Core Viewpoint - Beike's strategic decision to partner with Shengdu in the home decoration sector three years ago has proven successful, as evidenced by its recent financial performance, particularly in the home decoration segment [1] Financial Performance - In Q3, Beike reported a net income of 23.1 billion yuan, a year-on-year increase of 2.1%, with total transaction volume reaching 736.7 billion yuan [2] - The home decoration segment generated a net income of 4.3 billion yuan, contributing a profit margin of 32%, marking two consecutive quarters of profitability at the city level before deducting headquarters expenses [1][2] Business Segmentation - Beike's total transaction volume for existing homes was 505.6 billion yuan in Q3, reflecting a year-on-year increase of 5.8% [2] - The non-real estate business's net income share rose to 45%, a historical high, with the rental service segment generating 5.7 billion yuan, up 45.3% year-on-year [3] Home Decoration Segment Growth - Beike's home decoration segment has shown steady growth, with projected net incomes of 10.9 billion yuan and 14.8 billion yuan for 2023 and 2024, respectively [3] - In the first half of 2025, the home decoration segment's net income reached 7.5 billion yuan, a year-on-year increase of 16.5% [3] Technological Integration - Beike has been actively developing its home decoration business since 2019, launching various platforms and systems to enhance service quality and operational efficiency [4] - The company has introduced a Home SaaS system to standardize and digitize key processes in home decoration [4] Strategic Initiatives - Beike initiated the "Full Case Decoration Service Provider" strategy to address industry pain points, integrating design, construction, supply chain, and after-sales services [6] - The company has implemented a bidding and centralized procurement model to ensure product quality and streamline supply chain management [6] Consumer Protection Measures - Beike is addressing consumer concerns regarding prepayment in home decoration by offering a fund custody service, which ensures that payments are only released upon successful completion of key project milestones [8][9]

Core Viewpoint - The company Mingdiao Co., Ltd. (002830.SZ) is experiencing significant financial challenges despite a mild recovery in the home decoration industry, with notable declines in revenue and profit margins [1][2][14]. Financial Performance - For the first half of 2025, the company reported total revenue of 267 million yuan, a year-on-year decrease of 8.93%, and a net profit of 7.68 million yuan, down 11.95% [1]. - In 2024, the company had total revenue of 674 million yuan, a decline of 14.07%, while net profit increased by 4.08% to 40.68 million yuan, primarily due to cost-cutting and non-recurring gains [2]. - The company's gross margin fell to 30.7% in the first half of 2025, a decrease of nearly 1 percentage point, while net margin dropped from 3.77% to 3.58%, indicating weakened pricing power and ineffective cost control [3]. Operational Challenges - Accounts receivable surged by 349.26% to 3.38 million yuan, raising concerns about longer collection cycles and increased credit risk [6]. - Inventory levels reached 18.72 million yuan, an 82% increase, with inventory turnover days rising from 11 to 19 days, indicating potential issues with product sales and liquidity [7]. Market Dependency - Over 90% of the company's revenue is concentrated in the Pearl River Delta region, with more than 50% coming from Shenzhen alone, making it vulnerable to regional economic fluctuations [8][10]. - The company has attempted to expand into other cities like Changsha, but these efforts have yielded minimal results, contributing to ongoing regional risk exposure [10]. R&D and Innovation - The company has significantly reduced its R&D investment, with expenses dropping from 7.53 million yuan in 2023 to 4.59 million yuan in 2024, a decline of 39.13%, and further down to 1.53 million yuan in the first half of 2025 [11][13]. - The reduction in R&D personnel from 57 to 18 represents a 68.42% decrease, which could hinder the company's ability to innovate and meet evolving consumer demands [11][13]. Industry Context - Despite a general recovery in the home decoration industry, with a 0.92% increase in sales for large-scale home furnishing markets, Mingdiao's performance indicates internal issues rather than external market conditions [14]. - Analysts suggest that the company needs to diversify its market presence, reinvest in R&D, and improve credit policies to alleviate liquidity pressures and enhance competitiveness [14].