Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The company is expected to achieve a revenue of 2.9 billion yuan in the first half of 2025, a decrease of 5% year-on-year, while the net profit attributable to shareholders is projected to be 220 million yuan, an increase of 4% year-on-year [2][4]. - The second quarter revenue is anticipated to be 1.9 billion yuan, down 7% year-on-year, with a net profit of 250 million yuan, up 12% year-on-year [2][4]. - The company is expected to achieve net profits of approximately 470 million yuan and 580 million yuan in 2025 and 2026, respectively, corresponding to valuations of 16 and 13 times [6]. Financial Performance - The company reported a gross margin of approximately 30.3% in the first half of the year, with a slight year-on-year decline in tile gross margin to 31.5% and an increase in sanitary ware gross margin to 22.4% [11]. - The net profit margin for the first half of the year was approximately 7.5%, an increase of 0.6 percentage points year-on-year, with the second quarter net profit margin reaching 12.8%, up 2.2 percentage points year-on-year [11]. - The cash flow from operating activities for the first half of the year was 440 million yuan, an increase of 210 million yuan year-on-year, indicating improved operational quality and collection capabilities [11]. Market Dynamics - The company has seen a 5.9% year-on-year increase in revenue from the retail channel for tiles, with high-value product revenue growing by 19.5% [11]. - The company has opened 133 new stores and upgraded 168 existing ones, indicating a focus on expanding its retail presence [11]. - The supply exit in the tile industry is significant, with a projected 12% year-on-year decline in ceramic tile production in 2024, leading to a reduction in the number of enterprises in the industry [11].

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company achieved an annual revenue of 6.5 billion yuan, a year-on-year decrease of 17%, and a net profit attributable to shareholders of 330 million yuan, down 54% year-on-year [2][4]. - In the first quarter, the company reported a revenue of 1 billion yuan, a decline of 2% year-on-year, with a net profit of -30 million yuan, a decrease of 164% year-on-year [2][4]. - The ongoing price war in the industry is expected to continue, with a significant impact on profitability and revenue [11]. Summary by Sections Financial Performance - The company's revenue for 2024 is projected to decline by 17%, with tile revenue down 18% due to weak terminal demand and a 9% decrease in tile sales volume [11]. - The average price of tiles fell by approximately 10%, while production costs decreased by 7%, leading to a decline in gross margin from 33.5% in 2023 to 31.0% in 2024 [11]. - The net profit margin for 2024 is estimated to be around 5.1%, down 4.2 percentage points year-on-year [11]. Market Conditions - The first quarter showed a slight recovery in revenue decline, but profitability remains under pressure due to the ongoing price war [11]. - The construction area is expected to decline by about 28% in 2024, impacting overall demand in the industry [11]. Future Projections - The company is expected to achieve net profits of approximately 340 million yuan and 480 million yuan in 2025 and 2026, respectively, corresponding to valuation multiples of 21 and 15 times [6]. - The cash flow performance is strong, with a net cash flow from operating activities of 860 million yuan in 2024 [11]. Industry Dynamics - The supply side of the tile industry is experiencing significant exits, with production expected to decrease by 12% in 2024 compared to previous years [11]. - Environmental policies are pushing the industry towards green production and smart manufacturing, which may further influence supply dynamics [11].