Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [4][22]. Core Insights - The company is positioned in a growth phase with improved profitability and high growth potential in new business models. The net profit forecasts for 2025 and 2026 have been raised to 1.0 billion and 1.4 billion RMB, respectively, reflecting optimism about the company's expansion and profit recovery [4][22]. - The "马上住" community store model is compared to the tea beverage industry, highlighting similarities in brand standardization and service enhancement to address consumer trust issues. The tea beverage sector has reached a mature stage, while "马上住" is still in the growth phase, indicating significant market potential [2][10][21]. Summary by Sections Company Overview - The company has launched the "马上住" one-stop service system since 2016, with strategic upgrades leading to a comprehensive service ecosystem. The goal is to provide a seamless home renovation experience, with plans to expand the number of community stores significantly by 2026 [9][21]. Financial Projections - Revenue projections for the company are as follows: 12,476 million RMB in 2023, with a growth rate of 10.03%, and expected to reach 16,212 million RMB by 2027. The net profit is projected to grow from 174 million RMB in 2023 to 1,759 million RMB by 2027, indicating a robust growth trajectory [8][22]. Market Comparison - The initial investment for a "马上住" store is approximately 100,000 RMB, significantly lower than the average costs for tea beverage stores, which range from 170,000 to 800,000 RMB. The average payback period for "马上住" stores is around 6 months, suggesting a favorable investment environment [3][16]. Competitive Landscape - The report emphasizes the importance of establishing a strong supply chain and human resource management to support rapid expansion. The company aims to leverage its existing brand recognition and operational standards to create a competitive edge in the home renovation market [21][22].

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company is experiencing a turning point in operations, supported by the resilience of the retail market and the rapid replication of new business models such as "Immediate Move-In" and "Beautiful Countryside" [1][2] - The overall price competition in the paint industry has temporarily subsided, leading to a steady growth in retail and an improvement in gross margins [2] - The demand for renovation in the paint sector has exceeded 50%, with the "Immediate Move-In" model aligning well with consumer needs in the existing housing market [3] - The company is actively participating in rural revitalization, maintaining the top market share in the imitation stone paint segment [4] Summary by Sections Financial Performance - In the first half of 2025, the company achieved revenues of 1.574 billion, 1.795 billion, 1.733 billion, and 460 million for home decoration wall paint, engineering wall paint, base materials, and waterproof membranes respectively, with year-on-year changes of +8.4%, -2.3%, +10.4%, and -28.6% [2] - The overall gross margin improved to 32.35%, a year-on-year increase of 3.7 percentage points, with specific margins for home decoration wall paint, engineering wall paint, base materials, and waterproof membranes at 49.4%, 35.4%, 20.6%, and 13.8% respectively [2] - The company forecasts net profits of 780 million, 980 million, and 1.21 billion for 2025, 2026, and 2027 respectively, with a compound annual growth rate (CAGR) of 54.0% [5] Market Position and Strategy - The company has over 2,300 "Immediate Move-In" community stores, reaching 420,000 households, with more than 15,000 professional service personnel [3] - The imitation stone paint market in China is projected to reach 22 billion by 2024, with the company holding a market share of 7.6% [4] - The company's revenue from the "Beautiful Countryside" business, primarily based on imitation stone paint, reached 940 million, growing over 50% year-on-year [4] Valuation - The target price for the company is set at 53.19 RMB, with a closing price of 47.71 RMB as of August 27 [11] - The report assigns a 40x price-to-earnings (PE) ratio for 2026, reflecting the strong retail attributes of the paint sector and the potential for domestic brand replacement [5]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company is experiencing continuous retail growth, with brand value becoming increasingly prominent. The retail segment is driving up average prices, while the engineering segment maintains stable volume and pricing [8][9] - The company is positioned in a recovering paint industry, with a focus on high-margin products and services, which is expected to enhance profitability [9] Financial Performance Summary - For 1H2025, the company reported revenue of 5.816 billion yuan, a year-on-year increase of 0.97%, and a net profit attributable to shareholders of 436 million yuan, up 107.53% year-on-year [9] - The company’s gross margin increased by 3.70 percentage points to 32.35% due to a 13% decrease in raw