Goldman Sachs: Suofeiya Home Collection (002572) 2025 Earnings Review: Continued Growth Pressure, Higher Dividend Payout; Neutral
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Goldman Sachs maintains a Neutral rating on Suofeiya Home Collection with a 12-month target price of RMB 11.4, lowered from RMB 12.3 and based on 12x trailing P/E. Full-year 2025 revenue fell 11% year-over-year to RMB 9.367 billion, missing estimates by 2%, while net profit declined 34% to RMB 901 million, approximately 10% below expectations. Fourth-quarter revenue dropped 17% and net profit fell 51%. Retail and home-decoration channels continued facing pressure through 2H25 with double-digit percentage declines, though engineering channels improved sequentially to slight positive growth as the company expanded its non-developer customer base. Gross margins improved, with 4Q25 and full-year figures at 37.1% and 35.7% respectively, reflecting cost reductions and efficiency gains. However, net margins contracted to 9.3% for 4Q25 and 9.6% for the full year due to investment fair-value losses. The company announced an 85% dividend payout ratio for 2025, up from 70% in 2024, corresponding to a 6% dividend yield. Goldman Sachs lowered 2026-2028E EPS forecasts by 9-10%. While secondary-market transaction volumes in tier-one cities have recently recovered on policy support, the firm notes that furniture demand transmission typically requires 6-9 months, suggesting continued near-term growth pressure. Goldman Sachs maintains a Neutral stance pending evidence of sustained demand recovery. Key risks include real estate market fluctuations, competitive intensity, and engineering channel mix shifts.