Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 37.37 RMB [8][9]. Core Views - The company reported Q1 2025 revenue of 1.206 billion RMB, a year-over-year decrease of 11.70% and a quarter-over-quarter decrease of 30.16%. The net profit attributable to the parent company was -40.61 million RMB, showing a reduction in losses compared to the previous value of -58.37 million RMB, with a year-over-year improvement of 11.46% and a quarter-over-quarter decline of 171.10% [1]. - The company has shown initial success in cost reduction and efficiency improvements, with a gross margin of 30.55% in Q1 2025, a slight year-over-year increase of 0.19 percentage points, despite a quarter-over-quarter decrease of 2.09 percentage points [2]. - The company’s accounts receivable decreased by 6.7% year-over-year, and the operating cash flow improved, with a net cash outflow of 436 million RMB, which is 174 million RMB less than the previous year [3]. - The real estate market is showing signs of marginal improvement, which is expected to positively impact the demand for hardware products, potentially narrowing the decline in sales [4]. - The revenue forecasts for 2025-2027 are set at 6.613 billion RMB, 7.126 billion RMB, and 7.857 billion RMB respectively, with corresponding net profits of 194.79 million RMB, 251.81 million RMB, and 314.27 million RMB [5]. Summary by Sections Financial Performance - Q1 2025 revenue was 1.206 billion RMB, down 11.70% year-over-year and down 30.16% quarter-over-quarter. The net profit attributable to the parent company was -40.61 million RMB, showing a year-over-year improvement of 11.46% [1]. - The gross margin for Q1 2025 was 30.55%, reflecting a year-over-year increase of 0.19 percentage points [2]. - The company’s accounts receivable decreased to 3.004 billion RMB, a 6.7% decline year-over-year [3]. Market Outlook - The real estate market is showing signs of recovery, with new home sales in key cities increasing by 7.2% week-over-week, which may lead to improved demand for the company's products [4]. Valuation and Forecast - The revenue projections for 2025-2027 are 6.613 billion RMB, 7.126 billion RMB, and 7.857 billion RMB, with net profits of 194.79 million RMB, 251.81 million RMB, and 314.27 million RMB respectively [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.60 RMB [8][9]. Core Insights - The company reported a revenue of 28.06 billion RMB for 2024, a year-over-year decrease of 14.52%, and a net profit attributable to shareholders of 108 million RMB, down 95.24% year-over-year [1]. - The company is actively optimizing its revenue structure, with a notable decline in gross margin in Q4 attributed to increased sales rebates [2]. - The company has a strong cash flow position, with operating cash flow of 3.46 billion RMB for the year, up 64.4% year-over-year, and a cash dividend distribution rate of 4085% [4]. Summary by Sections Financial Performance - In 2024, the company achieved revenues of 28.06 billion RMB, with a significant decline in net profit to 108 million RMB [1]. - The revenue breakdown for key segments includes waterproof membranes (11.79 billion RMB), coatings (8.82 billion RMB), mortar powder (4.15 billion RMB), and waterproof construction services (1.58 billion RMB), all showing year-over-year declines [2]. - The overall gross margin for the year was 25.8%, a decrease of 1.9 percentage points compared to the previous year [2]. Cost Structure - The company experienced a rise in operating expense ratio to 19.3%, up 3.3 percentage points year-over-year, with increases in sales, management, and R&D expenses [3]. - The net profit margin for 2024 was 0.39%, down 6.5 percentage points year-over-year [3]. Cash Flow and Dividends - The operating cash flow for the year was 3.46 billion RMB, with a cash collection ratio of 105.5% [4]. - The company plans to distribute a cash dividend of 18.50 RMB per 10 shares, indicating a strong commitment to returning value to shareholders [4]. Earnings Forecast - The expected EPS for 2025, 2026, and 2027 are projected to be 0.68 RMB, 1.01 RMB, and 1.21 RMB respectively, reflecting adjustments due to ongoing impairment risks [5]. - The target price of 15.60 RMB corresponds to a PE ratio of 23 times for 2025, aligning with the average PE of comparable companies [5].