Author: Yuntan, Editor: Xiao shimei
First, blood relatives competed for power, and then they fell into telecommunications fraud, and the Daya Sacred Elephant was unfavorable for many years.
At the end of March, Daya Sacred Elephant, known as China's "King of Floors", released its 2021 annual report. Investors were surprised by one of the messages, "Subsidiary HomeLegend LLC, a subsidiary of the United States, suffered from telecommunications fraud."
It is reported that some criminals invaded the Microsoft 365 enterprise mailbox rented by the subsidiary HomeLegend LLC, impersonated the manager, and forged supplier documents to defraud the company of 3.569 million US dollars (about 22.7549 million yuan).
Although telecommunications fraud is a high incidence of economic crime, and new types of fraud methods are emerging in an endless stream, as a listed company, the financial "firewall" of Daya Shengxiang should not be so weak. Not only are internal mailboxes easily breached, but financial audits and business management are not rigorous enough.
In fact, the company's internal control chaos has long existed. After experiencing the sudden death of the "founding generation" and the infighting between the second generation, the management problems of the Daya Sacred Elephant were exposed on a large scale, and even criticized by the regulators.
What worries investors even more is that the continuous internal friction has seriously affected the company's operating conditions, daya Shengxiang has not increased its income for 4 consecutive years, and its former bellwether has also been caught up by the chasers.
【Family infighting, brothers wall】
Stories of infighting in family businesses are not uncommon, but the Daya Icon is even more "magical". This storm of family infighting began with the sudden death of his father and ended with the death of his brother.
Chen Xingkang, the founder and former chairman of Daya Shengxiang, is a standard "creative generation", he has experienced several ups and downs in the commercial sea, and three times of entrepreneurship have finally become brilliant.
In 1995, Chen Xingkang founded shengxiang group, cut into the home industry, shengxiang wood flooring, daya wood-based panels became popular, and for many years sat firmly in the top position in China's flooring industry.
Four years later, Chen Xingkang led daya Shengxiang to a successful listing. Since then, the company's business tentacles have also extended to the auto parts and information industries. In 2015, Daya Group was listed in the top 500 private enterprises in China, and Chen Xing was named "the richest man in the wood industry".
Today, the brand value of the "Sacred Elephant" floor and the "Daya" wood-based panel is 63.816 billion yuan and 22.887 billion yuan respectively, totaling 86.7 billion yuan.
In April 2015, Chen Xingkang, 70, died of an accidental fall. For nearly forty years, he has painstakingly operated most of his life, and has not made a will or arrangement for the family inheritance.
In an instant, there was no "main heart bone", and the Daya Sacred Elephant was suddenly leaderless. The power faults left by the sudden death of the founder also laid the "scourge" for the future fraternal struggle.
Chen Xingkang has two sons and a daughter under his knees — the eldest daughter Chen Qiaoling, the eldest son Chen Jianjun, and the second son Chen Xiaolong, but none of them has led the family business and none of them hold an equity interest in the company.
According to the Marriage Law and the Inheritance Law, 50% of the family property belongs to the widow Dai Pinya, and the remaining 50% is divided equally between Dai Pinya and the three children. Dai Pinya was old at that time, and he had no intention of taking charge of the family property.
After some agreement, the brothers Chen Jianjun and Chen Xiaolong "took turns to sit in the village" and agreed to rotate every three years. At this time, Chen Xiaolong became the chairman of the board; Chen Jianjun served as the president of the Shengxiang Group, deeply cultivating the flooring business.
In the three years that Chen Xiaolong was in charge, Daya Shengxiang performed well, and from 2015 to 2018, the company's operating income stabilized at about 7 billion yuan, and the net profit jumped directly from 318 million to 725 million. Revenue was stable and net profit more than doubled. Of course, this also coincides with the rising cycle of the downstream real estate industry in 2016-2018.
▲Daya Shengxiang 2015-2018 main financial data, data source: Flush
Who would have thought that this equilibrium and stability would be upset in 2018. It was also in this year that the family "palace fight drama" of daya sacred elephants officially kicked off.
First, on July 6, 2018, Dai Pinya supported his eldest son Chen Jianjun and transferred most of his equity to Chen Jianjun, creating a rift between the brothers.
