Revenue increased by 15%, net profit decreased by 17%, EPS 0.08 yuan.

2017H1 Hongtao shares achieved operating income of 1.951 billion yuan, an increase of 15.36% over the same period last year, and the net profit attributed to the parent company was 104 million yuan, a decrease of 17.22% over the same period last year. Q2 realized revenue of 1.221 billion, an increase of 66.87% over the same period last year, and a net profit of 53 million yuan, an increase of 23.54% over the same period last year, basically in line with previous expectations. In terms of business, the revenue of the decoration section reached 1.795 billion, an increase of 16.65% over the same period last year, while that of the vocational education sector reached 119 million, a decrease of 6.72% over the same period last year. The company expects to achieve a net profit of 1.26-231 million yuan from January to September, a year-on-year change of-40%.

Gross profit margin has declined and management capacity has been improved.

The company's 2017H1 achieved a comprehensive gross profit margin of 20.39%, down 3.56% from the same period last year, mainly due to the impact of increased business on the one hand, and large investment in new businesses such as Internet home improvement and vocational education, on the other hand, the performance has not yet been released. The company's three-item expense rate in the first half of the year was 12.35%, an increase of 0.58% over the same period last year, mainly due to an increase in interest-bearing liabilities over the same period last year, resulting in a relatively significant increase in the financial expense rate, reaching 2% (+ 0.93pct). However, under the leadership of the new leadership, the company re-improved the organizational structure, optimized management processes and systems, improved management efficiency, and reduced the management expense rate to 4.92% (- 0.64pct).

Abundant on-hand orders, structural optimization, continuous layout of Internet home furnishings

During the reporting period, the company accumulated 2.8 billion yuan in newly signed orders (including winning unsigned orders, the same below), including 1.617 billion yuan in Q2 newly signed orders and 3.5 billion unfinished orders signed in the first half of the year. From the perspective of the change in the order structure, in addition to ensuring the proportion of cultural projects with traditional advantages, the proportion of hotel projects has increased compared with last year, made breakthroughs in transportation hubs and hospital projects, and gradually turned to integrated design and construction projects. lay the foundation for long-term and steady development in the future. In addition, the company's fund-raising project "Guangdong Yunfu Hongtao High-tech Stone Industry Park Project" was successfully put into production, further strengthening the overall decoration capacity of the company's project. The company continues to make efforts in Internet home improvement, has opened 14 urban sub-stations, services and word-of-mouth have been well received in the industry.

Vocational education is worth looking forward to, maintaining the rating of "increasing holding"

At the beginning of this year, the qualification training examination suspended in 2016 has basically been fully restored, and the training business of Xuelsen has begun to recover actively. At the same time, the company has set up a qualified talent team with rich experience and professional technology in the education industry. In-depth platform construction, at present, its education platform has accumulated hundreds of thousands of students, brand awareness is high, vocational education performance is expected to be released. It is estimated that in 17-19, the EPS will be 0.17, 0.20, 0.25, respectively, and the current share price will correspond to the PE of 38-31-26, maintaining the "overweight" rating.