东易日盛(002713) - 2025 Q2 - 季度财报

Part I Important Notice, Table of Contents, and Definitions This section provides important notices, the report's table of contents, and definitions of key terms for clarity Important Notice The Board of Directors, Supervisory Board, and senior management guarantee the report's accuracy, while the company plans no cash dividends or share transfers from capital reserves - The Company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content[4] - Company's responsible person Chen Hui, head of accounting work Chen Hui, and head of accounting department Chen Hui declare that the financial report in this semi-annual report is true, accurate, and complete[4] - The Company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[6] Table of Contents This section lists the structured table of contents, covering key chapters such as important notices, company profile, management discussion and analysis, corporate governance, share changes, bond information, and financial reports - The report contains nine main chapters, covering various aspects of the company's operations, financials, governance, and risks[8] Definitions This section defines common terms used in the report, including company names, laws, related parties, business types, and digital systems, ensuring clear understanding of the content - "The Company, Company, Dongyi Risheng" refers to Dongyi Risheng Home Decoration Group Co., Ltd[16] - "DIM+" refers to the digital home decoration in-depth design system, which is a core system for the company's digitalization efforts[16] - "Reporting Period" refers to January-June 2025, and "Prior Period" refers to January-June 2024[16] Part II Company Profile and Key Financial Indicators This section presents the company's basic information and key financial performance metrics, highlighting significant changes in revenue, net profit, and asset status Company Profile This section outlines the company's basic information, including stock details, legal representative, and contact information, noting no changes during the reporting period - Company stock abbreviation: *ST Dongyi, stock code: 002713, listed on: Shenzhen Stock Exchange[18] - The company's legal representative is Chen Hui, who also serves as the Board Secretary[18][19] - During the reporting period, there were no changes in the company's registered address, office address, website, email, information disclosure, or document storage locations[20][21] Key Accounting Data and Financial Indicators In the first half of 2025, the company's operating revenue significantly decreased by 59.11% year-on-year, but net loss attributable to shareholders narrowed by 90.47%, with total assets and net assets declining to a negative value 2025 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Reporting Period (RMB) | Prior Period (RMB) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 360,495,824.49 | 881,648,646.49 | -59.11 | | Net Profit Attributable to Shareholders of the Listed Company | -51,479,189.93 | -539,965,219.16 | 90.47 | | Net Profit Attributable to Shareholders of the Listed Company (Excluding Non-recurring Gains and Losses) | -41,176,102.64 | -347,288,629.60 | 88.14 | | Net Cash Flow from Operating Activities | -57,231,375.72 | -58,556,580.54 | 2.26 | | Basic Earnings Per Share (RMB/share) | -0.12 | -1.29 | 90.70 | | Diluted Earnings Per Share (RMB/share) | -0.12 | -1.29 | 90.70 | | Weighted Average Return on Net Assets | -4.54 | -262.65 | 258.11 | | End of Current Reporting Period | End of Prior Year | Change from Prior Year-end (%) | | | Total Assets | 1,460,157,900.60 | 1,683,324,773.86 | -13.26 | | Net Assets Attributable to Shareholders of the Listed Company | -1,158,621,403.60 | -1,106,831,502.80 | -4.68 | - The company's net assets attributable to shareholders are negative, indicating insolvency[23] Differences in Accounting Data under Domestic and Overseas Accounting Standards The company reported no differences in net profit and net assets between international or overseas accounting standards and Chinese accounting standards during the reporting period - The company reported no differences in net profit and net assets between international accounting standards and Chinese accounting standards during the reporting period[24] - The company reported no differences in net profit and net assets between overseas accounting standards and Chinese accounting standards during the reporting period[25] Non-recurring Gains and Losses and Amounts Non-recurring losses totaled RMB -10.30 million in the reporting period, primarily due to non-current asset disposal gains, government subsidies, and non-operating expenses from litigation and pre-restructuring claims 2025 Semi-Annual Non-recurring Gains and Losses and Amounts | Item | Amount (RMB) | Explanation | | :--- | :--- | :--- | | Gains and losses from disposal of non-current assets | 1,819,013.06 | Primarily gains from early termination and derecognition of right-of-use assets | | Government grants recognized in current profit or loss | 1,145,644.24 | Primarily government grants | | Fair value changes and disposal gains/losses from financial assets and liabilities held by non-financial enterprises, excluding effective hedge accounting related to normal business operations | 70,411.60 | | | Other non-operating income and expenses apart from the above | -14,040,000.74 | Primarily confirmed payables from unresolved lawsuits and parent company pre-restructuring creditor declarations | | Less: Income tax impact | -179,368.55 | | | Less: Impact on minority interests (after tax) | -522,476.00 | | | Total | -10,303,087.29 | | Part III Management Discussion and Analysis This section analyzes the company's principal business, core competitiveness, financial performance, investment status, and risks, along with management's strategies and responses Principal Businesses Engaged by the Company During the Reporting Period The company primarily offers integrated home decoration services to individual clients, actively pursuing pre-restructuring efforts amidst industry challenges, while leveraging its leading position in digital and technological home decoration Introduction to the Company's Principal Businesses and Products Dongyi Risheng, established in 1997, provides comprehensive home decoration services, including design, construction, material agency, and soft furnishing, aiming to create ideal living spaces through digitalization and industrialization - The company primarily