Core Viewpoint - The company reported a decline in revenue for H1 2025, but a significant increase in net profit, indicating a mixed performance amid ongoing industry price competition [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved revenue of 3.22 billion yuan, a year-over-year decrease of 7.23%, while net profit attributable to shareholders was 46.96 million yuan, up 49.98% year-over-year [1]. - The second quarter saw revenue of 1.83 billion yuan, down 8.10% year-over-year but up 30.83% quarter-over-quarter [1]. - The comprehensive gross margin for H1 2025 was 24.68%, an increase of 1.23 percentage points year-over-year, attributed to an optimized revenue structure and increased high-end market sales [2]. Group 2: Revenue Structure and Cost Management - Revenue from waterproof membranes and coatings decreased by 9.79% and 9.15% respectively, while construction business revenue increased by 2.36% [2]. - The company’s operating expenses ratio was 18.06%, up 0.74 percentage points year-over-year, with sales expenses increasing due to enhanced market development efforts [2]. - Financial expenses decreased by 49.56% year-over-year, primarily due to reduced interest expenses [2]. Group 3: Strategic Initiatives - The company established a 240 million yuan investment in a 481 million yuan industrial merger fund to target cutting-edge technology sectors, aiming to drive innovation and efficiency [3]. - The company is focusing on the renovation of old residential areas to capture demand in the home decoration materials market, reinforcing its leading position in the waterproof materials sector [3]. Group 4: Profit Forecast and Valuation - The company revised down its net profit forecasts for 2025-2027 by 27.65%, 10.23%, and 4.31% to 184 million, 330 million, and 433 million yuan respectively [4]. - The target price was adjusted to 5.81 yuan, based on a 35 times PE valuation for 2025, reflecting a higher valuation average among comparable companies [4].