Dacai Research, Chief Analyst: Deng Chaoming, Pan Home Furnishing Boss Business Internal Reference, Manager's Daily Reading, Business Staff of Front-line Personnel, to create an influential large home furnishing construction and decoration research institution, professional evaluation and communication center.
In recent days, several new situations have been unfavorable to Dongyi Risheng.
The first is the issue of information disclosure.
According to the announcement, Dongyi Risheng received the "Decision on Issuing Warning Letters to Dongyi Risheng Home Decoration Group Co., Ltd. and Guan Zhe" issued by the Beijing Supervision Bureau of the China Securities Regulatory Commission.
The issues raised were mainly errors, omissions or inaccuracies in the information disclosed.
At the beginning of May, the Shenzhen Stock Exchange also issued a regulatory letter, pointing out the problem of information errors.
The regulatory authorities require Dongyi Risheng and relevant persons in charge to take effective measures to improve the quality of information disclosure and ensure that the information disclosed is true, accurate and complete.
Although there are seemingly small problems in the information disclosure, such as time and options, the impact is still relatively poor, and many media reports have mentioned that they have been issued a warning letter, or that they have been warned, and the impression they bring to the society will be relatively bad.
In addition, the news is very widely disseminated, and it is always inappropriate for well-known brands to have mistakes in details.
Perhaps it also gives more listed home furnishing companies a wake-up call, the management must review and check the disclosed information, take turns proofreading, and ensure the accuracy of the expression, time, terminology and other details, especially in accordance with the relevant requirements of laws and regulations, the disclosure of information is strictly reviewed.
The second is the turmoil at the business level.
Since May, complaints have appeared on a number of social media, reflecting the problem of people in a branch of Dongyi Risheng going to the empty building. After the news appeared, the brand was being questioned, which has been reported by the industry media.
Specifically, it is mainly mentioned that there is no staff in the office of the Wuhan branch, and many netizens who signed home improvement contracts with the company said that they could not contact the relevant personnel. There are some on-site pictures in the online article, mainly banner photos of rights protection.
Some netizens shared that there were also problems with the branches in Hefei and Zhengzhou.
A netizen shared on Weibo that he had just paid for the project and had not yet been constructed, so he was told that the construction could not be carried out, and the refund timeliness could not be guaranteed.
In addition, netizens in Beijing complained that the woodworking department replaced three staff docking in a row during the entire decoration process, which led to a slow delay in the construction period, and every time they left their jobs, they had to re-dock and go to the door, and the person in charge did not communicate actively, and the completion date of the remaining project could not be given after 12315 complaints.
Running a business will inevitably encounter some complaints, but if the complaints are not resolved in a timely manner, or if there are a large number of user complaints, the situation will be more tricky.
It is recommended that Dongyi Risheng respond as soon as possible to clarify market doubts. According to the current speed of public opinion diffusion, the impact on brand reputation is very large. If it can be properly resolved, there is still a chance to save the situation.
Third, the performance is not ideal, and we need to find ways to continue to expand the market.
According to the financial report for the first quarter of 2024, Dongyi Risheng's total operating income was 440 million yuan, a year-on-year decrease of 20.68%; The net profit attributable to the parent company was -116 million yuan, and the loss increased by 28.47% year-on-year.
However, the performance in 2023 has improved significantly.
In 2023, the company's total operating income will be about 2.934 billion yuan, a year-on-year increase of 16.26%; The net profit attributable to the parent company was 208 million yuan, compared with a loss of 744 million yuan in the same period last year, and the loss narrowed.
For revenue growth, the reason given by Dongyi Risheng is that the digital home improvement strategy has been implemented, and the project implementation and completion progress have been actively promoted, and the revenue has increased compared with the previous year; Strictly control various costs and expenses, improve operating efficiency, and greatly reduce the amount of losses.