engages in comprehensive home services for individual customers, including overall home decoration design, engineering construction, main material agency, self-produced woodworking product配套, soft furnishing design, and finished home products[30] - The company is committed to realizing lifestyle planning suitable for each family through digital, professional, and industrialized tools[30] Brand Introduction The company operates multiple brands, including "Dongyi Risheng" for full-service home decoration, "Chuangyu Home" for package products, and "Jiai Interior Design" and "Qiu Deguang Design" for high-end commercial and luxury residential projects - The "Dongyi Risheng" brand focuses on providing full-service home decoration for quality-seeking customers[30] - "Chuangyu Home (Guan Zhenquan)" offers home decoration package products, targeting new urban white-collar workers[30] - "Jiai Interior Design" and "Qiu Deguang Design" specialize in top-tier commercial real estate, hotels, and high-end luxury residential design, respectively[30] Key Operating Activities During the Reporting Period During the reporting period, the company focused on debt collection, liquidity improvement, cost reduction, organizational adjustments, and actively advanced pre-restructuring, securing RMB 183.56 million in investor deposits - The company actively took measures to strengthen debt collection, improve liquidity, reduce investment, continuously adjust internal organizational structure, and compress management costs[31] - The company has signed a restructuring investment agreement with the selected industrial investor, Beijing Huazhuo Technology Co., Ltd., and separate restructuring investment agreements with 12 financial investors[31] - The company has received full deposits totaling RMB 183.56 million from investors[31] Industry Overview During the Reporting Period The home decoration industry, a post-real estate cycle sector, faces demand contraction but sees opportunities in policy optimization and secondhand housing, with trends towards digitalization, personalization, green solutions, and integrated services - The home decoration industry, a post-real estate cycle sector, is significantly affected by the real estate market, currently facing challenges of shrinking demand and decreased consumer willingness to pay[32] - In the first half of 2025, secondhand homes accounted for 42% of national housing transactions, reaching a historical high, making renovation and partial refurbishment of secondhand and existing homes a key focus for customer acquisition in the home decoration industry[32] - Industry development trends include digitalization, personalized customization, green environmental protection, one-stop integrated decoration models, and online-offline integrated marketing and technological innovations such as AI and big data[33][34] Company's Industry Position Dongyi Risheng is China's first A-share listed home decoration company, leading in digital integration across its entire business chain, establishing an advanced technology-driven home decoration model for full lifecycle project management - Dongyi Risheng is China's first A-share listed company in the home decoration sector, focusing on innovative development of the home decoration industry[35] - The company pioneered the use of digital means to connect all home decoration businesses, establishing a leading technology-driven home decoration model in the industry[35] - Through digital marketing, sales management, design, smart delivery, and a full-chain intelligent operation system, it has achieved full lifecycle management of home decoration projects[35] Analysis of Core Competitiveness The company's core strengths include strong brand influence, continuous innovation, stringent quality assurance, an international design team, advanced construction standards, and a comprehensive digital home decoration model, supported by numerous awards and patents - The company has received over a hundred honors, including "No. 1 Home Decoration Enterprise in the Home Industry Top 100" and "China Franchise Innovation Award," and was listed among China's Top 500 Financially Secure Listed Companies[36] - The company pioneered hiring foreign designers in China's home decoration industry, forming an international design team, and owns ecosystem enterprises "Jiai Interior Design" and "Qiu Deguang Design"[37][38] - The company possesses 8 major construction processes, 28 construction standards, and over 80 utility model patents, achieving full lifecycle management of home decoration projects through the Xingyao SaaS system and Tianyan system[38][39] - The company has been recognized as a "Beijing Enterprise Technology Center" and "Beijing Design Innovation Center," and approved to establish a postdoctoral research workstation branch, demonstrating its scientific research and innovation capabilities[41] Analysis of Principal Business The company's principal business revenue decreased by 59.11% year-on-year, mainly due to reduced home decoration income, with significant declines across various expenses and regional revenues, and a shift in revenue composition Major Financial Data Year-on-Year Changes | Indicator | Current Reporting Period (RMB) | Prior Period (RMB) | Year-on-year Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 360,495,824.49 | 881,648,646.49 | -59.11 | Primarily due to reduced home decoration income | | Operating Cost | 223,310,544.06 | 627,595,050.04 | -64.42 | Primarily due to reduced home decoration income | | Selling Expenses | 73,925,157.00 | 319,624,907.25 | -76.87 | Primarily due to reduced employee compensation, advertising, decoration amortization, and rent/property fees | | Administrative Expenses | 65,873,940.54 | 184,920,979.19 | -64.38 | Primarily due to reduced employee compensation, decoration amortization, and rent/property fees | | Financial Expenses | 6,651,653.07 | 13,435,310.52 | -50.49 | Primarily due to reduced unrecognized financing expenses | | R&D Investment | 23,961,968.17 | 45,144,970.16 | -46.92 | Primarily due to reduced employee compensation | | Net Cash Flow from Operating Activities | -57,231,375.72 | -58,556,580.54 | 2.26 | | | Net Cash Flow from Investing Activities | 7,720,648.50 | -123,504,092.86 | 106.25 | Primarily due to reduced unexpired wealth management products in the current period | | Net Cash Flow from Financing Activities | 48,228,086.97 | -154,766,641.35 | 131.16 | Primarily due to increased net proceeds