ORIENTAL YUHONG(SZ:002271) Tianfeng Securities·2025-08-03 15:14Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock over the next six months [6]. Core Views - The company experienced a revenue decline of 10.84% year-on-year in H1 2025, with total revenue reaching 13.569 billion. The net profit attributable to shareholders decreased by 40.61% to 564 million [1]. - Despite the overall pressure on revenue, the decline in Q2 was less severe, with a revenue drop of 5.64% year-on-year [1]. - The company has announced price increases for its products, which are expected to support an improvement in profitability moving forward [2]. - The retail business segment has shown resilience, with a revenue of 5.059 billion in H1 2025, although the direct sales channel saw a significant decline [3]. - The company is expanding its global footprint, with a 42.16% increase in overseas revenue, and plans to acquire a 100% stake in a Chilean building materials supermarket [3]. Financial Performance Summary - In H1 2025, the company reported a comprehensive gross margin of 25.40%, down 3.82 percentage points year-on-year, with product-specific gross margins under pressure [2]. - The company’s cash flow management has improved, with a reduction in cash outflow by 9.32 billion year-on-year, despite an increase in credit impairment losses [4]. - The forecast for net profit attributable to shareholders has been adjusted to 1.03 billion, 1.48 billion, and 1.81 billion for 2025-2027, down from previous estimates [1]. Revenue and Profitability Outlook - The company’s revenue is projected to recover slightly in the coming years, with expected growth rates of 0.08%, 6.81%, and 7.50% for 2025, 2026, and 2027 respectively [5]. - The EBITDA is forecasted to decline in 2024 but is expected to recover in subsequent years, indicating a potential rebound in operational performance [5]. - The net profit margin is projected to improve gradually, with estimates of 3.67%, 4.95%, and 5.61% for 2025, 2026, and 2027 respectively [11].