Era Decoration IPO "terminated" with the company facing the risk of declining performance.

On March 1st, Shenzhen Times Decoration Co., Ltd. (referred to as "Times Decoration") announced that its IPO application on the Shenzhen Stock Exchange Main Board has been terminated, as the company requested to withdraw its application for listing. According to the prospectus, Times Decoration is a leading provider of residential interior decoration, public building decoration, curtain wall and landscape engineering decoration services in the domestic construction decoration industry. Its main clients are large domestic real estate developers, and the company has a strong market competitiveness and good reputation in the field of residential interior decoration for bulk projects. With years of industry experience, the company has established a market positioning focusing on bulk residential interior decoration and public building decoration for urban complexes, targeting high-quality domestic real estate developers to develop its business in residential interior decoration. The company has gained a good reputation in the industry for its excellent decoration quality and project management capabilities. Since its establishment, the company has been engaged in the construction decoration business, with stable main business operations and no major changes. The main sources of revenue for the company during the reporting period are as shown in the table below: All branch offices of the company are direct branches, operating under a model of independently contracting business and organizing construction independently. The main operations of the company include project contracting, project implementation, project acceptance, final settlement, and after-sales service. Moreover, to address the risks of fluctuation in the downstream real estate industry, the company has always implemented a strategy of serving high-quality large clients. Over the years, the company has established long-term stable cooperation relationships with state-owned or state-controlled high-quality real estate enterprises such as Vanke Real Estate, China Resources Group, Poly Real Estate, China Overseas Land & Investment Ltd, and China Merchants Real Estate. In terms of finances, the company achieved operating revenues of approximately RMB 3.711 billion, RMB 4.062 billion, RMB 3.491 billion, and RMB 1.38 billion in 2020, 2021, 2022, and the first half of 2023, respectively. During the same period, the company achieved net profits of approximately RMB 109 million, RMB 118 million, RMB 66.5139 million, and RMB 19.2118 million, respectively. It is worth noting that in the prospectus, Times Decoration mentioned the risk of declining performance. The company's overall performance remained stable in 2020 and 2021, but in 2022 and the first half of 2023, the company's operating performance declined due to factors such as fluctuations in the real estate industry. Considering the significant impact of macroeconomic and policy regulation on the downstream real estate industry, if there is a significant slowdown in real estate investment and development progress, a sharp decline in real estate market demand, or major adverse changes in the company's main clients' operations leading to liquidity crises, it may affect the stability of the company's business and further lead to a decline in performance. Additionally, as the company's business scale continues to expand, if a significant reputational loss occurs due to lagging operational management levels, it may also result in a decline in the company's operating performance.