material costs and an increase in the proportion of high-margin home decoration paint [8][9] - The net profit margin rose by 3.85 percentage points to 7.49%, supported by cost reductions and improved pricing strategies [8][9] Earnings Forecast - The forecast for net profit attributable to shareholders for 2025-2027 is 1.081 billion, 1.335 billion, and 1.591 billion yuan, respectively, with corresponding EPS of 1.47, 1.81, and 2.16 yuan [7][9] - The projected PE ratios for 2025-2027 are 30.99x, 25.10x, and 21.06x, respectively [9] Market Performance - The company’s stock has shown a significant performance compared to the market, with a 66% increase over the last 12 months, outperforming the Shanghai Composite Index and the construction materials sector [4][9]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5][13]. Core Insights - The company is projected to achieve a net profit attributable to shareholders of 3.8-4.6 billion RMB in the first half of 2025, representing a year-on-year increase of 80.94%-119.04% [2]. - The company’s retail business continues to grow against the backdrop of a declining real estate market, with revenue growth rates for home decoration wall paint projected at 18.2%, 2.6%, and 12.8% from 2022 to 2024 [3]. - Gross margin is recovering, with a gross margin of 32.5% in Q4 2024, up 0.44 percentage points year-on-year, and 31.05% in Q1 2025, up 2.67 percentage points year-on-year [4]. - The company is expected to achieve net profits of 9.0 billion RMB and 12.5 billion RMB for 2025 and 2026, respectively, with corresponding P/E ratios of 31.0 and 22.3 [5]. Performance Summary - The company reported a historical high in total profit for the first half of 2025, with a net profit forecast midpoint of 4.2 billion RMB [2]. - The company has effectively reduced expenses through improved operational efficiency, with a 2024 expense ratio of 25.7%, down 0.5 percentage points year-on-year [4]. - The revenue forecast for the company shows a slight decline in 2024, followed by a recovery with growth rates of 8.00% and 12.49% in 2025 and 2026, respectively [10]. Financial Projections - The projected diluted earnings per share for 2025 is 1.221 RMB, with a significant increase in net profit growth rate expected at 171.32% [10]. - The return on equity (ROE) is expected to rise to 27.92% in 2025 and stabilize around 30.91% by 2027 [10]. Market Sentiment - The report indicates a favorable competitive landscape in the incremental market segments, with sustained demand despite the overall industry challenges [3]. - The company’s strategic focus on consumer-oriented growth and product structure optimization is expected to drive profitability and market share [4].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 42.96 [8][9]. Core Views - The company is expected to benefit from the resilience of the retail market due to the expansion of home decoration subsidies and the improving channel structure, leading to a potential recovery in profit margins and operational flexibility [1]. - The "Immediate Living" and "Beautiful Countryside" initiatives are anticipated to accelerate the company's presence in the stock renovation and third- and fourth-tier markets, with a projected demand for stock renovation of approximately 11 to 12 million units per year from 2024 to 2026, reflecting a CAGR of 5% [2]. - The company is undergoing a channel transformation towards engineering distribution, maintaining a leading market share despite a decline in direct sales revenue, which is expected to stabilize in the coming years [3]. - The retail sales of construction and decoration materials reached RMB 53 billion in the first four months of 2025, showing a year-on-year increase of 2.3%, with a significant monthly increase of 9.7% in April [4]. Summary by Sections Financial Forecasts and Valuation - The company’s net profit forecasts for 2025 to 2027 are RMB 651.4 million, RMB 847.05 million, and RMB 1.09 billion respectively, indicating a CAGR of 48.7% [5]. - The company is assigned a PEG ratio of 0.75x for 2025, with a target price based on a PEG of 1.0x, reflecting the expected growth in the "Immediate Living" business and stable market share in engineering [5]. - The projected revenue for 2025 is RMB 13.203 billion, with a year-on-year growth of 9.07% [7]. Market Position and Competitive Landscape - The company is positioned to capture growth opportunities in the renovation market, with its brand strength gradually being validated against competitors like Nippon Paint [2]. - The engineering business is expected to maintain its leading market share while reducing impairment risks, with accounts receivable turnover improving to 3.6 in 2024 [3]. Operational Insights - The company is actively managing costs and improving operational efficiency, with expectations for continued profit elasticity due to effective expense control measures [4]. - The average price of titanium dioxide, a key raw material, has decreased by 9.6% year-on-year, which may limit further price declines in products [4].