Engineering channels continue to exert strength Wang Li Security's revenue in the first three quarters increased by 30.13% year-on-year

On the afternoon of October 25, Wang Li Security (SH.605268) released the third quarter report of 2021, the company's operating income from the beginning of the year to the end of the reporting period was 1.806 billion yuan, an increase of 30.13% year-on-year; the net profit attributable to the shareholders of the listed company reached 148 million yuan, a slight increase year-on-year. Under the influence of the sharp rise in the price of raw materials such as steel in 2021, the company has once again handed over a good result.

The engineering channel business is growing rapidly Unique margin model is kept away from risk

In recent years, the scale of China's hardcover housing market has continued to develop, and the hardcover penetration rate has gradually increased. Since the State Council first issued the fine decoration policy in 1999, the number of relevant policies issued by governments at all levels has increased every year, with a total of 46 policies issued in 2020, and a total of 9 national policies, 51 provincial policies and 81 municipal policies since 2021. According to the statistics and forecasts of Aowei Cloud Network, from 2016 to 2019, the scale of China's fine decoration market developed rapidly, rising from 1.156 million sets to 3.262 million sets, and the CAGR reached 41.33%; in 2020, due to the influencing factors of the epidemic, the market size fell by 0.21% to 3.255 million sets, and with the improvement of epidemic control, the fine decoration market will rebound strongly to continue the upward trend, and it is expected to rise by 29.34% and 20.00% in 2021 and 2022, respectively. Reached 4.210 million, 5.052 million sets.

The large sales volume achieved by the engineering business helps safety gate enterprises to achieve large-scale and standardized production of safety gates. The demand for security door locks of real estate developers continues to increase, and real estate developers are more willing to choose to cooperate with leading door lock enterprises with large production capacity and strong financial strength, Wang Li Security seizes this market opportunity, continues to increase the development of customers in the process of development, and broadens the category of cooperative products. According to statistics, from January to September this year, the cumulative amount of contracts signed by Wang Li Security Engineering End reached 2.141 billion yuan, an increase of 20.33% year-on-year.

Since the beginning of this year, Wang Li Security has reached cooperation with a number of strong real estate developers, including New Town, China Resources, Gemdale, Xuhui, etc.; renewed customers include R&F, Country Garden, Sunac, Helenburg, etc. Up to now, 9 of the top 10 real estate companies in China have adopted Wang Li security products. In addition, Wang Li Security has also participated in a number of national engineering projects such as the Hangzhou G20 Summit, Beijing Daxing Airport, Xichang Satellite Launch Center, etc., and has been rated as the first place in the steel household category of the preferred supplier of real estate for eight consecutive years.

From the perspective of the industry, the safety gate industry is greatly affected by the downstream real estate industry. China's real estate industry has passed the high growth stage of sustained and rapid expansion of the total amount, and entered a new stage of quality improvement and steady development, but benefiting from the growth of urban permanent population and regional migration, the improvement of living conditions, and the transformation of old houses in urban renewal, China's housing market still has great potential in the future.

According to Wang Li Security's 2021 third quarter report, the company's accounts receivable and notes receivable were 973 million yuan, while the notes payable and accounts payable also reached 974 million yuan. From the perspective of amount, the company's accounts payable and accounts receivable amount are similar, indicating that the company has a strong voice in the channel, and can offset the occupation of funds by accounts receivable in a payable manner, in other words, the company's cash flow pressure is small.

As we all know, these large customers of B-end real estate developers have strong bargaining power and the ability to occupy funds for upstream suppliers, so how does Wang Li Security have healthy cash flow and maintain accounts receivable at a reasonable level?

This has to mention the special sales model set up by Wang Li Security for the engineering end business.

After Wang Li Security signed a contract with the engineering business customer, all the business was completed by the company and the dealer. Distributors, provide installation and after-sales service, and are responsible for following up the progress of project implementation and supervising customers to handle settlement and payment. Before shipment, Wang Li will require the dealer to pay a deposit according to the ex-factory price of the product, and the part of the contract that exceeds the ex-factory price is the installation cost and sales service fee of the dealer. When Wang Li receives money from the customer, he first returns the dealer deposit, and the remaining money is the installation service fee given to the dealer.

Wang Li Security uses this sales model to disperse the pressure of funds to various dealers, effectively alleviating the biggest collection problem when cooperating with key engineering customers. Without the shackles of cash flow, Wang Li Security can boldly lay out production capacity and build its own business map.

Intelligent manufacturing base blessing Forward-looking layout of smart home industry

Smart home is the trend of the future, and Wang Li Security has long been laid out in this field. Relying on the advantages of traditional business in terms of technology, quality, brand and marketing channels, the company has vigorously expanded the smart lock business by setting up Yongkang headquarters, Hangzhou, Shenzhen, Shanghai and Munich R&D centers in Germany, and built it into a key node for intelligent security and smart home in the future. Since the successful research and development, Wang Li smart lock has won a number of honors, in 2019 won the German Red Dot Supreme Award; 2020 iF Design Award, becoming the only enterprise in the industry to win two international three major industrial design awards.

