How is Tubaobao holding up with its non-GAAP net profit declining for two consecutive years?

Ask AI · Under the real estate downturn, construction business shrinks; can retail channels become a new engine?

During the real estate downturn cycle, the company’s engineering business may need to find a new balance.

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Investment Time Network, Punctuation Finance Researcher Wang Zixi

Leading panelboard companies’ 2025 performance reports are mixed with both good and bad news.

Recently, Tubaobao (002043.SZ) released its 2025 performance brief. During the period, the company achieved revenue of 8.887 billion yuan, down 3.29% year-over-year; net profit attributable to parent company was 722 million yuan, a 23.29% increase. The revenue decline was mainly due to the company’s risk management in engineering custom business, with subsidiary Qingdao Yufeng Hantang Wood Industry Co., Ltd. (Yufeng Hantang) seeing a 362 million yuan decrease in engineering custom revenue year-over-year.

However, the significant rise in net profit attributable to parent company was not from core operations but mainly due to fair value changes in associate Hanko Group (001221.SZ), which went public in July 2025, increasing gains by 253 million yuan. Excluding non-recurring gains and losses, net profit attributable to parent was 392 million yuan, down 20.06%. This marks Tubaobao’s second consecutive year of decline in net profit after non-recurring items.

Investment Time Network and Punctuation Finance Researcher note that the continued decline in net profit after non-recurring items is also related to Yufeng Hantang. Tubaobao explained that this was mainly due to reduced revenue from Yufeng Hantang’s engineering custom business, leading to lower gross profit, along with increased management and sales expenses.

Founded in 1992, Tubaobao listed on the Shenzhen Stock Exchange in 2005, becoming China’s first listed company in the decorative panel industry. The company currently has two main business segments: decorative materials and custom home furnishings. The decorative materials segment includes panels, auxiliary materials, and decorative material licensing; the custom home segment includes the main home furnishings (whole-house customization, wooden doors, flooring, etc.) and engineering customization.

The operating entity for engineering customization is Yufeng Hantang, mainly focusing on real estate clients. In recent years, as the real estate industry has remained sluggish, Yufeng Hantang’s real estate fine decoration customization business has been significantly impacted. Data shows that Yufeng Hantang’s revenue has declined from 1.894 billion yuan in 2021 to 1.147 billion yuan in 2023, and further down to 610 million yuan in 2024. According to the performance brief, revenue in 2025 may shrink to less than 300 million yuan, just over 10% of 2021.

In 2021, Yufeng Hantang’s net profit was over 100 million yuan, but from 2022 to 2024, it sustained continuous losses, with a significant loss of 159 million yuan in 2024.

Looking at the listed company level, due to the sharp contraction of Yufeng Hantang’s engineering customization scale in 2022, dragging down Tubaobao’s overall revenue growth, the company’s revenue for that year fell 5.40% to 8.917 billion yuan. In the following two years, Yufeng Hantang’s revenue continued to decline, but growth in the company’s decorative materials and main home furnishings offset the decline, returning Tubaobao’s revenue to positive growth. In 2023 and 2024, revenue growth was below 2%.

It is also worth noting that in 2022 and 2024, significant impairment of credit and goodwill related to Yufeng Hantang affected the company’s final profit figures. Data shows that after non-recurring items, net profit attributable to parent was 346 million yuan in 2022 and 490 million yuan in 2024, both with double-digit year-over-year declines.

Currently, Tubaobao’s strategy for the custom engineering business has shifted to “controlling scale, reducing risk, and seeking transformation,” with risk management emphasized. Meanwhile, the retail business of custom home furnishings relies on the company’s brand influence and environmental advantages, positioning products in the mid-to-high-end segment, aiming to build regional strong brands. This part of the business may become the dominant force in the company’s custom home segment in the future.

Tubaobao’s net profit after non-recurring items and YoY growth over the years (billion yuan, %)

Data source: Choice, 2025 performance brief

Earlier, Guosheng Securities research report pointed out that in 2024, China’s artificial board consumption reached 330 million cubic meters, with a market size of about 725.3 billion yuan. According to the broker’s estimates, the market size for artificial boards used in furniture manufacturing is about 250 billion yuan. Overall, the artificial board industry has entered a stable development phase, with particleboard benefiting from the rapid growth of the custom furniture industry, and segmented varieties still holding structural growth opportunities.

At the same time, due to regional preferences for wood materials, transportation radius constraints, and highly dispersed end customers, the artificial board industry has long exhibited a highly fragmented competitive landscape. By the end of 2024, there were still over 8,600 companies in the industry, with abundant OEM resources but few well-known brands. As a leading company in the industry, Tubaobao is expected to benefit from the trend of B-end consumption in the panelboard market.

Investment Time Network and Punctuation Finance Researcher note that Tubaobao’s main revenue source—the decorative materials channel—operates through multiple channels, including retail stores, home decoration companies, and furniture factories. As of the end of June 2025, the company had 4,673 decorative material stores, more than half of which are in towns and villages; it also cooperates with over 20,000 furniture factories through its dealer network; additionally, the company has established a home decoration operation company, aiming to cooperate with top 30 national home decoration companies, top 6 provincial companies, and top 3 prefecture-level cities.

In the future, what will truly determine Tubaobao’s next phase of growth may not just be the number of stores but the speed of B-end penetration and industry consolidation. In an industry characterized by high fragmentation and scarce brands, the reshaping of channels and industry structure may just be beginning.

Keywords for Investment Timing: Tubaobao (002043.SZ) | Hanko Group (001221.SZ)

Author’s statement: Personal opinions are for reference only.