SKSHU(SH:603737) Great Wall Securities·2024-04-24 00:32Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company has shown steady revenue growth and improved operational quality, with a projected increase in net profit for 2024-2026 [7] - The first quarter of 2024 saw a significant increase in net profit, primarily due to government subsidies and the reversal of bad debt provisions [1] - The company is focusing on enhancing operational efficiency and expanding its retail and engineering channels [7] Financial Performance Summary - Revenue: The company achieved a revenue of 12,476 million yuan in 2023, a year-on-year increase of 10.03%, with projections of 14,111 million yuan for 2024 [1][6] - Net Profit: The net profit attributable to shareholders was 174 million yuan in 2023, a decrease of 47.33% year-on-year, but is expected to rebound to 726 million yuan in 2024, reflecting a growth of 318% [1][6] - Gross Margin: The gross margin for Q1 2024 was 28.38%, slightly down from the previous year, while the net margin improved to 2.29% [1] - Cash Flow: The operating cash flow for Q1 2024 showed a net outflow of 264 million yuan, but this was an improvement compared to the previous year [1] Product Performance Summary - Sales Growth: Key products such as home decoration wall paint and waterproof membranes showed positive sales growth in Q1 2024, with respective sales volumes increasing by 14.84% and 11.83% [1] - Price Changes: The average prices of most products decreased, impacting the overall revenue, while raw material prices showed mixed trends [1][6] Strategic Initiatives - The company has launched a "Quality Improvement and Efficiency Enhancement" action plan for 2024, focusing on channel development and cost reduction [7] - The retail segment is undergoing a transformation towards high-end retail, while the engineering segment is shifting towards integrated solution offerings [7]