With the vigorous development of technological innovation and intelligent interconnection, the field of smart home is ushering in new development opportunities. The categories of smart home equipment continue to be enriched, and smart products equipped with cutting-edge technology have entered more and more markets.
Focus on smart manufacturers and home furnishing figures, and explore a new track for the home furnishing industry. Sohu Finance has launched a new column "Fox Enjoyment", which presents the self-evolution and butterfly changes of the smart home industry with a series of company in-depth reading, entrepreneur character features, and industry observation reports.
This article will start from the overseas warehouse business and focus on the "first share of ergonomics".
On the evening of April 17, Lege shares (300729. SZ, hereinafter referred to as "Lege") released its 2023 financial report. Last year, its operating income was about 3.902 billion yuan, an increase of 21.61% year-on-year, and the net profit attributable to the parent company was about 634 million yuan, an increase of 189.72% year-on-year.
Regarding the main drivers of performance growth, the annual report explained that it benefited from the high growth of overseas warehouse business, the continuous enrichment of product categories such as smart home, and the continuous improvement of the influence of independent brands.
In terms of products, the furniture manufacturing industry with lifting desks, ergonomic chairs and other main products is still the basic plate of Lege, with a revenue of 2.95 billion yuan last year, an increase of 8.55% year-on-year. The warehousing and logistics service industry based on overseas warehouses had a revenue of 951 million yuan last year, a year-on-year increase of 94.03%.
In fact, it is not surprising that the high growth rate of the overseas warehouse business has become the most "eye-catching" part of Lege's financial report. In 2023, based on the strategy of "small warehouses for large warehouses", Lege will carry out as many as 5 overseas warehouses and land deliveries, involving.
In the context of the industry going overseas, as one of the earliest enterprises to lay out overseas brand independent stations and overseas warehouses, can Lege Co., Ltd. seize this wave of dividends to create a solid second growth curve?
The revenue of overseas warehouses doubled, and the proportion increased to nearly a quarter
From the perspective of share, the scale of Lege's overseas warehouse business and the proportion of revenue in its main business have increased year by year.
In just two years, Lege's overseas warehouse business has grown from about 200 million yuan in 2021 to 951 million yuan in 2023, and its proportion in the main business has also increased from single digits to nearly a quarter of the current one.
Specifically, in Lege's operating income last year, the furniture manufacturing industry accounted for 75.62%, and the warehousing and logistics service industry accounted for 24.38%, and the warehousing and logistics service is also Lege's overseas warehouse business.
In 2022, the proportion of furniture manufacturing and warehousing and logistics services will be 84.72% and 15.28% respectively. In that year, Lege also listed the "public overseas warehouse" as its main product for the first time, and the revenue of this subject was 490 million yuan at that time.
Further forward in 2021, according to the comparison of various data, the overseas warehouse business should be divided into "other 2", with a revenue of 203 million yuan, accounting for only about 7% of the overall revenue.
What is the basis for the rapid expansion of the overseas warehouse business? The answer is to frequently expand the scale of warehousing and increase the land resource reserve.
According to the financial report, as of the end of 2023, the company has 12 self-operated overseas warehouses around the world, covering an area of 289,600 square meters. In the first quarter of 2024, it will accelerate the progress of warehouse expansion, and currently has 13 self-operated overseas warehouses around the world, with a total area of 362,400 square meters.
Based on the above calculation, in the first quarter of 2024 alone, the area of Lege's single overseas warehouse increased by 72,800 square meters, accounting for about 20% of the total area of the current self-operated overseas warehouse.
In the investor research announcement at the beginning of 2024, Lege disclosed that in 2024, it will expand its position in North America by 10-150,000 square meters based on the needs of its own business growth.
In the rapid development of cross-border e-commerce, the industry has begun to reshuffle, and land resource reserves are the cornerstone of steady expansion. According to incomplete statistics from Sohu Finance, in 2023, Lege will carry out a total of 5 overseas warehouse and land deliveries, of which nearly 600 acres of land will be purchased (more than 3,600 acres after conversion), and the amount spent will be more than 7,500 US dollars.
(Image source: Sohu Finance)
According to the 2023 annual report, from 2022 to 2023, the company reserved 5,000 acres of industrial logistics land in the core port area of the United States at a lower price in advance in the process of "replacing small warehouses with large warehouses" to meet the demand for self-built warehouses in the future.
In fact, the overseas warehouse industry has developed from the original labor-intensive industry to a new stage of relying on intelligent and information management to improve service quality. The development of overseas warehouses needs to be incremental, and it is also necessary to improve quality.
