Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% within the next six months [5][73]. Core Insights - The company is a leading player in the customized home furnishing industry, benefiting from national subsidies that are expected to drive demand and improve market conditions [1][24]. - The company's brand recognition, manufacturing advantages, and channel strategies have remained stable, contributing to strong profitability [2][27]. - The company's revenue growth has outpaced the industry average, particularly due to its strong performance in the whole-house customization segment [3][42]. - The company is projected to maintain a stable profit margin and dividend yield, with a focus on shareholder returns [4][52]. Summary by Sections Company Overview - The company, founded in 2003, pioneered the concept of customized wardrobes in China and has since expanded into a full range of home furnishing products [13][18]. Financial Performance - In 2023, the company achieved a revenue of 11.67 billion yuan, a year-on-year increase of 3.9%, and a net profit of 1.26 billion yuan, up 18.5% [22][54]. - For 2024, the company expects revenue to decline by 10% to 0%, with a net profit forecasted between 1.32 billion and 1.45 billion yuan, reflecting a growth of 5% to 15% [2][40]. Strategic Advantages - The company has a high brand recognition and a strong return on investment for advertising expenses, leading the industry [2][27]. - Manufacturing efficiency is highlighted by an average delivery cycle of 7 to 12 days, which helps reduce operational costs [2][28]. - The company has cultivated a strong network of agents, with average retail store sales increasing significantly [2][34]. Market Position and Growth - The company has successfully implemented a whole-house strategy, significantly increasing its product categories and revenue from integrated solutions [3][42]. - The company’s revenue growth in the whole-house segment has been impressive, with a year-on-year increase of 67.52% in 2023 [3][48]. Profitability and Valuation - The company is expected to maintain a net profit margin of around 12.5% in 2024, with a projected dividend yield of approximately 6.6% [4][52]. - The current stock price corresponds to a 2025 price-to-earnings ratio of 11x, slightly below the industry average of 12x [4][52].

Investment Rating - The investment rating for Sophia (002572) is not explicitly stated in the provided documents, but the report indicates a positive outlook for 2025, suggesting potential for improvement in performance [1]. Core Insights - The company is expected to achieve revenue between 10.499 billion to 11.666 billion yuan in 2024, reflecting a year-on-year decline of 10% to flat growth. The net profit attributable to the parent company is projected to be between 1.324 billion to 1.450 billion yuan, indicating a growth of 5% to 15% year-on-year [1]. - The fourth quarter of 2024 is anticipated to show a revenue range of 2.844 billion to 4.010 billion yuan, with a median of 3.427 billion yuan, which represents a slight decline of 1.1% year-on-year. The net profit for this quarter is expected to be between 403 million to 529 million yuan, with a median of 466 million yuan, showing a significant increase of 50.8% year-on-year [1][2]. - The company is actively responding to national subsidy policies, which are expected to boost performance in 2025. The central government has allocated 81 billion yuan for consumer subsidies in 2025, which may enhance the company's operations [2]. Summary by Sections Financial Performance - The total revenue for 2022 was 11.223 billion yuan, with a growth rate of 7.8%. In 2023, revenue increased to 11.666 billion yuan, reflecting a growth of 3.9%. However, a decline to 10.889 billion yuan is expected in 2024, representing a decrease of 6.7% [5]. - The net profit attributable to the parent company was 1.064 billion yuan in 2022, increasing to 1.261 billion yuan in 2023, with a projected net profit of 1.392 billion yuan in 2024, indicating a growth of 10.3% [5]. - The gross margin is expected to remain stable at around 36.5% from 2024 to 2026 [5]. Market Strategy - The company is enhancing its retail channel structure and adjusting its product offerings to capture market share in the renovation and home improvement sectors. The revenue from integrated decoration channels grew by 26% year-on-year in the first three quarters of 2024 [3]. - The company has established partnerships with 277 decoration companies across 196 cities by the end of Q3 2024, indicating a strong market presence [3]. - The company is also expanding its overseas business, having established 31 overseas distributors and entering over 40 countries and regions [3]. Profit Forecast - The forecast for net profit attributable to the parent company for 2024 to 2026 is 1.39 billion yuan, 1.21 billion yuan, and 1.28 billion yuan, respectively, with corresponding price-to-earnings ratios of 11.3X, 13.0X, and 12.3X [3].

