Core Viewpoint - Hangao Group is a leading enterprise in the domestic hardware and outdoor furniture manufacturing sector, with steady growth in main business revenue and profitability [1] Group 1: Company Performance - The company has increased its self-production ratio, showcasing scale advantages [1] - The company is expected to accelerate capacity expansion and market deployment due to increased operational pressure on overseas enterprises and the rapid replacement of imported products by domestic hardware [1] Group 2: Market Position and Strategy - The company’s hardware products are expected to gain market share as production capacity comes online, supported by brand advantages that enhance profitability and drive consumption upgrades in the domestic hardware industry [1] - In the outdoor furniture segment, the company is leveraging the global expansion of the outdoor goods market, with products being launched both domestically and internationally, creating a second growth curve for the company [1] Group 3: Investment Rating - The initial coverage of the company has been rated as "Buy" [1]

Core Insights - Hanhigh Group is a leading enterprise in the domestic hardware and outdoor furniture manufacturing sector, with steady growth in main business revenue and profitability [1] - The company is expected to accelerate capacity expansion and market deployment due to increased self-production ratio, scale advantages, and the pressure on overseas enterprises [1] Financial Performance - Revenue for 2024 is projected to reach 2.857 billion yuan, a year-on-year increase of 28.6%, with net profit attributable to shareholders at 531 million yuan, up 59.7% [3] - For the first three quarters of 2025, revenue is 2.497 billion yuan, a 24.27% increase year-on-year, and net profit is 483 million yuan, up 38.07% [3] - From 2019 to 2024, revenue and net profit CAGR are 28.91% and 59.36%, respectively, driven by product scale expansion and management optimization [3] Product Structure - Basic hardware is the main driver of revenue growth, with continuous high growth since 2020, including a 111.37% increase in 2021 [3] - Outdoor furniture revenue is expected to reach 262 million yuan in 2024, a year-on-year increase of 39.69%, accounting for 9.18% of total revenue [3] Channel Structure - Offline distribution accounts for 56.33% of total revenue in 2024, with sales reaching 1.609 billion yuan, a 26.48% increase [4] - Cloud commerce revenue is 294 million yuan, up 59%, while online e-commerce contributes 312 million yuan, a 24.67% increase [4] Industry Landscape - The hardware industry is characterized by a large number of small enterprises, with leading domestic companies like Hanhigh Group gradually breaking through [5] - The market is expected to grow at a CAGR of 7.6%, reaching 324.45 billion yuan by 2028, driven by consumer demand for quality hardware [5] Outdoor Furniture Demand - The increase in per capita GDP and service consumption spending is driving the demand for outdoor furniture [6] - Revenue from outdoor furniture is projected to grow significantly in 2024, following a decline in previous years [6] Competitive Advantage - Hanhigh Group is positioned to capture market share in the mid-to-high-end hardware market due to the structural exit of foreign brands [6] - The company has improved its gross and net profit margins, surpassing those of imported high-end hardware enterprises [6] Growth Forecast - Revenue projections for 2025-2027 are 3.569 billion, 4.426 billion, and 5.364 billion yuan, with year-on-year growth rates of 25%, 24%, and 21% respectively [9] - Net profit for the same period is expected to be 719 million, 917 million, and 1.137 billion yuan, with growth rates of 35%, 28%, and 24% respectively [9]