The company released a semi-annual report

In 24Q2, the company's revenue was 0.52 billion, a decrease of 16.7%; net profit to mother was 0.03 billion yuan, a decrease of 55.6%. 24H1's revenue was 0.92 billion, a decrease of 5.1%; net profit to mother was 0.04 billion yuan, a decrease of 46.9%.

By business, furniture manufacturing revenue was 0.88 billion yuan, a decrease of 4.6%; of these, overall wardrobe revenue was 0.66 billion, a decrease of 8.7%, accounting for 71.7% of the total; cabinet revenue was 0.14 billion yuan, an increase of 18.1%, accounting for 15.2% of the total.

The revenue from 24H1 cabinet products and bulk business channels maintained double-digit growth, mainly due to an increase in the completion and acceptance of 24H1 housing enterprise projects.

24H1's gross profit margin was 35.0%, or 0.8 pct; of these, the gross profit margin of the overall wardrobe was 39.0%, a decrease of 0.3 pct; the gross profit margin of the cabinet was 27.0%, or 0.1 pct; and the net profit margin was 4.9%, or 3.8 pct.

Focus on brand and product building to enhance core competitiveness

The company continues to strengthen extensive cooperation with well-known design teams, overseas home designers, and college design forces, accelerate the iterative upgrading of products, strengthen market research and customer demand analysis, and sort out and optimize all aspects of the IPD process to achieve efficient innovation and continuous improvement of product quality. The company adheres to market-orientation, maintains design leadership, and accelerates strategic cooperation in supporting products to form a product matrix with wardrobe+cabinet+wooden doors+walls+finished products to provide complete household solutions to meet the one-stop consumer needs of all categories of consumers.

Improve omnichannel operation management and achieve high growth in bulk business

The assembly channel is an important supplementary channel for the company. 24H1 revenue also increased by more than 130%. On the one hand, the company strengthened cooperation with assembly companies, and on the other hand, continuously improved its own assembly design and delivery capabilities to create differentiated competitiveness. In the engineering bulk channel, the company adheres to a customer structure with state-owned enterprises and state-owned enterprises as the core and high-quality private enterprises, and built an Iron Triangle team composed of sales, technology and service to form a closed-loop management of “market development solution - project guarantee” to help the continuous and steady development of the engineering business; 24H1's engineering bulk channel revenue also increased by 73%.

Adjust profit forecasts to maintain “gain” rating

Based on 24H1's performance and weak recovery in consumption, we adjusted our profit forecast. We expect net profit to be 0.12 billion, 0.13 billion, and 0.14 billion yuan (original value was 0.19/0.23/0.3 billion yuan) for 24-26, respectively, and the corresponding PE is 18, 17, and 16X.

Risk warning: risk of raw material price fluctuations; risk of seasonal fluctuations; risk of overcapacity; risk of products not complying with environmental policies, etc.