In March, the annual reports of listed home industry companies were released. In 2014, competition among home furnishings companies intensified, and the upstream real estate sector faced a downturn. Most of the listed companies reported losses, showing a positive trend of 20%-40% growth. Analysts believe that the brand effect of these companies became more prominent in the fierce market, and the industry still has significant room for improvement in terms of products and experiences. However, some companies are trying to overcome their challenges through transformation.
According to the reporters' statistics, A-share listed home enterprises include Meike Home, Yihua Wood, Daya Technology, Shengda Forestry, Xilinmen, Jinluo, Bunny, Hao Laike, Jilin Sengong, Seagull Sanitary Ware, Haier Home, East Yi Risheng, AIA ceiling, Sophia, Oriental Yuhong, and others. Home textile companies include Luolai Home Textiles, Fu Anna, and Meng Jie Home Textiles. Except for a few like Xilinmen and Jilin Forest Industry, which have not yet released results or suffered major losses, other companies reported good performance with a 20%-40% increase.
Zhang Cheng, a senior investment consultant at Datong Securities, believes that while the overall trend is general, there are clear differences in performance. Furniture companies such as Meike Home and Sofia showed growth above 30%. Flooring companies had varied performances; Del Home saw a 41.23% increase, Bunny 62.10%, and Daya 35.14%, while Shengda Forestry and others remained flat. Jilin Sengong experienced a significant decline. In the home improvement sector, Dongyi Risheng grew by 18%, Jinyu by about 20%, and AIA's ceiling revenue increased by 22%. For household products, Xilinmen hasn't released an annual report but is expected to see slight growth. Seagull Sanitary Ware remained flat. The three home textile listed companies haven't released annual reports, but their forecasts show a slight increase of 5%-10% in revenue.
Extending the industrial chain effect is one of the key factors contributing to the improved performance of listed companies. Zhang Cheng analyzed that from a holistic perspective, furniture companies have gradually shifted from OEM models to building their own brands and expanding into personal home decoration and consumer markets. Meike Home transformed from a retailer to a brand, creating superior customer experiences and expanding the integrated home consumer goods market, ending its 20-year OEM business with 100% factory capacity under its own brand.
Personalized customization and integrated home improvement solutions are increasingly welcomed by the market. In 2014, Sofia demonstrated full-house custom storage space solutions through scene experiences. With the growing demand for whole-house customization, the company aimed to increase the proportion of custom cabinets and cooperate with foreign brands for domestic cabinet operations. Bunny also focused on the continuous integration trend, providing a full range of decorative materials for design and decoration companies, offering consumers a one-stop display experience platform.
The brand effect of listed companies has deeply resonated with consumers, leading to accelerated performance growth. Zhang Cheng said that the home improvement and furnishings industry is a large consumer goods sector, where brand consumption and word-of-mouth play a crucial role in purchasing decisions. Listed companies benefit from advertising and brand promotion, and with the rising demand for consumption upgrades, consumers pay more attention to quality when choosing household items and home decor. The brand effect of listed companies significantly supports product sales. Brands like Sophia and Del have gained strong recognition, with steady increases in market share over recent years. In Del Home's annual report, "brand advantage" was highlighted as the core competitiveness, stating that it greatly promoted product sales and enhanced profitability.
E-commerce and smart home technologies are competing for focus in the industry. Many listed home companies are developing e-commerce strategies. For example, Meike Home focuses on OBO projects, integrating online and offline channels to enhance customer experience. Bunny pointed out that the current home marketing model is shifting towards digital and mobile internet. Zhang Cheng noted that the promotion of online business helps personalize customized products, reduce intermediate sales links, improve cost performance, and provide real-time sales feedback for production and new product design. Companies involved in e-commerce and informatization can significantly boost their competitiveness if they grasp these points.
After integrating resources from home appliance enterprises, smart home has become a hot topic in the industry. Some analysts suggest that the large building materials and home furnishing industry is transforming into a "one-stop shopping experience" and "integrated solutions" to create an e-commerce platform. By integrating "Internet of Things" elements, smart home solutions are becoming a trend. Del Home's annual report disclosed that to seize the investment opportunities in the Internet and smart homes, the company established a strategic investment platform focusing on smart home, Internet home, big data, IoT, 3D printing, and industry 4.0. Related industries such as energy conservation, environmental protection, and intelligent manufacturing are also being explored.
However, some companies face poor conditions and are undergoing transformations to seek new paths. Weihua shares turned into Luzhou rare earth (failed), Shengda Forestry seeks to transform into clean energy, and Jilin Sengong's reorganization after trading suspension highlights the industry's challenges. Seagull Sanitary Ware continues to upgrade its transformation, strengthening its R&D and manufacturing capabilities in energy-saving and environmental protection products. Del Home also revealed plans to build a new material and new energy external strategic investment platform to achieve "double main businesses." Xilinmen is acquiring media companies. Zhang Cheng analyzed that the home improvement industry is low-margin with heavy assets. After company shareholders and bosses have money, they aim to find emerging high-margin industries. Transformation can also stimulate stock price rises, benefiting shareholders and bosses, so many listed companies are scrambling to transform.
Despite the positive reports, the home industry market still feels cold. Several listed companies mention "high market competition," "product homogeneity," and "overall downturn of building materials and home market" in their annual reports. Analysts believe the overall home furnishings industry is still facing challenges during the real estate cold period.
However, many companies remain optimistic about development opportunities. Meike Home believes the home consumption market is huge, with urbanization and improved household consumption increasing the proportion of rigid consumption. Bunny's annual report also believes that although the building materials and home furnishings industry is affected by the real estate market, once it breaks through the development bottleneck, it remains a "sunrise industry." With the rise of post-80s and 90s consumer groups, changes in consumption habits bring new opportunities and challenges. As long as companies choose business and service approaches that suit the habits and lifestyles of new consumer groups, the home industry will continue to develop and maintain stability.
Zhang Cheng also believes that people's continuous improvement in brand and experience of decoration and home products brings opportunities for well-managed home furnishings companies. He said that with the emergence of industry disruptors like Xiaomi, the entire home improvement industry still has significant room for product and experience enhancement, and who can seize the market first will determine the future brand and performance of the company.
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