Investment Rating - The report maintains a "Buy" rating for the company with a target price yet to be specified [4]. Core Views - The company is expected to face challenges in 2024 due to the real estate cycle and intensified market competition, leading to a projected revenue decline of 0-10% year-on-year. However, the implementation of government policies supporting consumer demand is anticipated to drive a recovery in the home furnishing sector [1]. - The company has implemented cost reduction and efficiency enhancement measures, focusing on improving labor efficiency and strict expense control, which is expected to optimize its debt structure and significantly reduce financial costs [1]. - Non-recurring gains from the sale of equity stakes in subsidiaries are projected to positively impact net profit, with an estimated contribution of 229-280 million yuan, leading to an overall increase in net profit [1]. Summary by Sections Financial Performance - The company forecasts a net profit attributable to shareholders of 1.32-1.45 billion yuan for 2024, representing a year-on-year increase of 5-15%. The adjusted net profit is expected to be 1.02-1.13 billion yuan, reflecting a decrease of 0-10% year-on-year [1]. - Revenue for 2024 is projected to be between 10.5-11.67 billion yuan, with a decline of 0-10% compared to the previous year [1]. - The fourth quarter of 2024 is expected to see a net profit of 400-530 million yuan, marking a year-on-year increase of 29-71% [1]. Competitive Advantages - The company has established five core competitive strengths, including brand marketing, research and development, environmental performance, quality control, channel expansion, and delivery services [3]. - The company has developed a comprehensive product matrix covering various categories, including wardrobes, cabinets, doors, walls, flooring, home appliances, and sanitary ware, while continuously innovating to meet aesthetic trends [3][4]. - The company has expanded its sales channels, with approximately 4,000 retail stores across 1,800 cities, and is actively pursuing online and offline integrated marketing strategies [3]. Financial Data and Valuation - The company’s total market capitalization is approximately 15.77 billion yuan, with a circulating market capitalization of about 10.67 billion yuan [5]. - The earnings per share (EPS) for 2024 is projected to be 1.41 yuan, with a price-to-earnings (P/E) ratio of 12x [9]. - The company’s asset-liability ratio stands at 47.31%, indicating a moderate level of financial leverage [5].

Investment Rating - The investment rating for the company is "Accumulate" [5] Core Views - The company is expected to benefit from the implementation of the "old-for-new" consumption policy, which is anticipated to boost demand in the home furnishing industry [4] - The company has launched the "Whole House 4.0" strategy to enhance its one-stop customization capabilities across all product categories, aiming to improve operational efficiency and reduce costs [4] - The company is projected to experience a decline in revenue in 2024 due to the real estate cycle and intensified market competition, but net profit is expected to grow [2][3] Financial Summary - The company forecasts 2024 revenue between CNY 10.50 billion and CNY 11.67 billion, representing a year-on-year change of -10% to 0% [2] - The net profit attributable to shareholders is expected to be between CNY 1.32 billion and CNY 1.45 billion, reflecting a growth of 5% to 15% compared to the previous year [2] - The company anticipates a significant impact from non-recurring gains and losses on net profit, with an estimated increase of CNY 229 million to CNY 280 million due to the sale of equity in a subsidiary [3] - For the fourth quarter of 2024, revenue is projected to be between CNY 2.84 billion and CNY 4.01 billion, with a year-on-year change ranging from a decline of 17.95% to an increase of 15.73% [3] - The earnings per share (EPS) for 2024-2026 are adjusted to CNY 1.39, CNY 1.46, and CNY 1.57, respectively, with a 2025 price-to-earnings (PE) ratio of 11 times, which is below the average of comparable companies [5]

Financial Projections - The estimated net profit attributable to shareholders for 2024 is projected to be between CNY 1,324.34 million and CNY 1,450.47 million, representing a year-on-year growth of 5% to 15%[3]. - The estimated operating revenue for 2024 is expected to be between CNY 1,049.08 million and CNY 1,166.56 million, with a year-on-year change of -10% to 0%[3]. - The estimated net profit after deducting non-recurring gains and losses is projected to be between CNY 1,021.15 million and CNY 1,134.62 million, indicating a decline of 0% to 10% compared to the previous year[3]. - The basic earnings per share for 2024 is expected to be between CNY 1.38 and CNY 1.51, consistent with the previous year's figure[3]. Market Challenges - The company anticipates a short-term challenge in the operating environment due to the real estate cycle and intensified market competition, leading to a potential decline in revenue[6]. Non-Recurring Gains - Non-recurring gains from the sale of equity stakes in subsidiaries are expected to positively impact net profit, estimated to be between CNY 229.36 million and CNY 280.32 million, an increase compared to the previous year[6]. Cost Management - The company is implementing cost reduction and efficiency enhancement measures, focusing on improving labor efficiency and controlling expenses[6]. Market Outlook - The implementation of government policies supporting consumption upgrades is expected to revive demand in the home furnishing industry[6]. Financial Audit - The financial data related to this earnings forecast has not been audited by the accounting firm, but there are no significant discrepancies reported[4]. Investor Advisory - The company will provide detailed financial data in the 2024 annual report, urging investors to be aware of investment risks[7].

