DEHUA TB(002043)2022-11-11 00:39Financial Performance - In the first half of 2022, the company achieved revenue of 3.732 billion CNY, a decrease of 2.54% year-on-year; net profit was 267 million CNY, down 15.01% year-on-year; and non-recurring net profit was 214 million CNY, a decrease of 12.09% year-on-year. Excluding stock incentive expenses, non-recurring net profit increased by 2.54% compared to the same period last year [3] - In Q2 2022, the company reported revenue of 2.106 billion CNY, a year-on-year decrease of 14.5%; net profit was 172 million CNY, down 18.57% year-on-year; and non-recurring net profit was 137 million CNY, a decrease of 20.46% year-on-year. Excluding stock incentive expenses, non-recurring net profit declined by 10.46% year-on-year [4] - The company's main business segment, the decoration materials division, achieved revenue of 3.265 billion CNY in the first half of 2022, a decrease of 1.3% year-on-year; net profit was 271 million CNY, down 8.2% year-on-year; and non-recurring net profit was 229 million CNY, an increase of 1.1% year-on-year [5] Business Impact and Strategy - The company's engineering customization business, affected by real estate policy adjustments and macroeconomic conditions, reported revenue of 467 million CNY in the first half of 2022, a decrease of 10.6% year-on-year [4] - The company is focusing on expanding its retail and customization channels, with traditional retail distribution accounting for approximately 57%, decoration companies 11%, and engineering channels 4% [5] - The company plans to increase the number of stores and improve operational quality, with approximately 400 stores currently concentrated in the Jiangsu, Zhejiang, and Shanghai regions [6] Cost and Management - The increase in expense ratio in the first half of 2022 is primarily due to stock incentive expenses rising by 45.1 million CNY year-on-year, and the expansion of the number of subsidiaries from 9 to 16, leading to increased personnel costs [7] Market Outlook - The company anticipates a healthier and more rational development of the real estate market following the elimination of some enterprises during the deleveraging process, with a significant opportunity for leading real estate companies [8] - The top five revenue clients for the company in the first half of 2022 were Vanke, CIFI, Sunac, Zhongnan, and China Overseas [8]