Deeper Brand and Channel Reach Ahead of Demand Recovery
发布时间:2026-09-11 来源:华泰证券
The company has released its 2026 interim report: in 1H26, it achieved revenue of RMB3.377bn / YoY -25.8%, a net profit attributable to the parent of RMB62mn / YoY -80.6%, and a net profit attributable to the parent after deducting non-recurring items of RMB122mn / YoY -71.5%, in line with prior earnings guidance (a net profit attributable to the parent of RMB48mn-70mn, a net profit attributable to the parent after deducting non-recurring items of RMB99mn-146mn). Of this, 2Q26 revenue was RMB1.857bn / YoY -26.1%, the net profit attributable to the parent was RMB100mn / YoY -67.3%, and the net profit attributable to the parent after deducting non-recurring items was RMB115mn / YoY -58.5%. The company’s revenue and profit were under pressure in the first half, which we mainly attribute to continued contraction in domestic new-home renovation demand and intensifying competition in the home furnishing industry. The company is firmly advancing its “multi-brand, full-category, omni-channel” development strategy. We think that its brand and channel layout advantages remain significant, and we are positive on the company capturing structural opportunities in the existing-home market to gradually unlock profit elasticity. Maintain OVERWEIGHT.
Soft demand weighs on revenue; brand upgrades continue
Revenues from wardrobes and accessories, kitchen cabinets and accessories, and wooden doors were RMB2.63bn, RMB392mn and RMB167mn in 1H26, down by 26.6%, 30.4% and 22.2% YoY, respectively. We attribute the pressure across major categories to the industry’s deep adjustment and contracting demand. By brand: 1) SOGAL generated revenue of RMB3.02bn in 1H26, down by 26.9% YoY. It continued to integrate customized furnishing with interior fit-out services and completed its strategic upgrade toward full-scope customized home solutions. 2) MILANA generated revenue of RMB144mn, down by 18.2% YoY, while continuing to enhance its value-for-money whole-home product portfolio. 3) SCHMIDT completed its strategic transition from kitchen cabinets to premium integrated home-customization solutions, while Huahe developed an integrated product portfolio and expanded into emerging channels such as home-improvement contractors and e-commerce. The company operated approximately 3,500 specialty stores across its four major brands at end-1H26. We think that the differentiated category coverage and positioning of each brand support a comprehensive presence in key existing-home use cases, including full-home renovation and partial refurbishment, helping to unlock operating leverage.
Earnings forecasts and valuation
Given that end-market demand has yet to recover and industry competition is intensifying, we lower our 2026-28 revenue and gross margin forecasts and raise our operating expense ratio forecasts. We now expect attributable NP of RMB453mn, RMB582mn, and RMB798mn in 2026, 2027, and 2028, respectively (previous forecasts: RMB1.01bn, RMB1.10bn and RMB1.20bn, revised down by 55.2%, 47.3% and 33.4%). Corresponding EPS are RMB0.47, RMB0.60 and RMB0.83. As earnings upside takes time to emerge, we roll our valuation forward to 2027. Comparable companies trade at an average of 13x 2027E PE on Wind consensus. Given the company’s leading multi-brand, full-category and omnichannel presence, continued expansion in the existing-home market and strong long-term competitive advantages, we apply 17x 2027E PE and derive our target price of RMB10.20 (previously RMB16.80, based on 16x 2026E PE and EPS of RMB1.05). Maintain OVERWEIGHT.
Risks: weaker-than-expected demand, declining property sales, slower-than-expected expansion of new brands and channels.