from various borrowings | Operating Revenue Composition (by Industry) | Industry Segment | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue (%) | Prior Period Amount (RMB) | Proportion of Operating Revenue (%) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Home Decoration Revenue | 228,375,035.82 | 63.35 | 733,606,602.89 | 83.20 | -68.87 | | Fine Decoration Revenue | 22,794,577.92 | 6.32 | 31,274,158.81 | 3.55 | -27.11 | | Public Decoration Revenue | 76,104,756.44 | 21.11 | 76,233,968.94 | 8.65 | -0.17 | | Franchise Revenue | 411,859.01 | 0.11 | 3,503,447.21 | 0.40 | -88.24 | | Sales | 512,595.93 | 0.14 | 1,825,708.90 | 0.21 | -71.92 | | Logistics and Installation Revenue | 0.00 | 0.00 | 114,866.79 | 0.01 | -100.00 | | Other Business Revenue | 32,296,999.37 | 8.96 | 35,089,892.95 | 3.98 | -7.96 | Operating Revenue Composition (by Region) | Region | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue (%) | Prior Period Amount (RMB) | Proportion of Operating Revenue (%) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | North China | 59,647,117.94 | 16.55 | 210,887,703.74 | 23.92 | -71.72 | | Northeast China | 7,532,313.31 | 2.09 | 29,618,555.63 | 3.36 | -74.57 | | East China | 265,836,584.97 | 73.74 | 409,220,018.61 | 46.42 | -35.04 | | South China | 8,866,777.09 | 2.46 | 59,934,136.74 | 6.80 | -85.21 | | Northwest China | 4,728,743.85 | 1.31 | 39,542,815.96 | 4.49 | -88.04 | | Central China | 8,549,598.00 | 2.37 | 77,348,105.96 | 8.77 | -88.95 | | Southwest China | 5,334,689.33 | 1.48 | 55,097,309.85 | 6.25 | -90.32 | Analysis of Non-Principal Business Non-principal business negatively impacted total profit, primarily due to non-operating expenses from unresolved lawsuits and pre-restructuring creditor claims, which are not sustainable Non-Principal Business Analysis | Item | Amount (RMB) | Proportion of Total Profit (%) | Explanation of Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 70,411.60 | -0.13 | | No | | Asset Impairment | -5,196,434.72 | 9.71 | | No | | Non-operating Income | 3,132,261.19 | -5.85 | | No | | Non-operating Expenses | 16,386,085.11 | -30.62 | Primarily confirmed payables from unresolved lawsuits and parent company pre-restructuring creditor declarations | No | Analysis of Assets and Liabilities At the end of the reporting period, total assets and net assets attributable to shareholders decreased, with significant changes in current and non-current liabilities, and a substantial portion of assets under judicial freeze or seizure Significant Changes in Asset Composition Total assets decreased by 13.26% from the prior year-end, driven by a significant reduction in short-term borrowings and assets held for sale due to property and equity transfers Changes in Asset and Liability Composition | Item | Amount at End of Current Reporting Period (RMB) | Proportion of Total Assets (%) | Amount at End of Prior Year (RMB) | Proportion of Total Assets (%) | Change in Proportion (%) | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,460,157,900.60 | | 1,683,324,773.86 | | -13.26 | | | Monetary Funds | 325,015,186.47 | 22.26 | 289,742,927.06 | 17.21 | 5.05 | | | Short-term Borrowings | 98,914,237.22 | 6.77 | 248,242,195.37 | 14.75 | -7.98 | Primarily due to repayment of Industrial and Commercial Bank of China and CITIC Bank borrowings | | Contract Liabilities | 710,897,745.25 | 48.69 | 712,262,977.70 | 42.31 | 6.38 | | | Assets Held for Sale | 0.00 | 0.00 | 147,844,036.70 | 8.78 | -8.78 | Primarily due to the transfer of property at No. 10 Jia, Jiuxianqiao North Road, Chaoyang District, Beijing, Building 303, Floors 1-7, Room 102 | | Non-current Assets Due Within One Year | 0.00 | 0.00 | 67,349,268.88 | 4.00 | -4.00 | Primarily due to the recovery of the final payment for the transfer of minority equity in a subsidiary in 2023 | Major Overseas Assets The company had no major overseas assets during the reporting period - The company reported no major overseas assets during the reporting period[52] Assets and Liabilities Measured at Fair Value At the end of the reporting period, the company's trading financial assets totaled RMB 16.29 million, with no financial liabilities measured at fair value Assets and Liabilities Measured at Fair Value (RMB 10,000) | Item | Beginning Balance | Fair Value Change in Current Period | Cumulative Fair Value Change Included in Equity | Impairment Provision in Current Period | Amount Purchased in Current Period | Amount Sold in Current Period | Other Changes | Ending Balance | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Subtotal of Financial Assets | 1,119.64 | | | | 5,150.00 | 4,640.69 | | 1,628.95 | | Financial Liabilities | 0.00 | | | | 0.00 | 0.00 | | 0.00 | Asset Restrictions at the End of the Reporting Period At the end of the reporting period, multiple assets, including monetary funds, fixed assets, intangible assets, accounts receivable, and investment properties, were restricted by judicial freeze, seizure, or factoring, totaling RMB 352.14 million in book value Asset Restrictions (RMB) | Item | Book Balance | Book Value | Type of Restriction | | :--- | :--- | :--- | :--- | | Monetary Funds | 67,892,522.47 | 67,892,522.47 | Judicially frozen funds, letter of guarantee deposits | | Fixed Assets | 189,665,184.37 | 138,410,054.17 | Judicial seizure | | Intangible Assets | 29,645,433.13 | 21,825,321.97 | Judicial seizure | | Accounts Receivable | 5,001,178.22 | 4,460,332.77 | Accounts receivable factoring financing | | Investment Properties | 145,251,218.92 | 119,552,117.97 | Judicial seizure | | Total | 437,455,537.11 | 352,140,349.35 | | Analysis of Investment Status During the reporting period, the company's investment amounted to RMB 3 million, a 100% year-on-year increase, with no significant equity, non-equity, securities, or derivative investments, nor any use of raised funds Investment Amount in Reporting Period (RMB) | Investment Amount in Reporting Period | Investment Amount in Prior Period | Change Percentage | | :--- | :--- | :--- | | 3,000,000.00 | 0.00 | 100.00% | - The company reported no securities investments, derivative investments, or use of raised funds during the reporting period[56][57][58] Significant Asset and Equity Disposals During the reporting period, the company sold a property in Beijing for RMB 16.16 million, as planned, with no significant equity disposals - The company sold the property at No. 10 Jia, Jiuxianqiao North Road, Chaoyang District, Beijing, Building 303, Floors 1-7, Room 102, for