With the half-yearly report season coming to an end, the listed 9 customized furniture enterprises all disclosed their half-yearly report. From an overall perspective, the custom furniture industry overall performance is good, the companies have achieved synchronized growth in revenue and net profit. 9 listed companies combined revenue growth of 11.08% over the same period last year, net profit growth of 12.16%, the overall gross margin level basically remained stable. Sub-channel view, distribution growth slowed down significantly, bulk and engineering business has become the main contributor to the performance. In addition, the customized furniture industry under the first payment after goods is still a good business, the industry's overall advance receipts continue to rise, the downstream bargaining power of enterprises continue to strengthen. As a leading indicator of revenue, a significant increase in advance receipts of enterprises, the next probability of revenue will also increase. Focusing on the fundamentals, the industry continues to maintain a strong attraction to external capital.
The industry as a whole in the first half of 2019 has achieved faster growth, but hidden worries have emerged. With the downward trend of real estate growth, the slowdown of the customized furniture industry has become a realistic problem that the industry has to face. How to realize the value mining of the stock under the background of the slowdown of incremental housing, expanding categories, big home, integrating the whole channel, focusing on product innovation, heavy service, heavy experience, expanding new channels to attract more traffic, a variety of words constitute the imagination of the future of the new development of the customized furniture industry, and at the same time constitute different strategic choices of each customized furniture enterprise. However, the effectiveness of the various strategic choices, there is no way to draw conclusions here, and only rely on the market and performance to test.
One, the overall revenue growth rate slowed down,Meile home furnishings and other bright growth rate
In the first half of 2019, the customized furniture industry 9 listed companies to achieve operating income of 16.080 billion yuan, compared with the same period last year, an increase of 11.08%, compared with the first half of 2018 year-on-year The growth rate decreased by about 14 percentage points, and the industry growth rate slowed down significantly. Shangpin House furnishings and Sophia are affected by the larger scale, and the growth rate has dropped significantly, and the growth rate in 2019H1 slipped to single digits. Piano, I Le home furnishings and gold medal cabinet is to achieve more than 20% rapid growth.
Specifically, Pi Arnold bulk engineering business, whole-house customization business grew faster. Piano has made every effort to increase the investment promotion of engineering dealers, and in the first half of 2019, it successfully introduced a number of real estate developers, such as Poly Real Estate, Sunshine 100, and Aoyuan, to expand the national engineering distribution coverage area. Meanwhile, customized cabinets and their supporting home products achieved revenue of 423 million yuan, with a growth rate of about 34%, and a revenue share of 76.25%.
Weile Home has strengthened cooperation with national TOP50 real estate developers, and the bulk business has realized a rapid growth of 262.82%, and the proportion of operating income increased to 16.78% from 5.68% in the same period last year. In addition, revenue from directly-managed channels rose 27.44%, becoming a major contributor to the half-yearly growth together with the bulk business.
Gold Medal Kitchen Cabinet is the only company whose operating income has continued to rise for two consecutive years of growth in the same period. Half-yearly report shows that the gold medal kitchen cabinet revenue rose 22.15% year-on-year. Among them, the closet business has entered a period of rapid growth, 2019H1 realized operating income of 99.8337 million yuan, up 183.33% year-on-year. The bulk of the business is also growing rapidly, has signed strategic partnership agreements with 38 of the country's top 100 real estate companies, realizing an operating income of 172,692,800 yuan, up 142.98% year-on-year.
In comparison, Opie Home Furnishings, Sophia and Shangpinzha distribution revenue growth rate is less than the above enterprises. During the reporting period, Opie Home Furnishings realized total operating income of 5.51 billion yuan, an increase of 13.72% year-on-year, and net profit attributable to shareholders of listed companies of 633 million yuan, an increase of 15.04% year-on-year. Shangpin Mansion and Sofia revenue growth of 9.44% and 5.17%, respectively.
Overall, only from the first half of 2019, in the case of a gradual slowdown in the growth rate of distribution channels, I Le home furnishings, Piano, gold kitchen cabinets performance is the most eye-catching, generally benefited from the rapid growth of bulk business in the first half of the year to achieve a rapid catch-up, the industry leader Opie Home Furnishings, Shangpin Mansion with still maintains a relatively fast growth rate.
Two, Industry's overall net profit growth returned to rationality, I music home fastest growth rate
In the first half of 2019, the customized furniture industry 9 listed companies realized net profit of 1.640 billion yuan, compared with the same period last year, an increase of 12.16%. The industry's overall net profit growth of enterprises is now bidding farewell to the growth rate of more than 30% at every turn in 2017 and 2018, and the growth range has fallen back to 10%-20%, and the logic of growth has returned to rationality.
Only Meile Home's net profit continued to grow rapidly among the nine listed companies, and on the basis of 61.79% year-on-year growth in the half-year period of 2018, it continued to realize high-speed growth in H1 2019, with a year-on-year growth of 129.25% in the half-year period of 2019.
