Home page observation: Capacity expansion, production line upgrading, going to sea to build factories, home furnishing enterprises increase investment

Since the beginning of this year, a number of home furnishing companies have announced the expansion of their production bases.

In fact, since the second half of last year, the home industry has set off a round of "expansion tide", many head home companies are actively expanding capacity, upgrading production lines, and even building factories at sea.

Combined with the performance of a number of listed home companies in 2023, the entire home industry has indeed begun to gradually pick up.

Many companies have gradually got rid of the real estate industry adjustment, bulk business bad debts brought by the haze, the performance of home listed companies collective rebound, there are many companies to achieve a profit.

Everyone seems to have smelled the opportunity, while the home industry began to walk out of the real estate industry aftershock momentum, actively prepare for a new round of industry war, the future, the home industry will usher in what new opportunities?

Performance rebound

Home furnishing industry collective "good"

Recently, a number of pan-home listed companies intensively disclosed 2023 performance, on the whole, can achieve profit and net profit increase the majority of enterprises.

From the performance of leading enterprises in the fields of customization, building materials, home improvement, ceramics and other segments, "winter" seems to be gradually becoming a thing of the past.

In the field of customization, Opai achieved revenue of 22.782 billion yuan last year, an increase of 1.35%; Net profit attributable to the parent was 3.036 billion yuan, up 12.92% year on year;

Sophia's revenue last year was 11.666 billion yuan, an increase of 3.95%, and the net profit attributable to the mother was 1.261 billion yuan, an increase of 18.51%.

In the field of building materials, most listed companies are more affected by real estate adjustment, but they are beginning to come out of the haze.

Oriental Yuhong suffered a sharp decline in performance in 2022 due to the dual impact of weaker demand and rising costs.

However, in 2023, its net profit to the mother was 2.273 billion yuan, an increase of 7.16%, and the net profit amount in the first half of last year was second only to the highest in the history of the first half of 2021.

Under the influence of the overall industry demand slowdown and market transformation, the company's revenue in 2022 also experienced a rare year-on-year decline.

After a series of strategic adjustments, its performance began to stand firm in 2023, achieving revenue of 22.426 billion yuan, an increase of 11.27%; Net profit returned to the mother was 3.524 billion yuan, up 12.07% year-on-year.

In the field of home improvement, although the increment of new homes has decreased, the stock of houses has replaced it as a new increment, and under the new air mouth such as the renovation of old houses and local modifications, the home improvement industry has also begun to usher in a reversal.

Compared with the loss of most listed decoration companies in 2022, the proportion of listed decoration companies that have achieved profits this year is more, and the home improvement industry has ushered in new opportunities.

In the field of furniture, listed companies with overseas businesses are even more jubilant.

Qisheng Technology, the main smart bed export business, achieved revenue of 3.103 billion yuan last year, an increase of 16.50%; The net profit returned to the mother was 206 million yuan, an increase of more than 6.25 times, and it was one of the companies with a larger increase in net profit among listed household enterprises.

Lege shares, whose main business is the export of office tables and chairs, achieved revenue of 3.902 billion yuan in 2023, an increase of 21.61%; Net profit of 634 million yuan, an increase of 189.72%, music shares also seem to get rid of the epidemic, geographical constraints on performance.

Of course, the home industry is not "all good", in the 70 listed home companies that have issued performance forecasts, there are still nearly 30% of the phenomenon of loss or net profit decline.

However, in general, there are still more "good news" than "bad news", and behind this, it is also due to the key impact of frequent favorable policies, market segment demand, and successful self-rescue of enterprises.

On the one hand, since 2022, policies favorable to the home industry have been frequently released at the policy level, such as "Several measures to promote home consumption" and "Action Plan to promote the replacement of old consumer goods".

Driven by the policy, sales of the home industry are picking up, and more companies can ease the financial pressure.

On the other hand, the new house dividend faded, but the stock dividend began to top, under the joint efforts of policies and home enterprises, more segmented demand was tapped, and the home industry also began to transform the group.

Finally, although the market has been adjusted, many home furnishing companies are also actively helping themselves. For example, Opai, Sofia and other fixed enterprises began to collectively layout the entire business and expand new increments;

Last year just experienced the "bankruptcy tide" of the home improvement industry, many companies have reduced costs and increased efficiency by adjusting outlets, personnel layout and other ways, guarding the granary, and looking for opportunities to attack again.

Home furnishing enterprises have expanded production

The industry faces a shake-up

The warming market environment seems to have also led to the investment intention of home furnishing companies. Media statistics show that in the past four years, at least hundreds of home furnishing enterprises have carried out capacity expansion, production upgrades and other actions.

Only in the past half a year, many enterprises such as Shengao, Lege, Gu Jia, Yongyi, Jiu Mu, Liwei Jia, Niman, A8 space, Zhi Bang, Gold kitchen Cabinet, Blum are ready to invest in a new production base, or to transform and upgrade the original production line.

Some enterprises are ready to expand their production bases.