What cannot be ignored is the company's ability to allocate and use various resources such as capital and technology.
On March 20, Lege issued an announcement on the completion of the "Vietnam Fortune Smart Home Products Factory Project" and the balance of the raised funds (a total of 43.5317 million yuan as of March 12, 2024) into the "Ellabell Overseas Warehouse Project in Georgia, USA".
According to the announcement, in order to improve the efficiency of the use of raised funds and rationally allocate high-quality resources, the company combines the "two-wheel" collaborative development strategy of linear drive products and overseas warehouse business and the actual capital demand.
On April 1, Lege added the concept of "intelligent logistics". According to Flush data, the reason for the selection is that "the company actively explores large-scale logistics warehousing automation solutions to improve the operational efficiency and automation level of Lege's overseas warehouses, and the relevant automation equipment will be applied to the actual operation of overseas warehouses after the development is completed." ”
According to an article published on April 8 on the official account of Lege Overseas Warehouse, "In the future, Lege Overseas Warehouse will increase investment in automation construction, build 120,000 square meters of automated warehouses in the east and west of the United States, and build a highly automated and intelligent North American No. 1 warehouse of Lecang." ”
The improvement in operational efficiency is directly reflected in the service data. According to the financial report, Lege has served more than 600 customers, which is a certain increase compared with more than 580 announced at the end of last year.
In terms of gross profit margin, the profitability of overseas warehouses has also improved significantly. The annual report explains, "Through the orderly expansion of warehouses, as well as the improvement of storage capacity utilization and turnover, the number of shipments has increased significantly year-on-year, the bargaining power of last-mile discounts has been enhanced, and profitability has continued to improve." ”
In 2023, the gross profit margin of Lege's overseas warehouse business will be 12.69%, an increase of 9.32 percentage points over last year. From 2020 to 2022, the gross profit margin of Lege's overseas warehouse business will be 3.82%, -0.75%, and 3.46% respectively.
Major General Ding, a senior industry observer, said that in the past three or four years, whether it is in terms of area layout or revenue growth, the construction of Lege's overseas warehouse has developed rapidly, and it is indeed expected to become its second growth curve. In terms of hidden dangers, "acquiring land to build overseas warehouses" is a relatively asset-heavy operation model, with relatively large capital investment and a long return cycle.
Overseas warehouses calmly grow Lege or be "vigilant by peers"?
Cross-border e-commerce, brand going overseas, industrial transformation... At the moment of the structural transformation of international trade, Chinese enterprises are moving towards deeper participation and higher voice in the overall industrial chain, and overseas warehouses are the industry that benefits from this.
In terms of policy, on January 26, Wang Shouwen, international trade negotiator and vice minister of the Ministry of Commerce, said at the press conference that the Ministry of Commerce will introduce several measures to expand cross-border e-commerce exports and promote the development of overseas warehouses in 2024 to cultivate new momentum for foreign trade and consolidate the fundamentals.
At the industry level, cross-border e-commerce is improving as a whole, and there are some local differentiations. According to China Customs data, China's cross-border e-commerce exports will be 1.83 trillion yuan in 2023, an increase of 19.6%.
As the infrastructure for a new round of growth of cross-border e-commerce, according to data from the Ministry of Commerce, as of January 2024, there are currently more than 2,400 overseas warehouses built by mainland enterprises, covering an area of more than 25 million square meters.
As the name suggests, an overseas warehouse refers to a warehouse established overseas. Its main advantage in going overseas is that domestic merchants or manufacturers will ship the products to overseas warehouses first, and after overseas customers place orders to buy products, merchants can ship goods from closer overseas warehouses to shorten logistics time, reduce transportation costs, and improve customer satisfaction.
For Lege, the logic of developing overseas warehouse business is first to empower its own cross-border e-commerce business, and secondly, to serve other foreign trade enterprises.
On the one hand, the basic market of Lege is indeed in the foreign market, and there is a trend of increasing year by year.
In terms of regions, Lege's revenue in overseas regions was 3.598 billion yuan, accounting for a new high of 92.21% of revenue. The gross profit margin in overseas areas also reached 36.9%, an increase of 3.8 percentage points year-on-year. This is nearly five percentage points higher than the 32.08% in the domestic area.
On the cost side, Lege's main products such as smart lifting desks, ergonomic chairs, and smart electric beds are large household furnishings, with high value and slow turnover.