a transaction amount of RMB 16.16 million[59] - The asset disposal was implemented as planned, with a 0.00% contribution to the company's net profit[59] - The company reported no significant equity disposals during the reporting period[60] Analysis of Major Holding and Participating Companies Several of the company's major subsidiaries, such as Dongyi Risheng Smart Home Technology and Sumi JIJIA Technology, reported losses, while Shanghai Chuangyu Industrial and Jiai Interior Design (Shanghai) achieved profitability Major Holding and Participating Companies (RMB 10,000) | Company Name | Company Type | Principal Business | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing Yidefajia Economic and Trade Co., Ltd. | Subsidiary | Sales | 5000 | 7,165.92 | 1,954.43 | 51.22 | -27.97 | -27.89 | | Dongyi Risheng Smart Home Technology Co., Ltd. | Subsidiary | Sales | 10000 | 41,349.35 | 5,251.76 | 556.74 | -1,011.97 | -1,101.26 | | Sumi JIJIA Technology Co., Ltd. | Subsidiary | Decoration Design | 5000 | 7,351.63 | -29,312.58 | 55.50 | -59.13 | -63.39 | | Dongyi Risheng Longteng Engineering Technology Co., Ltd. | Subsidiary | Decoration Design | 10000 | 25.15 | -1,256.51 | 0.00 | -131.27 | -139.09 | | Shanghai Chuangyu Industrial Co., Ltd. | Subsidiary | Decoration Design | 500 | 26,456.23 | 1,927.78 | 20,081.00 | 683.15 | 510.32 | | Jiai Interior Design (Shanghai) Co., Ltd. | Subsidiary | Decoration Design | 3000 | 30,095.97 | 18,737.62 | 7,864.53 | 68.15 | 121.74 | - The company did not acquire or dispose of any subsidiaries during the reporting period[62] Structured Entities Controlled by the Company The company had no controlled structured entities during the reporting period - The company reported no controlled structured entities during the reporting period[63] Risks Faced by the Company and Countermeasures The company faces risks from macroeconomic changes, seasonal performance fluctuations, rising costs, and potential pre-restructuring failure, actively responding with debt collection, liquidity improvement, cost control, asset disposal, and pre-restructuring efforts - The company faces risks from changes in macroeconomic prosperity, seasonal fluctuations in operating performance, rising raw material and home product prices, and increasing labor costs[64][65][66] - The company has initiated pre-restructuring, but whether it can enter formal restructuring procedures remains uncertain; if restructuring fails, the company's shares will face the risk of delisting[66] - The company is actively taking measures, including strengthening debt collection, improving liquidity, reducing investment, adjusting organizational structure, compressing management costs, and actively promoting pre-restructuring related work[31][66] Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan The company did not formulate a market value management system or disclose a valuation enhancement plan during the reporting period - The company did not formulate a market value management system during the reporting period[68] - The company did not disclose a valuation enhancement plan during the reporting period[68] Implementation of "Dual Improvement in Quality and Returns" Action Plan The company did not disclose an announcement regarding the "Dual Improvement in Quality and Returns" action plan during the reporting period - The company did not disclose an announcement regarding the "Dual Improvement in Quality and Returns" action plan during the reporting period[68] Part IV Corporate Governance, Environment, and Society This section covers changes in the company's governance structure, profit distribution, employee incentives, environmental disclosures, and social responsibility initiatives Changes in Directors, Supervisors, and Senior Management There were no changes in the company's directors, supervisors, or senior management during the reporting period - There were no changes in the company's directors, supervisors, or senior management during the reporting period[70] Profit Distribution and Capital Reserve Conversion to Share Capital in the Reporting Period The company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for the semi-annual period - The company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for the semi-annual period[71] Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures implemented during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures implemented during the reporting period[72] Environmental Information Disclosure The listed company and its major subsidiaries were not included in the list of enterprises required to disclose environmental information by law - The listed company and its major subsidiaries were not included in the list of enterprises required to disclose environmental information by law[73] Social Responsibility The company upholds its mission to "decorate beautiful spaces and build happy lives," providing safe, environmentally friendly, and high-quality home decoration services while actively fulfilling social responsibilities through transparent information disclosure and safeguarding investor rights - The company adheres to the vision of "becoming the most respected and excellent home decoration brand operator" and the mission of "decorating beautiful spaces and building happy lives"[73] - The company strengthens interaction and communication with investors through timely, accurate, truthful, and complete information disclosure, as well as platforms like Interactive Easy and annual report briefings[74] - The company standardizes the procedures for convening, holding, and voting at general meetings of shareholders, ensuring the right to know, participate, and vote for small and medium investors on major company matters through online voting and other means[74] Part V Significant Matters This section details the fulfillment of commitments by various parties, non-operating fund occupation, external guarantees, auditor appointments, pre-restructuring progress, significant lawsuits, and related party transactions Commitments Fulfilled and Overdue Unfulfilled by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and Other Committed Parties During and as of the End of the Reporting Period The company, its controlling shareholder, actual controller, directors, supervisors, and senior management strictly adhered to all commitments during the reporting period, including share repurchase, profit distribution, avoiding competition, reducing related party transactions, and