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“In the post-epidemic period, Huida bathroom to seize the opportunity to actively and orderly layout. Do not take a momentary gain or loss to affect the rhythm of the strategy.” Mix úuch., Huida bathroom actively laid out the market in order to enrich the product line. It spent 200 million yuan to acquire a new Shengda New Material Co., Huida Sanitary Ware (603385.SH) President Wang Yanqing said.

A few days ago, Huida Sanitary Ware released its semi-annual report for 2021. The earnings report shows that Huida bathroom although revenue rose, but net profit fell year-on-year. What does the release of Huida bathroom’s mid-year earnings report reveal about the industry? What is the focus of attention for stockholders and investors?

Steady growth in domestic sales, incremental space is obvious

The financial report shows that in the first half of this year, Huida bathroom achieved revenue of 1.743 mil millones yuanes, Jump'éel aumento ti' 32.38% ja'aba' paach ja'aba'. Its total assets reached 6.162 mil millones yuanes, Jump'éel aumento ti' 9.07% ja'aba' paach ja'aba'. The high increase in revenue scale, domestic retail exhibition stores restart and home improvement channel breakthrough played a crucial role.

By the first half of 2021, domestic retail and engineering sales achieved revenue of 1.322 mil millones yuanes. Foreign sales, on the other hand, reached 406 millones yuanes, tak ka'anal 41.09% y 10.55% respectively from the same period last year. Ichilo'obe', domestic sales remain the main sales support of the company, Contabilización u 76.48% of the company’s overall revenue. With the opportunities in the post-epidemic era, the domestic sales market recovered. This became the core driver of the company’s revenue scale growth in the first half of 2021. And domestic retail sales achieved revenue figures of 901 millones yuanes, a change of 51.14% from the same period last year. This became the main driver of growth in the domestic sales market. In the engineering channel, it achieved 421 millones yuanes, surpassing the entire external sales market. It further boosted the confidence of the domestic sales market, reflecting the side of the domestic engineering channel still has a large incremental space.

Area		Revenue from main business during the reporting period	Year-on-year change	Percentage of main business revenue
Domestic Sales	Retail Channel	90,06& 12	51. 14%	52.11%
	Engineering Channel	42,135. 41	23. 52%	24.38%
	Subtotal	132,203. 53	41.09%	76.48%
Foreign Sales		40,647. 66	10.55%	23.52%
Total revenue from main business		172,851.19	32. 48%	100.00%

Details Huida bathroom revenue in the first half of the main force has two major channels of domestic sales retail and engineering. The financial report shows that in the retail channel, as of the first half of 2021, “Huida” brand in the blank market opened 112 new stores. Yaan 108 stores upgraded and renovated. A total of 2,323 stores were opened in the territory, a net increase of 128 stores over the same period last year. Ichilo'obe', there are 1,900 bathroom brand stores, a net increase of 101 stores over the same period last year. Yaan 423 tile stores, a net increase of 27; this indicates that the company’s focus on the development of retail channels has switched back to network expansion.

As for the engineering channel, the company continued to rely on the “1+5” engineering base and deepen the strategic cooperation with famous real estates developers such as Cinnamon Park, Sunac and Poly. Beey xan, during the reporting period, the company has signed a strategic cooperation with “Masterpiece”, “Industry Summit Decoration” and other head decoration enterprises, and the growth rate of sales increased significantly. In the current situation, Huida bathroom is expected to accelerate the expansion of the head of the second half of the installation enterprises, to seize the front entrance of the traffic, and pull the performance growth.

It is understood that since 2019, Huida bathroom actively carry out the construction of retail channels and engineering channels. In important sales areas and blank markets, subsidiaries or flagship stores have been established. This can provide consumers with quality and convenient services on the one hand, and can better understand the needs of consumers on the other. This in turn provides a strong guarantee for the development of Huida bathroom. From the last two years of financial data can be seen, Huida bathroom in the domestic market layout has achieved significant results.

Multi-dimensional factors, profits slightly fluctuate

Chongqing factory officially put into operation, the industry’s first SMC material assembly balcony cabinet was launched. The national investment promotion, the country’s marketing activities, and raw material prices continue to go high.

In the reporting period, although revenue rose sharply, monetary funds, Huida bathroom with nearly perfect results delivered the first half of the answer sheet. Chéen ba'ale', net profit is declining. In the first half of this year, the net profit of Huida sanitary ware is 112 millones yuanes, kaambal 12.94% ja'aba' paach ja'aba'.

