SCSF(SH:600779) Huachuang Securities·2025-08-29 07:06Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 64 yuan [2][9]. Core Insights - The company reported a total revenue of 1.5 billion yuan for the first half of 2025, a decrease of 12.8% year-on-year, and a net profit attributable to shareholders of 110 million yuan, down 56.5% year-on-year. In Q2 alone, revenue was 540 million yuan, down 31.4%, with a net profit of -80 million yuan compared to 60 million yuan in the same period last year [2][9]. - Q2 sales collections reached 990 million yuan, an increase of 29.5%, with contract liabilities at the end of Q2 amounting to 980 million yuan, up 50 million yuan from the end of Q1 [2][9]. - The company is focusing on inventory reduction and maintaining a positive outlook for the second half of the year, with plans to strengthen brand strategies and improve channel profitability [9]. Financial Performance Summary - For 2025, the company is projected to have total revenue of 4.687 billion yuan, a decrease of 10.1% year-on-year, and a net profit of 1.004 billion yuan, down 25.1% year-on-year. The earnings per share (EPS) is expected to be 2.06 yuan [5][9]. - The company’s gross margin decreased by 1.7 percentage points in the first half of 2025, with a more significant decline of 7.1 percentage points in Q2, primarily due to increased discounts and a drop in average selling prices [9]. - The company’s cash flow performance improved, with a net operating cash flow of 70 million yuan in Q2, compared to -190 million yuan in the same period last year [9]. Market Strategy and Outlook - The company is implementing a dual-brand strategy with "Shuijingfang" and "Diyifang," planning to launch new products across various price segments and explore low-alcohol products [9]. - The report anticipates that the company will continue to manage market order and pricing effectively, with a focus on key regional markets to enhance investment efficiency [9].