In one month, 9 home furnishing companies hit the IPO capital dispute is what is the mystery

From June 8 to July 7, 2021, within a month, 9 home furnishing companies submitted prospectuses one after another, of which on July 1 alone, the prospectuses of Wrigley, Lens and Shuxiang Mendi were hung on the official website of the CSRC. This is rare in the home furnishing industry, why will the summer of 2021 usher in the home furnishing industry concentrated on the impact of IPO boom?

Analysts believe that the concentrated impact of the IPO is only a coincidence of time, these home furnishing companies have undergone several years of preparation, behind the capital struggle is the scale of the race, once the company is successfully listed, get capital support, or will quickly pull away from the peers at the production end, accelerate into the "smart, green" track, with the scale advantage to strive for a stronger right to live.

9 home furnishing companies concentrated on impacting IPOs

In the summer of 2021, one household company after another launched an impact on the capital market.

According to incomplete statistics from the Beijing Business Daily reporter, within a month from June 8 to July 7, the official website of the CSRC hung up the prospectuses of 9 home furnishing companies. On June 8, Shenzhen Yuanchao Smart Life Co., Ltd. (which owns a CBD home brand); on June 22, Mousse Healthy Sleep Co., Ltd.; on June 28, Zhejiang Lianxiang Smart Home Co., Ltd. (which owns the lingxiu home brand), Hangzhou Pan Asia Sanitary Ware Co., Ltd.; June 29, Zhiou Home Technology Co., Ltd.; June 30, Tubatu Group Co., Ltd.; July 1, Wrigley Home Group Co., Ltd., Zhongshan Lens Home Co., Ltd., Shuxiang Mendi Group Co., Ltd.

In just one month, there are 9 home furnishing companies submitting prospectuses one after another, which is rare in the home furnishing industry, in the summer of 2021, why is the home furnishing industry so "fanatical" for capital?

Jiang Chen, a senior investor, told the Beijing Business Daily reporter that "this concentration itself has no inevitable law, and enterprises have begun to plan a few years ago, not recently decided to go to the IPO."

Li Qian, a senior expert in the pan-home furnishing industry, also believes that the concentration is just a coincidence, "these companies have achieved good growth after these years of development, the company itself has long had the willingness to go public, many companies have been preparing since a few years ago, but concentrated on this time of year to declare materials."

What is the mystery behind the battle for capital

Counting the companies that have recently impacted IPOs, it is not difficult to find that most of them are the heads of the home furnishing industry segment.

If the IPO is successful, Tuba Rabbit will become the first share of A-share "Internet Home Improvement", and Lingxiu Home will become the "first share of pure wall cloth"; Mousse and CBD will join the already listed Gujia Home, Man Wah Holdings, Xilinmen and Dream Lily to form the head camp of the top six.

To impact ipipos, what is desired is the power of capital. In a conversation with a reporter from Beijing Business Daily, Bu Lixin, chairman of Shuxiangmendi, revealed his ambition for the international market in his words. "Shuxiang Mendi hopes to use the power of capital to make the industry bigger, lead the industry to really compete for the global market, and PK European and American flooring giants!"

Chasing capital, these home furnishing companies tacitly tell stories related to production projects. CBD home raised funds are mainly used for cbd home Huizhou production base intelligent production transformation and upgrading project and CBD home smart center project; after deducting the issuance cost, Mousse is planned to invest in the east China health bedding production line construction project, digital marketing project and healthy sleep technology research center construction project; After deducting the issuance cost, the funds raised by Lens Home are intended to be used for the intelligent upgrading technology transformation project of Zhongshan Lens production base after deducting the issuance cost. Jiangsu Langsi Pizhou R & D Center construction project and supplementary working capital project; Shuxiang Mendi's funds will be used for the annual output of 6 million square meters of solid wood composite floor construction project, intelligent workshop construction project, information system upgrading project, marketing network expansion and brand aesthetics promotion project and supplementary working capital and other projects...... The Beijing Business Daily reporter found that these fundraising projects focused on the "intelligence" and "digitalization" of production.

"With the help of capital power, the head enterprise accelerates to the intelligent manufacturing track, or will open a scale race." One analyst lamented.

Li Qian pointed out that behind this wave of listing boom in the capital struggle is a scale race, "with the development of the home furnishing industry, the head effect will become more and more obvious, the scale will occupy a greater advantage, if you can not use the power of capital to quickly expand the scale will be affected, in a disadvantageous position, these companies compete to go public, in fact, hope to get more capital, expand production capacity, in the future development to obtain a certain right to survive."

How to compete for the second half after the IPO

"In the past, as long as a startup IPO, the major shareholders were almost relieved (commonly known as landing), but now, after the IPO, it is not easy to find that the second half of the company's operation has just begun." Zeng Qiao, a capital observer, pointed out that the registration system has changed not only the capital market ecology of A-shares, but also the ultimate choice of listed companies.

The registration system, that is, the securities issuance registration system in the securities market, is a system for the listing of securities issued by companies, which is different from the approval system, which originates from the "Opinions on Further Improving the Quality of Listed Companies" issued by the State Council on October 9, 2020, which proposes to "fully implement and step by step implement the securities issuance registration system and support the listing of high-quality enterprises". Its most important feature is that under the registration system, the securities issuance review body only conducts a formal examination of the registration documents, and does not make substantive judgments.

"We judge that the registration system has brought a very large reform dividend to the entire market. Many companies also hope to catch up with this wave and achieve great development. This is also in line with the background of China's economic transformation and upgrading, and attracting more capital into the real economy is still very beneficial to economic development. Fang Hao, managing director of CITIC Securities, believes that the registration system and the institutional reform of the New Third Board have opened up a new situation for the activity of China's multi-level equity financing market.

The registration system makes it easier for companies to go public, but it also accelerates the marginalization of junk stocks, which may still be delisted after listing.

A few months ago, on March 22, Yihua Life, a veteran household wood listed company, was delisted from the Shanghai Stock Exchange due to its daily closing price of less than RMB1 for 20 consecutive trading days, and officially withdrew from the A-share market, becoming the first "1 yuan delisted stock" under the new delisting rules.

"Yihua died by himself, the money in the capital market is easy to earn, and he did not put any energy into the industry." Jiang Chen said that many people think that the successful listing will be all right, shareholders cash out or mortgage, mergers and acquisitions to play capital, pull up stock prices, some of the fundraising projects are just flickering is not really good to do, but want to fool the end will generally fool themselves lame, seriously do it, will continue to expand their core advantages, maintain sustained growth.

Li Qian also believes that Yihua was delisted because it did not do a good job, "the listing itself is a good thing, but some companies have strategic mistakes in the business process, or their original intention is not right, so it is not good, the purpose of the company listing should be to do a good job, not to list for the sake of listing."

In the face of the hot capital market in the summer, the home furnishing industry that has passed the epidemic test needs more rationality.

Beijing Business Daily reporter Xie Jiating