The financial report shows that in terms of expense ratio, Huida bathroom spent 8.29% / 7.40% / 4.45% / 0.24% on sales / management / research and development / financial expense ratio in the first half of 2021, respectivamente, compared with the same period last year change of -1.46 / 0.80 / 0.40 / 0.34 ti'its porcentuales. Its consolidated expense ratio was unchanged from last year. In terms of net margin, the company’s net sales margin was 7.04% in the first half of 2021, kaambal 2.84 percentage points year-on-year.

From the analysis of the financial report data, it is concluded that the net profit in the first half of the year decreased mainly due to the enjoyment of social security exemptions, category expansion, R&D investment, increased marketing expenses and rising raw material prices in the same period. The financial report shows that the company’s investment in research and development expenses amounted to 77,572,000 yuan, Contabilización u 4.45% of operating income, Jump'éel aumento ti' 45.51% ja'aba' paach ja'aba'. Compared to the market in the first half of 2021, in the first half of 2020, Huida bathroom enjoys national social security exemptions and other policy support, also has a significant impact on net profit.

Area		Revenue from main business during the reporting period	Year-on-year change	Percentage of main business revenue
Domestic Sales	Retail Channel	90,06& 12	51. 14%	52.11%
	Engineering Channel	42,135. 41	23. 52%	24.38%
	Subtotal	132,203. 53	41.09%	76.48%
Foreign Sales		40,647. 66	10.55%	23.52%
Total revenue from main business		172,851.19	32. 48%	100.00%

In wéet k'iin, in the first half of this year, at the same time, on March 28, 2021 Huida Intelligent Home (Chongqing) Co. Huida bathroom increased its subsidiary’s capital by 198 million yuan as well as the preliminary trial production and other factors caused a decline in the company’s overall profit. It is understood that Huida bathroom in the first half of the research and development of new balcony cabinet category, not only increased the cost of research and development investment costs, equipment procurement costs, raw material costs, while the marketing team configuration has also increased. For the first half of the Shanghai Kitchen and Bathroom Exhibition, the Expo and other exhibitions, Huida bathroom actively participates in them. They made big investment activities to support the opening of stores, etc., resulting in a large increase in marketing costs. The financial report shows that in the first half of this year, the sales costs of Huida bathroom are 145 millones yuanes, Jump'éel aumento ti' 12.53% ja'aba' paach ja'aba'. Multiple inputs squeezed the net profit margin of Huida sanitary ware. Chéen ba'ale', compared to the decline in net profit, Huida bathroom current financial position is robust enough.

The financial report shows that in the first half of this year, the money capital of Huida sanitary ware is 854 millones yuanes, Contabilización u 13.85% of total assets, Jump'éel aumento ti' 110.34%. And this period, the short-term loan of Huida bathroom is 476 millones yuanes. Huida’s bathroom cash number is much higher than short-term loans.

Project Name	End of the period	End of the period as a percentage of total assets Ratio (%)	Prior year end	End of previous year Number to total assets Percentage of total assets (%)	End of the period Amount compared to previous year Change from previous year-end Percentage change (%)	Situation Description
Money Funds	853, 569,327. 72	13.85	649,828,880. 30	11.50	31.35	See table after
Receivables financing	58,489,290.91	0.95	96.549,245. 65	1.71	-39.42	See after the table
Prepayments	49,454,632.04	0.80	33,888,614. 58	0.60	45.93	After the table
Other receivables	165, 303, (Mb. 60	2.tt«	10,915,354.63	0. iy	1,414.41	See after table
Other current assets	11,497,393.94	0.19	37, 189,235. 53	0.66	69.08	See after table
Other non-current financial assets	28,647,396.24	0.46	3,647,396. 24	0.06	685.42	See after table
Other non-current Assets	125, 351,268. 49	2.03	65,332,892. 90	1.16	91.87	See after the table
Short-term loans	475, 551,831.07	7.75	250,278,333. 32	4.43	90.01	See after the table

Increase in innovation, layout “intelligent”, the growth rate of each category is bright

Revenue rise can not be separated from the continued strength of the product. In the first half of this year, the sanitary ceramics, losa, Bañeras, bathrooms, bathroom cabinets and hardware sanitary ware, respectivamente, achieved revenue of 896 millones yuanes, 238 millones yuanes, 0.62 mil millones yuanes, 131 millones yuanes, 291 millones yuanes. Data show that sanitary ceramics is still the mainstay of Huida bathroom products, Jump'éel aumento ti' 23.72% ja'aba' paach ja'aba'.

