Ruihe Decoration(SZ:002620) Zheng Quan Zhi Xing·2025-08-28 22:59Core Viewpoint - ST Ruihe (002620) reported a significant decline in total revenue and a notable increase in net profit loss, indicating ongoing financial challenges despite some improvements in profit margins [1][3]. Financial Performance Summary - Total revenue for the first half of 2025 was 231 million yuan, a decrease of 44.01% year-on-year [1]. - The net profit attributable to shareholders was -23.2 million yuan, an increase in loss of 71.9% compared to the previous year [1]. - The gross profit margin improved to 19.86%, up 39.09% year-on-year, while the net profit margin was -4.69%, an increase of 72.88% [1]. - The total of selling, administrative, and financial expenses reached 57.86 million yuan, accounting for 25.07% of total revenue, which is an increase of 80.44% year-on-year [1]. Cash Flow and Debt Analysis - The company's cash flow situation is concerning, with cash and cash equivalents to current liabilities ratio at 12.17% and the average operating cash flow over the past three years to current liabilities ratio at 4.61% [4]. - The interest-bearing debt ratio has reached 26.82%, and the ratio of interest-bearing debt to the average operating cash flow over the past three years is 15.15% [4]. - The liquidity ratio is low at 0.82, indicating potential liquidity issues [4]. Historical Performance Insights - The company's historical financial performance has been weak, with a median Return on Invested Capital (ROIC) of 5.37% over the past decade, and a particularly poor ROIC of -60.98% in 2021 [3]. - The company has reported losses in three out of its thirteen annual reports since going public, suggesting a fragile business model [3].