Introduction to this report:

The company's participation in Easyhome is expected to effectively complement the company's traditional home building materials real estate business, etc., and strengthen its layout.

Key points of investment:

Maintain the “Overweight” rating. In November 2023, the company announced that it would invest 10% of Easyhome's shares, which is expected to form a synergistic effect with it and improve the home furnishing business layout. Considering the pace of real estate carry-over and changes in the profitability of the cement business, the 2023-2025 company's EPS was lowered to 0.04 (-0.24), 0.10 (-0.23), and 0.15 yuan. According to the comparable company valuation method, it was given 28.5 XPE in 2024, corresponding to the target price of 2.76 yuan (-1.59), maintaining the “increase in holdings” rating.

One of the leading duopolies in strategic investment in the home furnishing market. According to Frost & Sullivan's data, China's home furnishing store sales CR2 in 2022 was 35.3%. Among them, Easyhome's market share ranked second in the industry with 16.3%, making it one of the leaders under the duopoly pattern. The company acquired 10% of Easyhome's shares with its own capital at a unit price of 3.55 yuan/share, with a total transaction amount of 2,232 billion yuan.

In the context of strategically strengthening home layout, strategic cooperation is expected to reflect synergies. In recent years, home furnishing businesses such as Jinyu Tiantan decoration have developed rapidly, showing that the major household business has become the core of the company's growth strategy. Meanwhile, Easyhome's shareholding and collaboration is expected to strengthen the synergy of the home furnishing business sector: from a regional perspective, EasyHome's advantage area is in central China, which complements Jinyu's traditional predominant regions in North China and East China; from a business perspective, Jinyu's home manufacturing and decoration expansion complement Easyhome's stores; from a supply chain perspective, Jinyu's logistics, transportation and digital layout complement Jinyu Group; at the same time, Jinyu's traditional commercial real estate business and store business complement each other's complementary relationships.

The traditional real estate building materials business is developing steadily. The company's real estate business focuses on advantageous regions and is expected to maintain its advantages during the industry reshuffle period. The cement building materials business continues to consolidate cost advantages and regional share.

Risk warning: raw material cost risk, domestic monetary policy, real estate policy risk.