Depth independent penetration
Fight for the Red Sea, survival of the fittest!
Author: Mondo.
Editor: Wu Shuang.
Style: Ling Yu.
*: Shoucai - Shoutiao Institute of Finance and Economics.
The real estate industry is still warm and cold.
According to the National Bureau of Statistics, in the past 2023, the national real estate development investment will 110913 billion yuan, a year-on-year decrease of 96% (on a comparable basis); Among them, residential investment was 8,382 billion yuan, down 93%；The construction area of real estate development enterprises was 838364 million square meters, a decrease of 72%, the sales area of commercial housing 111735 million square meters, down 85%。
The more mature the industry, the more it will lead to the whole body. In the deep reshuffle and reshaping, the first to bear the brunt is the downstream home furnishing enterprises in the chain. This can be seen from the performance forecasts that have been released in recent days. For example, Markor Home Furnishing and Diou Home Furnishing have suffered consecutive losses, how to get out of trouble?
Two consecutive losses, high costs, and vigilance against debt pressure
On January 30, Markor Home Furnishing released a forecast that it is expected to have a net profit of -2 in 20237 billion to -40.5 billion yuan, deducting non-attributable net profit -28 billion to -41.5 billion yuan.
It is worth mentioning that in 2022, the net profit attributable to Markor Home Furnishing will be about -29.8 billion yuan, deducting the net profit of non-attributable to the parent company of about -31.6 billion yuan. That is, the company has lost money for two consecutive years, and the loss is likely to deepen in 2023.
Shares of companies fell 31% to close at 256 yuan. As of February 20, the ** price is 218 yuan, compared with the ** price on January 30, it has dropped by nearly 15%.
In fact, the market has expected the above-mentioned annual loss. In the first three quarters of 2023, the company's net profit attributable to the parent company was -26.6 billion yuan, down 1945%；Deduction of non-attributable net profit -27.4 billion yuan.
From this, the net profit loss in the fourth quarter is at least 00.4 billion yuan, up to 1$3.1 billion; The net profit deducted from the non-attributable parent is at least 0$1.4 billion, up to $14.1 billion yuan.
Gather in 2023, Markor Home Furnishing has a quarterly report, an interim report, and a third quarterly reportRevenues were 111.7 billion, 230.9 billion, 336.6 billion, corresponding to the growth rate. 88%；Net profit attributable to the parent company - 4902780,000, -8666620,000, -26.6 billion, corresponding to the growth rate. 13%、-19.45%。The growth rate of revenue has slowed down step by step, and the net profit attributable to the parent company has also declined after experiencing high growth.
Earnings indicators are also not encouraging. Gross profit margin decreased period by period, respectively. 14%；The net profit margin was even more negative, at -429%、-3.70%、-7.87%。Combined with revenue growth, it is inevitable that the outside world will mutter, how is the quality of enterprise development?
The reason for this is that the cost is high. In the first quarter, half a year, and first three quarters of 2023, the total operating cost of Markor Home Furnishing will reach 118.1 billion, 240.5 billion, 368.7 billion, which is higher than the total operating income of each period.
Where is the money spent? Taking the first three quarters of 2023 as an example, the largest expenditure item is sales expenses, reaching 112.7 billion yuan, a year-on-year decrease of 042%。The R&D expenses are only 8608840,000 yuan, although a large increase of 4379%, and the gap with the volume of sales expenses is still obvious. This was followed by a year-on-year decrease of 461 per cent, still up to 36.9 billion yuan, again the financial fee is 12.4 billion yuan, a year-on-year increase of 2037%。Among them, the interest expense is as high as 1$3.1 billion;
High interest rates stem from high liabilities on the books. As of the end of September 2023, the company's short-term borrowings on the books were as high as 116.3 billion yuan, a year-on-year increase of 4127%, far exceeding the book money funds in the same period. In addition, non-current liabilities due within one year of the book amounted to 8$8.9 billion, notes payable and accounts payable were 94.4 billion yuan, liquidity pressure is obvious.