Previously, most of Lege's overseas warehouses came from purchases and leases, and the frequent "land delivery" last year was to prepare for the self-built overseas warehouse.
"In the future, as other overseas warehouse operators lease warehouses expire one after another, they may face greater pressure to renew their leases. Lege also analyzed in the financial report.
Regarding the development plan of the overseas warehouse business in 2024, Lege said that "it will promote the construction of self-built overseas warehouses, and reduce the overall operating costs of overseas warehouse properties by increasing the proportion of self-built overseas warehouses with relatively low costs, so as to improve the competitive advantage of Lege's overseas warehouses and attract more cross-border e-commerce sellers to settle in." ”
In addition, it is increasingly important to take low-cost warehousing into your own hands. In particular, challenges such as international trade disputes, tightened platform supervision, and intensified competition in the industry have brought uncertainty to the development of cross-border e-commerce.
According to a survey in the "2023 Cross-border E-commerce Industry Annual Report" released by AMZ123, in 2023, 31.92% of cross-border enterprises will have an annual revenue of less than 1 million. Among them, more than half of sellers reported that the rise in operating costs, including logistics fees and advertising fees, was the main reason for compressing sellers' profit margins.
From February 5, 2024, Amazon has made significant adjustments to logistics fulfillment fees. The general analysis of the market believes that it will be more cost-effective to put medium and large goods in overseas warehouses than Amazon logistics. Based on this, there may be more medium and large sellers to increase the demand for overseas warehouses.
However, a person who has been engaged in the B2B supply chain industry in the UK for more than ten years told Sohu Finance that overseas warehouses have experienced a wave of "false peaks" before, and it will be very dangerous to blindly expand at this stage.
"In the middle and late stages of the epidemic, there has been a wave of overseas warehouses. At that time, some peers had warehouses of more than 10,000 square meters, and the empty warehouse rate could reach 50%. Later, there was a wave of fake liquidation, and after the overcapacity was transferred overseas, the overseas demand did not keep up, which caused a backlog of inventory. ”
He believes that once foreign policies and regulations are tightened, the market advantage of the "price war" of domestic e-commerce platforms may no longer exist. To a certain extent, cross-border e-commerce is not a real brand going overseas, and the successful overseas expansion at this stage is the "localization" of the brand in its own hands in terms of technology and channels.
Therefore, compared with the mushrooming growth of overseas warehouses in previous years, the industry as a whole in 2024 will be more "calm growth" and structural optimization.
He also mentioned that there is a conflict between "big selling" and overseas warehouse business, and many customers will be wary of their peers. The reason is that as a service provider, you can have "all the data" in your hands.
"I can say bluntly, what can be sold and what cannot be sold, customer information and customs clearance information are in the hands of you (overseas warehouse service provider). There are also some very well-known giant enterprises in China that have not succeeded in warehousing. If you want to do a service chain, then the 'big sell' may have to be cut away, or at least not so openly advertised as a 'big sell'. He confessed.
However, Lege also has a characteristic "hole card" - Chairman Xiang Lehong. In his narrative, Lege's overseas warehouse is "in the spirit of altruism".
Xiang Lehong is an "Internet celebrity chairman" with more than 2.3 million followers on Douyin. According to the financial report, the account was "personally managed" by Xiang Lehong, "sharing entrepreneurial stories and business insights, and also enhancing the popularity of the Lege brand and overseas warehouses." ”
(Image source: Douyin account @乐歌資資語 homepage screenshot)
Since April 11, its Douyin account has released a total of 6 live slice short videos with the theme of "What are the opportunities for cross-border e-commerce" on its Douyin account for 6 consecutive days.
He mentioned in the live broadcast that when cross-border e-commerce brands go overseas, "localization" is far from how many people are sent and how many local executives are invited, but also at the level of manufacturing, regulations, and culture.
"No entity, in any country, exists in isolation. Our localization means that you are doing charity for local job creation, tax revenue, and not just benefiting from it. Xiang Lehong said in the live broadcast.
Major General Ding also believes that many problems faced by cross-border e-commerce businesses going overseas can be solved together with the globalization process of Chinese brands. In particular, localization is whether it is possible to establish a supporting supply chain and coordinate the operation of overseas warehouses to hedge policy risks.
The growth rate of core products behind the "two-wheel drive" has slowed down
In Lege's 2023 financial report, "two-wheel drive" is a high-frequency keyword. On the other side of two-wheel drive, as the "first stock of ergonomics", the growth rate of its core products is slowing down.
