Investment Rating - The report maintains a "Buy" rating for the company with a target price of $22.15 [1][5][29] Core Insights - The real estate industry is experiencing a slowdown in growth, with the company expected to see a 12% year-on-year revenue increase in Q2 2025, reaching 26.3 billion RMB [5] - The adjusted net profit is projected to decline by 33% year-on-year to 1.79 billion RMB in Q2 2025, primarily due to the overall slowdown in the real estate sector [5][10] - Despite the challenges, the company is expected to improve its operating profit margin sequentially, driven by enhanced efficiency in stores and agents, as well as the continued advantages in its home decoration business [5][10] Revenue and Profit Forecast - Revenue projections for the company are adjusted downwards for 2025-2027, with expected revenues of 102.59 billion RMB, 115.78 billion RMB, and 128.57 billion RMB respectively, reflecting a decrease of 10.8%, 12.5%, and 14.1% from previous estimates [4][25][27] - The adjusted net profit for 2025 is revised to 7.02 billion RMB, down 14.6% from earlier forecasts, with further adjustments for 2026 and 2027 [25][27] Business Segment Performance - The company anticipates a 14% year-on-year growth in its home decoration business in Q2 2025, with a potential for breakeven in quarterly earnings due to increased order volumes and cost efficiencies [8][9] - The real estate transaction services are expected to show mixed results, with existing home transaction services projected to decline by 3%, while new home transaction services are expected to grow by 13% [5][10] Market Conditions - The report highlights a weakening in the real estate market, with inventory pressures and a prolonged de-stocking cycle affecting sales [6][14] - Recent policy changes in Beijing aimed at easing purchase restrictions are expected to temporarily boost transaction activity, particularly in the outer districts [7][23]