Home textiles are one of the important terminal consumer products in my country’s textile industry. In recent years, with the continuous development of economy and society, the characteristics of residents’ consumption upgrade have become more obvious. Home textile products that meet the needs of beautiful decoration, practical functions, fashion, health and comfort, green ecology, etc. are gradually loved and recognized by consumers. Some key home textile companies have also entered the capital market. At present, there are 6 companies listed on the main board in my country’s home textile industry. Zhongwang Fabric (SH605003) officially landed on the Shanghai Stock Exchange in September 2020, becoming the seventh main board listed company in the home textile industry. This report organizes and analyzes the relevant data disclosed in the 2020 semi-annual reports of six listed companies except Zhongwang Fabric. Generally speaking, in the first half of 2020, faced with the impact of the COVID-19 epidemic and the complex and severe domestic and international development environment, listed home textile companies not only actively took measures to rescue companies under the difficult circumstances of weak market demand and overall decline in revenue, but also It also persisted in promoting transformation and upgrading, and made various useful attempts in switching production of anti-epidemic materials, deepening brand building, and strengthening operational management. It basically achieved stable operations and demonstrated good development resilience.
01 The operation situation is basically stable, and the performance performance is somewhat differentiated
Affected by the COVID-19 epidemic, the performance of listed home textile companies has declined compared with the same period last year, but the overall operating situation is basically stable. In the first half of 2020, listed home textile companies achieved a total operating income of 9.51 billion yuan and an operating profit of 960 million yuan, a year-on-year decrease of 3.2% and 19.3% respectively. The average gross profit margin of the six listed companies is 37.7%, the average operating profit margin is 10.1%, and the average net profit margin is 8.2%, which are significantly higher than the level of home textile companies above designated size. Among them, there are 5 companies with operating income exceeding 1 billion yuan. Mengbaihe ranks first among the 6 listed companies, with operating income reaching 2.42 billion yuan.
Table 1 Overall performance of six listed companies in the home textiles industry in the first half of 2020
Data source: Compiled based on the 2020 semi-annual reports of listed companies
Table 2 Performance of listed companies in China’s home textile industry in the first half of 2020
Data source: Compiled based on the 2020 semi-annual reports of listed companies
The performance of listed companies is somewhat differentiated. By strengthening the construction of direct sales channels and increasing the operation of e-commerce platforms, Fuanna’s operating income fell slightly by 0.4% year-on-year, but its net profit increased by 8.1% year-on-year during the same period, and its net sales profit margin reached 15.2%, which was higher among the six listed companies. level; the advantages of Mengbaihe’s production capacity and brand international layout have been revealed, and its profitability is generally good, with operating income and net profit achieving double growth of 52.9% and 2.9% respectively year-on-year. Due to the lack of terminal demand caused by the COVID-19 epidemic, market orders have been greatly affected. Luolai Life, Mengjie Co., Ltd. and Vosges Co., Ltd. have experienced obvious declines in profits, with profit declines of more than 20% in the first half of the year. From the perspective of profitability, the gross profit margins of Luolai Life, Fuanna and Mengjie Shares exceeded 40% and increased compared with the same period last year. There are 5 companies with gross profit margins of more than 30%, indicating that the overall value-added ability of listed companies is relatively stable. From the perspective of shareholder income, the basic earnings per share of Menglily and Mercury Home Textiles exceeded 0.3 yuan, and the return to shareholders was relatively high; the basic earnings per share of Fuanna increased slightly by 0.01 yuan compared with the same period last year, which improved the return to shareholders.
