ORIENTAL YUHONG(SZ:002271) CMS·2025-08-07 12:31Investment Rating - The report maintains a "Strong Buy" rating for the company [2][6]. Core Views - The company is experiencing short-term pressure on performance, with a focus on increasing retail sales and actively expanding into overseas markets [2][6]. - The domestic construction waterproofing industry is undergoing a structural transformation, with increasing concentration towards leading companies due to enhanced regulations and rising quality demands from downstream customers [2][6]. - The company has made significant strides in establishing overseas operations and pursuing acquisitions, including the construction of a production and logistics base in Houston and the acquisition of local retail companies in Hong Kong and Chile [2][6]. Financial Performance Summary - In the first half of 2025, the company achieved total revenue of 13.569 billion yuan, a year-on-year decrease of 10.84%, and a net profit attributable to shareholders of 564 million yuan, down 40.16% [1][5]. - The company's retail channel revenue increased to 5.059 billion yuan, accounting for 37.28% of total revenue, indicating a shift in sales strategy [5][6]. - The overall gross margin for the first half of 2025 was 25.40%, a decline of 3.82 percentage points year-on-year, with specific product margins also under pressure [5][6]. Business Structure and Strategy - The company is transitioning its sales model from direct sales to a channel-focused approach, with engineering and retail channels accounting for 84.06% of total revenue [5][6]. - The company is actively optimizing its product structure, with non-waterproof business revenues increasing, which supports overall profitability despite challenges in the main business [5][6]. Future Earnings Forecast - The earnings per share (EPS) for 2025 and 2026 are projected to be 0.57 yuan and 0.72 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 21.8 and 17.3 [6][7].