Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company reported a revenue of 3.634 billion yuan in the first half of 2025, a year-on-year decrease of 7.01%, while the net profit attributable to the parent company was 268 million yuan, an increase of 9.71% year-on-year [8] - The decorative panel business faced pressure, with a revenue of 2.985 billion yuan in the first half of 2025, down 9.05% year-on-year, and a significant decline in panel product revenue by 16.45% [8] - The company is actively expanding its distribution channels, particularly in rural markets, with 2,481 rural stores established by the end of the reporting period, an increase of over 300 stores since the beginning of the year [8] - The gross profit margin improved year-on-year to 18.27%, with a slight increase in the gross margin of decorative materials by 0.85 percentage points [8] - The company plans to distribute a cash dividend of 2.8 yuan per 10 shares (including tax), maintaining a high dividend payout ratio of approximately 86% [8] - The company is expected to achieve net profits of 754 million yuan, 877 million yuan, and 958 million yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 11.61X, 9.98X, and 9.15X [8] Financial Summary - Total revenue for 2023 is projected at 9.063 billion yuan, with a year-on-year growth of 1.63% [1] - The net profit attributable to the parent company for 2023 is estimated at 689.42 million yuan, reflecting a year-on-year increase of 54.66% [1] - The latest diluted EPS for 2023 is expected to be 0.83 yuan per share [1] - The company’s total assets are projected to reach 6.279 billion yuan by 2025, with a debt-to-asset ratio of 44.23% [6][9]

Investment Rating - The report maintains a rating of "Accumulate" for the company [3][7]. Core Views - The company demonstrates steady revenue growth and high interim dividends, showcasing its value [7]. - The company is a leading player in the decorative materials sector, focusing on furniture panels and has effectively diversified its product offerings [7]. Financial Performance Summary - **Revenue**: The company is projected to achieve revenues of CNY 9,063 million in 2023, with a slight growth to CNY 9,189 million in 2024, and further growth to CNY 11,057 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 8% from 2024 to 2027 [1][8]. - **Net Profit**: The net profit is expected to reach CNY 689 million in 2023, with a forecasted increase to CNY 985 million by 2027, indicating a growth rate of 10.7% in 2027 compared to 2026 [1][8]. - **Return on Equity (ROE)**: The ROE is projected to remain strong, with values of 21.2% in 2023 and stabilizing around 20.9% by 2027 [1][8]. - **Earnings Per Share (EPS)**: The EPS is expected to grow from CNY 0.83 in 2023 to CNY 1.19 in 2027 [1][8]. - **Price-to-Earnings (P/E) Ratio**: The P/E ratio is projected to decrease from 12.7 in 2023 to 8.9 by 2027, indicating an attractive valuation over time [1][8]. Business Segment Performance - **Custom Home Revenue**: The custom home segment showed a revenue increase of 4.46% year-on-year, while the decorative materials segment experienced a decline of 9.05% [1][2]. - **Gross Margin Improvement**: The gross margin for decorative materials improved to 17.59%, driven by effective cost control and a focus on high-margin products [1][2]. - **Sales Growth in Channels**: The company reported a 46.5% increase in sales through home decoration company channels, indicating successful channel expansion efforts [1][2]. Dividend Policy - The company plans to distribute a cash dividend of CNY 2.8 per share, totaling CNY 2.29 billion, which represents 85% of the net profit attributable to shareholders [7].

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company shows steady profit growth and margin improvement, with a reported revenue of 3.634 billion yuan in H1 2025, a year-on-year decrease of 7.0%, while net profit attributable to shareholders increased by 9.7% to 268 million yuan [5] - The company is optimizing its product and channel structure in response to pressures in the decorative materials segment, with a revenue of 2.985 billion yuan in H1 2025, down 9.05% year-on-year [5] - The custom home business is growing steadily, with revenue of 621 million yuan in H1 2025, an increase of 4.46% year-on-year [5] - The profit forecast for 2025-2027 has been revised down, with expected net profits of 706 million, 832 million, and 923 million yuan respectively, corresponding to PE ratios of 12, 10, and 9 [5] Financial Data and Profit Forecast - Total revenue forecast for 2025 is 8.602 billion yuan, with a year-on-year growth rate of -6.4% [4] - Net profit attributable to shareholders for 2025 is projected at 706 million yuan, with a year-on-year growth rate of 20.7% [4] - The company’s gross margin is expected to improve to 19.6% in 2025, with a return on equity (ROE) of 22.7% [4]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the stock with expected returns exceeding 20% over the next six months [6][17]. Core Insights - The company's revenue for the first half of 2025 (25H1) was 3.63 billion yuan, a year-on-year decline of 7.01%, while net profit attributable to shareholders increased by 9.71% to 268 million yuan [1]. - The company continues to implement a high dividend strategy, distributing 229 million yuan in cash dividends, which represents 95.13% of its distributable profits [1]. - The company is experiencing stable growth in its custom home business and rapid development in overseas markets, with overseas revenue increasing by 33.22% to 191 million yuan in 25H1 [2]. Financial Performance - The comprehensive gross profit margin for 25H1 was 18.27%, an increase of 0.80 percentage points year-on-year, while the net profit margin improved to 7.43%, up 1.07 percentage points [3]. - The company reported a decrease in operating cash flow, with a net inflow of 107 million yuan, down from 171 million yuan year-on-year [3]. - The company has adjusted its net profit forecasts for 2025-2027 to 650 million, 760 million, and 870 million yuan respectively, reflecting a cautious outlook amid industry challenges [4]. Business Segments - In terms of product revenue, decorative materials accounted for 2.8 billion yuan, a decline of 8.58%, while cabinet business revenue grew by 5.72% to 441 million yuan [2]. - The company has successfully completed the recruitment of 847 township stores and has upgraded its retail model to adapt to market trends [4]. Valuation Metrics - The projected earnings per share (EPS) for 2025 is 0.79 yuan, with a price-to-earnings (P/E) ratio of 13.20 [5][11]. - The company’s total market capitalization is approximately 8.74 billion yuan, with a price-to-book (P/B) ratio of 2.83 [7][11].

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].