Core Insights - The company has evolved over 21 years from an industry disruptor to a leader in AI-driven home ecosystem reconstruction, aiming to meet the modern expectations of an "ideal home" [1] - In 2023, the company launched the "Flexible Whole House Customization Package," marking a new industry model, and plans to establish an AI design factory in 2024 to drive innovation in business and operational models [1] - The company views AI as a "super brain" for service upgrades, creating a fully digital system covering measurement, design, and delivery, thereby redefining the boundaries of home services [1] Technological Innovation - The company's technological innovation aligns with the evolution of the custom home industry from its inception to maturity, providing significant insights for industry development [2] - Leveraging its deep learning capabilities, the company utilizes a semantic analysis engine to transform vague customer needs into professional design language, enhancing the understanding of lifestyle demands [4][6] Integrated Design Approach - The AI design system enables a comprehensive planning approach, moving beyond traditional design methods to create cohesive and functional home environments tailored to customer lifestyles [7] - The integration of various design elements such as doors, walls, and cabinets allows for a unified aesthetic and functional space, enhancing the overall customer experience [10] Smart Delivery System - The company has implemented an AI-driven full-process control system to eliminate uncertainties in the service chain, ensuring zero-error delivery and enhancing customer satisfaction [12] - The AI system manages the entire process from 3D modeling to precise pricing and production, facilitating a seamless integration of design and delivery [12] Strategic Vision - The company aims to leverage its digital capabilities as an accelerator for growth, focusing on upgrading free space design planning as a competitive advantage [14] - The ultimate goal is to democratize customization, making tailored living solutions accessible to a broader audience, reflecting a commitment to enhancing everyday life through technology [14]

Core Viewpoint - The company is experiencing a decline in revenue and net profit, but there are signs of improvement in the upcoming quarters due to government subsidies and strategic changes in its business model [1][2]. Revenue and Profit Summary - In 2024, the company achieved revenue of 3.789 billion yuan, with a net profit attributable to shareholders of -215 million yuan and a non-deducted net profit of -228 million yuan, representing a 23% year-on-year decline in revenue [1]. - For Q4 2024, the revenue was 1.057 billion yuan, with net profits of -101 million yuan and -95 million yuan for non-deducted net profit, showing a 24% year-on-year decline [1]. - In Q1 2025, the revenue is projected to be 741 million yuan, with net profits of -39 million yuan and -45 million yuan for non-deducted net profit, indicating a 5% year-on-year decline, but a narrowing of losses [1]. Market Trends and Business Model - Since Q4 2024, government subsidies have started to show effects, leading to a narrowing of revenue decline from 29% in Q3 2024 to 17% overall for Q4 2024 to Q1 2025 [2]. - The company is focusing on a customized and supporting business model, with a significant emphasis on the "随心选" full-house customization package as a key strategy [2]. - The company is also innovating with a "30万一价全包" model to lower the entry barriers for franchisees, allowing for quicker store openings and shared resources between franchisees and direct stores [2]. Cost Management and Efficiency - In 2024, the company's gross margin and net profit margin decreased by 1.9 and 7.0 percentage points, respectively, while sales, management, R&D, and financial expense ratios increased [3]. - In Q1 2025, the gross margin and net profit margin improved by 7.4 and 5.9 percentage points, respectively, indicating a reduction in loss margins and a decrease in various expense ratios [3]. Channel Strategy and Expansion - The company is implementing a "1+N+Z" model for direct sales cities, transitioning direct stores into flagship stores that support distributors in logistics and delivery [4]. - For franchise cities, the company is focusing on a "1+N+Z" model to leverage local resources and reduce operational requirements for franchisees, aiming to expand into lower-tier cities [4]. - The company plans to continue its focus on high-quality development in its traditional strengths of customization and supporting businesses, with expectations of improved demand and market conditions due to accelerating government subsidies [4]. Dividend and Future Projections - In 2024, the company distributed dividends amounting to 187 million yuan, corresponding to a dividend yield of nearly 7% [4]. - The projected net profit attributable to shareholders for 2025-2027 is approximately 70 million, 100 million, and 150 million yuan, with corresponding price-to-earnings ratios of 39, 27, and 18 times [4].