As of the end of September 2023, Markor Home Furnishing paid cash for the purchase and construction of fixed assets, intangible assets and other long-term assets amounted to 11.1 billion yuan, debt repayment payment cash 208.6 billion yuan. The sum of the two expenses far exceeded the net cash flow from operating activities for the same period.
Wang Tingyan, an industry analyst, said that with continuous losses and high debts, the operating pressure of Markor Home Furnishing is not small. In the face of the continuation of the spillover risk of real estate reshuffle, how to maintain stable cash flow and get out of the performance dilemma as soon as possible is a focus of attention from the outside world.
External Guarantee Examination and Relief from Difficulties
Through the equity structure, it can be seen that the controlling shareholder of Markor Home Furnishing is Markor Investment Group***, which holds 3301% equity. The actual controller of the listed company is Feng Dongming, who holds 1816% equity.
As the founder, Feng Dongming has faded out of the listed management. The current chairman Feng Lu is the son of Feng Dongming. According to NetEase Home, Feng Lu was the chairman of the Asian-American Chamber of Commerce at Harvard University, an analyst at Morgan Stanley's capital markets, and the chairman of the Morgan Stanley Asia-Pacific Analyst Council. From April 15, 2021 to April 25, 2022, he served as the vice chairman of Markor International Household Products Co., Ltd.; Since April 2022, he has served as the chairman of Markor International Household Products Co., Ltd.
Sun Yewen, an industry analyst, said that in the early stage of enterprise development, family management is conducive to operational stability and efficient decision-making. After growing to a certain scale, modern enterprise management is the top priority. The transparency of family business governance, advanced decision-making, openness, accuracy and foresight, team talent training, and improvement space are all the focuses.
According to Phoenix.com Finance, on June 3, 2021, a person named Yang Zhen broke the news that the "Xu Yafei" team collected a deposit from Markor Home, and the latter provided him with inside information throughout the process. At that time, due to the inside information of "Markor Home", Xu Yafei's team had made a bottom warehouse of about 1 billion yuan, and the control exceeded 10%.
According to the 21st Century Business Herald, Yang Zhen personally had a creditor-debt relationship with Xu Yafei in the process of business development, and Xu Yafei owed him tens of millions of yuan. In order to show his ability to repay, the latter revealed that he had participated in the stock price manipulation of many listed companies. Yang Zhen said that in order to provide "efficiency" for manipulation, Xu Yafei's partners and others also did everything possible to pull individual ** managers into the water.
As soon as the news came out, it can be described as a thousand layers of waves, which attracted the attention of the outside world. Subsequently, Xu Yafei published a long article on Weibo to reply to Yang Zhen, calling him "a thief shouting to catch a thief". Xu Yafei said that he was only a financial intermediary and did not have any excesses, and the so-called manipulation of stock prices was just Yang Zhen's "drunken bragging" in order to solicit more business.
At the same time, the relevant person in charge of Markor Home Furnishing publicly stated for the first time, "The content of the online article is purely subjective fabrication, and the company has never participated in the manipulation, and has never paid a deposit or provided insider information to any institution or individual." The content fabricated by the relevant personnel with ulterior motives seriously infringes on the reputation of the company and its shareholders. ”
Which is right and which is wrong, do not evaluate, leave time to answer.
In contrast, off-balance sheet liabilities are more vigilant. According to public information, the investment territory of enterprises involves finance, hydrogen energy, industrial parks, etc. In order to promote the development of diversified sectors, it has provided guarantees for affiliated companies on many occasions.
For example, at the 2023 third quarter performance briefing, Zhang Li, financial director of Markor Home, revealed that the total external guarantee of the company and its wholly-owned (holding) subsidiaries is currently 221.9 billion yuan, and the guarantee amount between the company and its wholly-owned (holding) subsidiaries reached 160.3 billion yuan.
The superposition of the above-mentioned self-debt pressure will inevitably make the outside world examine the development soundness of Markor Home, and the compliance and necessity of specific guarantees.
In this regard, the ** department of Markor Home Furnishing has responded that the mutual insurance between the company and its wholly-owned (holding) subsidiaries is that the company raises funds through mutual insurance between parent and subsidiary companies according to the needs of working capital and bank credit management requirements, so as to meet the needs of the company's daily operations and obtain low-cost financing channels at the same time, and there is no operational risk and performance risk.