In October 2023, the industrial park of Shengao Furniture in Hebei Xiongheng was officially put into operation, and the product line covers all types of office, medical, education and hotel furniture, with an estimated annual output of about 700,000 sets of furniture.

Some enterprises upgrade the production line.

In March this year, the Gemani Smart Home (Guangxi) production project also opened the groundbreaking ceremony;

Kejin intelligent furniture Industrial Park was also completed last year, with intelligent manufacturing as the main direction, through automatic transformation, to achieve the whole process of digital intelligence, the whole link of lean quality control.

Some enterprises go abroad to invest in building factories or opening shops.

At the end of 2023, Yongyi Shares announced that it plans to invest 50 million US dollars in the construction of the third phase of Vietnam production base project; In July 2023, PVC elastomeric flooring producer Ally Home announced that it would invest no more than $30 million to establish a production base in Mexico.

Chi-bang Home has opened overseas retail stores in Singapore, Cambodia, Philippines, Malaysia and other places; At the end of 2023, Gu Home India overseas store grand opening, in the local launch of the first "integrated whole" benchmark store.

It can be seen that although the home furnishing industry has faced challenges such as the global epidemic, real estate adjustment, cost pressure, and slowing consumer demand since 2020, the industry growth rate has slowed down, but there are still many home furnishing companies expanding against the trend.

However, the home industry is still in the fog, why do they dare to take a chance?

First, from the point of view of the expansion and upgrading of the above enterprises, whether it is investing in a new base or upgrading the original factory, it generally involves the purchase of a new generation of furniture and equipment or the intelligent upgrading of the entire production line.

For home furnishing enterprises, no matter what kind of cycle the industry is in, as long as the enterprise wants to achieve sustainable development, there will inevitably be an urgent need for digital upgrading.

In the face of the increasingly personalized needs of consumers, digital management capabilities, flexible production capabilities, intelligent production response, etc., are the standard equipment of enterprises, which is also the main demand of the expansion tide of the home industry in recent years.

Second, whether it is to build factories overseas or expand regional production, these reflect the capacity layout of the home industry has changed from the past concentrated distribution to regional distribution, and even to the sea development.

Building factories abroad can help enterprises to undertake more export policy dividends and labor cost advantages, while helping enterprises to shorten the transportation distance, reduce logistics costs, and improve the response speed to regional markets and improve customer experience.

From this level, the expansion of production capacity is not only an important measure to enhance the market competitiveness of enterprises, but also an important way for enterprises to expand business territory, and the home industry has begun to go to the world in a new way.

Finally, it has to be mentioned that so many home furnishing companies dare to expand production against the trend, one of the important reasons is that they are still optimistic about the development prospects of the home furnishing industry.

Although the home industry has experienced a period of "winter", but the industry's favorable policies have not stopped, which also brings more confidence to practitioners. For them, building strength in the trough is to better develop strength in the future.

Head effect intensification

Where household capacity flows

At the same time that the home industry continues to expand and upgrade, the home industry will be able to achieve higher production efficiency than before, but if the home market capacity has not been increased in the same proportion, it also means that the next home industry competition will be more intense.

With faster production and more capacity, the industry is not only fighting "who is faster", but "who is better" and who is easier to "be found". Where the extra capacity will eventually flow will depend on the following aspects.

First of all, behind the collective expansion and upgrading of the home industry, small and medium-sized enterprises have accelerated the production efficiency, but the head enterprises have also strengthened their market competitiveness through intelligent upgrading.

At the same time that major furniture companies have upgraded intelligent industrial parks, giants such as Opai and Sophia have long built digital factories, not only using advanced energy-saving technologies, equipment and products, but also actively achieving the "double carbon goal" to reduce energy consumption, water consumption and pollution emissions.

Therefore, the collective upgrading of the production line in the home industry has further exacerbated the leading effect of the industry.

The iteration and expansion of the production side have brought more opportunities to the industry, but leading enterprises can often reap more technical dividends with the blessing of capital advantages.

For other small and medium-sized household enterprises, the future can not simply fight production speed, but also consider how to fight service, fight after-sales, fight local market advantages.

Secondly, the acceleration of the production end of the internal volume, but also forced home furnaces to dig deep in other market increments, so many home furnaces to accelerate the layout of online channels.

If the home industry has entered the stock market, only by opening up more marketing channels can we grab the flow and grab orders. In order to get closer to consumers and open up more market space, enterprises must find ways to find more traffic.

At the same time, there are more home furnishing companies choose to enter overseas to expand a new growth curve.

According to the data disclosed by the General Administration of Customs, from January to February, the export value of furniture and its parts was 84.69 billion yuan, an increase of 39.8% over the same period last year;

The exports of ceramic products, lamps, lighting devices, and home appliances all achieved year-on-year growth, and the pan-home export market has been fully recovered.

Finally, the export market has recovered, I believe that the spring of the domestic market will not be far away. Recently, the Ministry of Commerce has repeatedly pointed out that it will promote household appliances, home improvement kitchen and other products to replace the old, hoping to further promote home consumption.

From the "old for new" policy, it can be seen that to promote home consumption, the focus is on how to provide consumers with higher quality products and services.