The panel furniture equipment business grew strongly, and Nanxing's revenue in 2023 reached a new high

A few days ago, Nanxing shares (002757. SZ) released its 2023 annual report, and for the whole year of last year, the company achieved operating income of 3.629 billion yuan, a significant increase of 22.58% year-on-year, a new high, and a net profit attributable to the parent company of 173 million yuan and a non-net profit of 152 million yuan. At the same time, the company plans to distribute cash dividends of 2 yuan to all shareholders for every 10 shares, with a total cash dividend of nearly 60 million yuan, counting the 88.6367 million yuan distributed in the middle of last year, the cash dividend ratio of Nanxing shares in 2023 is as high as 85%.

Founded in 1996 and listed on the Shenzhen Stock Exchange in May 2015, Nanxing Co., Ltd. is the first A-share listed panel furniture equipment manufacturing enterprise in China. In 2018, Nanxing Co., Ltd. entered the field of IDC and cloud computing through the acquisition of the only network, and at present, the main business includes panel furniture machinery business and IDC and cloud computing related services.

From the perspective of the current statement, in 2023, the company's net cash inflow from operating activities will reach 580 million yuan, a significant increase from 256 million yuan in the previous year. This growth is due to the significant improvement of the company's ability to collect payments, and the company's cash received from selling goods and providing labor services increased by more than 900 million yuan year-on-year, which exceeded the operating income.

On the same day as the release of the annual report, Nanxing also disclosed the first quarter report of 2024. In January ~ March this year, Nanxing Co., Ltd. achieved operating income of 954 million yuan, a year-on-year increase of 1.46%, and realized a non-net profit of 79 million yuan, a year-on-year increase of 6.46%. Single-quarter revenue continued to hit a record high.

The performance of the special equipment business was outstanding

In the field of panel furniture equipment, Nanxing shares is one of the earliest enterprises in China, after more than 20 years of deep accumulation, the company with mature technology, reasonable prices, high-quality services, become the preferred overall solution provider for home furnishing enterprises.

As the foundation business of Nanxing Co., Ltd., the field of panel furniture and equipment has always been the cornerstone of the company's stable development, and continues to show a steady growth trend. In 2023, Nanxing's special equipment business will achieve an operating income of 2.187 billion yuan, a year-on-year increase of 45.02%, demonstrating the competitiveness of the leading domestic panel furniture production equipment enterprises.

Behind this is Nanxing's unremitting exploration of business and the continuous promotion of R&D and innovation. As an enterprise that has been deeply involved in the industry for many years, Nanxing's product technology has been in a leading position in China, and some products have reached or even exceeded the international advanced level. In the field of manufacturing, the company's machining level has also reached the international advanced level.

In terms of technology, Nanxing Co., Ltd. participated in the drafting and formulation of a number of national industry standards; in terms of intelligence, the company took the lead in developing and launching the home furnishing industry 4.0 intelligent production line in China, and set up a professional team to provide system solutions for the intelligent manufacturing of home furnishing enterprises.

Looking forward to the future, the development prospects of Nanxing shares in the field of panel home furnishing equipment are highly anticipated. According to the data of the International Woodworking Exhibition, from 2020 to 2027, the compound growth rate of the mainland woodworking machinery market is about 43%, and the global average is 1.7%, and China's high-end woodworking machinery equipment is expected to continue to maintain a growth momentum. Northeast Securities pointed out that foreign equipment is gradually replaced by domestic equipment with a higher performance-to-price ratio, and import substitution has become the general trend. This also provides a huge market opportunity for domestic woodworking machinery manufacturers.

At the same time, with the advantages of cost performance and intelligence, Nanxing is actively expanding the global market. According to the annual report, the company has more than 200 sales and service centers around the world, and in 2023, the company's sales revenue in overseas regions will reach 463 million yuan, with steady growth for many consecutive years.

In order to cope with the growth of downstream market demand, Nanxing Co., Ltd. is accelerating the implementation of the new production base project on the basis of the existing four production bases, so as to further enhance the company's production capacity in the field of high-end furniture equipment and consolidate the company's position in the industry.

Another major business of Nanxing Co., Ltd., IDC, will achieve operating income of 1.442 billion yuan in 2023. In the past year, the company focused on data center, cloud computing, cloud networking and digital solutions, and continuously strengthened its strategic cooperation with leading cloud providers.

The transformation of the home furnishing industry and the opportunity for equipment manufacturers

At present, the pessimistic expectation of the real estate downturn is continuing to affect the home furnishing industry, but the long-term growth space of the industry is still sufficient. On the one hand, the renovation and partial decoration of stock houses are becoming an important source of growth for the industry, and on the other hand, the logic of increasing the concentration of leading home furnishing companies is still being deduced.

Policies are strongly supporting the renovation of existing housing. A few days ago, the Ministry of Commerce and other 14 departments jointly issued the "Action Plan for Promoting the Trade-in of Consumer Goods", which mentioned that it is necessary to expand the decoration and transformation of existing houses as the starting point to promote the replacement of consumer goods for home decoration, kitchen and bathroom, promote smart home consumption, and continue to release the potential of home consumption.

In the field of home improvement, "trade-in" goes beyond a simple item update, but a deeper "upgrade". The plan proposes to promote the implementation of smart homes in more life scenarios such as smart kitchens, healthy bathrooms, home security, and elderly care, continue to carry out pilot projects for digital home construction, accelerate the production, certification and promotion of green building materials, and comprehensively carry out green building materials to the countryside.

In terms of market concentration, according to the analysis and calculation of brokers, the overall market share of the nine listed custom home furnishing companies in the A-share market in 2022 will be less than 14%. This data is still insufficient compared with international counterparts. In FY2021, for example, the top five companies in the Japanese furniture industry (CR5) accounted for 32.5% of the market share in net sales. This comparison clearly reveals that the market concentration of the mainland custom home furnishing industry is low, and there is still room for further improvement and development.

In addition, within the home furnishing industry, a profound change is quietly taking place. According to the research report of Guohai Securities, in the post-epidemic era, the change of consumer demand has given birth to new retail, complete customization, intelligent manufacturing and other new markets that are more in line with contemporary consumer trends.

These changes have put forward new challenges and requirements for players in the home furnishing industry, and at the same time, they have also brought new growth opportunities to Nanxing shares, which are further upstream of the industrial chain. It is reported that the current products of Nanxing Co., Ltd. have been widely used by well-known home furnishing brands such as Sophia, Qumei, Jiangshan Opai, Dongyi Risheng, Shangpin Home Delivery, Gold Medal, Piano, IKEA Home OEM System, as well as a large number of second- and third-tier influential home furnishing brand enterprises.

With the development of the service model of the custom home furnishing industry in the direction of a higher level of integration and personalization, Nanxing Co., Ltd. is expected to further consolidate and expand its influence in the industrial chain and grasp the new opportunities for the development of the industry by virtue of its professional advantages in intelligent manufacturing and flexible production. It is reported that Nanxing Co., Ltd.'s new generation of intelligent production line solutions, covering the sawing series, CNC cutting series, edge banding series, drilling series, workstation series and other five series of new products, these new products to intelligence, digitalization, informatization as the core, in terms of stability, processing accuracy, cost reduction and efficiency increase, etc., for home enterprises to provide strong intelligent manufacturing support, can meet the differentiated production needs of different home enterprises.

Overall, with the increase in demand for renovation and partial decoration of existing houses, as well as the rise of emerging markets such as whole home customization and smart home, home furnishing companies need to continuously improve their competitiveness and adapt to market changes. In this process, the role of home equipment suppliers such as Nanxing shares will be more important.