SCSF(SH:600779) SINOLINK SECURITIES·2025-10-31 02:01Investment Rating - The report maintains a "Buy" rating for the company, with a target price range of 67.10 RMB [5][13]. Core Views - The company reported a significant decline in revenue and net profit for Q3 2025, with revenue at 8.5 billion RMB, down 58.9% year-on-year, and net profit at 2.2 billion RMB, down 75.0% year-on-year [2][3]. - The decline in sales volume is identified as the primary reason for the poor performance, attributed to price fluctuations of core products and measures taken to stabilize the value chain [3]. - The company is expected to see a gradual recovery in revenue and net profit from 2025 to 2027, with projected revenues of 3.5 billion RMB, 3.8 billion RMB, and 4.3 billion RMB respectively, and net profits of 499 million RMB, 608 million RMB, and 818 million RMB [5][10]. Summary by Sections Financial Performance - For Q1-Q3 2025, the company achieved a total revenue of 23.5 billion RMB, down 38.0% year-on-year, and a net profit of 3.3 billion RMB, down 71.0% year-on-year [2]. - The revenue breakdown shows high-end products generating 20.8 billion RMB and mid-range products 1.3 billion RMB, with respective declines of 39.9% and 33.1% [3]. - The gross margin for high-end products decreased by 3.0 percentage points to 83.0%, while mid-range products saw a decline of 8.7 percentage points to 54.5% [3]. Sales Channels - Revenue from new channels increased by 71.2% to 5.6 billion RMB, while wholesale and agency channels saw a decline of 50.5% to 16.5 billion RMB [4]. - In Q3 2025, new channels generated 0.9 billion RMB, down 22.3%, and wholesale channels generated 7.2 billion RMB, down 62.3% [4]. Future Projections - Revenue and net profit are projected to decline significantly in 2025, with a recovery expected in the following years, with growth rates of 7.0% and 13.9% in 2026 and 2027 respectively [5][10]. - The earnings per share (EPS) is expected to be 1.02 RMB in 2025, increasing to 1.68 RMB by 2027 [5].