Summary of Yasha Co. Conference Call Company Overview - Yasha Co. is a leading enterprise in China's decoration and renovation industry, focusing on stable operations and investor communication [3][4] Industry Context - The decoration and renovation industry is currently in a stable phase, having undergone adjustments over the past four years, with a need to observe marginal changes and new incremental markets [3][4] - The overall market is expected to shift towards a model similar to Singapore's, where the government ensures public interest while allowing market-driven pricing for high-end consumers [17][18] Key Financial Metrics - In the first half of 2025, Yasha Co. signed new orders totaling approximately 4 billion yuan, a year-on-year decline, reflecting industry adjustment characteristics [2][4] - As of the first five months of 2025, the total order backlog was about 12 billion yuan, laying a solid foundation for annual growth [6] - The composition of new orders includes 42% from government and state-owned enterprises, 33% from real estate, and 24% from industrial capital, with the residential market showing strong performance at 28% [2][4] Future Growth Areas - Yasha Co. plans to focus on urban renewal, old city renovation, and expansion of quality enterprises as key growth areas [7][19] - The company is also emphasizing cost reduction and efficiency improvement, while paying attention to the impact of new productivity on the industry [7] Cash Flow and Receivables Management - The improvement in operating cash flow is attributed to a focus on order quality and timely collections, with a significant portion of orders coming from regions with good credit conditions [9][10] - The accounts receivable structure aligns with the order composition, with government projects accounting for 40%, real estate for 30%, and industrial capital for 30% [9][10] - Measures to mitigate receivables risk include strict customer selection and enhancing business quality [9][10] Market Trends and Innovations - The company is a leader in the prefabricated decoration sector, holding industry standards and numerous patents, with this segment accounting for 10% of total revenue [12] - New market trends include the introduction of housing quality standards, which could stimulate market activity and improve overall product quality [8][20] Strategic Initiatives - Yasha Co. has optimized its market layout by focusing resources on the Yangtze River Delta, Greater Bay Area, and Sichuan-Chongqing regions, while withdrawing from less profitable areas [22] - The company is actively recovering cash flow and has implemented legal measures to ensure receivables are collected [22] Long-term Vision - The company’s future development goals align with national policies, focusing on urban renewal, prefabricated construction, and the integration of industrial and information technology [23]

Core Viewpoint - The implementation of the new national standard "Residential Project Specifications" is expected to drive the development of new residential buildings towards safety, comfort, sustainability, and intelligence, while also providing opportunities for quality upgrades in the real estate supply chain [1][6]. Group 1: Impact on High-Performance Building Materials - The new regulations have led to a significant increase in demand for high-performance building materials due to mandatory requirements for insulation and soundproofing [2][3]. - Real estate companies are shifting their focus from price to quality, actively seeking new materials and technologies that enhance housing quality [2][3]. - The new regulations are seen as a milestone for the building materials industry, promoting a shift from low-quality price competition to a focus on performance, quality, durability, and user experience [2][3]. Group 2: Technological Advancements and Innovations - The promotion of prefabricated construction is expected to enhance market acceptance and improve construction efficiency [4]. - Companies are investing in research and development for prefabricated decoration technologies, achieving significant reductions in construction time and improving quality [4][5]. - The integration of smart home systems is expanding, with companies developing customized and innovative functional scenarios for their projects [5][6]. Group 3: Transformation of the Real Estate Supply Chain - The new regulations are reshaping the supply and procurement systems in the building materials industry, emphasizing transparency and quality control [6][7]. - The cost of green building materials has become comparable to traditional materials due to technological advancements and policy support, leading to higher project implementation rates [6][7]. - The entire real estate industry is moving towards high-quality and sustainable development, with expectations for further maturity in the supply chain over the next few years [8].