Investment Rating - The report maintains a "Buy" rating for the company [10][15]. Core Views - Luolai Life is a leading player in the home textile industry, continuously optimizing its brand matrix and focusing on high-quality products to meet the growing consumer demand for home textiles [4][19]. - The company is expected to benefit from a rebound in franchise replenishment driven by policy subsidies, alongside a stable recovery in its Lexington business as the U.S. interest rates decline [4][10]. - The company has maintained a high dividend payout ratio of 92% over the past five years, with a dividend yield of 6.1%, indicating strong shareholder returns [7][40]. Summary by Sections Company Overview - Luolai Life has established a comprehensive brand matrix in the home textile sector, focusing on bedding, quilts, and furniture, which together account for approximately 85% of its revenue [7][26]. - The company has been the market leader in bedding for 19 consecutive years, with a stable market share [9][35]. Industry Demand and Market Dynamics - The home textile industry has a stable market size, fluctuating between 320 billion to 340 billion yuan, with the bedding market around 240 billion yuan [8][45]. - The market is characterized by a low concentration of leading brands, with the top five brands holding only 3.1% market share, significantly lower than in the U.S. and Japan [8][51]. Channel Management and Operational Strategy - Luolai Life has optimized its channel inventory and expanded its supply chain to address previous capacity bottlenecks, enhancing its operational efficiency [4][9]. - The company has a strong franchise model, with franchise sales accounting for 32% of total sales, and has been actively opening stores in shopping centers and outlet malls [9][30]. Financial Performance and Projections - The company is projected to achieve net profits of 530 million, 580 million, and 630 million yuan for the years 2025 to 2027, corresponding to P/E ratios of 14, 13, and 12 times [10][40]. - Despite short-term pressure on performance, the company has maintained a resilient profit margin, with an average net profit margin of around 11% over the past five years [24][40].