DEHUA TB(002043) 西南证券·2024-10-31 06:37Investment Rating - The report assigns a "Buy" rating for the company with a target price of 14.55 CNY over the next six months [1][3]. Core Insights - The company reported a total revenue of 64.6 billion CNY for the first three quarters of 2024, representing a year-on-year increase of 12.8%. The net profit attributable to the parent company was 4.8 billion CNY, up 5.6% year-on-year. In the third quarter alone, revenue reached 25.6 billion CNY, a 3.6% increase year-on-year, with net profit soaring by 41.5% [3][15]. - The company is enhancing its channel competitiveness and expanding revenue sources through various initiatives, including the establishment of multiple operational centers and a focus on e-commerce platforms [3][15]. - The gross margin has decreased by 1.5 percentage points to 17.3% due to a decline in the real estate market and weak demand for renovation materials. However, the net profit margin has remained stable, with a slight increase in the non-recurring net profit margin [3][17]. - The company has a strong competitive advantage in high-end products, with a focus on brand building and product quality, supported by a robust distribution network of over 4,000 specialized stores nationwide [3][15]. Summary by Sections Financial Performance - For 2023A, the company reported a revenue of 90.63 billion CNY, with projections of 99.65 billion CNY for 2024E, 111.01 billion CNY for 2025E, and 124.61 billion CNY for 2026E, reflecting growth rates of 1.63%, 9.95%, 11.40%, and 12.25% respectively [2][21]. - The net profit attributable to the parent company for 2023A was 6.89 billion CNY, with forecasts of 6.69 billion CNY for 2024E, 8.03 billion CNY for 2025E, and 9.60 billion CNY for 2026E, indicating a growth rate of 54.79% in 2023A followed by a decline of 2.92% in 2024E and subsequent increases [2][21]. Market Position and Strategy - The company has established a comprehensive competitive advantage in the decorative materials industry, focusing on high-end brand development and maintaining a strong market reputation [3][15]. - The report highlights the company's strategic initiatives to penetrate lower-tier markets and expand its B-end customer base, which includes furniture manufacturers and home decoration companies [3][15]. Valuation and Future Outlook - The company is expected to maintain a stable earnings trajectory, with EPS projected at 0.80 CNY for 2024E, 0.97 CNY for 2025E, and 1.15 CNY for 2026E, corresponding to PE ratios of 15, 12, and 10 respectively [2][21]. - The report anticipates that the company will benefit from the recovery of the real estate market and the ongoing urban renewal initiatives, positioning it to capture significant market share as conditions improve [3][22].