared to a net outflow of 932 million CNY in the same period last year [8]. Future Outlook - The company forecasts revenues of 25.436 billion CNY, 26.554 billion CNY, and 27.833 billion CNY for 2025, 2026, and 2027, respectively, with expected net profits of 1.227 billion CNY, 1.439 billion CNY, and 1.696 billion CNY, indicating significant growth in net profit in 2025 [9].