Group 1: Decorative Materials Business Performance - The decorative materials business achieved revenue of 7.404 billion in 2024, representing a year-on-year increase of 7.99% [1] - The revenue from board products was 4.77 billion, up 7.57% year-on-year, while brand usage fees for board products reached 493 million, increasing by 14.18% [1] - The number of rural stores expanded significantly from 739 at the beginning of 2024 to 2,152 by the end of the year, with sales in rural channels doubling [1] Group 2: Custom Home Business Challenges - The custom home business reported revenue of 1.72 billion in 2024, a decline of 18.73% year-on-year, with the Qingdao Yufeng Hantang engineering business experiencing a significant drop of 46.81% to 610 million [2] - The growth in the custom home segment was driven by the Rabbit Baby full-house customization, which generated 707 million, up 18.49% year-on-year, supported by a focus on mid-to-high-end positioning and the introduction of the UNICO light high-end series [2] - By the end of 2024, the number of custom home specialty stores reached 848 [2] Group 3: Financial Performance and Cash Flow - The company recorded asset impairment and credit impairment of 145 million and 280 million respectively in 2024, with the majority attributed to goodwill impairment related to the acquisition of Qingdao Yufeng Hantang [3] - The adjusted net profit, excluding goodwill impairment, was 811 million, reflecting a year-on-year increase of 23.36% [3] - The company proposed a cash dividend of 3.2 per 10 shares, totaling 493 million, with a dividend payout ratio of 84.21% [3] Group 4: Q1 2025 Performance Insights - In Q1 2025, the decorative materials business generated revenue of 1.068 billion, down 13.02% year-on-year, while the board business revenue fell by 22.53% to 588 million [4] - The high-margin brand usage fee business increased to 99.85 million, up 0.91% year-on-year, contributing to a 3 percentage point increase in gross margin [4] - The company expects revenues for 2025-2027 to be 9.934 billion, 10.921 billion, and 11.86 billion respectively, with corresponding net profits of 728 million, 868 million, and 940 million [4]

Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company is characterized by stable operations, high dividends, and low valuation. In 2024, it achieved operating revenue of 9.19 billion, a year-on-year increase of 1.4%, and a net profit attributable to shareholders of 585 million, a decrease of 15.1% [2][3]. - The company’s main business growth remains evident, with the decorative materials segment generating revenue of 7.404 billion, up 7.99% year-on-year, while the custom home business saw a revenue decline of 18.73% [9]. - The company is expected to maintain a high dividend payout ratio, with a projected dividend of 493 million for 2024, corresponding to a dividend rate of 84.21% and a dividend yield of 5.3% [9]. Summary by Sections Financial Performance - In 2024, the company reported total revenue of 9.189 billion and a gross profit of 1.663 billion, resulting in a gross margin of 18% [14]. - For Q1 2025, the company achieved revenue of 1.271 billion, a decrease of 14.3% year-on-year, but net profit attributable to shareholders increased by 14.2% to 101 million [2][3]. Business Segments - The decorative materials business showed resilience with a revenue increase, while the custom home segment faced challenges, particularly with a significant decline in revenue from the Yufeng Hantang brand [9]. - The company’s operational cash flow for 2024 was 1.152 billion, indicating strong cash generation capabilities [14]. Valuation and Future Outlook - The company is considered undervalued with a projected PE ratio of 11 and 10 for 2025 and 2026, respectively, suggesting potential for valuation expansion [9]. - Future profit forecasts indicate net profits of 810 million and 910 million for 2025 and 2026, respectively [9].

Core Viewpoint - The company reported its 2024 annual results and Q1 2025 results, showing a slight revenue increase but a significant decline in net profit for 2024, while Q1 2025 net profit improved due to higher gross margins. Financial Performance - In 2024, the company achieved revenue of 9.189 billion yuan, a year-on-year increase of 1.39%, while net profit attributable to shareholders was 585 million yuan, a decrease of 15.11% [1][2] - For Q1 2025, the company reported revenue of 1.271 billion yuan, a year-on-year decline of 14.30%, but net profit attributable to shareholders increased by 14.22% to 101 million yuan [1][4] - The company plans to distribute a cash dividend of 3.2 yuan per 10 shares, with a total cash dividend payout ratio of approximately 84.21% of the net profit for 2024 [1] Business Segments - The decorative materials segment generated revenue of 7.404 billion yuan in 2024, up 7.99% year-on-year, while the custom home segment saw revenue decline by 18.73% to 1.720 billion yuan [2] - The decline in the custom home segment was primarily due to a significant drop in revenue from the engineering side, which fell by 46.81% [2] Profitability Metrics - The overall gross margin for 2024 was 18.10%, with Q4 showing an improvement to 19.95% [3] - The net profit margin for 2024 was 6.48%, down 1.36 percentage points year-on-year, impacted by increased asset and credit impairments [3] Cash Flow and Expenses - Operating cash flow for 2024 was 1.152 billion yuan, a decrease of 39.68% year-on-year, primarily due to mismatched payment schedules [3] - The company’s expense ratio for 2024 was 5.99%, with a notable reduction in management expenses by 23.04% [3] Market Strategy - The company is focusing on expanding its presence in rural markets and furniture factories, with a total of 5,522 decorative materials stores by the end of 2024, including 2,152 in rural areas [5] - The custom home segment is optimizing its structure, with 848 dedicated stores by the end of 2024, including 341 comprehensive home stores [6] Future Outlook - The company is expected to achieve revenues of 9.981 billion yuan, 10.779 billion yuan, and 11.688 billion yuan for 2025-2027, with respective year-on-year growth rates of 8.62%, 8.00%, and 8.43% [6]

Core Viewpoint - Zhejiang Shenghua Yunfeng New Material Co., Ltd. (referred to as Yunfeng New Material) has had its IPO review status on the Shanghai Stock Exchange changed to "terminated" due to the withdrawal of its listing application by the company and its sponsor [1] Company Overview - Yunfeng New Material primarily engages in the design, research and development, production, and sales of indoor decorative materials and customized home products, including artificial boards, wooden floors, technology wood, wardrobes, cabinets, and wooden doors [1] - The company has established competitive advantages in the customized home market by leveraging its existing channel, brand, and product advantages in the decorative materials industry [1] - The "Mogan Mountain" brand plywood ranks second in industry sales, focusing on environmentally friendly, green, and healthy board materials, with a strong reputation and comprehensive competitiveness built over more than 20 years [1] Sales Model - The sales model includes a distributor model and a trademark licensing model, where OEM suppliers sell directly to distributors using Yunfeng New Material's brand [1] - During the reporting period, the top ten OEM suppliers under the trademark licensing model totaled 19 [1] Financial Performance - The company reported revenues of approximately 2.362 billion yuan, 2.669 billion yuan, 3.429 billion yuan, and 1.634 billion yuan for the years 2021, 2022, 2023, and the first half of 2024, respectively [2] - Net profits for the same periods were approximately 224 million yuan, 245 million yuan, 320 million yuan, and 149 million yuan [2] Key Financial Data - As of June 30, 2024, total assets amounted to 2.468 billion yuan, with equity attributable to shareholders of the parent company at 1.289 billion yuan [3] - The company's debt-to-asset ratio was 55.90% as of June 30, 2024, compared to 35.20% in 2023 [3] - Basic earnings per share were 1.56 yuan for the first half of 2024, with a diluted earnings per share of the same amount [3] - The company’s R&D expenditure as a percentage of revenue was 1.09% for the first half of 2024 [3]