Unit: millones yuanes

Categorías yik'áalil	Revenue from main business in the reporting period	Year-on-year change	Percentage of main business revenue
Sanitary ceramics	89,577.08	23.72%	51.82%
Ichilo'obe':Intelligent sanitary ware	18.873.43	102.24%	10.92%
Overall sanitary ware	5,489. 53	370.95%	3.18%
Tile	23,673.07	54.97%	13.69%
Wichkíil	6,233.47	57.48%	3.61%
Bathroom Cabinet	13,097.35	48.86%	7. 58%
Hardware and sanitary ware	29,105. 53	39. 73%	16.84%
Láak'o'ob	11.164.69	21.28%	& 16%
Total revenue from main business	172,851.19	32.48%	100.00%

It is understood that in the innovation combined with the new crown epidemic normalized background, Huida sanitary ware developed LED ultraviolet sterilization intelligent products, touch-free induction products and automatic disinfection products. In order to enhance customer comfort experience, Huida bathroom developed convenient control products, convenient storage products and induction to soap products. It is also concerned about the trend of an aging society. Huida bathroom layout developed the monitoring of health intelligent products and age-friendly accessories. It has insight into the southern balcony cabinet market situation, and found the balcony blue ocean. Huida bathroom actively innovative materials. It utilizes SMC material as a cabinet basin. In the production industry, it pioneered assembled balcony cabinets.

The investment in research and development also makes the Huida bathroom achieve efficient results. Bejla'e', Huida Sanitary Ware has completed 165 new product designs, which have won many awards such as German Red Dot and IF. As of the reporting period, Huida bathroom valid patents totaled 615, ti' le ju'unil 150 newly granted patents. Beey xan, Huida bathroom has applied for 124 new patents in the first half of the year, Incluido 16 invention patents, 59 designs, y 49 utility models.

In the era of intelligent intelligence, data show that Huida bathroom intelligent bathroom series products have also won the recognition of consumers. As of the first half of 2021, the revenue achieved by intelligent sanitary products is 189 millones yuanes, Jump'éel aumento ti' 102.24% ja'aba' paach ja'aba'.

A lo largo de ja'ab, Huida bathroom has always adhered to independent research and development, and mastered a number of core patents. In the industry, it took the lead in introducing a gas thermostat, solar thermostat, waterproof hammer impact spool, overflow prevention device, etc. It developed a series of intelligent bathroom products, so that consumers feel intelligent, safe, healthy and comfortable. It has become the industry’s green, healthy, clean concept of the guide.

Leti'e' “whole” look at Huida, the future can be expected

Innovation, intelligence, are just the means of enterprise production and development. This is the achievement of a hundred years Huida, ten billion Huida (denominadas ti' u sucesivo “double hundred Huida”) that must go through. As early as 2017, Huida bathroom has entered the second five years of the second venture, and officially launched a “holistic, intelligent, ecological” three major strategies.

Overall, ti' 2018, Huida sanitary ware launched the Tangshan headquarters production base construction. It introduced the industry’s leading automated production equipment to make a strong endorsement for assembly-type housing products. In May 2019, Huida Sanitary’s Tangshan integral bathroom project was officially put into operation, and is expected to achieve an annual output of 150,000 sets of integral bathrooms by the end of 2021.

Whole Bathroom	5,489.53	370. 95%	3. 18%
Tile	23,673. 07	54.97%	13.69%
Wichkíil	6,233. 47	57. 48%	3.61%
Bathroom Cabinet	13,097. 35	4& 86%	7. 58%
Hardware Sanitary Ware	29,105.53	39. 73%	16. 84%

The financial report shows that in the first half of this year, the whole bathroom Huida bathroom operating income is 54,895,300 yuan, a year-on-year surge of 370.95%.

In the previous, Huida bathroom president Wang Yanqing said to the media, “Huida bathroom has long set down a ‘holistic, intelligent, ecological’ three major strategies. Ti' le futuro, we will continue to optimize the strategic direction, to ‘double hundred Huida’ run. The current trend of holistic we have firmly grasp, become a powerful weapon for Huida growth.”

Of course, “double hundred Huida” is not just a slogan, and Huida bathroom is taking action to say. In addition to the establishment of factories, it is also constantly enriching the product line. Earlier, Huida Sanitary Ware announced that the company intends to increase its capital by not more than 200 million yuan of monetary funds Beiliu City New Shengda New Material Co. The source of funds for this investment is the company’s own funds. If Huida bathroom completed the acquisition, it will hold no less than 70% of the equity of the new Shengda, becoming its controlling shareholder.