compensation, with no overdue unfulfilled commitments at period-end - The company and its controlling shareholder, Dongyi Tianzheng, committed to repurchasing shares if the prospectus contained false records, misleading statements, or major omissions affecting issuance conditions, and strictly adhered to this commitment[75] - The company committed to implementing a continuous and stable profit distribution policy, prioritizing cash dividends, with annual cash dividends not less than 30% of distributable profits, and strictly adhered to this commitment[75] - Controlling shareholder Dongyi Tianzheng, actual controller Chen Hui and Yang Jin (later changed to Mr. Chen Hui) committed to avoiding horizontal competition, reducing related party transactions, and not occupying funds, and strictly adhered to this commitment[77] - The company's directors, senior management, and supervisors committed to share lock-up, transferring no more than 25% of their directly held company shares annually during their tenure, and no transfers within six months after resignation, which is currently being fulfilled[81] Non-Operating Fund Occupation by Controlling Shareholders and Other Related Parties of the Listed Company The company had no non-operating fund occupation by controlling shareholders or other related parties during the reporting period - The company reported no non-operating fund occupation by controlling shareholders or other related parties during the reporting period[84] Irregular External Guarantees The company had no irregular external guarantees during the reporting period - The company reported no irregular external guarantees during the reporting period[85] Appointment and Dismissal of Accounting Firms The company's semi-annual report was not audited - The company's semi-annual report was unaudited[86] Explanation by the Board of Directors and Supervisory Board on the "Non-Standard Audit Report" for the Current Reporting Period An explanation for a non-standard audit report is not applicable for the current reporting period - An explanation for a non-standard audit report is not applicable for the current reporting period[87] Explanation by the Board of Directors on the "Non-Standard Audit Report" for the Prior Year The Board respects the independent judgment of the annual audit firm and is actively implementing measures to mitigate the impact of the 2024 non-standard audit opinion, safeguarding the company's and investors' legitimate rights - The Board respects the independent judgment of the annual audit firm and is actively implementing effective measures to eliminate the impact of the 2024 non-standard audit opinion as soon as possible[87] Bankruptcy Reorganization Related Matters The company initiated pre-restructuring in October 2024, appointed a temporary administrator, signed restructuring investment agreements with industrial and financial investors, receiving RMB 183.56 million in deposits, and is progressing with the dual-track reporting, though formal restructuring remains uncertain - The company received a court decision on October 18, 2024, to initiate pre-restructuring procedures, and a temporary administrator was appointed on November 5[88] - The company has signed restructuring investment agreements with the selected industrial investor, Beijing Huazhuo Technology Co., Ltd., and 12 financial investors, receiving full deposits totaling RMB 183.56 million from investors[90][91] - On August 16, 2025, four financial investors withdrew from this investment, with their respective shares taken over by four other financial investors within the consortium[91] - The dual-track reporting work for restructuring is progressing continuously and orderly, but whether it can enter formal restructuring procedures remains uncertain[31] Litigation Matters The company is involved in multiple significant lawsuits and arbitrations, primarily concerning construction, sales, and loan contracts, with substantial amounts at stake, some resolved or awaiting execution, and provisions made for certain liabilities Significant Litigation and Arbitration Matters (Partial) | Basic Information of Litigation (Arbitration) | Amount Involved (RMB 10,000) | Provision for Liabilities Formed | Litigation (Arbitration) Progress | Outcome and Impact of Litigation (Arbitration) | Execution Status of Litigation (Arbitration) Judgment | | :--- | :--- | :--- | :--- | :--- | :--- | | Company vs. China Railway No. 12 Bureau Group Co., Ltd. for construction contract dispute | 2,689.73 | No | Company submitted written withdrawal of arbitration application | Taiyuan Arbitration Commission approved the company's withdrawal | Not applicable | | Company vs. Knauf New Building Systems (Tianjin) Co., Ltd. and others for sales contract dispute | 1,317.94 | Included in liabilities | Judgment rendered | Judgment requires company to pay goods and interest | Awaiting execution | | Company vs. Industrial Bank Co., Ltd. Beijing Chongwenmen Branch for loan contract dispute | 5,045.39 | Included in liabilities | First-instance judgment requires company to pay loan, interest, and legal fees | Awaiting execution | Awaiting execution | Penalties and Rectification The company had no penalties or rectification situations during the reporting period - The company reported no penalties or rectification situations during the reporting period[94] Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The company's controlling shareholder, Tianjin Dongyi Tianzheng Investment Co., Ltd., experienced a passive share reduction due to judicial auction for debt, while the actual controller's integrity status remained unaffected - The company's controlling shareholder, Tianjin Dongyi Tianzheng Investment Co., Ltd., had part of its shares judicially auctioned and the transfer of ownership completed due to debt disputes[95] - Dongyi Tianzheng passively reduced its shareholding by 2,042,253 shares, and the reduction plan has been fully implemented[96] Significant Related Party Transactions During the reporting period, the company had no significant related party transactions involving daily operations, asset/equity acquisitions or disposals, joint investments, non-operating creditor-debtor relationships, or financial business with affiliated finance companies - The company reported no related party transactions related to daily operations during the reporting period[97] - The company reported no non-operating related party creditor-debtor transactions during the reporting