Guo Xing, an industry analyst, said that whether it is strategic investment or financial investment, the diversified development of Markor Home Furnishing is understandable, which is a manifestation of the vitality of development, and is also consistent with Feng Lu's previous practice experience. However, it should be pointed out that this is based on business synergy and self-control. Especially in the pressure cycle of the industry, the most test of the resilience of enterprise development, the basic skills of the main business, how to properly eliminate operational risks, back to the growth track, Markor Home Furnishing self-certification time is not much.
Increasing profits does not increase income, and liquidity pressure is great
What hurdles do we have to go through for salvation?
Look at Diou Home Furnishings again.
On January 31, the company announced that the net profit loss attributable to shareholders of listed companies in 2023 would be 5500 million yuan-6800 million yuan. The net loss for the previous year was 150.7 billion yuan.
It can be seen that, like Markor Home, Diou has also suffered consecutive losses, but fortunately, the losses have narrowed significantly, showing a positive recovery momentum.
For the above changes, Diou Home Furnishing said that it was mainly due to the company's current business improvement and improvement of business quality. The loss during the period was mainly related to the provision for impairment.
It's not too much of an exaggeration. In the first quarter, interim report and third quarter report of 2023, the net cash flow generated by Diou Home's operating activities was 26.3 billion, 29.6 billion, 37.5 billion, corresponding to the growth rate year-on-year. 92%。Net profit attributable to the parent company was -8032270,000, -6055480,000, -6518000,000, corresponding to the growth rate. 45%。
Interestingly, the revenue for the same period was 61 billion, 177.5 billion, 274.4 billion, with a year-on-year growth rate of -2032%、-11.21%、-11.91%。There is still a question mark about whether to increase profits or not, how sustainable it is, and what the quality of development is.
On the other hand, the asset impairment loss continued to expand during the period, which was 923700,000, 2169340,000, 2700790,000, corresponding to the growth rate. 00%。The interest expense is also not low, at 4315180,000, 8007050,000, 12.8 billion. Two expenses became an important reason for the company's loss.
At one point, the widening of asset impairment losses was related to high book inventories. During the period, they were 78.7 billion yuan, 76.3 billion yuan, 77.5 billion yuan, accounting for about the company's current assets in the current period. 65%。The deep-seated reason for the high inventory balance is still the reshuffle of the real estate market.
Similar to Markor Home, Diou also suffers from excessive debt. In 2023Q1, H1, and Q3, the company's debt ratio at the end of the period was respectively. 29%。
According to the type of debt, the company's short-term borrowings during the period were 104.1 billion, 97.9 billion, 89.3 billion; Non-current liabilities due within one year were 13.4 billion, 13.3 billion, 11.9 billion; Other current liabilities were 2134350,000, 1989840,000, 1867050,000; Long-term borrowings are 42.5 billion, 39.4 billion, 38.6 billion.
As of the end of September 2023, the monetary funds on the books of Diou Home Furnishing are only 80.1 billion. It is worth noting that the company's contract liabilities amounted to 17.4 billion yuan. It can be seen that Diou Home Furnishing is tightly liquid.
As of the end of September 2023, the company's sales expenses are 28.3 billion, down 3.2 billion year-on-year16%；Management Fee 15.7 billion yuan, down 18 percent year-on-year30%。
In the view of industry analyst Wang Tingyan, it is commendable to reduce expenditure and improve efficiency, which will help improve profits and also reduce the heart of Diou in awe of the market. However, blindly reducing expenditure is not a long-term solution, and it is fundamental to deepen the main business and enhance the core competitiveness. With the end of the era of large-scale real estate development, home furnishing enterprises should pay more attention to the demand for improved housing, highlight the ratio of product quality to price, personality and characteristics, and transform sales from relying on developers to multiple channels. How to overcome these transformation hurdles, we still have to show great wisdom as a family.
