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HAIER SMARTHOME(6690)
Analysis：
Amid the challenging first half of 2022, Haier Smart Home (6690) leveraged strengths in high-end brands, overseas proprietary brands while accelerating digital transformation, to deliver solid results. In the first half of 2022, the Company realized sales revenue of RMB121.846 billion, representing an increase of 9.1% year-on-year. Profit attributable to owners of the Company reached RMB7.949 billion, representing an increase of 15.9% compared to the same period of 2021. The Company`s gross profit margin reached 29.7%, up 0.2 percentage points yearon-year, driven by product mix upgrade with enhanced competitiveness, effective supply chain cost management, streamlined SKUs supported by integrating R&D and distribution; improved management of tier 2 & 3 suppliers, increased level of inhouse produced components, all of which aimed at improving the Company`s competitiveness of the entire value chain. (I do not hold the above stock)
Strategy：
Buy-in Price: $25.50, Target Price: $27.50, Cut Loss Price: $24.50
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GREENTOWN MGMT(9979)
Analysis：
For the six months ended 30 June 2022, The net profit attributable to the shareholders of Greentown Management (09979) RMB360.8 million, representing an increase of 33.4% YoY. During the Period, company has revenue of RMB1,258.5 million, representing a YoY increase of 16.4%. Commercial project management is still the largest source of revenue and profit for the company, with revenue of RMB764.7 million in the first half of 2022, accounting for 60.8% of total revenue, slightly decreased by 1.0% compared with the same period in 2021. The main reason for the decline was that due to the impacts of the pandemic, the revenue from projects in cooperation with business partners decreased compared with the same period last year. revenue from government project management reached RMB381.3 million, accounting for 30.3% of the overall revenue, representing an increase of 73.5% compared with in the same period in 2021. The main reasons were driven by the demand for government project management was rapidly released, and resulted in an increase in the project management area under the company's management this year and a corresponding increase in revenue. Revenue from other services was RMB112.5 million, accounting for 8.9% of the total revenue. The gross profit margin was 50.4%, representing an increase of 2.9 percentage points compared with 47.5% in the same period in 2021. As at 30 June 2022, the company's contract assets were RMB556.2 million, representing an increase of 15.3% from RMB482.4 million at the end of 2021. Besides, the net cash flow from operating activities of the company reached RMB363.3 million during the period, and the company had no liabilities and sufficient cash flow. In the future, with more and more business opportunities from clients such as the government, state-owned enterprises, local urban investment companies, and financial institutions, which will form a diversified investment landscape. Many cities across the country have introduced measures to increase the scale of affordable housing construction, the company's new business scale expansion would maintain its growth against the downward trend in the second half of 2022.
Strategy：
Buy-in Price: $6.90, Target Price: $7.70, Cut Loss Price: $6.29
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Report Review of August 2022
Sectors: TMT, Semiconductors, Consumer & Healthcare （Eric Li） TMT, Semiconductors, Consumer, Healthcare (Eric Li)This month I released 4 reports of Topsports INT. (6110), Chinasoft (0354), Xtep International (1368) & Vinda International (3331). For the financial year ended 28 February 2022, Topsports recorded revenue of RMB31,876.5mn (2021: RMB36,009.0mn), a decrease of 11.5% YoY, below our estimates of RMB4,104mn. operating profit of RMB3,430.1mn, a decrease of 14.0% YoY. The profit attributable to the shareholders during the year amounted to RMB2,446.5mn, a decrease of 11.7%, also below consensus. Final dividend for the FY2022 of RMB7.00 cents per ordinary share and a special dividend of RMB23.00 cents per ordinary share, full year dividend of $0.43, equivalent to a payout ratio of 109% (2021: 143%). The decline of revenue was mainly due to the impact of frequent pandemic outbreaks and global supply chain disruption, since late July and the second half of the financial year respectively. When broken down by brand categories, revenue from the Principal brands (including Nike and Adidas) was RMB27,569.3mn, down 12.3% YoY, and represents 86.5% of total revenue. Other brands (including Puma, Converse, VF Corporation's brands: i.e. VANS, The North Face and Timberland, ASICS, Onitsuka Tiger, Skechers and LI-NING) generated revenue of RMB4,005.2mn, down 6.1% YoY, and accounted for 12.6% of total revenue. Revenue from e-Sports income was RMB66.0mn, down 19.0% YoY and accounted for 0.2% of total revenue. When broken down by sales channel, retail operations decreased by 14.2% to RMB26,354.3mn, while Wholesales operations increased by 5.4% to RMB5,202.2mn and Concessionaire fee income decreased by 1.7% to RMB236.0mn. The gross profit margin was 43.4%, increased by 2.6ppt. Increase in gross profit margin primarily resulted in disciplined markdown control of retail operations, improved wholesales discount YoY, as well as more integrated cooperation with the brand partners. Selling and distribution expenses accounting for 29.6% of the total revenue (2021: 26.8%). Increase in a percentage of revenue was mainly due to the adverse impact of the pandemic and global supply chain disruption on sales which increased operating leverage, decrease in the rent concessions. General and administrative expenses accounting for 4.1% of the total revenue (2021: 3.5%). The increase primarily due to decrease in the government policy of provisional reduction and exemption of social insurance premium as the impact of the pandemic during the year. Topsports provide the operational update on the business for 1Q2023 (three months from 1 March 2022 to 31 May 2022), the total sales of retail and wholesale operations registered a high-twenties decline on a year-on-year basis. As at 31 May 2022, the gross selling area of directly-operated stores declined by 2.0% since the end of previous quarter, and increased by 2.8% on a YoY basis. In other words, Topsports in 1Q2023 is expected to have more negatively impacted. In addition, since March 2022, Shanghai and other first-tier cities have been temporarily closed due to pandemic. Although the prevention and control has been gradually relaxed, it is expected to affect consumer confidence and slow down the pace of recovery. 
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