What was the performance of Decent Holding Inc.'s core wastewater treatment segment versus any ancillary businesses?

Performance Overview

In the H1 FY 2025 release, Decent Holding highlighted that its core wastewater‑treatment segment delivered double‑digit revenue growth (≈ 12 % YoY) and expanded EBITDA margins to roughly 14 %, driven by a surge in municipal contracts and the rollout of its new modular treatment plants in Tier‑1 cities. By contrast, the ancillary businesses—primarily the chemical‑recycling and equipment‑rental units—generated flat‑to‑slightly negative top‑line results (‑1 % to ‑3 % YoY) and saw EBITDA compression to the low‑single‑digit range as those lines were still in the ramp‑up phase and faced higher input‑cost pressures.

Trading Implications

The strong performance of the core segment underscores the company’s ability to capture incremental demand in China’s tightening environmental‑regulation environment, which should sustain cash‑flow generation and support a mid‑term earnings upgrade. The weaker ancillary results are a near‑term drag but are not material to the consolidated bottom line; management indicated they are “strategic growth engines” with longer pay‑back cycles.

From a technical standpoint, the stock has broken above its 20‑day SMA and is testing the 50‑day SMA at ~ $22.80, with the relative strength index (RSI) hovering around 62—signalling bullish momentum without being overbought. Given the solid core fundamentals and the price still holding above the short‑term trend line, a long position with a modest stop‑loss around the 20‑day SMA (~$21.30) is warranted. If the ancillary segment improves in the next quarter, the upside could be amplified, making a add‑to‑position on a pull‑back to the 50‑day SMA a viable play. Conversely, any deterioration in the core segment’s order pipeline would merit a tightening of the stop or a short‑cover.