Resolute transformation vs quality control fence
According to public information, Diou Home Furnishing is one of the leading R&D, production and manufacturing enterprises of sanitary ware and architectural ceramics products in China, with two major brands of "Emperor" sanitary ware and "Oushennuo" ceramics, and the company has long adhered to the high-end positioning.
According to the 2020 annual report, the sales model of the company's bathroom products is mainly based on the distribution model, and a distribution network has been established in 31 provinces, autonomous regions and municipalities directly under the central government in the interior of the country, especially in some areas of southwest and east China, and the sales outlets have penetrated into key county cities.
Ceramic tile products have won the favor of leading real estate enterprises by virtue of their comprehensive service capabilities accumulated over the years, and have established a huge customer base such as Country Garden, Vanke, Evergrande, Agile, China Resources Land, CIFI, Rongsheng, Tahoe, Longguang, and Huaxia Fortune.
However, with the cold operation of the customer base of real estate enterprises, Diou Home Furnishing began to promote the channel integration of the two brands.
According to the 2023 interim report, the company's ceramic tile products have established a sales model based on dealer channels and engineering channels in terms of channels. It has large national dealers including Huanai and Huiquan, as well as regional dealers in major provinces and cities across the country. As of June 2023, Oushenuo has more than 1,400 dealers and nearly 4,000 terminal stores. There are more than 750 imperial distributors of sanitary products, with nearly 1,000 stores.
According to the interim report, the company's engineering channel revenue fell by 33%, and the distribution channel revenue increased by 10%. Between the lifting, there is a big environment, and you can also experience the transformation and change of Diou Home.
As we all know, the sanitary ware and architectural ceramics industry is a mature and fully competitive industry. Perfect channels have given Diou a certain competitive advantage. But reaching consumers is only the first step, and strict control of quality experience is the last leap.
Browsing the black cat complaints, as of February 20, there have been a total of 9 complaints about "Oushennuo Ceramics", the number is really not much, but the spearhead focuses on product quality and service.
For example, on December 9, 2023, the complaint numbered 17370308557 shows that on January 1, 2022, a consumer purchased ceramic tiles from Shanghai Oushennuo Ceramics. Around November 2023, it was found that the living room tiles were cracked for no reason. On December 2, 2023, the after-sales personnel of the tile party were contacted through the WeChat group, and no one has come to deal with it until now. For more than a week, the merchant completely failed to deal with the time schedule that had affected the consumer, causing a lot of confusion.
For example, on June 13, 2023, the complaint of No. 17366963370 shows that a consumer bought 18,000 floor tiles in Oushennuo, and the mulch film was returned, and found that 600 tiles were problematic. At first, the consumer asked for direct compensation for the purchase of floor tiles**, and then hoped that the supplier could compensate for the price of the problem bricks. In the end, the rights were successfully defended.
Look at "Emperor Sanitary Ware" again, on January 13, 2024, the complaint of the numbered 17370961607 shows that a consumer said that he bought the Emperor Sanitary Ware toilet, paid in cash during the purchase process, did not give the invoice bill, and purchased it in Huangdao District. The consumer believes that the after-sales service is not handled properly.
Another example is January 12, 2024, the complaint of No. 17370946833 alleges that a consumer purchased a bathroom kit at the Imperial Sanitary Ware store after the house renovation was completed on March 28, 2023. On December 23, the water valve was opened and cleaned in the first room, and no one was left in the house after cleaning.
On December 25, the property informed the house that there was water inside, it was soaked, the downstairs was dripping, all the walls were blistered to peel, the furniture cabinets were also soaked, the household appliances had not been used, and the inspection found that the water pipe of the triangle valve next to the toilet was broken, and the water pipe could be broken before the water pipe was used. According to the consumer, this is an obvious product quality problem. Emperor Sanitary Ware denied that it was not their product problem and refused to compensate.
(The above complaints have been reviewed by the platform).
Admittedly, it is not realistic for consumers to be satisfied with everyone, and the above complaints may be biased and one-sided. However, it is also an indisputable fact that the home furnishing industry emphasizes experience and strong reputation. Especially in the face of the growth of demand for improved housing, the importance of quality-price ratio and cost-effectiveness is highlighted.
