坚守战略，清风自来

Investment Rating - The investment rating for the company is "Buy" and is maintained [13]. Core Views - The company has shown a steady decline in its debt-to-asset ratio, which decreased to 46% in 2023 and further to 41% in Q1 2024. This indicates a strong financial position as it continues to invest in expansion projects across various locations [9]. - Despite a challenging external environment, the company has managed to maintain positive revenue growth, with a notable increase in per capita output. The revenue growth rates for the past five quarters were 5%, 2%, 2%, 1%, and 1% respectively [13]. - The company is focusing on enhancing its cash flow stability and has been recognized as one of the companies with the least risk in the B-end market. The net cash flow from operating activities for Q1 was -610 million yuan, compared to -360 million yuan in the same period last year [14]. - The company is strategically investing in new product categories, particularly in home and building hardware, which have seen significant revenue growth, with home products growing nearly 40% and other building hardware products growing around 30% in Q1 [13]. - The company is expected to see a gradual recovery in net profit margins, with projected net profits of 570 million yuan and 730 million yuan for 2024 and 2025 respectively, corresponding to valuation multiples of 18 and 14 times [25]. Summary by Sections Financial Performance - The company reported a revenue of 1.37 billion yuan in Q1 2024, representing a year-on-year growth of 1%. The net profit attributable to the parent company was -50 million yuan, an increase of 18% year-on-year, while the non-recurring net profit grew by 3% [23]. - The gross margin for Q1 was approximately 30.4%, reflecting a year-on-year increase of 0.3 percentage points. The company has managed to stabilize its cost structure despite changes in product mix [24]. Strategic Initiatives - The company is actively expanding its production capacity with three major projects in different regions, focusing on various industrial applications. This includes a smart home and security product manufacturing project at its headquarters and a project in Henan focusing on engineering industries [9]. - The company has adopted a direct sales model in the small B home building materials sector, which has shown resilience despite market fluctuations. The strategic focus on reducing accounts receivable and investing in product categories is expected to yield positive returns [25].