Since the beginning of this year, policies to promote consumption have been intensively introduced. As early as March, the Ministry of Commerce designated this year as the "Year of Consumption Boost". At the end of July, the National Development and Reform Commission (NDRC) issued the Measures for Restoring and Expanding Consumption, proposing 20 policy measures. In September, the Ministry of Commerce also launched a series of consumption promotion activities such as the "Golden Autumn Shopping Festival". A series of measures have promoted the potential and vitality of the consumer market.
In this context, on the evening of October 30, Heilan Home Group Co., Ltd. (600398. SH, hereinafter referred to as Heilan Home or the company) disclosed the third quarter financial report, confirming the strong recovery trend of the clothing consumer market. According to the report, the company's operating income in the first three quarters was 15.569 billion yuan, a year-on-year increase of 13.85%; The net profit attributable to the parent company was 2.452 billion yuan, a year-on-year increase of 40.14%.
According to statistics, Heilan Home has been ranked first in revenue of listed companies in the A-share garment industry for four consecutive years. It is worth mentioning that the company's good performance is favored by investors, and since the beginning of this year, the market value of Heilan Home has increased by more than 60%.
Since the strategy of "multi-brand, multi-category, and collectivization" was put forward in 2021, Heilan House is gradually transforming from "men's wardrobe" to "wardrobe for the whole family". During the reporting period, the main brand "Heilan Home" achieved revenue of 11.888 billion yuan, a year-on-year increase of 14.86%; Heilan group purchase customization achieved revenue of 1.691 billion yuan, a year-on-year increase of 30.32%, with a bright growth rate; Other brands achieved revenue of 1.471 billion yuan, a year-on-year increase of 4.35%.
Precise positioning and R&D Focus on improving the core of the product
On the basis of the national brand "Heilan Home", the company has successively launched the trendy men's wear brand Black Whale, the women's wear brand OVV, and the lifestyle home furnishing brand Heilan Preferred after 2017, acquired the baby and children's clothing brand Yingshi YeeHoO, and acted as the sports brand HEAD (Haide), covering six major subdivisions such as men's wear, women's wear, children's wear, professional wear, home wear and household living products, accelerating the company's gradual transformation from "men's wardrobe" to "wardrobe for the whole family".
In terms of brands, in the third quarter, the main brand "Heilan Home" achieved revenue of 11.888 billion yuan, accounting for about 76% of the total revenue. During the reporting period, the main brand increased the research and development of scientific and technological fabrics, and continued to launch technological, fashionable and functional explosive products: focusing on the launch of the "Fresh Jacket" series to create a fashionable jacket that is more suitable for young people to wear; Launched the "Energy Lucky Shirt" series, including two self-created IP series of "Clover Grass" and "Lucky Rabbit", all of which have antibacterial and anti-mite functions; Launched the "Cool Technology" series, adding the scientific and technological factor of touch and cooling in the clothing, and the "New Ice Cool Cotton" product achieves the ultimate multi-functional cooling item, and has the functions of quick-drying, 3A-level antibacterial, and 2A-level anti-mite.
At the same time, on September 17 this year, the "2023 Taihu Lake Beauty Concert" launched by Heilan House and China Central Radio and Television Station was broadcast in prime time on CCTV-1, CCTV-3, and CCTV-15 channels, and new media platforms such as CCTV and CCTV Literature and Art were launched simultaneously to enjoy the beautiful picture of "Taihu Lake Pearl", feel the prosperity of "Jiangnan Shengdi", and spread China's excellent traditional culture.
The company's strategy for group buying customization and other brands is to "enrich categories, upgrade products, and create differentiated competitive advantages". Heilan Group Buying Customization has focused on group professional clothing customization for more than 20 years, with an annual production capacity of about 4 million sets of suits and 10 million shirts, while the gross profit margin of the brand is stable at about 50%. During the reporting period, Heilan Group Purchase Customization achieved revenue of 1.691 billion yuan, a year-on-year increase of 30.32%.
The company pointed out that in the first three quarters, Heilan Group Buying customized and innovatively launched new products such as six-dimensional stretch casual pants, natural elastic boutique shirts, and business parka, enriching the category of professional clothing and continuing to broaden the breadth of the brand market.
