SKSHU(SH:603737) Tianfeng Securities·2025-10-21 01:14Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative return of over 20% within the next six months [7][19]. Core Views - The company achieved a net profit of 740 million yuan in the first three quarters, representing a year-on-year increase of 81.2% [1]. - The company is experiencing strong growth in its retail new business formats, which is contributing to improved operational quality [1]. - The company is optimistic about the recovery of profitability and the growth potential of its C-end business [4]. Financial Performance - In the first three quarters, the company reported operating revenue and net profit of 939 million yuan and 74 million yuan, respectively, with year-on-year growth of 2.7% and 81.2% [1]. - The gross margin for the first three quarters was 32.8%, an increase of 4.1 percentage points year-on-year, with a quarterly gross margin of 33.6% [3]. - The company’s operating cash flow showed a net inflow of 1.09 billion yuan, up 18.7% year-on-year, indicating improved operational quality [3]. Business Segments - The company’s home decoration paint revenue grew by 11.8% year-on-year to 2.49 billion yuan, while engineering paint revenue declined by 2.5% to 2.90 billion yuan [2]. - The C-end business is experiencing rapid growth through three main models: "Immediate Move-In," "Beautiful Countryside," and high-end artistic paint products [2]. - The company is focusing on optimizing its revenue structure, with the C-end business accounting for 26.5% of home decoration paint revenue in the first three quarters, up 2.2 percentage points year-on-year [3]. Profit Distribution - The company announced a cash dividend distribution of 369 million yuan, with a payout ratio of 49.61%, reflecting its commitment to shareholder returns [4].