A research report indicates optimism for CHERVON (02285) as a high-quality overseas brand positioned to benefit from the dual resonance opportunity of the 30-year major US real estate recovery and the left side of the 5-year inventory cycle. The firm remains bullish on demand-side accelerated growth over a 2-3 year horizon, with Vietnam's US export capacity expected to achieve basic coverage next year, driving profit margin recovery. The company demonstrates superior fundamentals with a solid channel foundation, positioning it as potentially one of the most resilient targets in this round of US real estate chain demand recovery. Revenue projections for 2025-2027 show year-over-year changes of +3.6%/+12.0%/+8.5% respectively, while adjusted net profit for 2025-2027 is expected to change by -3.0%/+3.3%/+23.7% year-over-year, maintaining a "BUY" rating.
The company's 2025H1 results show revenue of $912 million, representing 11.9% year-over-year growth, primarily driven by strong terminal demand for the proprietary EGO brand and North American customers' advance inventory buildup to address tariff concerns. By category, outdoor power equipment sales reached $602 million, up 22.8% year-over-year, with EGO brand's high-value new products continuing strong momentum. Power tools sales totaled $306 million, down 2.5% year-over-year, mainly affected by OEM order contraction and weak Chinese real estate demand.
The company's 2025H1 gross margin reached 33.3%, up 0.4 percentage points year-over-year, benefiting from increased revenue contribution from high-margin EGO products, declining raw material costs, and favorable exchange rates. Net profit stood at $95 million, and after excluding one-time gains from automotive business disposal, adjusted net profit reached $76 million, up 23.4% year-over-year, with a net profit margin of approximately 10.4%.
Category expansion and new product launches continue to consolidate CHERVON's market position. In 2025H1, the company's R&D expenses increased 6.8% year-over-year, launching approximately 100 new products during the period, with over 90% being lithium battery products. EGO holds the number one market share across multiple lithium battery OPE categories in North America and is accelerating flagship store expansion in Europe. FLEX sales performance has outpaced the overall market in Europe despite challenging conditions.
Risk factors include: 1) Intensifying market competition; 2) Other potential macroeconomic environmental factors; 3) Market acceptance of new products.