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Finance Associated Press, August 23rd (Reporter Chen Kang) Due to the drag of the second quarter, Zhejiang Dahua Technology (002236.SZ) saw a year-on-year decline in net income in the first half of the year. According to the company's announcement tonight, in the first half of 2024, the company achieved operating income of 14.867 billion yuan, a year-on-year increase of 1.59%; net income was 1.81 billion yuan, a year-on-year decrease of 8.42%.

By quarter, the revenue of both quarters saw a slight year-on-year increase, but the net income increased by 13.26% year-on-year in the first quarter and decreased by 15.68% in the second quarter.

By region, in the first half of the year, Zhejiang Dahua Technology's overseas revenue increased by 9.08% year-on-year, accounting for 50.35% of the revenue, while domestic income decreased by 5.01% year-on-year, accounting for 49.65% of the revenue. Overseas revenue exceeded domestic revenue for the first time. In the same period last year, domestic revenue was higher than overseas, accounting for 53.11% and 46.89% of the revenue, respectively.

In the domestic business segment, the TO G business saw a significant decline, with a 15.07% decrease in revenue year-on-year, while the TO B business increased by 1.11% year-on-year, and other businesses decreased by 6.47% year-on-year.

Regarding the overseas market, the company stated that it is currently continuing to deepen the distribution system, comprehensively promote grid coverage, explore the operation of third-level customers, accelerate the layout of new business channels, and maintain continuous business growth. At the same time, the construction of overseas supply centers is accelerating, continuously improving overseas delivery capabilities.

The main business of Zhejiang Dahua Technology is the research, development, production, and sales of smart IoT products, providing video-centered smart IoT solutions and operation services.

According to the financial report, the profitability of all products declined in the first half of the year, with the gross margin of smart IoT products and solutions decreasing by 1.28 percentage points compared to the same period last year, including a 1.44 percentage point decrease in software business gross margin; and a 0.12 percentage point decrease in innovative business gross margin. The gross margin of domestic and overseas business declined by 2.72 and 1.03 percentage points year-on-year respectively.

However, the revenue of the innovative business increased by 8.95% year-on-year in the first half of the year, and the current revenue accounted for 16.55% of the total. In the field of innovation, Zhejiang Dahua Technology explores business that includes machine vision and mobile robots, smart life, thermal imaging, automotive electronics, smart security inspection, smart fire protection, and storage media.

In the first half of the year, Dahua's R&D investment increased by 4.78% year-on-year. In terms of R&D, the company polished large model sample points, promoted replication and implementation, and continued to launch new products such as Zhiquiang, Luban, Honghu, Tian series, and Night Vision King 2.0.

During the reporting period, due to the increase in tax payments and employee compensation compared to the same period last year, the net cash flow from operating activities of the company decreased by 293.07% year-on-year. In addition, the net cash flow from investment activities in the first half of the year decreased by 2080.04% year-on-year, mainly due to the purchase of large bank deposits.