Customized Home Business Slows Revenue Growth In The Third Quarter, Industry Concentration Will Increase

- Jan 09, 2019-

With the completion of the disclosure of the three quarterly reports, the transcripts of the customized home-listed companies were unveiled. Most companies have achieved double growth in revenue and net profit, but the industry's revenue growth rate has slowed down. Insiders pointed out that overall, the custom furniture industry is still developing at a high speed, but due to the decline in real estate sales growth and increased competition, the development speed has slowed down. At present, the concentration of the customized home industry is low, and the volume of individual enterprises is large. As competition intensifies, the elimination of SMEs will become a trend and industry concentration will increase.

h550w366-5c346f22400ad

Slowdown in revenue growth


According to statistics, in terms of profitability, 17 of the 28 listed companies in the Shenwan Furniture segment achieved net profit growth in the first three quarters; in terms of revenue, 25 companies achieved year-on-year growth in operating income in the first three quarters, with only three companies top three Quarterly operating income decreased year-on-year. However, the trend of slowdown in the revenue growth of the furniture industry has been reflected in the third quarterly report. In the first three quarters of this year, only two companies with a year-on-year increase in operating income of more than 40% were Xilinmen and Piano. The revenue growth was 44.78% and 40.21%, respectively. The other 23 companies achieved a year-on-year increase in revenue. Below 40%.


Specific to the custom home sector, most of the custom home furnishing companies achieved double growth in revenue and net profit in the first three quarters. Custom home faucet Ou Pai home achieved revenue of 8.197 billion yuan in the first three quarters, realizing a net profit attributable to shareholders of listed companies of 1.20 billion yuan, an increase of 18.73% and 27.07% respectively; Sofia achieved revenue of 5.106 billion yuan in the first three quarters. The net profit attributable to shareholders of listed companies was 692 million yuan, a year-on-year increase of 20.11% and 20.16% respectively.


However, under the brilliant performance, there is a hidden worry in the custom home business, and the growth rate of the revenue terminal has slowed down noticeably. In the third quarter of this year, Europa Home achieved revenue of 3.352 billion yuan, a year-on-year increase of 10.66%. From the first quarter of last year to the second quarter of this year, the growth rate of Europa Home's single-quarter revenue was over 20%, reaching a maximum of 44.89%. In the third quarter of this year, the home delivery revenue was 1.771 billion yuan, a year-on-year increase of 22.71%. This data is also the lowest increase in a single quarter since the company's listing. From the first quarter of last year to the second quarter of this year, in addition to the increase in revenue of 27.65% in the first quarter of last year, the remaining single-season housing sales revenue increased by more than 30%.


Industry concentration will increase


Guosheng Securities pointed out that “Overall, the custom furniture industry is still developing at a high speed in 2018. However, due to the decline in real estate sales growth and increased competition, the growth rate has slowed down.” Guojin Securities said that since the beginning of this year, the real estate cycle effect Weakened, and the impact on custom companies has gradually deepened. For example, the cabinet products are closely tied to the sales of new homes, and the growth rate continues to slow down. At the same time, the cost of getting customers online or offline is increasing. In the case of continuous regulation of real estate, the market environment faced by customized home enterprises is still difficult to improve rapidly.


An light industry manufacturing analyst accepted an interview with China Securities Journal and said that it is not necessary to be overly pessimistic about the slowdown in custom home revenue. The urbanization process is still going on, and the custom home industry still has a broad market space. Major custom home companies have taken action to seek new profit growth points. For example, the whole category layout, the upstream and downstream home improvement and other links are extended.


Tianfeng Securities believes that the challenges faced by the customized home industry are numerous, but the industry concentration is low, and the space for individual enterprises is huge. Relying on multi-category expansion, continuous channel layout and continuous extension of the industry chain such as the whole assembly, the industry will gradually differentiate. Leading enterprises rely on the ever-increasing supply chain integration capability and multi-category selection to provide consumers with scene sales scenarios, thus continuously improving The customer price and number of customers will win in the long-term competition, and eventually change from product brand to pan-home channel brand. Guosheng Securities pointed out that the elimination of small and medium-sized enterprises will become a trend, and the concentration of the furniture industry will be further enhanced.


Previous:5G Is Fully Commercialized, And The Impact Of Inventory On Smart Home 4 Next:Giants Have Entered The Field. IoT Home Has Great Potential.