SFY(SZ:002572) Changjiang Securities·2025-09-14 14:12Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of 4.551 billion yuan, a net profit attributable to shareholders of 319 million yuan, and a net profit excluding non-recurring items of 429 million yuan for the first half of 2025, representing year-on-year declines of 8%, 43%, and 19% respectively. In Q2 2025, the figures were 2.513 billion yuan, 307 million yuan, and 278 million yuan, with year-on-year declines of 11%, 23%, and 26% respectively. Both retail and bulk sales faced pressure, and profitability was under strain in Q2 [2][6] Summary by Sections Revenue - Revenue from traditional retail, integrated decoration, bulk sales, and exports showed year-on-year changes of -7%, -13%, -12%, and +39% respectively in H1 2025. Exports demonstrated a strong growth trend. The brands saw revenue changes of -7% for Sophia, -27% for Milan, -22% for Huaher, and +9% for others [12] Profitability - In Q2 2025, the net profit margin and net profit excluding non-recurring items decreased by 1.9 and 2.3 percentage points year-on-year. The gross margin and operating expenses showed a year-on-year change of -2.3 and +0.8 percentage points respectively. The overall gross margin for H1 decreased by 1.4 percentage points, while the gross margin for retail and bulk sales decreased by 0.6 and 8.8 percentage points respectively [12] Store Dynamics - The net change in the number of stores for the brands in H1 2025 was +14 for Sophia, -26 for Si Mi, -19 for Huaher, and +13 for Milan, resulting in a total of 2,517, 135, 260, and 572 stores respectively [12] Future Outlook - The company’s integrated home strategy positions retail as the core, with Milan and integrated decoration showing growth potential. The expansion of supporting products and customer order value is expected to contribute to revenue growth. The average customer order value reached 22,340 yuan in H1 2025, down from 19,619 yuan in 2023, but is expected to recover. The integrated decoration segment is improving in quality, with partnerships covering 211 and 1,450 market areas respectively. The company has established 26 overseas distributors across 23 countries/regions, indicating potential for growth in exports [12] Long-term Value - The long-term value in the home furnishing sector remains intact, with expectations for continued high dividends. The company is set to benefit from national subsidies in the home furnishing sector, with a projected dividend of 960 million yuan for 2024, representing 88% of net profit excluding non-recurring items, yielding a dividend rate exceeding 7%. Forecasted net profits for 2025-2027 are approximately 1.17 billion, 1.16 billion, and 1.28 billion yuan, with corresponding price-to-earnings ratios of 11, 11, and 10 times [12]