In addition, the company's other brands cover multiple tracks such as trendy men's wear, women's wear, and children's wear: the product design of women's wear brand OVV returns to technology and essence, focusing on improving representative categories such as suits, silk, and coats; Heilan, a lifestyle brand, prefers to explore the origin of clothing inwardly through natural fibers such as cotton, linen, and wool, and functional fabrics enhance wearing comfort; Children's clothing brand YeeHoO has developed a high-end product line P&P series, and Ying's has become the general agent of Nuna, a Dutch boutique baby and children's brand in Chinese mainland.
During the reporting period, the company's R&D expenses in the first three quarters were 144 million yuan, a year-on-year increase of 8.83%.
Deep integration of online and offline digital means is deeply empowered
For clothing manufacturers serving the C-end, the channel can be described as the capillary of the company's service, and excellent channel construction can often play a role in expanding market coverage, improving sales efficiency, increasing sales, and profits, and supporting brand image building.
According to the third quarter report of 2023, the company's offline channels achieved main business income of 12.839 billion yuan, accounting for 85.31%, a year-on-year increase of 17.6%; The main business income of online channels was 2.211 billion yuan, a year-on-year increase of 3.45%.
Deeply cultivated in China's menswear industry for more than 20 years, offline channels have always been regarded as the cornerstone of Heilan House's development and growth.
The company pointed out that in terms of offline channels, the main brand Heilan Home continued to focus on shopping mall stores, continued to increase the proportion of shopping center stores, optimized the store structure, and improved operational efficiency; Other brands adhere to a steady and progressive expansion strategy; Overseas markets will continue to deepen the development of mature markets, while strengthening the development of emerging markets. During the reporting period, the number of main brand stores of "Heilan Home" was 6,046, of which 1,224 were directly operated stores, with a net increase of 170.
Heilan Home said that in the future, based on the "New Thousand Store Plan" proposed at the end of 2022, the company will accelerate its entry into landmark commercial complexes and continuously optimize the channel layout of offline stores based on the guidance of "fine layout, high quality, and strong experience".
In terms of online channels, from 2020 to 2022, the company's online sales revenue increased from 2.050 billion yuan to 2.856 billion yuan, increasing year by year, and the proportion of online sales also increased from 11.75% to 15.95%. On this basis, in the first three quarters of 2023, the company's online sales revenue was 2.211 billion yuan, a year-on-year increase of 3.45%.
Under the strategy of "deepening the stock and developing the increment", Heilan Home adheres to the omni-channel and full-platform layout of online business, consolidates the basic market of traditional e-commerce, continues to increase investment in social e-commerce platforms, and creates growth points for new business platforms such as Douyin and Kuaishou. According to the third quarter report of 2023, in May this year, the Heilan e-commerce team planned Kuaishou Heilan Home Super Products, and the co-branded short-sleeved T-shirt of the popular Cool Mi Rabbit ranked first in the T-shirt category of the platform; During the "618" event, the self-broadcasting business achieved rapid growth, and the Heilan Home brand won the first place in Douyin brand men's wear, Kuaishou brand men's wear, Douyin Mall and so on.
It is worth noting that in the process of channel construction, Heilan Home has strongly empowered channels by adopting multiple strategic measures based on digital platforms: actively exploring the "contactless economy" and accelerating industrial transformation; The combination of online + offline marketing can quickly attract and expand customers and lock customers; With the "intelligent manufacturing" model, reduce costs and improve quality and efficiency; Optimize the company's operational processes, demonstrate brand resilience, and inject sustainable potential energy into development.
Chen Jiani, an analyst at Founder Securities, said that the main brand of Heilan Home is a leading brand of men's clothing in China, committed to providing high-value clothing products for male consumers aged 20-45 in the whole scene, and is committed to moving from a national brand to a super national brand. On the product side, we continue to increase research and development, conform to the trend of younger and diversified consumption, and create products with trend, quality and high cost performance. On the channel side, we continued to optimize the offline layout, put forward the "New Thousand Store Plan", and accelerated the entry into landmark commercial complexes; Online conforms to the new retail trend, omni-channel and all-platform layout, and the business maintains rapid growth.