Since the beginning of this year, the price of raw materials in the upstream of the home furnishing industry has risen all the way, affected by this, and recently related enterprises in the field of bathroom, tiles and other home furnishings have raised product prices, causing market concern.
Rising costs such as raw materials Home furnishing companies have adjusted prices
The reporter learned that before and after the "Eleventh", a number of leading home furnishing enterprises, including Oupai Home, Dongpeng Holdings, etc., announced price adjustments, involving whole house customization, tiles, waterproof coatings, lighting and other fields, and the home furnishing industry set off a new round of price increases.
Chen Wei, vice chairman of Guangzhou Seagull Residential Industry Co., Ltd.: Even twice a week, the entire home furnishing industry, including sofas, furniture, bathrooms and tiles and other categories, has about 5% to 10% of the different degrees of rise.
Industry insiders told reporters that the price of household products in previous years was relatively stable, but since last year, due to the continuous rise in raw material prices, the cost of many home furnishing production enterprises has increased sharply, and they can only follow the market to passively increase prices. Wang Jihong, the head of the purchasing department of a sofa company in Shenzhen, told reporters that he experienced such a long wave of raw material price increases for the first time in so many years.
In the face of fierce market competition, home furnishing companies cannot pass on the pressure of rising costs to the downstream terminal market, so many home furnishing companies are facing huge operating pressure.
Home furnishing companies actively respond to resolve the rising pressure on costs
At present, the rise in the cost of raw material procurement is a common problem faced by the entire home furnishing industry, and in the case that the price of products cannot rise significantly, it will test the operating ability of enterprises. Many home furnishing companies have digested the unfavorable situation brought about by rising costs by innovating products, strengthening supply chain management, reducing costs and increasing efficiency.
Chen Wei, the head of a sanitary ware export company in Guangzhou, told reporters that since the beginning of this year, the export orders of his company to the European and American markets have grown significantly. In order to relieve the rising pressure of raw materials, they signed long-term price lock-in contracts with foreign major customers and domestic raw material suppliers. For small and medium-sized customers abroad, they will flexibly adjust the price of products according to raw material prices and exchange rate fluctuations.
In the face of increasingly fierce market competition, many home furnishing companies focus on building the core competitiveness of products. In a tile manufacturer in Foshan, Guangdong Province, the reporter saw that the R & D team was doing some functional testing on a new tile. R & D personnel told reporters that in order to meet market demand, this year they launched more than a hundred new products.
In a sofa production enterprise in Shenzhen, the reporter found that the application of digitalization has greatly improved the production and research and development efficiency of the enterprise, thereby reducing the production cost. Through this system, the staff can not only intuitively see the shape of the sofa on the computer, but more importantly, they can accurately calculate the cost of the product.
Industry insiders said that the current market environment is more testing the business ability of enterprises, direct price increases in products are only short-term strategies to cope with rising costs, and product structure improvement is the long-term driving force for enterprise development, only by constantly seeking new changes, enterprises can adapt to fierce market competition.
The concentration of the home furnishing industry can be increased, and the focus can be on leading enterprises
Recently, the relevant listed companies in the A-share home furnishing industry have successively released the results of the third quarter of 2021. Under the background of the sharp rise in raw material prices and the intensification of market competition, how should investors avoid risks and grasp investment opportunities in the home furnishing industry?
The data shows that among the 31 listed companies in the A-share home furnishing industry, there are 20 companies that reported net profit growth in the third quarter of 2021. Among them, Gujia Home achieved a net profit of 1.238 billion yuan in the first three quarters of 2021, an increase of 22.58% year-on-year; Oupai Home achieved a net profit of 2.113 billion yuan in the first three quarters of 2021, an increase of 45.73% year-on-year; and the net profit of Xilinmen in the first three quarters of 2021 was about 374 million yuan, an increase of 107.47% year-on-year. From the performance of the entire sector, the CITIC Home Index rose by 5.11% so far in 2021, the Shanghai Composite Index rose by 1.55% in the same period, and the CITIC Home Index outperformed the market by 3.56 percentage points.
Tu Yiting, chief analyst of light industry at Shanghai Shenyin Wanguo Securities Research Institute: The profit-side home furnishing industry has generally been affected by many aspects, including raw material price increases, tight shipping resources, and pressure on the profitability of hardcover business. The market has also given a higher valuation to such leading enterprises.
Industry insiders said that the current market is worried about the growth rate of real estate sales and new construction, it is expected that the growth rate of new housing completion and delivery in the future real estate market will decline, but the proportion of secondary decoration of existing houses will gradually increase, and in the long run, the consumption attributes of the home furnishing industry will gradually exceed the cyclical attributes. With multi-channel and multi-category efforts, the concentration of head enterprises is expected to be further improved.
Tu Yiting, chief analyst of light industry at Shanghai Shenyin Wanguo Securities Research Institute: The company's valuation is worried by the post-real estate cycle, and there is a certain degree of drawdown, and investors need to pay close attention. However, we still emphasize that the trend of long-term concentration of the industry is unchanged, and it is recommended that investors focus on leading home furnishing companies with clear strategies and strong execution, accompanied by the growth of excellent leading enterprises, do not pay too much attention to short-term macro-level data fluctuations, and high-frequency trading due to short-term negative impacts.
Column Editor-in-Chief: Gu Wanquan Text Editor: Dong Siyun Title Image Source: Figure Worm Picture Editor: Su Wei
Source: Author: CCTV Finance