Weile Home's half-yearly report shows that operating income increased by 22.94% in the 2019 half-yearly period, while operating costs increased by only 8.08% in the same period. The announcement said that the company further optimized the use of production capacity, improve production efficiency, Lishui modern industry 4.0 flexible new factory, that is, the investment project "whole-house customized intelligent home system project" production benefits further release. With the expansion of sales business the company's capacity utilization has been further optimized, production efficiency has also been effectively enhanced, coupled with the implementation of the company's cost reduction and efficiency measures, *** with the control of the growth of operating costs. On the other hand, I music home furnishing is located in the high-end customized furniture, puts great emphasis on the design power and brand power, product competitiveness and bargaining power is high. In addition, the rapid growth of bulk business orders of Weile Home has diluted the unit cost, and the expansion of directly-managed business have all had an effect on the Company's consolidated gross profit margin. Based on the above impacts, I Le Home 2019H1 gross profit margin level increased to a record high of 42.60%, this gross profit margin level directly forced the direct operation of the main Shangpin Zhaodu.
Piano's net profit growth rate in H1 2019 also ranked among the top, mainly due to the bulk business and customized furniture business revenue growth.
Net profit scale of more than 100 million listed companies, Opie, Shangpin Mansion and Zhibang home furnishings also realize profit growth rate higher than revenue growth. Among them, Shangpin home furnishings 2019H1 revenue growth rate of 9.44%, net profit growth of 22.66%, the Department of research and development costs capitalization led to a decline in research and development costs, research and development costs of 57.2 million yuan in the current period decreased by 42.83 million year-on-year. ZhiBang home to big home business development, customized furniture industry (especially customized closet industry) continued to grow, driving revenue growth. Meanwhile, with the development of scale, the material utilization rate was improved, prompting the growth of operating costs to be lower than the growth of operating revenue. Influenced by the R&D cycle, the R&D investment of Zhibang decreased by 18.96%. The decrease in cost reduction and R&D investment ****simultaneously led to faster net profit growth than revenue growth.
Three,Sub-channel view: the overall distribution growth rate slowed down, engineering business growth faster
Sub-channel view, after experiencing rapid growth in 2016-2017, sales growth in the distribution channel continued to slow down. 9 listed companies in 2018, the average growth rate of sales in the distributor channel was 17%, compared to 2017, a decline of 12.6 pct, this trend is more obvious in the first half of 2019. 2019H1, there are six customized furniture listed companies announced the sales growth rate of the distribution channel, without exception, the growth rate all fell back to single digits. This is mainly related to the overall slowdown in the industry, the decline in single-store traffic and the decline in the rate of expansion of the channel expansion near saturation stores. It can be said that the traditional retail channel expansion of the dividend is approaching the end, the flow of growth continues to slow down is the integration of the industry must face the problem.
Direct channel data, Opie Home and Weile Home both realized a rise. in the first half of 2019, Opie Home announced the number of directly-managed stores 34, an increase of 4, the sales revenue of the directly-managed store channel increased by 7.57% year-on-year. I music home in 2018 strengthened the direct channel investment, completed the Nanjing direct channel development and layout direct, in order to expand the direct channel set up the Wuxi Lejiu home limited company, Shanghai Youxian home limited company, based on this 2019 H1 direct revenue to achieve a year-on-year growth of 27.4%. On the contrary, Sofia, Goodluck and Zhibang home furnishings in direct sales performance. The three direct revenue recorded negative growth in the first half of the year, of which Sofia and Goodluck's decline was more dramatic, down 10.3% and 15% year-on-year, respectively. Started with the direct channel Shangpin House with no announcement of its direct business revenue growth, but the announcement mentioned the first half of Shangpin House with the direct store optimization, the number of stores from 101 at the end of last year down to 94.
The engineering channel has been the fastest growing channel in the last two years, and its performance in 2019H1 remains strong. In the first half of the year, the engineering channel Weile Home grew the fastest, with a half-yearly growth rate of 262.8%. Golden Kitchen Cabinet followed with a year-on-year growth rate of 143%, and Opie Home's year-on-year growth rate in the engineering channel in the first half of the year also exceeded 50%.
According to AVC's big data monitoring, the number of hardcover housing openings in 2018 was 2.53 million sets, up 59.9% year-on-year. The custom furniture industry belongs to the real estate post-cycle industry, often lagging half a year to a year behind the existing house transactions, so the rapid rise in the engineering and bulk business of listed companies of custom furniture from 2019H1 is closely related to the volume of fine-decorated house projects in 2018. Although with the increasing penetration rate of the refined decoration house, the number of refined decoration openings has increased faster, but it is still an indisputable fact that real estate has entered a downward cycle, and the total amount of the total amount has decreased, and the number of refined decoration openings is bound to decline rapidly. Relevant data also reflects this trend, according to Aowei Yunwang, the number of refined new openings in the first half of 2019 was 1,296,000 units, an increase of only 17.28% year-on-year. Optimistic estimates put the number of refined housing openings at 3 million units for the whole year of 2019, with an annual year-on-year growth rate of 18.59%, far less than the 59.91% year-on-year growth rate for the whole year of 2018. The decline in the growth rate of the number of hardcover houses will largely affect the growth of the bulk and engineering channels of the customized furniture industry, which in turn is likely to drag down the overall performance growth. In short, it can be expected in the next 1-2 years, the bulk business growth will gradually slow down, customized furniture companies want to continue to maintain growth in the next few years urgently need to find other growth channels.
