The author | Deepwater Finance and Economics Agency He Li
On the evening of April 21, Changzhou Ingenious Furniture (301061) released its 2021 financial report, and last year the company achieved revenue of 1.925 billion yuan, a year-on-year increase of 46.04%; achieved a net profit of 298 million, an increase of 45.15% year-on-year.
Ingenious Furniture Company is mainly engaged in the production and sales of intelligent electric sofas, intelligent electric beds and their core accessories, and the core markets of the main companies are the United States, Canada, Australia and some European countries.
Although the production and shipment in the third and fourth quarters were greatly affected by the epidemic in Vietnam, Power Rationing in China, CONGESTION in U.S. ports, and restrictions on international logistics, the company's main business still experienced explosive growth last year.
The data shows that from 2013 to 2021, the company's operating income has increased by nearly 4 times, and net profit has increased by nearly 7 times.
| Smart electric sofas increased by 70%.
According to the data, in 2021, the sales revenue of smart electric sofas, the first core product of Ingenuity Home, reached 1.342 billion yuan, accounting for 70.20% of the main business income, an increase of 73.74% year-on-year. In 2020, smart electric sofas accounted for only 58.92% of the main business income.
Since 2020, the company has focused on the development and promotion of multi-seat sofas (combination sofas with two or more seats), and a large number of leather materials have been selected, and the effect of increasing revenue is more significant. In 2021, the sales revenue of multi-seat sofas increased by 138.46% year-on-year.
However, in 2021, the sales revenue of the company's smart electric bed fell by 4.56%, mainly because the market size of the smart electric bed itself is smaller than the smart electric sofa. According to the report provided by "Zhiyan Consulting", the market size of smart electric beds in the United States will reach 1.801 billion US dollars in 2020, with a market share of less than 15%. Most of the customers of the company's smart electric bed are furniture retailers, selling the company's own brand products, with a long promotion cycle and slower results.
In addition, due to the serious epidemic situation in Vietnam in the third quarter of 2021, the relatively remote phase IV factory (smart electric bed production base) can not recruit enough employees who are willing to cooperate with the Vietnamese government's "three in-place" model (local production, local dining, local accommodation), and a considerable part of the smart electric bed orders cannot be produced and shipped on time.
| The North American market continues to grow at a high rate
In foreign business, Ingenious Home mainly adopts three models, namely OBM (independent brand sales of Original Brand Manufacturer), ODM (manufacture of Original Design Manufacturer for brand customers according to its own design) and OEM (manufacture of Original Equipment Manufacturer according to the design of brand customers).
Among them, the OBM method is mainly traded by foreign furniture retailers, and ODM and OEM are mainly well-known foreign furniture factories and brand owners. At present, the number of customers is more than OBM, sales revenue is more than ODM, and the proportion of OEMs is relatively small.
The main customers and markets of Ingenious Home are abroad, especially in the North American market, of which the United States has the highest proportion. The company's products are mainly produced in Binh Duong Province, Vietnam and Changzhou City, China. In order to reasonably avoid tariffs to the United States, the company's current production proportion in Vietnam has exceeded that of China.
According to the data, in 2021, the company's sales revenue to the US market reached 1.680 billion yuan, accounting for 87.65% of the main business income, an increase of 43.43% year-on-year. The company developed 13 new customers throughout the year, 10 of which are headquartered in the United States.
By the end of 2021, 21 of Furniture Today's top 100 furniture retailers in the United States in 2020 are the company's customers, of which 16 are purchasing their own brand products from the company.
In 2021, despite Canada's anti-dumping and countervailing sanctions on some cushioned seats from China and Vietnam, the company's sales revenue to Canada still increased by 62.3% year-on-year. Leon's is one of Canada's largest furniture retailers and will become a customer of the company in 2021.
At present, the main business income of Ingenuity Home in the Chinese market accounts for a relatively small proportion, only 1.63%. The company said in its annual report that the reason why the Chinese market has not been opened at all is because there are no marketable products, no sales channels, no brand influence, and no traces of products and services.
| R&D investment continued to grow last year
According to the data, last year, the research and development expenses of ingenuity home reached 93.82 million yuan, accounting for 4.87% of the revenue, and the amount of research and development investment has increased for two consecutive years since its listing, with research and development expenses of 71.36 million yuan and 66.67 million yuan in 2020 and 2019, respectively.
The company said in the annual report that since the existing core management team took over the operation of the enterprise, the company has always insisted on independent research and design to develop new products, and put an end to plagiarism and imitation.
According to the annual report, since the first participation in the US industry exhibition in 2015, the company has insisted on launching innovative products every six months, not only the change of product appearance, but also related to product functions, structure, material selection, use methods, etc. The differentiation, particularity and advanced nature of the company's products have helped the company achieve rapid development in these years. In the upholstered furniture industry in the United States, the company has gradually become synonymous with "NEW". When a customer comes to a company showroom, the first thing they usually say is "What is new, MOTO ?" ”。
| The e-commerce channel has not been opened
According to Statista's September 29, 2021 report, U.S. furniture and homeware e-commerce retail revenue reached $55 billion in 2021, accounting for 12% of the total U.S. e-commerce retail sales. Home and home improvement products are one of the fastest growing e-commerce categories. Furniture and appliances are the e-commerce retail categories with the highest expected CAGR between 2018 and 2025, surpassing other core e-commerce sectors such as fashion (apparel) and 3C small electronics.
However, although some of the company's products are sold on Costco.com, Costco.ca, Amazon, Wayfair and other platforms, all of them rely on customers and their channels, and there is no direct e-commerce retail business so far, which is not conducive to the promotion of its own brand overseas, nor is it conducive to "planting grass" and cultivating its own future direct users.
The company said that due to the particularity of furniture products, logistics involves warehousing, trunk line transportation, branch line transportation and terminal services, etc., the service chain is long, the operation difficulty is high, it is easy to lead to damage to goods, and the overall cost is high. Due to the large size and weight of the company's products, the cost of "last-mile tail delivery" is relatively not low. In the future, while paying attention to new formats and new models, the company must have a new positioning and consideration for product design, packaging, transportation and installation methods.
(Exclusively released by the global market value research institute Deepwater Finance and Economics, please indicate the source when reprinting the citation)