SKSHU(SH:603737) SINOLINK SECURITIES·2025-10-19 08:35Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock over the next 6-12 months with expected price appreciation of over 15% [5]. Core Insights - The company reported a revenue of 9.39 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 2.7%. The net profit attributable to shareholders was 740 million yuan, up 81.2% year-on-year, while the non-recurring net profit reached 565 million yuan, a 126.4% increase [2]. - In Q3 alone, the revenue was 3.58 billion yuan, reflecting a 5.6% year-on-year growth, with a net profit of 310 million yuan, up 54% year-on-year [2]. - The company is experiencing a transformation in its retail segment, with significant growth in new business models, which are key growth drivers [3]. Summary by Sections Performance Review - For the first three quarters of 2025, the company achieved a revenue of 9.39 billion yuan, with a net profit of 740 million yuan and a non-recurring net profit of 565 million yuan, marking substantial year-on-year growth [2]. - Q3 results showed a revenue of 3.58 billion yuan and a net profit of 310 million yuan, indicating strong performance [2]. Operational Analysis - The revenue from home decoration wall paint, engineering wall paint, and auxiliary materials showed varied performance, with home decoration wall paint growing by 12% and engineering wall paint declining by 3% [3]. - Excluding the actively shrinking waterproof business, the revenue from coatings and auxiliary materials grew by 6.2% year-on-year in the first three quarters [3]. Profitability and Cash Flow - The gross margin in Q3 was 33.6%, an increase of 4.9 percentage points year-on-year, while the expense ratio decreased to 21.0% [4]. - Operating cash flow for the first three quarters was 1.09 billion yuan, a year-on-year increase of 170 million yuan, with a proposed cash dividend of 370 million yuan, representing a 50% payout ratio [4]. Profit Forecast and Valuation - The company is expected to achieve net profits of 1 billion yuan in 2025 and 1.4 billion yuan in 2026, with corresponding P/E ratios of 34.2 and 24.4 [5]. - The report emphasizes the stability of the company's profitability and the high growth potential of its new business models [5].