SKSHU(SH:603737) HTSC·2025-11-07 01:40Investment Rating - The investment rating for the company is maintained as "Buy" [1] Core Insights - The company has shown strong performance in the retail sector, particularly in the home improvement segment, with significant growth in sales volume despite pricing pressures. The revenue from home decoration wall paint reached 2.491 billion RMB, reflecting an 11.8% year-on-year increase, while the overall revenue from retail new business models has supported rapid income growth [2][3] - The company is well-positioned to benefit from the ongoing urban renewal initiatives and the substantial demand in the existing housing market, with a focus on the renovation segment, which accounts for over 50% of the home decoration paint market [3][4] - The company is actively participating in rural revitalization efforts, maintaining the leading market share in imitation stone paint at 7.6%, and has expanded its coverage in rural areas to nearly 20% [4] Summary by Sections Financial Performance - For the first nine months of 2025, the company achieved a comprehensive gross margin of 32.81%, an increase of 4.2 percentage points year-on-year, with the gross margin for Q3 reaching 33.6% [2] - The projected net profit for the company is estimated at 9.15 billion RMB for 2025, with a compound annual growth rate of 60.47% over three years [5] Market Position - The company has established over 3,000 "immediate living" community renovation stores, aligning with consumer needs in the existing housing market [3] - The company’s market share in the engineering paint sector is steadily increasing, projected to reach approximately 13% [3] Valuation - The target price for the company is set at 53.19 RMB, based on a 35x PE valuation for 2026, reflecting the strong retail attributes of the paint sector and the potential for market share growth in the domestic market [5]