（三）上市公司监管新规解读。 民生证券股份有限公司 关于索菲亚家居股份有限公司 2024 年度持续督导定期培训报告 民生证券股份有限公司（以下简称"民生证券"或"保荐人"）作为索菲亚 家居股份有限公司（以下简称"索菲亚"或"发行人"）持续督导的保荐人，根 据《证券发行上市保荐业务管理办法》、《深圳证券交易所股票上市规则》及《深 圳证券交易所上市公司自律监管指引第 13 号—保荐业务》等相关规定，对索菲 亚相关人员进行了持续督导培训，本次持续督导培训情况如下： 一、培训的基本情况 2024 年 12 月 25 日，持续督导项目组对发行人的控股股东、实际控制人、 董事、监事、高级管理人员等人员进行了培训。 二、培训的主要内容 （一）新国九条总体解读； （二）关于进一步做好资本市场财务造假综合惩防工作的意见解读； 三、培训结论 本次持续督导培训的工作过程中，发行人积极予以配合，保证了培训工作的 有序进行。 通过本次培训，索菲亚全体参加培训人员对新国九条、资本市场财务造假综 合惩防工作等新政策有全面认识，对退市条件、现金分红、规范减持等相关内容 有更深刻理解，加深了对相关法律、法规、业务规则的了解和认识，方便以后在 ...

| 争 | | | --- | --- | | （二）内部控制 | | | 现场检查手段：查阅相关的董事会记录；查阅审计委员会会议决议、内部审计部门 | | | 提交的工作计划和报告；查阅公司内部控制评价报告；查阅募集资金专户的银行对 | | | 账单、明细账。 | | | 1.是否按照相关规定建立内部审计制度并设立内部 | √ | | 审计部门 | | | 2.是否在股票上市后 个月内建立内部审计制度并 6 | √ | | 设立内部审计部门（如适用） | | | 3.内部审计部门和审计委员会的人员构成是否合规 | √ | | （如适用） | | | 4.审计委员会是否至少每季度召开一次会议，审议 | √ | | 内部审计部门提交的工作计划和报告等（如适用） | | | 5.审计委员会是否至少每季度向董事会报告一次内 | | | 部审计工作进度、质量及发现的重大问题等（如适 | √ | | 用） | | | 6.内部审计部门是否至少每季度向审计委员会报告 | | | 一次内部审计工作计划的执行情况以及内部审计工 | √ | | 作中发现的问题等（如适用） | | | 7.内部审计部门是否至少每季度对募集资金的 ...

Brand Strategy and Market Positioning - The company has established a four-brand matrix to cater to different consumer needs: Sophia, Milan, Simi, and Huahe [2] - Sophia brand focuses on whole-home marketing strategy to drive growth in cabinets, doors, and furniture [2] - Milan brand is targeting the lower-tier market with rapid store expansion and whole-home strategy [2] - Simi and Huahe brands are transitioning from single products to whole-home customization [3] Core Competencies - The company has developed 5 core competencies: brand power, product power, channel power, digital capability, and service capability [3] - Brand power: Four brands cover different consumer segments with comprehensive customization services [3] - Product power: Complete whole-home product matrix covering 8 categories including wardrobes, cabinets, doors, and furniture [3] - Channel power: 4,000 retail stores across 1,800 cities, with online-offline integration and expansion in overseas markets [3] - Digital capability: DIYhome system enables 7-12 days average delivery cycle [3] - Service capability: Upgraded to "full-chain delivery" service model [4] Business Development - Whole-home strategy implementation: 6+N solutions, green products, and senior-friendly designs [4] - Integrated home improvement channel: 277 partner companies by Q3, with 26.34% YoY revenue growth [4] - Overseas expansion: 31 overseas distributors covering 40 countries and regions [5] Financial and R&D Performance - R&D investment: 417 million yuan in 2023, 16.81% YoY growth, with cumulative investment of 2.143 billion yuan since 2011 [5] - Digital transformation: Industry-leading digital operation platform and DIY Home system [5] - Environmental commitment: Continuous improvement in board environmental standards and participation in industry standard setting [5] Market Outlook and Strategy - Positive impact from home improvement subsidy policies in Q4 2024 [5] - Focus on existing home renovation and replacement demand [5] - Commitment to stable cash dividend policy [6]

