Entering the fund heavy position, the financial report pre-increase exceeded expectations, why did Oupai Home fall sharply?

Financial Associated Press | New Consumption Daily (researcher Liang Youyun) news, on January 21, after the release of the 2021 annual performance pre-increase announcement, the response of the Oupai home market was cold.

According to the announcement, the company's revenue in 2021 is expected to increase by 541 million yuan to 735 million yuan, an increase of 28% to 38% year-on-year; net profit (net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses) is expected to increase by 541 million yuan to 735 million yuan, an increase of 28% to 38% year-on-year.

A day earlier, Oupai Home furnishing finally rose from the "invisible heavy stock" of Xiao Nan, the "consumption brother", to the top ten heavy stocks, appearing in the list of heavy stocks in the consumer industry of E Fangda.

Fu Youxing, the "10 billion fund manager" of GF Fund, also continued to increase his position in Oupai Home, rising to the third place in the heavy position.

However, after the opening of the market on the 21st, Oupai Home Stock suddenly plunged, falling from a pre-market rise of 2.3% to about -4%, and has continued to decline since then. As of the close, the closing price of Oupai Home was 140.9 yuan / share, down -4.47%, with a total market value of 85.83 billion.

As an offline home leader, Oupai Home has been involved in disputes with dealers many times before, and the transformation and development of live streaming with goods model has not improved. Coupled with the continuous decline in the gross profit of the company disclosed in the previous three quarterly reports, the market's concerns may be justified.

Home faucets with declining gross profits

By comparing the pre-increase in annual performance in 2021 and the financial report in the third quarter of 2021, it can be found that the single-quarter revenue of Oupai Home in the fourth quarter of 2021 was 5.497 billion yuan to 6.971 billion yuan, an increase of 9.76% to 39.19% year-on-year; while the company's net profit was 527 million yuan to 733 million yuan, and the growth rate in the fourth quarter of 2020 was -15.45% to 19.85%.

This means that from the performance of the fourth quarter of 2021 alone, the net profit of Oupai Home is likely to have negative year-on-year growth, slightly lower than expected.

Analysts from many institutions said that in 2021, the price of raw materials such as upstream hardware, wood, leather and so on will rise, the real estate industry chain will continue to be under pressure, and the national epidemic situation will be repeated in the fourth quarter, affecting offline furniture sales and order installation and delivery progress will have an impact on the company's performance.

However, compared with the possible decline in profit growth in a single quarter, what worries the market more is that the gross profit margin of Oupai Home as the leader has a downward trend. Behind this is the concern of the industry that the development of the cabinet industry has touched the ceiling.

According to the financial report, from 2018 to the first three quarters of 2021, the gross profit margin of Oupai Home Sales was 38.38%, 35.84%, 35.01% and 32.52% respectively.

Among them, the gross profit margin of cabinet products, which is the main pillar of revenue, fell the fastest, from 38.81% in 2018 to 33.44% in the third quarter of 2021.

In addition, affected by the real estate market, the decoration business cooperated by Oupai Home and major real estate developers, that is, the gross profit margin of "bulk business" fell to 30.42%, below the average line of the overall business. Oupai Home furnishing previously said that Evergrande's total debt to the company does not exceed 50 million yuan. Compared with the hundreds of millions of arrears of peers such as Piano and Sofia, the figure of Oupai is not surprising, but it may also pose a potential threat to future profits.

However, fortunately, in terms of the overall revenue situation, the performance of Oupai Home Furnishing in 2021 is still in line with market expectations, and the revenue and profit water are stable and rank first in the industry.

The analysis of Orient Securities Research Report said that in the medium and long term dimensions, the advantages of the national industrial layout of all categories and omni-channels of Oupai will become more and more prominent, and it is expected to continue to achieve growth higher than the industry average. However, combined with the changing trend of real estate prosperity, the growth rate of bulk income in the next 2 years will be appropriately lowered.

There are many offline disputes, and online expansion is busy

At the end of December 2021, a dealer reported that Oupai Home was suspected of tax evasion and tax evasion, and Oupai Home quickly denied it, indicating that the company did not violate accounting standards and tax laws and regulations.

Previously, some media had suspected that the tax revenue of Oupai Home had not increased for several years, while the company's revenue and profit continued to rise, and whether there was a tax problem. The relevant person in charge of Oupai responded that this is due to the decline in tax rates, high-tech tax incentives and other factors, and it is not that there is no delay in tax payment.

At present, no verdict has been given on the incident, but the dissatisfaction of dealers is far more than that.

Although in the face of upstream materials and pressure from all parties, Oupai Home only raised the supply price to dealers by 1% in July 2021, but for a total of nearly 7500 offline stores, any price adjustment will have a greater impact.

Looking back at the previous years, hundreds of offline dealers closed their stores every year, and the number of store closures in 2020 even reached 1345. However, the number of stores opened in the same period also reached a staggering 1404, and the overall number of stores did not decline, and did not have a significant impact on the revenue of Oupai Home.

While maintaining the basic disk of offline stores, Oupai Home is also actively seeking changes.

In order to make up for the dilemma of reducing offline passenger flow, in the performance pre-increase announcement, Oupai Home said that in 2021, the company relied on its leading position and its own channels, supply chain and other advantages, under the pressure of the continuous rise in raw material costs, chose to deepen the gradual transformation of channel operations and agents, open up new sales paths, and continuously enrich the company's big home strategy.

Recently, Oupai Home said on the interactive platform of e-company that the company has vigorously promoted the upgrading and reform of e-commerce business in recent years, concentrated on building an MCN matrix, and created a micro-mall and mini program; and actively opened up an online live broadcast model, established a live broadcast base, and won public and private domain traffic orders through the live broadcast modes of "star drainage", "in-depth experience marketing" and "online and offline".

It is not difficult to see that one of the measures mentioned by Oupai Home to "deepen the gradual transformation of channel operations and agents" is to actively invest in the "embrace" of online live broadcasting and e-commerce.

In early January, a reporter from the Financial Associated Press found that the regional manager of Oupai Home would give some support to dealers, such as live streaming to divert customers, and did not need agents to spend money.

The dealer revealed to reporters that although tired, the live broadcast can basically get customers, but from the perspective of sales performance, he hopes that the company can give more support from other aspects such as price. However, some dealers said that although live broadcasting does not cost money, the effect is not obvious for small shopping malls, and more refined operational guidance is needed.

According to the latest data from the National Bureau of Statistics, the retail sales of furniture consumer goods in mainland China in 2021 will be 166.7 billion yuan, an increase of 14.5% year-on-year; the retail sales of consumer goods such as construction and decoration materials will be 196.7 billion yuan, an increase of 20.4% year-on-year, a new high.

On this basis, the home track, including Gujia Home, Fangtai Group and other companies, has a pre-increase of more than 30%, and the overall performance is eye-catching.

This is due to the renovation of old houses and the improvement of "whole house customization" and personalized decoration needs. According to data from the China Building Materials Circulation Association, the unit price of building materials and home furnishing stores has increased by 37.18% compared with 2020.

There are also a number of home furnishing companies that continue to seek listing financing, and the home furnishing companies that have been listed in 2021 include Wang Li Security, True Love Meijia, and Ingenious Home. The competition pattern of home furnishing is becoming more and more fierce, and how to stabilize gross profit and stabilize channels in the fierce price competition is a problem that all companies need to think about.

Xiao Nan, fund manager of E Fangda, has analyzed that the home furnishing industry is also experiencing a strong process of survival of the fittest, and the difference between players in the industry in the next three to five years may be more obvious.