In addition, Dongyi Risheng transferred 29% of the equity of its subsidiary Jiai Interior Design (Shanghai) Co., Ltd., which is an equity transaction and is expected to increase the capital reserve by 67 million, which is subject to the final audit results.
The capital market is sluggish, and one reflection is that in the stock bar, many netizens are giving feedback on the current business problems.
According to data from the Xueqiu platform, its market capitalization on May 14, 2024 is 1.531 billion, down 44.86% year-to-date. Compared with the same period last year, it has become much worse.
Of course, it's not all bad news, judging from the signing situation in the first quarter of 2024, Dongyi Risheng is still relatively good.
According to the company's "Briefing on the Main Operations of the Decoration and Decoration Business in the First Quarter of 2024", in the first quarter, the newly signed single contract amount was about 595 million yuan, of which the home improvement business was about 526 million yuan, the precision equipment business was 8.66 million yuan, and the public decoration business was 60.19 million yuan. As of March 31, 2024, the decoration and decoration business has signed a total of 1.424 billion yuan of unfinished contracts.
However, compared with the signing data in the first quarter of 2023, there is a decline.
According to Dongyi Risheng's "Briefing on the Main Operations of Decoration and Decoration Business in the First Quarter of 2023", the amount of newly signed single contracts in the first quarter was about 727 million yuan, of which about 682 million yuan was in the home decoration business, 13.47 million yuan in the precision workwear business, and 32.38 million yuan in the public decoration business.
Objectively speaking, Dongyi Risheng is a hard-working and innovative enterprise, and the research of large materials has also paid attention to it before.
For example, the company has been promoting the iteration of the technical level, according to public information, in 2023, it will develop "intelligent mortar coating device", "a cabinet", "a household water-saving equipment", "a wooden cabinet structure", etc., to improve the construction technology such as wooden cabinet structure, modeling ceiling, coating method, etc.
Moreover, a series of digital tools for home decoration have been upgraded, such as the new design tool "Zhenjia AIGC", and two intelligent application design tools have been created: AI creative master and AI white designer. In terms of products, it also keeps up with the trend and launches minimalist, light luxury, French, lonely, modern and other series.
In the public report, Dongyi Risheng disclosed the situation of the supply chain, with 33,648 SKUs of online products, 7,813 SKUs of products on sale in the vertical supply chain, and 25,835 SKUs of online regional supply chain.
At the same time, the development of the real home furnishing system, the 4D cloud whole house customization system, and the mid-to-high-end positioning supporting wardrobe system have been upgraded; The digital packaging business Xingyao SAAS system and the original business Tianyan system in the delivery link are equipped with stronger functions to improve the experience.
In terms of marketing, relying on multiple channels such as Douyin, Xiaohongshu, core business districts, and high-end villa communities, it has organized marketing activities such as "Meet Milan, Pretend to Be Extraordinary" and "Bidaning Offline Tour"; Add digital human live broadcast, KOC interaction, cloud exhibition hall, etc., and frequent innovative actions.
However, for home improvement companies, a large number of innovations may not necessarily bring value, the most realistic is two points:
The first is to obtain high-value customers, and profit margins can guarantee operations. Some installation companies fought a price war and took a lot of orders, but they operated at a loss until the thunderstorm.
The second is to ensure the quality of delivery, only the delivery to win customer recognition, avoid complaints, and gain word of mouth, in order to create conditions for low-cost acquisition of new customers.
Delivery is also a system engineering, which is not only related to digital tools and systems, but also depends on the quality and ability of people, which is the direction of the current decoration company's efforts.
Dazai Research believes that enterprises facing the retail market, especially in the home improvement industry, if their reputation suffers a heavy blow, the confidence of the consumer market may collapse, and it will become difficult to turn around. The only way to turn the situation around as quickly as possible is to solve the problem quickly.
I can't help but sigh that some tracks may have to be ready to deal with market shocks at any time and maintain a sense of crisis that "there are only three months left before bankruptcy".