period[100] - The company had no deposit, loan, credit, or other financial business with affiliated finance companies that have related party relationships[101] Significant Contracts and Their Performance The company had no significant entrustment, contracting, leasing, major guarantees, or other major contracts during the reporting period, but engaged in wealth management with an outstanding balance of RMB 5.09 million and no overdue principal - The company reported no entrustment, contracting, or leasing situations during the reporting period[104][105][106] - The company reported no significant guarantee situations during the reporting period[107] Entrusted Wealth Management (RMB 10,000) | Specific Type | Source of Entrusted Funds | Amount of Entrusted Wealth Management | Unexpired Balance | Overdue Unrecovered Amount | Impairment Provision for Overdue Unrecovered Wealth Management | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Own Funds | 5,150 | 509.31 | 0 | 0 | - The company reported no other significant contracts during the reporting period[109] Explanation of Other Significant Matters The company had no other significant matters requiring explanation during the reporting period - The company reported no other significant matters requiring explanation during the reporting period[110] Significant Matters of Company Subsidiaries The company had no significant matters concerning its subsidiaries during the reporting period - The company reported no significant matters concerning its subsidiaries during the reporting period[111] Part VI Share Changes and Shareholder Information This section details changes in the company's share capital, securities issuance, shareholder structure, and holdings of directors, supervisors, and senior management, as well as any changes in controlling shareholder or actual controller Share Change Status During the reporting period, restricted shares decreased by 1,146,837, with a corresponding increase in unrestricted shares, primarily due to the automatic unlocking of restricted shares held by directors, supervisors, and senior management, while the total share capital remained unchanged Share Change Status (Shares) | | Quantity Before This Change | Proportion Before This Change (%) | Net Increase/Decrease in This Change (＋,－) | Quantity After This Change | Proportion After This Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 9,182,986.00 | 2.19 | -1,146,837.00 | 8,036,149.00 | 1.92 | | II. Unrestricted Shares | 410,353,994.00 | 97.81 | 1,146,837.00 | 411,500,831.00 | 98.08 | | III. Total Shares | 419,536,980.00 | 100.00 | 0.00 | 419,536,980.00 | 100.00 | - The main reason for the share change is the automatic restriction and unlocking of shares held by directors, supervisors, and senior management in the current period as per regulations[114] Restricted Share Change Status (Shares) | Shareholder Name | Restricted Shares at Beginning of Period | Unrestricted Shares Released in Current Period | Restricted Shares Increased in Current Period | Restricted Shares at End of Period | Reason for Restriction | Date of Release from Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Li Shuangxia | 368,576 | 14,144 | 0 | 354,432 | Restriction due to resignation of director/supervisor/senior management | February 4, 2027 | | Guan Zhe | 210,770 | 52,693 | 0 | 158,077 | Restriction due to resignation of director/supervisor/senior management | February 4, 2027 | | Total | 579,346 | 66,837 | 0 | 512,509 | -- | -- | Securities Issuance and Listing The company had no securities issuance or listing activities during the reporting period - The company reported no securities issuance or listing activities during the reporting period[118] Number of Shareholders and Shareholding Status At the end of the reporting period, the company had 14,737 common shareholders, with Tianjin Dongyi Tianzheng Investment Co., Ltd. as the controlling shareholder (19.97% stake, mostly pledged), and Tianjin Chenshang Consulting Co., Ltd. holding 15.87%, while actual controller Chen Hui forms a concerted action with Dongyi Tianzheng - At the end of the reporting period, the total number of common shareholders was 14,737[119] Shareholding Status of Shareholders Holding 5% or More or Top 10 Shareholders (Excluding Shares Lent Through Securities Lending) | Shareholder Name | Shareholder Nature | Shareholding Ratio (%) | Number of Shares Held at End of Reporting Period (Shares) | Change in Current Period | Number of Restricted Shares Held (Shares) | Number of Unrestricted Shares Held (Shares) | Share Status | Quantity (Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tianjin Dongyi Tianzheng Investment Co., Ltd. | Domestic Non-State-Owned Legal Person | 19.97 | 83,780,381 | -30,000,000 | 0 | 83,780,381 | Pledged | 70,544,392 | | Tianjin Chenshang Consulting Co., Ltd. | Domestic Non-State-Owned Legal Person | 15.87 | 66,578,594 | | 0 | 66,578,594 | Not applicable | 0 | | Xiaomi Technology (Wuhan) Co., Ltd. | Domestic Non-State-Owned Legal Person | 4.01 | 16,804,700 | -4,195,300 | 0 | 16,804,700 | Not applicable | 0 | | Chen Hui | Domestic Natural Person | 1.36 | 5,711,520 | | 4,283,640 | 1,427,880 | Not applicable | 0 | - The actual controller of the controlling shareholder, Tianjin Dongyi Tianzheng Investment Co., Ltd., is Mr. Chen Hui, the company's chairman, and the two constitute a concerted action relationship[120][121] Changes in Shareholdings of Directors, Supervisors, and Senior Management There were no changes in the shareholdings of the company's directors, supervisors, or senior management during the reporting period - There were no changes in the shareholdings of the company's directors, supervisors, or senior management during the reporting period[122] Changes in Controlling Shareholder or Actual Controller The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder remained unchanged during the reporting period[123] - The company's actual controller remained unchanged during the reporting period[123] Preferred Share Related Matters The company had no preferred shares during the reporting period - The company reported no preferred shares during the reporting period[124] Part VII Bond Related Matters This section confirms the absence of any bond-related matters for the company during the reporting period Bond Related Matters The company had no bond-related matters during the reporting period - The company reported no bond-related matters during the reporting period[126] Part VIII