At the same time, in the layout of Wang Li Security Smart Home, its Aigang Zhijia brand has 5 intelligent plates of smart home, smart education, smart medical care, smart life, and smart shopping guide, covering 25 intelligent systems such as access control, security, health, lighting, home appliances, education, and shopping.

In the first half of this year, the operating income of the company's smart lock business reached 0.65 billion yuan, an increase of 124.14% year-on-year. From 2018 to 2020, China's smart lock penetration rate increased from 5% to 19.8%, showing a rapid growth trend, but compared with the penetration rate of 80% in Japan and South Korea and 60% in Europe and the United States, it is still in the early stage of industry development, and the growth space is broad. In the future, as the company continues to increase technology research and development in the smart lock business, it is expected to achieve rapid market expansion, and thus cut into the smart home market and create a new profit growth point for the company.

At this year's China (Guangzhou) Building Decoration Expo, Wang Li Security's insensible smart lock attracted the attention of the audience. This kind of non-sensor lock, using super C-class patented cylinder lock cylinder, the first non-sense unlocking technology, just put the special SIM card into the dual sim card dual mobile phone card slot, you can quickly identify the door opening. No need to press fingerprints, enter passwords, directly eliminate face recognition, to achieve a machine in hand, free passage. At the same time equipped with Wang Li's independent research and development of the special anti-lock, when closing the door, the control lever in the safety G-spot will automatically identify the door frame lock hole, once recognized, all the lock tongues will automatically pop out, close the door is anti-lock, put an end to forgetting the lock, leaking lock, convenient for the elderly and children to use. Through the separation of three defenses, mechanical anti-theft technology makes it impossible for thieves to steal, and through the visual monitoring system, thieves dare not steal.

Quality products also require efficient factories to ensure production capacity. On September 26 this year, Wang Li Changtian Intelligent Manufacturing Base - 5G Future Factory was broadcast on CCTV-2 Finance Channel. The smart factory covers an area of 230,000 square meters, including the company's investment of more than 28 million yuan and the China Machinery Science Research Institute to build the first automatic production line in the security door industry, reducing the original 34 people to 1 person, basically realizing the unmanned production line on the production line. Relying on the unique "intelligent manufacturing" force, the company improves precision manufacturing, agile manufacturing capabilities, improves the company's product quality, shortens product delivery, reduces product unit costs, leads the production and manufacturing process reform of the safety door industry with automation and informatization, drives industrial hardware upgrading with digital equipment, intelligent detection and efficient warehousing and logistics, improves the performance and quality of the company's safety door products, and further establishes the company's leading edge in the industry.

In the process of efficiency increase, Wang Li Security has also taken a solid step, taking the lead in entering the industrial "4.0" era, far ahead of competitors. The company has successively implemented SAP, ERP, and pan-micro OA systems, and with the two platforms as the core, through the implementation of EC, SCM, CRM, MES, APS and other information systems, to create an intelligent management system. Through cooperation with alibaba cloud, China Mobile, Siemens and other digital Internet companies, the company has built an information management platform, and with the realization of the whole process, all aspects of information from consumer quality information traceability, dealer customer information management, order management, to intelligent manufacturing have achieved effective closed-loop, and management efficiency has been improved.

In recent years, Wang Li has actively cooperated with world-class enterprises such as Alibaba, Foxconn, Hikvision, and strategic cooperation with famous universities such as Peking University, Wuhan University, Zhejiang University, and Xi'an Jiaotong University, sparing no effort to promote intelligent manufacturing, empower industrial transformation through digitalization, and reshape the vitality of the manufacturing industry. At the same time, the company actively carries out brand promotion strategy. Recently, Wang Li Security officially announced that the famous film and television actor Li Yifeng has become the brand spokesperson. This brand endorsement cooperation, the influence of the two sides in different fields will enable Wang Li Security to step to a higher level in the industry.

As a leading domestic safety door company, Wang Li Security successfully completed its listing this year and became the first A-share safety door listed company. The company has a strong channel advantage, dealer network throughout the country, engineering channels blossom at multiple points, and reached strategic cooperation agreements with major leading real estate developers. After the company was listed, it relied on strong financial strength to build an intelligent manufacturing factory, and its production capacity is expected to increase significantly, laying the foundation for the follow-up gongqu market. At the same time, the company actively expands the epitaxial business, focusing on wooden doors and smart lock products, and further improves the product and brand layout of Wang Li Security.

This article originated from the Financial Circle Network