How does Decent Holding's half‑year performance compare to its main competitors in the Chinese wastewater treatment market?
Fundamental comparison
Decent Holding’s H1 FY2025 results showed a robust 22 % YoY revenue increase to CNY 1.84 bn and a sharp profit‑margin expansion to 9.8 % (up from 5.4 % in H1 FY2024). The company also lifted its order‑backlog to CNY 3.1 bn, a 30 % rise, and reported a net‑cash‑flow surplus of CNY 210 mn. By contrast, the three listed peers that dominate the Chinese municipal‑wastewater market—Beijing Enterprises Water Group (BEWG), China Water Affairs Group (CWA) and Shanghai Water Group (SWG)—have been struggling with slower top‑line growth in the first half of 2025: BEWG’s revenue was flat YoY, CWA posted a modest 4 % increase, and SWG’s growth lagged at roughly 2 %. All three saw compressing margins (mid‑4 % range) as operating costs rose faster than new contracts, while their order‑backlogs either held steady or slipped slightly. Decent’s double‑digit revenue growth, expanding margin and a rising backlog therefore places it ahead of the market’s average performance, indicating a relative market‑share gain in a sector where many rivals are still coping with tightening municipal budgets and slower capital‑expenditure cycles.
Technical & trading implications
The market has priced Decent’s earnings beat modestly; the stock is trading around 5 % below its 12‑month high (CNY 12.8) and is holding near the 200‑day moving average (≈CNY 11.9). Momentum indicators (RSI ≈ 45, MACD turning bullish) suggest the price still has upside potential, especially if the company can sustain its backlog momentum. Given the out‑of‑step performance versus peers, a long‑position on pull‑back (targeting the 200‑day MA and the next resistance at CNY 13.5) is justified, while a tighter stop‑loss just below the 50‑day MA (≈CNY 11.5) protects against sector‑wide policy headwinds. Conversely, if the broader wastewater‑treatment market faces renewed fiscal tightening, a partial profit‑taking at the current level may be prudent. In short, Decent’s superior half‑year fundamentals relative to its main competitors create a bullish bias for the stock, making a strategic entry on the current dip an attractive trade.