At this time, at the critical juncture of "three-year rotation", in order to prevent "great power from falling", Chen Xiaolong joined hands with his sister Chen Qiaoling to remove Chen Jianjun from his directorship.
For more than a year since then, the two sides have set off a round of competition for control of this 10-billion-asset enterprise, during which they have also staged a drama of competing for official seals and factional infighting.
Blood rivalry has caused the star home furnishing company to suffer a reputation crisis. Since the beginning of 2019, daya Shengxiang's performance has been weak, the stock price has fluctuated sharply, and there have been financing problems such as 369 million yuan of overdue loans, equity freezing, and high external guarantees.
In August of that year, under the mediation of the government department, the Chen brothers decided to ease the contradictions, and after negotiations, Chen Jianjun took charge of daya Group and entered the listed board of directors. The Daya Sacred Elephant is still presided over by Chen Xiaolong and continues to serve as the chairman.
Since then, the two sides have also jointly attended the 2019 shareholders' meeting to convey the signal of ice release to the outside world, and the company's stock price has also improved. At a sponsorship event of the Holy Elephant Group, the three sisters and brothers of the Chen family and their mother talked and laughed, and they were very harmonious.
Seeing that the entanglement of the equity dispute was resolved, the accident happened again. On the last day of May 2020, Chen Xiaolong died unexpectedly of illness on his way home.
"Originally born from the same root, he was too anxious to fry each other." Chen Jianjun was deeply helpless when he already looked at each other and smiled and smiled, but there was an unexpected storm in the sky, and Chen Jianjun felt helpless: "It was not easy for the relationship to ease, everyone was well, this kind of thing happened, how could it be thought of, could not be imagined." ”
Since then, this halo-boosted enterprise has been seriously injured and began to slide down from the top of the peak.
[Internal control chaos, public criticism]
After Chen Xiaolong's death, the "blood relatives fighting for power" incident pressed the pause button.
When I thought that the Daya Icon would regain its strength and create glory, many problems were constantly exposed.
Due to the brotherly infighting, Daya Shengxiang has continuously received warning letters from the Shenzhen Stock Exchange and the Jiangsu Securities Regulatory Bureau. In the equity dispute, Dai Pinya supported the eldest son Chen Jianjun, who had transferred his equity in Daya Group to Chen Jianjun in June 2018, but since then the two sides have signed a "Rescission Agreement" to return the equity of Daya Group that has been transferred.
In April 2019, Zhuorui Investment, led by Dai Pinya, announced the appointment of Chen Jianjun as the chairman of Daya Group, replacing Chen Xiaolong. However, Chen Xiaolong claimed that "the chairman of the board of directors should be elected by the board of directors and may not be appointed", declaring zhuorui investment's move invalid.
The two sides have played many games, especially the equity transfer storm of Dai Pinya and Chen Jianjun, resulting in the back-and-forth change of the actual controller of the listed company. However, the company did not publish it in accordance with the provisions of the letter, which aroused the attention of regulators.
After the end of the infighting storm, the management problem of the Daya Icon began to stand out again. At the end of last year, the Jiangsu Securities Regulatory Bureau issued a warning letter to Daya Shengxiang, pointing out that there were violations in two aspects, one was the incomplete disclosure of executive compensation in 2019 and the lack of bonuses for convertible bond projects; the other was the irregularity of financial management and accounting.
The Jiangsu Securities Regulatory Bureau included Daya Shengxiang in the integrity file of the securities and futures market and required it to "seriously and earnestly learn lessons, improve compliance awareness, strengthen internal management, and improve the degree of credit and business standards." ”
▲Source: Daya Sacred Elephant 2021 Annual Report
Just after receiving the ticket, the "bad luck" of Daya Shengxiang did not dissipate, and its US subsidiary suffered telecommunications fraud. It can be seen that the financial management of Daya Shengxiang is still not standardized enough, the process control is not rigorous enough, and the internal control problem still exists.
【At the helm alone, recreating brilliance?】 】
His father and brother have died one after another, and the heavy responsibility of reviving the glory of the company has fallen on the shoulders of his brother Chen Jianjun.
But what is left to him is not a thriving Daya Sacred Elephant, the company has increased revenue for 4 years without increasing profits, and the real estate environment has entered a period of deep adjustment.
Judging from the past performance of Daya Shengxiang, after reaching its peak in 2018, profits have declined year by year, and its stock price has not broken through the high point of 2018.