Take change and strain to walk out of a new road of high quality
Looking at the business world, enterprises that have the courage to self-change and self-breakthrough are often more likely to break free from the shackles of development.
Home furnishing and real estate, one is prosperous and one is lost. Enjoying the prosperity of the past and the dividends of the times, how to face and adapt to the current black iron era and find a new stage direction is a soul thinking question for all home furnishing companies, including Markor and Diou.
Fortunately, the two companies, which are accustomed to the baptism of wind and rain, have enough market awe, awareness and ability to change.
Combing through some recent adjustments, it is not difficult to find that the ideas are the same. That is, say goodbye to the excessive dependence on real estate developers and take the initiative to embrace the majority of consumers.
For example, Markor Home Furnishing has given full play to its comprehensive operation capabilities from space design, fixed high-end design, furniture and home furnishing product design, and soft decoration accessories design, relying on its own furniture manufacturing system at home and abroad and the global first-class chain network, forming a unique design delivery model for the whole case.
In the face of thousands of people and consumers, who are increasingly pursuing individuality, Markor Home Furnishing breaks the traditional commercial space design process through special effects virtual design tools; The self-developed cloud platform "Smart Magic Box" combines 3D technology and art experience to help customers and franchisees feel the art and function of the overall design of the space in advance, and strive to achieve the WYSIWYG home purchase and store opening experience.
In terms of channels, Markor actively promotes the digital construction of online platforms and establishes a new retail format that combines online design services with offline immersive scene experience. It is important to mention the international wholesale business. Through the e-commerce data and service platform HouseofMarker, Markor can combine its own product R&D, manufacturing and resource advantages to accurately link the direct market demand and build a quality assurance system.
Diou Home Furnishing is also increasing its quality control and innovation. For example, on the one hand, the establishment of domestic advanced architectural ceramics research and development center, the establishment of postdoctoral research workstations. On the other hand, it has carried out cutting-edge industry-university-research cooperation with domestic universities and research institutes.
For example, Oushennuo Research Institute has cooperated with the research team of Sun Yat-sen University, South China University of Technology and other universities to carry out technological innovation and research and development of antibacterial bricks, which has lasted for many years from materials, processes to mass production, and realized the efficient antibacterial function of ceramic tiles.
In the first half of 2023, Diou Home Furnishing will add 62 patents, including 31 invention patents and 21 utility model patents; It has a total of 503 valid patents, including 153 invention patents and 156 utility model patents.
In addition to its own improvement, there is also good news in the industry track.
On February 20, the National Interbank Funding Center announced the interest rate (LPR) in the loan market for this month. LPR for more than 5 years is 395%, a decrease of 25 basis points, the largest decline in history. Subsequently, the interest on the loan million is less than 5The small composition of 20,000 rushed to the hot search, and real estate stocks rose sharply.
In Shoucai's view, there is no winter that will not pass. With the adjustment of real estate policies, the improvement of the business environment, as well as the market demand released by "old reform", "secondary renovation", "rural revitalization", home improvement and upgrading, the market prospects of Markor Home Furnishing and Diou Home Furnishing are still promising.
However, after this reshuffle, the competition in the home improvement and home furnishing market will become increasingly high-level, and if the two companies want to break out of the encirclement and get rid of the continuous loss and successful redemption, they must reflect on the mispayment and misjudgment of the past, get rid of the extensive expansion of high leverage, absorb the pain of inventory accumulation, and embark on a new road with higher quality, more development resilience and more core competitive barriers.
In The Theory of Evolution, Darwin proposed natural selection, the survival of the fittest. Similarly, shopping malls are like battlefields, and if you want to survive and live better in the law of the jungle, you must get rid of the old path dependence and dare to be the first to walk out of the new path. Otherwise, even if you get out of trouble, it will only be caused by external dividends, which is easy to be short-lived, and even brew a bigger crisis.
With the spring of 2024 coming, can Markor and Diou Home Furnishing compete for the Red Sea and embark on a new road of redemption?
This article was originally written by Shoucai