SFY(SZ:002572) HTSC·2025-08-29 07:14Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 17.85 [7][8]. Core Views - The company reported a revenue of RMB 45.51 billion for 1H25, a year-on-year decrease of 7.7%, and a net profit attributable to shareholders of RMB 3.19 billion, down 43.4% year-on-year [1][5]. - The decline in profit was attributed to fair value changes, while the company continues to focus on product quality upgrades and market expansion despite current demand pressures [1][5]. - The company is well-positioned with a low valuation and high dividend yield, making it an attractive investment opportunity [4][5]. Summary by Sections Financial Performance - In Q2, the company achieved revenue of RMB 25.13 billion, a decrease of 10.8% year-on-year, with a net profit of RMB 3.07 billion, down 23.0% year-on-year [1][2]. - The gross profit margin for 1H25 was 34.4%, a decline of 1.4 percentage points year-on-year, while the expense ratio increased by 0.4 percentage points to 21.2% [4]. Brand Performance - The company's main brands faced revenue declines: - Sofia brand revenue was RMB 41.28 billion, down 7.1% year-on-year - Milan brand revenue was RMB 1.76 billion, down 26.5% year-on-year - Sim brand revenue was RMB 0.56 billion, down 21.1% year-on-year [2]. Market Strategy - The company is actively expanding its presence in the stock market and enhancing cooperation with installation companies, with 270 direct partnerships covering 211 cities [3]. - The export business has shown significant growth, with a revenue increase of 39.5% year-on-year, reaching RMB 0.34 billion in 1H25 [3]. Profit Forecast and Valuation - The profit forecast for 2025-2027 has been adjusted downwards, with expected net profits of RMB 11.43 billion, RMB 12.66 billion, and RMB 13.66 billion respectively [5][10]. - The company is assigned a target PE of 15 times for 2025, leading to a target price of RMB 17.85, reflecting its competitive advantages in the market [5][10].