Recently, Dongfang Yuhong (002271.SZ), the leader in the waterproof industry, disclosed its 2025 annual report.
During the reporting period, the company achieved revenue of 27.579 billion yuan; net profit attributable to shareholders of listed companies was 113 million yuan; and net profit after non-profit deduction was 236 million yuan.
Among them, the company’s retail business achieved revenue of 9.944 billion yuan, accounting for 36.06% of the company’s operating income.
From the perspective of channel structure, the dual channels of engineering and retail contributed a total revenue of 23.224 billion yuan, accounting for 84.21% of the company’s total revenue. The optimization of channel structure has achieved remarkable results.
Industry analysts pointed out that although the real estate downstream industry continues to adjust and industry demand is still under pressure, Oriental Yuhong has demonstrated strong operating resilience with the optimization of its business structure, and its operating fundamentals have been steadily improved.
From the perspective of growth drivers, the retail business has become the company’s core growth engine, effectively hedging the operating risks caused by industry fluctuations.
At the same time, the “engineering + retail” two-wheel drive pattern continues to exert its effects, and the company’s business structure has been fundamentally optimized.
Annual report data simultaneously shows that the company’s operating cash flow in 2025 is 3.554 billion yuan, a year-on-year increase of 2.80%, reflecting the company’s continued improvement in its ability to collect payments and cost control levels, and its operating performance is steadily recovering.
During the reporting period, the high growth of Oriental Yuhong’s retail business was due to the in-depth exploration of the sinking market and the continuous upgrading of channel capabilities.
Niu Debin, president of Civil Building Materials Group, previously said that the “three sinks” of brand, channel and service are not a simple channel launch, but the key to seizing the incremental market in counties.
In response to the weak marketing capabilities of county dealer teams and weak market expansion, Oriental Yuhong will continue to iterate the channel empowerment system in 2025, relying on the “Hongren Plan” to build a three-dimensional training system that combines practical training and online courses to promote the transformation of traditional “mom-and-pop” dealers into comprehensive service providers with global new media operation capabilities; through the implementation of digital tools, it will help dealers upgrade from single-material sales to integrated services, further enhancing terminal competitiveness.
In addition, Oriental Yuhong has newly upgraded its service system to provide core support for user retention and repurchase.
During the reporting period, the C-side service brand “Yuhong Service” was relaunched and took the lead in launching a dual warranty model between service providers and manufacturers. With standardized construction processes and a team of officially certified engineers, it accurately solved the three major pain points of material selection, construction and guarantee in the field of home decoration. It provided professional home decoration and heatstroke prevention solutions to more than 120,000 households throughout the year.
At the same time, the company has broken through the circulation limitations of traditional building materials scenarios, and has successively opened “Yuhong Service” community stores, supermarket stores, and flagship stores, deepening the penetration of professional building materials consulting and home decoration services into daily consumption scenarios, effectively reducing consumer decision-making costs, and further broadening the boundaries of retail reach.
Data from the Western Securities Research Report show that from 2019 to 2024, the CR5 of the waterproof materials industry increased from 21.7% to 32.2%. The industry has a significant trend of concentration, and leading companies are expected to continue to seize market share by virtue of their scale, channels, and brand advantages.
Among them, Oriental Yuhong’s market share increased from 15.8% to 22.0%, further consolidating its leading position.
Market analysis believes that in the stock market era, the continued high growth of retail business and the continuous optimization of channel structure have enabled Oriental Yuhong to successfully pass through the industry cycle. The company has successfully transformed from a “material supplier” to an “integrated service provider”, and its subsequent development potential is expected to be further improved.