Financial Report This section includes the unaudited financial statements, company background, basis of preparation, significant accounting policies, tax information, detailed notes to the consolidated financial statements, changes in consolidation scope, equity in other entities, government subsidies, financial instrument risks, fair value disclosures, related parties, and commitments Audit Report The company's semi-annual financial report was unaudited - The company's semi-annual financial report was unaudited[128] Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025, comprehensively presenting its financial position, operating results, and cash flows Consolidated Balance Sheet Key Data (June 30, 2025) | Item | Ending Balance (RMB) | Beginning Balance (RMB) | | :--- | :--- | :--- | | Total Assets | 1,460,157,900.60 | 1,683,324,773.86 | | Total Liabilities | 2,487,254,970.88 | 2,657,873,530.12 | | Total Owners' Equity Attributable to Parent Company | -1,158,621,403.60 | -1,106,831,502.80 | | Minority Interests | 131,524,333.32 | 132,282,746.54 | | Total Owners' Equity | -1,027,097,070.28 | -974,548,756.26 | Consolidated Income Statement Key Data (2025 Semi-Annual) | Item | 2025 Semi-Annual (RMB) | 2024 Semi-Annual (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 360,495,824.49 | 881,648,646.49 | | Operating Profit | -40,264,971.66 | -321,188,050.32 | | Total Profit | -53,518,795.58 | -528,272,127.52 | | Net Profit | -52,030,462.57 | -536,827,464.81 | | Net Profit Attributable to Parent Company Shareholders | -51,479,189.93 | -539,965,219.16 | | Basic Earnings Per Share (RMB/share) | -0.12 | -1.29 | Consolidated Cash Flow Statement Key Data (2025 Semi-Annual) | Item | 2025 Semi-Annual (RMB) | 2024 Semi-Annual (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -57,231,375.72 | -58,556,580.54 | | Net Cash Flow from Investing Activities | 7,720,648.50 | -123,504,092.86 | | Net Cash Flow from Financing Activities | 48,228,086.97 | -154,766,641.35 | | Net Increase in Cash and Cash Equivalents | -1,216,217.10 | -336,964,054.16 | | Cash and Cash Equivalents at End of Period | 257,122,664.00 | 141,015,403.63 | Company's Basic Information The company, with a registered capital of RMB 419.54 million and controlled by Chen Hui, primarily engages in architectural decoration, offering home decoration design, construction, and related services, with 24 subsidiaries included in the consolidation scope this period, one of which was deregistered - The company's registered capital is RMB 419.54 million, and its actual controller is Chen Hui[160] - The company's principal business is architectural decoration, providing comprehensive services including home decoration design and construction, franchising, woodworking product配套, building material sales, and import/export[160] - A total of 24 subsidiaries were included in the consolidation scope this period, with Beijing Jiai Interior Design Co., Ltd., an indirectly 51% held subsidiary, deregistered on February 6, 2025[161] Basis of Financial Statement Preparation The company's financial statements are prepared based on enterprise accounting standards and regulatory requirements, using historical cost, and despite continuous losses and negative net assets, management's actions to secure operating funds support the going concern assumption - The company's financial statements are prepared in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance and the China Securities Regulatory Commission's "Information Disclosure and Reporting Rules for Companies Issuing Securities No. 15"[162] - The company's net profit attributable to parent company owners for the first half of 2025 was RMB -51.48 million, with continuous losses, and as of June 30, 2025, owners' equity attributable to parent company shareholders was RMB -1.16 billion[163] - The company has initiated pre-restructuring and signed restructuring investment agreements with investors, receiving deposits; management believes that by formulating development strategies, strengthening internal management, enhancing risk control, promoting settlement and collection, and actively cooperating with restructuring efforts, the company can obtain sufficient operating funds, making the going concern assumption reasonable[163][164][165][166] Significant Accounting Policies and Accounting Estimates This section details the company's significant accounting policies and estimates for financial statement preparation, covering business combinations, consolidation, financial instruments, receivables, inventories, investment properties, fixed assets, intangible assets, long-term deferred expenses, contract liabilities, employee compensation, provisions, revenue recognition, government grants, deferred taxes, and leases - The company classifies financial assets into those measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss, based on the business model for managing financial assets and their contractual cash flow characteristics[207][208][209] - The company performs impairment accounting for financial assets measured at amortized cost, lease receivables, and contract assets based on expected credit losses[237] - The company's revenue primarily derives from decoration projects, design services, franchise fees, and sales of goods, with revenue recognized when performance obligations are satisfied over time or at a point in time[327] - The company initially measures right-of-use assets at cost and depreciates them over the lease term; lease liabilities are initially measured at the present value of lease payments not yet paid at the commencement date of the lease[368][370] Taxation The company's main taxes include VAT, urban maintenance and construction tax, and corporate income tax, with the company and several subsidiaries enjoying high-tech enterprise tax incentives (15% rate) and small-profit enterprise benefits, along with R&D expense super deduction Major Tax Categories and Rates | Tax Category | Taxable Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Sales revenue, construction and installation income, design income, etc. | 6%, 9%, 13% (simplified taxation 3% or 5%) | | Urban Maintenance and Construction Tax | Amount of actual paid turnover tax | 5%, 7% | | Corporate Income Tax | Taxable income | 5%, 15%, 20%, 25% | - The company and its subsidiaries Shanghai Chuangyu, Beijing Xinyi, Changchun Dongyi, Shanghai Deguangju, and Jiai Interior Design have all obtained high-tech enterprise certificates, enjoying a 