Four, profitability and quality: industry gross margins remain stable, the quality of earnings Opie highest
2019H1 industry overall gross margins remain relatively stable, are above 35%. I music home furnishing half-year gross profit rate hit a record high of 42.59%, close to the direct camp accounted for a higher proportion of Shangpin house match gross profit rate of 43.01%. Other companies gross profit margins are between 35% -40%, so from the data alone in the first half of the year there is no price war.
From the point of view of net profit attributable to shareholders of listed companies, there is another general scenery. Revenue growth for two consecutive periods of gold kitchen cabinets by the subsidy impact is relatively large, non-deductible net profit year-on-year growth of only 4.06%. Under the influence of unfavorable revenue growth, Sofia, good Laike's deductible net profit industry almost no growth.
Benefiting from the rapid growth of bulk business I music home furnishings and Piano, both in the non-net profit growth outstanding performance. I music home deduction non-net profit to achieve a double rise, mainly due to the rapid growth of bulk business, operating costs increase is much lower than the growth rate of revenue, gross profit margins and other factors to push up the deduction non-net profit growth. The ratio of non-deductible net profit/net profit is at a low level, indicating that the growth of net profit in H1 2019 has been affected by government subsidies, but the flaws are not overshadowed by the fact that the non-deductible net profit still achieved an increase of more than 1 times.
Zhibang home furnishing and Shangpin Zhaodie's deduction net profit rose year-on-year both because of the decline in R & D investment. Shangpin Mansion is especially noteworthy, Shangpin Mansion's net profit from deduction of non-net profit for the half year of 2019 increased by 96.48% year-on-year. If you simply exclude the impact of the decline in R&D investment, Shangpinzhaiba's net profit year-on-year growth rate of deducted non-net profit was 32.9%, which is a very solid performance growth.
Ou pai home deduction non-net profit/net profit ratio of 94%, ranked first in the industry, deduction non-net profit growth and net profit growth rate is nearly synchronized.
V.Core business logic remains unchanged:Accounts receivable increased year-on-year, customized furniture is still a good business
Customized furniture under the pay-as-you-go business model is still a good business. Listed 9 customized furniture companies 2019H1 advance receipts increased by 12.53% year-on-year, the growth rate is higher than the growth rate of revenue. However, due to the rapid growth of the industry's overall bulk business, accounts receivable and inventory levels also increased rapidly year-on-year, and short-term operating cash flow is under pressure. Despite this, there is still no need to be overly concerned about receivable returns, after all, the bulk partners of the nine listed custom furniture companies are basically top50 real estate companies in the industry, with strong capital strength and better credit qualifications.
2019H1 advance receipts project, Piano, I Le home furnishings, gold kitchen cabinets and other enterprises to grow significantly, the company's orders are expected to still better growth, the second half of the performance of a certain guarantee, is expected to be implemented in the revenue, profit.
Accounts receivable, it can be said that all the listed 9 accounts receivable rise is attributable to the growth of bulk business. 2019H1 reporting period Shangpin Household and good Laike accounts receivable increase of more than double the two half-yearly report gives the reason is the long settlement cycle of engineering business and give franchisee credit. The other six accounts receivable relative rise is also mainly due to the expansion of bulk business.
The expansion of bulk business at the same time affects the customized furniture enterprise inventory data, good Laike and Shangpinzhaibu year-on-year increase, good Laike said inventory growth in the reporting period, production and sales scale expansion and the new window and door categories due to the operation, Shangpinzhaibu in the half-yearly report to the growth of sales performance and new business expansion increased inventory due to. Direct business and bulk business expansion at the same time also makes my home stocking volume, issued volume increased, inventory increased year-on-year.
Considering the cash flow aspect, the faster growth of the bulk business in driving the increase in the scale of corporate revenue at the same time, it also affects the growth rate of receivables closing balance is greater than the speed of payback, resulting in the industry company income cash ratio downward. 2019H1, Shangpin Household Accessories, top set and Piano net operating cash flow is negative, I music home due to the expansion of the scale of sales of the corresponding increase in sales of cash receipts, resulting in net operating cash flow Net cash flow improved. Opie home furnishing net operating cash flow of 1 billion yuan, an increase of 86%, ranking first in the industry.
Now, the demand for home furnishings into the inventory stage, the traditional crude store expansion model pressure gradually apparent, the industry will enter the stage of relying on the enterprise's own product power, channel power and supply chain management efficiency to grab a share. Some market participants believe that the industry pattern has not observed overcrowding, it is expected that the integration of the industry will be a gradual process, there will not be a rapid increase in concentration, there will not be a sharp decline in profitability, the industry still maintains a strong attraction to external funds.