R&T(SZ:002790) Huaan Securities·2025-08-27 12:25Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company reported a decline in revenue and net profit for the first half of 2025, with revenue at 920 million yuan, down 19.49% year-on-year, and net profit at 52 million yuan, down 43.20% year-on-year. The second quarter alone saw revenue of 508 million yuan, down 18.02% year-on-year, and net profit of 30 million yuan, down 6.88% sequentially. The performance was impacted by intense competition in the home and bathroom industry, as well as a slowdown in demand linked to the real estate sector, with varying execution of consumption promotion policies across regions [5][6][8]. Summary by Sections Financial Performance - In H1 2025, the company's revenue from water tanks and accessories was 263 million yuan, down 18.42% year-on-year, while revenue from smart toilets and covers was 531 million yuan, down 22.72% year-on-year. Gross margins for these products were 26.18% and 24.17%, respectively, reflecting a decline of 1.30 and 2.54 percentage points year-on-year. Domestic revenue was 585 million yuan, down 27.76%, while overseas revenue was 335 million yuan, up 0.60% [6]. Market Environment - The company is experiencing pressure on domestic sales and gross margins due to a competitive market environment. The demand for smart toilets is being affected by a decrease in new home renovations and cautious consumer behavior regarding existing home upgrades. The implementation of mandatory CCC certification for electronic toilets starting July 1, 2025, is expected to lead to industry consolidation, with weaker brands being eliminated [6][8]. Future Outlook - The company is positioned for future growth through a dual strategy of "own brand + OEM." It is a leading manufacturer of water-saving flushing components with stable customer relationships. The self-branded smart toilet line, launched in 2021, is expected to see increased market penetration and growth as the company's market share improves. Revenue projections for 2025-2027 are 2.029 billion yuan, 2.273 billion yuan, and 2.497 billion yuan, with corresponding net profits of 127 million yuan, 153 million yuan, and 177 million yuan [8][9]. Valuation Metrics - As of August 26, 2025, the expected earnings per share (EPS) are 0.30 yuan, 0.37 yuan, and 0.42 yuan for 2025, 2026, and 2027, respectively. The price-to-earnings (P/E) ratios are projected to be 26.12, 21.72, and 18.79 for the same years [9][11].