ORIENTAL YUHONG(SZ:002271) Guoxin Securities·2025-10-29 09:49Investment Rating - The investment rating for the company is "Outperform the Market" [4][24]. Core Views - The company's Q3 revenue has turned positive year-on-year, and the decline in net profit is narrowing quarter by quarter. For the first nine months of 2025, the company achieved operating revenue of 20.6 billion yuan, down 5.1% year-on-year, with a net profit attributable to shareholders of 810 million yuan, down 36.6% year-on-year [7][24]. - The company is undergoing a transformation, with results expected to gradually emerge. It is actively revitalizing assets and has completed the acquisition of a leading retail supermarket in Chile, which is anticipated to contribute to performance in the future [24]. Financial Performance Summary - Revenue and Profitability: In Q3, the company achieved operating revenue of 7.03 billion yuan, up 8.5% year-on-year, while the net profit attributable to shareholders was 250 million yuan, down 26.6% year-on-year. The net profit margin for Q3 was 3.4%, down 1.7 percentage points year-on-year [7][2]. - Gross Margin: The comprehensive gross margin for the first nine months of 2023 was 25.2%, down 3.9 percentage points year-on-year. The Q3 gross margin was 24.8%, down 4.1 percentage points year-on-year [2][14]. - Cash Flow: The company reported a positive operating cash flow of 420 million yuan for the first nine months of 2025, compared to a negative cash flow of 490 million yuan in the same period last year. The Q3 operating cash flow was 810 million yuan [3][19]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025-2027 is adjusted to 0.45, 0.67, and 0.89 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 29.4, 19.6, and 14.7 times [24][25]. - The company is expected to face short-term demand weakness, but the transformation effects are anticipated to gradually manifest, leading to a potential operational turning point [24].