15% corporate income tax preferential rate[375][376][377] - Some subsidiaries are eligible for preferential corporate income tax policies for small and micro-profit enterprises, and R&D expenses enjoy a 100% super deduction or 200% amortization for tax purposes[378][379] Notes to Consolidated Financial Statement Items This section provides detailed notes for consolidated financial statement items, including monetary funds, receivables, contract assets, inventories, long-term equity investments, fixed assets, intangible assets, goodwill, deferred tax assets/liabilities, short-term borrowings, payables, contract liabilities, share capital, capital reserves, retained earnings, revenue, costs, expenses, investment income, credit impairment losses, asset impairment losses, asset disposal gains, non-operating income/expenses, income tax expenses, and cash flow statement supplements Monetary Funds Composition and Restrictions (RMB) | Item | Ending Balance | Beginning Balance | | :--- | :--- | :--- | | Cash on Hand | 407,820.40 | 1,482,741.47 | | Bank Deposits | 256,714,843.60 | 256,856,139.63 | | Other Monetary Funds | 67,892,522.47 | 31,404,045.96 | | Total | 325,015,186.47 | 289,742,927.06 | | Of which: Restricted Monetary Funds | 67,892,522.47 | 31,404,045.96 | | (Judicially frozen funds, letter of guarantee deposits) | | | Accounts Receivable and Contract Assets Impairment Provision (RMB) | Item | Ending Book Balance | Ending Impairment Provision | Ending Book Value | | :--- | :--- | :--- | :--- | | Accounts Receivable | 387,475,067.78 | 191,793,682.82 | 195,681,384.96 | | Contract Assets | 66,444,586.34 | 25,156,708.38 | 41,287,877.96 | Overdue Unpaid Short-term Borrowings (RMB) | Lending Institution | Ending Balance | Loan Interest Rate | Overdue Date | Overdue Interest Rate | | :--- | :--- | :--- | :--- | :--- | | Industrial Bank Co., Ltd. | 30,000,000.00 | 3.80% | May 31, 2024 | 5.70% | | Industrial Bank Co., Ltd. | 20,000,000.00 | 3.80% | July 5, 2024 | 5.70% | | Bank of Beijing Co., Ltd. Xiong'an Branch | 10,000,000.00 | 4.10% | September 11, 2024 | 4.10% | | Beijing Daxing Development Financial Leasing Co., Ltd. | 25,913,059.00 | 4.00% | December 31, 2024 | 0.00% | | China Construction Bank Corporation Beijing Fangshan Branch | 8,000,000.00 | 4.20% | October 8, 2024 | 6.30% | | Total | 93,913,059.00 | -- | -- | -- | Operating Revenue and Operating Cost (RMB) | Item | Current Period Revenue | Current Period Cost | Prior Period Revenue | Prior Period Cost | | :--- | :--- | :--- | :--- | :--- | | Principal Business | 328,198,825.12 | 212,579,136.98 | 846,558,753.54 | 620,493,063.42 | | Other Businesses | 32,296,999.37 | 10,731,407.08 | 35,089,892.95 | 7,101,986.62 | | Total | 360,495,824.49 | 223,310,544.06 | 881,648,646.49 | 627,595,050.04 | Changes in Consolidation Scope The consolidation scope changed this period due to the deregistration of Beijing Jiai Interior Design Co., Ltd., a 51% indirectly held subsidiary, on February 6, 2025 - Beijing Jiai Interior Design Co., Ltd., an indirectly 51% held subsidiary, was deregistered on February 6, 2025[560] Equity in Other Entities This section outlines the company's equity in subsidiaries and associates, noting that several important non-wholly owned subsidiaries incurred losses during the reporting period, while investments in associates totaled RMB 3 million with a net loss of RMB -3.52 million - The company owns 24 subsidiaries, including Beijing Yidefajia Economic and Trade Co., Ltd. and Dongyi Risheng Smart Home Technology Co., Ltd[562] Key Financial Information of Important Non-Wholly Owned Subsidiaries (Current Period, RMB) | Subsidiary Name | Operating Revenue | Net Profit | Total Comprehensive Income | Net Cash Flow from Operating Activities | | :--- | :--- | :--- | :--- | :--- | | Shanxi Dongyiyuan Smart Home Technology Co., Ltd. | 25,628,189.68 | -1,726,686.64 | -1,726,686.64 | -4,567,174.72 | | Changchun Dongyi Fushengde Decoration Co., Ltd. | 7,064,953.59 | -2,738,047.16 | -2,738,047.16 | 2,309,747.93 | | Shanghai Chuangyu Industrial Co., Ltd. | 200,810,013.33 | 5,103,233.39 | 5,103,233.39 | 25,139,807.45 | | Jiai Interior Design (Shanghai) Co., Ltd. | 78,645,310.75 | 1,217,437.49 | 1,217,437.49 | 6,170,437.62 | - Investments in associates totaled RMB 3 million in book value, with a net loss of RMB -3.52 million for the current period[572] Government Grants The company has income-related deferred income of RMB 7,081.00. This period, RMB 968,368.17 was recognized as non-operating income from government grants, and RMB 177,276.07 was recognized as other income Liability Items Involving Government Grants (RMB) | Accounting Account | Beginning Balance | New Grants in Current Period | Amount Recognized as Non-operating Income in Current Period | Amount Transferred to Other Income in Current Period | Other Changes in Current Period | Ending Balance | Asset/Income Related | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 7,081.00 | 0.00 | 0.00 | 0.00 | 0.00 | 7,081.00 | Income-related | Government Grants Recognized in Current Profit or Loss (RMB) | Accounting Account | Amount in Current Period | Amount in Prior Period | | :--- | :--- | :--- | | Non-operating Income | 968,368.17 | 3,470,504.53 | | Other Income | 177,276.07 | 1,058,818.17 | Risks Related to Financial Instruments The company faces credit, liquidity, and market risks, managed through credit assessment, continuous monitoring of receivables, cash flow forecasting, and bank credit lines, with minimal foreign exchange risk and no exposure to floating interest rates - The company's main financial instruments include monetary funds, trading financial assets, notes receivable, accounts receivable, other receivables, long-term receivables, other equity instrument investments, other non-current financial assets, short-term borrowings, notes payable, accounts payable, and other payables[575] - The company faces credit risk, liquidity risk, and market risk, which are managed by formulating risk management policies and guidelines[575] - Credit risk is managed by assessing counterparty creditworthiness, continuously monitoring accounts receivable, and bank deposits; liquidity risk is controlled through cash flow forecasting and bank credit lines[576][577][578] - The company's foreign exchange risk is primarily related to the New Taiwan Dollar, but its impact is not significant; there are no floating-rate bank borrowings, so it is not affected by interest rate changes[579][580] [Fair Value Disc