SKSHU(SH:603737) NORTHEAST SECURITIES·2025-08-18 07:45Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock's performance in the near term [10]. Core Insights - The company reported a revenue of 5.816 billion yuan for H1 2025, a year-on-year increase of 0.97%, while the net profit attributable to shareholders reached 436 million yuan, up 107.53% year-on-year, driven by strong retail momentum [1][4]. - The retail segment, particularly in home decoration wall paint, showed robust growth with sales of 266,000 tons and revenue of 1.574 billion yuan, reflecting an 8.43% increase year-on-year [2]. - The company has successfully reduced bad debt provisions, which is expected to enhance net profit margins, with a net profit margin of 7.49% for H1 2025, an increase of 3.85 percentage points year-on-year [3]. Summary by Sections Financial Performance - For H1 2025, the company achieved a revenue of 5.816 billion yuan, with a net profit of 436 million yuan, marking significant growth compared to the previous year [1]. - The second quarter of 2025 saw a revenue of 3.686 billion yuan, a slight decrease of 0.24% year-on-year but a substantial increase of 73.01% quarter-on-quarter [1]. Product Segments - Home decoration wall paint sales reached 266,000 tons, generating 1.574 billion yuan in revenue, with a unit price increase of 2.8% year-on-year [2]. - The company’s engineering wall paint segment experienced a revenue decline of 2.26% year-on-year, with sales of 535,200 tons [2]. - The company is diversifying its product offerings, with revenue from base materials and auxiliary materials reaching 1.732 billion yuan and 460 million yuan, respectively [2]. Profitability Metrics - The overall gross margin for H1 2025 was 32.35%, an increase of 3.7 percentage points year-on-year, with specific margins for home decoration wall paint at 49.41% [2]. - The company reported a decrease in total impairment provisions to 101 million yuan, down by 58 million yuan year-on-year, contributing to improved profitability [3]. Future Projections - Revenue forecasts for 2025-2027 are projected at 13.231 billion yuan, 14.436 billion yuan, and 15.849 billion yuan, with respective year-on-year growth rates of 9.30%, 9.11%, and 9.78% [4]. - Net profit attributable to shareholders is expected to grow significantly, with projections of 953 million yuan, 1.198 billion yuan, and 1.507 billion yuan for the same period [4].