Summary of the Conference Call Company and Industry Involved - The conference call involved **Sophia** (索菲亚), a company in the home furnishing industry, specifically focusing on customized furniture and related products. Key Points and Arguments 1. **Sales Performance**: As of the end of October, the coverage rate of mid-range computer merchants has exceeded 50%, and sales in Guangzhou have doubled year-on-year, surpassing 100 million [2][3]. 2. **Subsidy Utilization**: The subsidy quota in Guangzhou is nearing exhaustion, with limited availability for new applicants. However, other cities like Xiamen, Nanjing, and Shenzhen are still actively providing subsidies, which benefits dealers' cash flow [3][4]. 3. **Consumer Behavior**: Consumers using subsidies tend to opt for higher-priced products to maximize their subsidy benefits, as seen in Guangzhou where the subsidy cap is 20,000 yuan, corresponding to a mid-range price of 130,000 yuan [5][14]. 4. **Strategic Goals**: The company aims to limit revenue decline to within 10% and maintain profit levels year-on-year. Specific targets for next year will be set after completing the current year's budget reports by the end of December [6][7]. 5. **Market Dynamics**: The company is experiencing increased market share despite a general decline in new housing sales, attributed to effective marketing strategies that capture market share from smaller brands [13][17]. 6. **Impact of Tax Policies**: Recent tax reduction policies in the real estate sector may not immediately affect the company's market share, as the impact of such policies takes time to materialize [10][11]. 7. **Competition and Strategy**: The company competes primarily with smaller brands rather than larger competitors like 欧派 (Oppein), focusing on capturing market share from those not included in subsidy programs [20][21]. 8. **Dealer Support**: The company provides extensive training and support to dealers, including online courses and performance assessments, to enhance their operational capabilities [23][24]. 9. **Order Conversion Rates**: The conversion rate from orders to factory production is currently at its maximum efficiency, with a typical lead time of over two weeks for production [19][20]. 10. **Future Outlook**: The company anticipates that the demand for home renovations will remain stable, with a focus on maintaining a balanced growth strategy across different sales channels [30][31]. Other Important but Possibly Overlooked Content 1. **Subsidy Structure**: The company’s subsidy structure includes a 15% government subsidy and a 20% company contribution, which may lead to significant discounts during promotional periods [34]. 2. **Market Concentration**: The current market dynamics are leading to increased concentration among top brands, which may benefit larger companies in the long run [28]. 3. **Product Flexibility**: The company plans to adopt a more flexible approach to its product offerings and pricing strategies in response to market conditions [32][33]. 4. **Community and Package Channels**: The company is exploring community store models and package channels, although these are still in the experimental phase [33]. This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting the company's performance, market strategies, and future outlook in the context of the home furnishing industry.

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 22.88 RMB for the next 6 months [1] Core Views - The company's performance is temporarily under pressure due to weak terminal demand, but it is expected to improve with the support of national subsidies [1] - The company's profitability remains stable, with a net profit margin of 12% in the first three quarters of 2024, up 0.4 percentage points year-on-year [1] - The company's whole-home channel has shown rapid growth, with a 26.34% year-on-year increase in revenue, driven by deep cooperation with leading decoration companies [1] - The company is actively responding to national policies, such as the "replacement of old with new" initiative, which is expected to boost demand in the fourth quarter of 2024 and beyond [1] Financial Performance - In the first three quarters of 2024, the company achieved revenue of 7.66 billion RMB, a year-on-year decrease of 6.6%, and net profit attributable to the parent company of 920 million RMB, a year-on-year decrease of 3.2% [1] - In Q3 2024, the company's revenue was 2.73 billion RMB, a year-on-year decrease of 21.1%, and net profit attributable to the parent company was 360 million RMB, a year-on-year decrease of 21.2% [1] - The company's gross profit margin in the first three quarters of 2024 was 35.8%, up 0.2 percentage points year-on-year, reflecting the continuous improvement in quality and efficiency [1] Business Segments - The Sofa brand generated revenue of 6.89 billion RMB in the first three quarters of 2024, a year-on-year decrease of 6.84%, with an average customer unit price of 23,679 RMB per order [1] - The Milan brand achieved revenue of 367 million RMB, a year-on-year increase of 14.87%, with an average customer unit price of 14,731 RMB per order, up 448 RMB compared to the first half of 2024 [1] - The company's whole-home channel revenue increased by 26.34% year-on-year, with 277 cooperative decoration companies covering 196 cities and regions nationwide [1] Profit Forecast and Valuation - The company's EPS for 2024-2026 is forecasted to be 1.30 RMB, 1.43 RMB, and 1.56 RMB, respectively, with corresponding P/E ratios of 15x, 13x, and 12x [1] - The company's ROE for 2024-2026 is expected to be 15.47%, 14.95%, and 14.37%, respectively [2] - The company's target price is set at 22.88 RMB, based on a 16x P/E ratio for 2025, considering the successful development of its whole-home business and the optimization of its brand matrix [6] Industry Comparison - The average P/E ratio for comparable companies in the furniture industry is 13.92x for 2025 [6] - The company's P/E ratio for 2025 is 13x, slightly lower than the industry average, reflecting its strong position in the market and the potential for growth driven by national policies [6]