SKSHU(603737) 国金证券·2025-01-23 02:58Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [4][12]. Core Insights - The company anticipates a significant increase in net profit for 2024, with estimates ranging from 310 to 420 million RMB, representing a year-on-year growth of 78.63% to 142.02% [1]. - The company is focusing on retail transformation, with a notable increase in retail sales of wall paint by 14.14% year-on-year, while engineering wall paint sales declined by 12.51% [2]. - The company is expected to complete its channel structure adjustment in 2024, with future growth driven by retail business expansion and diversified product offerings [2]. - Profitability is projected to improve due to better cost management and reduced impairment losses, with a significant decrease in impairment provisions compared to the previous year [2][3]. - The company forecasts a recovery in profit margins in 2025, supported by a slowdown in price competition and improved operational efficiency [3]. Summary by Sections Performance Review - The company expects its full-year revenue to remain stable, with a slight decline of 2.81% in the first three quarters [1]. - The anticipated net profit for 2024 is projected to be between 310 million and 420 million RMB, with a substantial increase in non-recurring net profit [1]. Operational Analysis - The company is shifting its focus from large B-end clients to small B+C-end clients, which is expected to enhance its customer base [2]. - The retail transformation is expected to continue, with contributions from various new business initiatives [2]. Profitability Outlook - The company is expected to see a significant recovery in profit margins due to reduced competition and improved operational efficiency [3]. - The cumulative credit impairment losses from 2021 to Q3 2024 are projected to be 1.58 billion RMB, indicating a release of bad debt risks [3]. Earnings Forecast and Valuation - The adjusted net profit forecasts for 2024, 2025, and 2026 are 370 million, 850 million, and 1.21 billion RMB, respectively [4]. - The current price-to-earnings ratios are projected to be 58.2, 25.2, and 17.8 for the years 2024, 2025, and 2026 [4].