In terms of products, taking the ergonomic workstation, Lege's main product, as an example, from 2019 to 2022, it will be 645 million yuan, 1.428 billion yuan, 2.163 billion yuan, and 2.197 billion yuan, a year-on-year decrease of 2.78%, an increase of 121.22%, an increase of 51.52%, and a decrease of 1.56%, respectively, with a significant decline in growth rate.
In the 2023 financial report, Lege merged the ergonomic workstation and the ergonomic large screen bracket into ergonomic series products, with a revenue of 2.612 billion yuan, a year-on-year increase of 8.7%. The growth rate of the two types of products will not be announced.
(Image source: Sohu Finance)
It can be found that Lege is also expanding product categories such as smart home and healthy office. According to the annual report, "during the reporting period, the company actively enriched its product categories and launched smart home and healthy office products such as electric sofas, ergonomic chairs and electric beds. ”
The sales volume of linear drive lifting system products in 2023 will be 1,397,100 sets, an increase of about 8% from 1,294,000 sets in 2022, and the average price will also increase from 1,428.8 yuan/set in 2022 to 1,461.63 yuan/set.
In fact, the linear drive system product industry as a whole is facing a sluggish growth situation.
In horizontal comparison, Kaidi Co., Ltd. (605288. SH) revenue in 2022 will be 1.172 billion yuan, a year-on-year decrease of 31.8%. The latest third quarter report shows that the revenue in the first three quarters of 2023 will be 350 million yuan, an increase of only 1.66% year-on-year.
Jiecang Drive(603583. SH) Although its revenue and net profit will increase in 2022, its third quarter report for 2023 shows that it has also fallen into the dilemma of declining revenue and net profit.
Major General Ding analyzed that on the one hand, there is no particularly clear industry standard for Ergonomic products, which is relatively unfavorable to the head enterprises, because there will be many mixed brands in the market.
"When the market competition is fierce, we insist on taking the high-end route, and when the minds of consumers are not cultivated, they will feel that there are many alternative products. There is still a big challenge for the sales side to soar in the short term. He thinks.
From the perspective of operating costs, it is mainly due to the expansion of overseas warehouse business that drives up costs. The operating cost of the furniture manufacturing industry increased by only 0.94% over the same period last year, while the operating cost of the warehousing and logistics service industry increased by 75.32% to 831 million yuan.
Although R&D expenses remained above 4%, judging from last year's financial report data, the growth rate of R&D expenses was not as fast as the growth rate of the "three fees", only 145 million yuan, a slight increase of 0.73%.
At the same time, in the past three years, the proportion of R&D investment in Lege's overall revenue has declined. From 2021 to 2023, Lege's R&D investment will be 132 million yuan, 151 million yuan, and 161 million yuan respectively, accounting for 4.60%, 4.69%, and 4.12% of operating income respectively. And the proportion of capitalized R&D expenditure in R&D investment reached a new high of 15.7808 million yuan last year, accounting for 9.83%.
In terms of channels, the situation of Lege's long-term "direct sales, supplemented by distribution" seems to have changed.
According to the financial report, in 2023, Lege's direct sales and distribution revenue will be 1.969 billion yuan and 1.933 billion yuan respectively, accounting for 50.46% and 49.54% respectively. In 2022, direct sales and distribution will account for 68.55% and 31.45% of the revenue.
From the perspective of online and offline conditions, the performance of traditional and emerging e-commerce platforms is differentiated. Specifically, cross-border e-commerce and independent stations performed well, among them, the sales revenue of cross-border e-commerce was 1.773 billion yuan, a year-on-year increase of 12.59%, which was still stable. The sales revenue of independent stations was 671 million yuan, a year-on-year increase of 16.72%.
The online direct sales revenue of the Douyin platform exceeded 10 million yuan for the first time, with a year-on-year increase of 83.47% to 14.145 million yuan. In 2022, this data will be 7.7097 million yuan, an increase of 673.7% year-on-year.
(Image source: Lege 2023 financial report)
It is worth noting that the online sales of traditional e-commerce platforms represented by Tmall and JD.com are not optimistic.
Although the proportion of domestic e-commerce platforms in Lege's main revenue is not high, in addition to JD's non-self-operated, Tmall direct sales, JD's self-operated and Taobao distribution have experienced varying degrees of revenue decline, with revenue falling by 6.63%, 14.27% and 14.54% respectively.
出品 | 搜狐财经作者 | 魏书琮编辑 | 吴亚运营编辑 | 薛苏文
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