CHEERWIN GP(06601) 3.03 Huachuang Securities: Maintains a "buy" rating on CHEERWIN GP (06601) with a target price of HKD 3.03.

Huachuang Securities released a research report stating that CHEERWIN GP (06601), as a leading home care group in China, has a solid base in traditional categories, with significant expansion effects in new brands and new segments (such as pets and high-end cleaning), and sufficient growth momentum. With the continuous release of consumption upgrades and segmented market demand, the synergies of the company's "multiple brands + multiple categories + omni-channel" will further manifest. The bank predicts that CHEERWIN GP's net profit attributable to the mother in the years 2025-2027 will be 218 million, 243 million, and 274 million yuan, respectively, with a compound annual growth rate of 12.1%. The target price is HKD 3.03, maintaining a "buy" rating. Event: In the first half of 2025, the company achieved revenue of 1.34 billion (+7.2%) and a net profit attributable to the mother of 174 million (-3.3%). Gross margin was 49.3% (+2.9pp), net margin was 12.8% (-1.3pp). Sales/management expenses ratio increased by 5.1% and decreased by 1.0% respectively. Huachuang Securities' main viewpoints are as follows: Brand strength and cost control resonate, profitability remains resilient Facing industry competition and raw material fluctuations, the company maintains profitability through three measures: 1) Core products (such as Superway insecticide aerosol) have significant economies of scale, optimizing production processes to reduce unit costs; 2) High-margin new products (pet care, high-end cleaning) have increased proportions, leading to an optimization of overall gross profit margin structure; 3) Long-term supply chain cooperation and digital management lock in key raw material supplies, providing cost control on the cost side. Deepening the multi-brand and multi-category strategy, opening up new growth space On the one hand, traditional leading brands such as "Superway" consolidate their moat through a "classic + innovative" dual-track product strategy (classic models maintain the base, innovative models expand the high-end market); on the other hand, new brands like "Beibei Jian" (maternal and child) and "Stubborn Tail" (pet) accurately position themselves in niche scenarios and quickly penetrate them with differentiated positioning, becoming the "second curve" of performance growth and driving long-term expansion of growth boundaries. The core team remains stable, and new product research and development and iteration continue. Research and development innovation + alignment with consumer trends, continuous strengthening of product power By using technological innovation to create a high-margin blockbuster matrix that meets consumer pain points, it drives the optimization of its overall revenue structure and the improvement of profitability; continuously enhancing the top brand strength of insect repellent, mosquito repellent, household cleaning products, and launching differentiated, highly effective, and healthy ingredient single products to further optimize the product structure. Omni-channel integration + digital empowerment, improving market response efficiency On the channel side, online channels have achieved rapid development on new e-commerce channels based on deep cultivation of Taobao, JD, and Pinduoduo, creating more channels with sales exceeding one billion; increasing the sales share of portable mosquito repellent, household cleaning, pet food, and other trend products; continuously optimizing production and increasing online operation efficiency and profitability. The offline distribution channels implement multi-category distribution coverage, strengthen the distribution quantity of high-margin products and the quality of distribution outlets, thereby improving the market foundation, using product image display, shelf display, and other special display methods to promote sales and increase the input-output ratio of resources; by enhancing brand visual image and service professionalism, standardizing store business models, and building information systems, the number of offline pet stores has increased to 60 by the end of 2024. At the same time, digital systems empower operations, improve operational efficiency, and respond more quickly to changes in market demand.