Core Viewpoint - Yongyi Co., Ltd. reported a mixed performance in its Q1-Q3 2025 financial results, with revenue growth but declining net profit, indicating challenges in both domestic and international markets [1][2][3]. Financial Performance - For Q1-Q3 2025, the company achieved a revenue of 3.483 billion yuan, a year-on-year increase of 2.75%, while the net profit attributable to shareholders was 191 million yuan, a decline of 14.83% [1]. - In Q3 2025, the company recorded a revenue of 1.294 billion yuan, down 3.26% year-on-year, and a net profit of 59 million yuan, down 40.15% year-on-year [1]. - The gross profit margin for Q1-Q3 2025 was 21.31%, a decrease of 1.37 percentage points year-on-year, while for Q3 2025, it was 20.46%, down 1.97 percentage points year-on-year [3]. Market Dynamics - The company faced pressure on sales due to trade wars and inflation in Europe and the U.S., leading to a decline in revenue from the U.S. market [2]. - Despite challenges, the company has accelerated its domestic market expansion and growth in non-U.S. markets, with significant increases in sales from Asia, Europe, the Middle East, and South America [2]. - The export value of office chairs from China decreased by 6.37% year-on-year, with exports to the U.S. dropping by 25.54% [2]. Cost Management and Profitability - The company’s expense ratio for Q1-Q3 2025 was 15.21%, an increase of 0.36 percentage points year-on-year, while for Q3 2025, it was 14.67%, up 0.41 percentage points year-on-year [3]. - The net profit margin for Q1-Q3 2025 was 5.48%, down 1.30 percentage points year-on-year, and for Q3 2025, it was 4.53%, down 2.94 percentage points year-on-year [3]. Growth Prospects - The company is positioned as a leading ODM exporter of office chairs, with new overseas clients and channels expected to drive growth, while its domestic self-owned brand is anticipated to become a second growth curve [4]. - Revenue projections for 2025-2027 are estimated at 5.146 billion, 5.802 billion, and 6.333 billion yuan, with corresponding net profits of 289 million, 378 million, and 445 million yuan [4].

Investment Rating - The investment rating for the company is "Buy-A" with a target price of 15.78 CNY, while the current stock price is 11.80 CNY [3][6]. Core Views - The company has experienced short-term revenue pressure in Q3 2025, but orders have begun to recover. The revenue for the first three quarters of 2025 was 34.83 billion CNY, a year-on-year increase of 2.75%, while the net profit attributable to shareholders was 1.91 billion CNY, a year-on-year decrease of 14.83% [1]. - The company is focusing on expanding its domestic market and non-US markets, which have shown faster growth. The domestic sales of self-owned brands have improved significantly, contributing to better profitability [2][6]. - The company is expected to see a gradual improvement in revenue and profitability, driven by new overseas customers and channels, as well as the growth of its self-owned brand in the domestic market [6]. Summary by Sections Financial Performance - In Q3 2025, the company achieved a revenue of 12.94 billion CNY, a year-on-year decrease of 3.26%, and a net profit of 0.59 billion CNY, down 40.15% year-on-year. The gross margin for the first three quarters was 21.31%, a decrease of 1.37 percentage points year-on-year [1][3]. - The company’s net profit margin for Q3 2025 was 4.53%, down 2.94 percentage points year-on-year, primarily due to the impact of trade wars and inflation in Europe and the US [3]. Market Dynamics - The company’s sales have been affected by trade tensions and inflation, particularly in the US market, where furniture demand has weakened. However, the uncertainty around tariff policies has started to ease, leading to a recovery in orders since August [2]. - The company has made significant strides in enhancing its brand presence and sales channels, particularly in high-end products, which have seen an increase in market influence [2][6]. Future Projections - Revenue projections for 2025-2027 are estimated at 51.46 billion CNY, 58.02 billion CNY, and 63.33 billion CNY, with year-on-year growth rates of 8.36%, 12.73%, and 9.16% respectively. Net profit is projected to be 2.89 billion CNY, 3.78 billion CNY, and 4.45 billion CNY for the same period [6][7].