Revenue is recovering quarterly, and we expect subsequent improvements in demand, maintaining that the “buy” rating company achieved revenue of 6.532 billion yuan (yoy -11.29%) in 23 years, with net profit attributable to mother of 333 million yuan (yoy -20.84%), lower than our previous expectations (343 million yuan), mainly due to the addition of 81 million yuan in assets and credit impairment; non-net profit of 298 million yuan (yoy -12.70%) was deducted in 23 years. On a quarterly basis, 23Q1/Q2/Q3/Q4 revenue declined 22.73%/17.58%/8.71%/0.37% year-on-year, respectively. The revenue decline narrowed quarterly, and we expect subsequent improvements in demand. Considering that demand is still recovering, we lowered our revenue forecast. The net profit for 24-26 is estimated to be 3.82/4.29/479 million yuan (the previous 24-25 year value was 3.94 billion yuan), and the corresponding EPS was 0.70/0.78/0.88 yuan. Referring to the comparable company's 24-24 wind consensus average PE average, considering the company's stable leading position in the wooden flooring industry, while actively promoting the construction of aluminum strip and battery foil projects, giving the company 13 times PE in 24 years, with a target price of 9.10 yuan (before (Value: 9.45 yuan), maintaining a “buy” rating.

Terminal demand performance was weak. The year-on-year pressure for wooden flooring and medium density board revenue was measured by business: 1) The year-on-year wooden floor revenue was -7.44% to 4.331 billion yuan, of which sales volume was -5.52% to 44.69 million square meters, and the average price was -2.03% to 99.62 yuan/square meter. We judge that it was mainly due to weak terminal demand and increased industry competition; 2) In 23, the company successfully developed and launched formaldehyde-free flooring substrates and bamboo carbon purification boards. 2) In 23, the company successfully developed and launched formaldehyde-free flooring substrates and bamboo carbon purification boards Wait for the new Products continue to enhance the influence of the Daya brand; 3) Furthermore, in 23 years, the revenue of bamboo/stone-plastic flooring, wooden doors and cloakroom was -42.25%/-1.76% year-on-year to 564 million yuan.

The gross sales margin also increased by 1.78 pct, and the gross sales margin increased by 1.66 pct year on year, and the gross sales margin increased by 1.78 pct to 25.9% year on year. We judge that it was mainly due to the decline in raw material costs; the cost ratio of 23 years also increased by 1.66 pct to 18.9%, of which the sales expense ratio also increased 0.37 pct to 8.1%, and the management+R&D expenses also increased by 1.32 pct to 11.1%. The company's sales and R&D expenses were reduced year on year. Management expenses increased slightly year on year in '23, but under the downward revenue, the rigid costs were diluted The effect weakened, leading to a year-on-year increase in the cost ratio; the financial expense ratio increased by 0.03 pct to -0.4% in '23, mainly due to an increase in interest income. In addition, the company's net operating cash flow also increased by 1.34% to 659 million yuan in '23, and the net operating cash flow performance was steady.

A leader in the flooring/wood-based panel industry, looking forward to subsequent business improvements

The company is a leading manufacturer in the domestic wooden flooring and wood-based panel industry. The company currently has an annual floor production capacity of 80 million square meters and an annual production capacity of 1.55 million cubic meters of medium and high density board and chipboard. The scale advantage guarantees market competitiveness; on the marketing side, the company has established nearly 3,000 flooring specialty stores in China, while actively laying out online and new retail channels. In the long run, the company's brand and scale advantages in the industry are still prominent, and we look forward to future business improvements. In addition, the company will actively promote investment and construction of aluminum strip and battery foil projects, and is expected to contribute new performance growth points in the future.

Risk warning: Demand recovery falls short of expectations, raw material costs are rising, and new business development falls short of expectations.