[Caitong Construction & Building Materials] #Tubaobao Research Key Points 20260730

English summary

1. Operating situation: In H1, A/B board combined equivalent saw double-digit growth. Profits were affected by fair value changes due to the drop in Hango's share price in Q2; excluding that, the overall situation was good. Among them, whole-house custom business declined slightly due to industry impact. In H1, the custom industry generally saw 40%-50% revenue declines, while the company performed relatively prominently. 2. Channels: The company continued to strengthen the furniture factory channel, with over 40,000 partners now, and the whole industry is estimated to have over 70,000. 2026H1 achieved double-digit growth. It developed rural channels, with a cumulative 3,800+ township stores built in the past 3 years. In 2025, township channel revenue grew 44% YoY, reaching about RMB 1 billion+, and H1 2026 revenue grew 30%-40% YoY. Cooperating with leading decoration companies, H1 2026 cooperation business grew 40%-50% YoY. 3. Shareholder returns: Continuously strengthening dividends. In 2026, it plans to distribute no less than RMB 500 million in dividends; if net profit growth is no less than 10%, it will pay an additional special dividend. Combined with the 2025 dividend of RMB 330 million paid in Q1 2026, the full-year cumulative dividend payout ratio is about 70%.