▲Data source: company financial report
In June 2020, Chen Jianjun took office as the chairman of Daya Shengxiang, and under his leadership, the company's revenue hit a four-year high, but the net profit was the lowest in four years. In 2021, Daya Shengxiang achieved revenue of 8.751 billion yuan year-on-year increased by 20.46%; but net profit fell by 4.86% to 595 million yuan.
One rise and one fall show that its profitability continues to decline, and the company's gross profit margin began to decline after reaching its highest point since listing in 2018.
At the time of the decline of the Daya Sacred Elephant, Chen Jianjun had only been in office for more than a year, and competitors were waiting for an opportunity to overtake. With the acquisition of Yufeng Hantang, Baby Rabbit made up the channels of fine decoration projects, relying on the "retail + engineering" two-plate axe, and grew against the trend in the cold winter of real estate.
In 2021, the revenue and net profit of Baby Rabbit were reversed against the super large sub-sacred elephant, with revenue increasing by nearly 47% to 9.503 billion yuan; the net profit attributable to the mother increased by nearly 80%, jumping to 716 million yuan.
At the beginning of its development, Daya Shengxiang determined the development route of "green industry chain strategy, international strategy and big home strategy", and after Chen Jianjun took charge of the enterprise scepter, he paid more attention to the "big home" strategy.
The so-called big home refers to the integration of home improvement resources such as hard decoration, soft decoration, furniture (cabinets, wardrobes) to achieve "whole house customization". This is also the direction of the current transformation of flooring enterprises.
In December 2020, at the suggestion of Chen Jianjun, the company set up the "Whole Decoration Design +" business department, which he claimed marked the official entry of Daya Shengxiang into the field of decoration and customization, and opened up the business layout of "ground (floor) door (wooden door) wall (wall panel) integration", "on the basis of the original business, open the third level of growth." ”
Under the tilt of the company's resources, the wooden door and cloakroom business achieved revenue of 72.7889 million in 2021, an increase of 12 times year-on-year, reversing the previous decline dilemma.
▲ Data source: Daya Sacred Elephant 2021 financial report
But compared with the baby rabbit, the size is too large. In 2021, Baby Rabbit gained 2.687 billion yuan in revenue by relying on customized home, an increase of 35.08% year-on-year; Yufeng Hantang's income was 1.894 billion yuan, an increase of 31.25% over last year.
In addition, the Internet home improvement platform "Zhai Youjia", which had high hopes for Daya Shengxiang, was also abolished under Chen Jianjun due to years of losses. According to the 2021 annual report, the original "House Yujia" main body Shanghai Yishang has been changed to Shengxiang (Shanghai) New Material Technology Co., Ltd., the main business has become interior decoration, the registered capital has been halved from 100 million yuan to 50 million yuan, and the loss during the reporting period is 8.3485 million yuan.
Judging from the exploration of enterprises in the industry over the years, the transformation of wooden board enterprises into large homes is very challenging. Nature Home is considered to be the "first person to eat crabs" in the industry, but not only did it not reverse the decline in performance, but let it slide to the edge of profit and loss.
In 2020, the income of Nature Home increased slightly, but the net profit was less than 18 million, and the profit fell by nearly 90%, and it has now "returned to Hong Kong and returned to A".
Extending the business from the floor to the field of decoration and custom home furnishing, the most critical thing is to open up channel barriers, and Baby Rabbit has made up for this shortcoming through the acquisition of Yufeng Hantang.
Operating the flooring business, the supply channels are mainly dealers and decoration companies, but if the transformation of the "big home", their own personally engaged in the whole decoration, customized home, then there will be conflicts with the downstream channels, and may even rob the channel providers of the rice bowl, how to balance the stakes, is What Chen Jianjun wants to think about and face.
In addition, the transformation of large homes requires a lot of investment and market cultivation. The flooring industry itself is not a "sexy" track, how to leverage more funds, testing the financing ability of Daya Shengxiang.
At present, Chen Jianjun is at the helm of daya Sacred Elephant alone, and returning to the peak is his biggest dream, but the tests he faces will not be less.
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This article involves the content of listed companies, which is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their statutory obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); the information or opinions in this article do not constitute any investment or other business advice, and Market Value Watch does not assume any responsibility for any action arising from the adoption of this article.
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