Vatti(SZ:002035) Changjiang Securities·2025-09-04 08:43Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company reported a revenue decline of 9.71% year-on-year for the first half of 2025, with total revenue reaching 2.8 billion yuan. The net profit attributable to shareholders decreased by 9.19% to 272 million yuan, while the net profit excluding non-recurring items fell by 8.92% to 266 million yuan [2][4]. - In the second quarter alone, the company achieved a revenue of 1.54 billion yuan, down 10.44% year-on-year, with a net profit of 166 million yuan, a decrease of 5.57% [2][4]. - The decline in revenue is primarily attributed to the impact of the real estate market and intensified industry competition. The retail volume of kitchen and bathroom appliances increased by 5.1% year-on-year, but the retail value growth has significantly weakened compared to the previous year [10]. Summary by Sections Financial Performance - For the first half of 2025, the company achieved a gross margin of 43.54%, an increase of 2.86% year-on-year. The gross margins for key products were 48.41% for range hoods, 48.73% for stoves, and 33.98% for water heaters [10]. - The company's net profit margin for the first half of 2025 was 9.72%, reflecting a slight improvement compared to the previous year [10]. Market Dynamics - The real estate sector's performance has been weak, with new housing starts down 20% year-on-year in the first half of 2025. This has contributed to the overall decline in the company's revenue [10]. - The company has a diversified brand portfolio, including Huati, Baide, and Huati Home, which allows it to cover various product categories and meet different customer needs [10]. Future Outlook - The company is expected to maintain growth in net profit, with projections of 517 million yuan, 563 million yuan, and 613 million yuan for 2025, 2026, and 2027, respectively. The corresponding price-to-earnings ratios are estimated to be 10.40, 9.54, and 8.76 [10].