Table 3 Operations of listed companies in my country’s home textile industry in the first half of 2020
Data source: Based on the 2020 semi-annual reports of listed companies
In the first half of 2020, the operating quality of 6 listed companies in the home textile industry has declined, and operating pressure has increased compared with the same period last year. Significantly increased. The inventory turnover rate of listed companies is between 0.6 and 1.7 times, which is lower than the same period last year, and 4 companies have an inventory turnover rate of less than 1 time, indicating that the inventory occupation level is relatively high, liquidity is insufficient, and the current market demand is weak. , consistent with the poor sales situation. The ratio of three fees for six listed companies ranges from 10% to 40%, which has improved to varying degrees compared with the same period last year. On the one hand, it is related to the use of channel construction, brand operations, and mergers and acquisitions in corporate production and operation activities. It is related to the increase in expenses. On the other hand, it is also related to the slow progress of enterprises in resuming business and market during the epidemic, which is related to the increase in rent, employee wages and related expenses. From the perspective of financial risk management and control, the asset liquidity of the six listed companies is generally normal, the current ratios are all within a reasonable range of more than 2:1, and the short-term solvency is good; the asset-liability ratios of Fuana, Mercury Home Textiles and Luolai Life are all at 25 A good level below %.
02 Strive to overcome the impact of the epidemic and continue to deepen transformation and upgrading
2020 In the first half of the year, due to the impact of the COVID-19 epidemic, the operating pressure of home textile companies increased significantly compared with previous years. Listed companies focus on leveraging their advantages in areas such as production and manufacturing, brand operations and resource coordination, in order to overcome the lack of market demand and trade environment under the impact of the epidemic.Various beneficial attempts have been made to combat the multiple adverse effects such as deterioration of economic conditions and rising comprehensive costs, which have become a new highlight for the textile industry to continue to promote transformation and upgrading under difficult circumstances, continuously extend endogenous resilience, and effectively improve the ability to resist risks.
First, actively switch production of epidemic prevention materials and coordinate resources to promote the resumption of work and production in an orderly manner. At the beginning of the epidemic, listed home textile companies quickly adjusted their production lines and business scope to produce masks, medical protective clothing and other anti-epidemic materials, making due contributions to the whole society’s joint fight against the new coronavirus epidemic. Mengjie Co., Ltd. officially put into production the medical N95 mask and protective clothing production line in late February. The 10 protective clothing production lines established by Mercury Home Textiles have reached an average daily production capacity of more than 2,000 pieces. Luolai Life Transformation added a production line for civilian masks, with an initial output of 5,000 pieces per day. Listed companies’ measures to switch production to fight the epidemic not only stabilize their own economic benefits, but also bring about good social repercussions.
The second is to actively use various new retail tools to explore new models and new business formats and seek new growth. Relying on the “Goddess’ Day” event, Luolai brand cooperates with the matrix of brand spokespersons and all-platform media KOL experts, with the consumption concept of “elegance, confidence, and understanding of life” to cater to consumers’ concerns about the quality of bedding during home isolation during the epidemic. In order to meet the needs, we created and strengthened the consumption scene of “super soft bedding” and achieved a breakthrough of 10 million live broadcast sales on that day. Fuanna actively deployed online live broadcasts and short video normalization operations, driving e-commerce platform sales to achieve a good growth of 13% in the first half of the year, and online channel revenue accounted for 42%.
The third is to accelerate the adjustment of global production capacity layout and properly deal with trade frictions. Dream Lily is an export-oriented company that produces memory foam home products. Its products are mainly sold in the European and American markets. It has production bases in Serbia, Spain, Thailand and the United States, and has retail terminals in North America, Europe, Oceania and Asia. Since September 2018, due to the implementation of additional import tariffs by the United States, the tariff rate on memory foam mattress products produced by Dream Lily domestically and exported to the United States has reached 25%. Since 2019, the United States has launched anti-dumping investigations into mattresses imported from China, Serbia, Thailand, Turkey and other countries. The foreign trade situation faced by Meng Lily is gradually deteriorating. Since this year, Dream Lily has accelerated the adjustment of its overseas production capacity layout, invested in new production capacity on the west coast of the United States and Spain, and has also put some production bases on the east coast of the United States and Thailand into production. At the same time, relying on its good R&D and design capabilities, stable product quality and large-scale production advantages, the company has accumulated stable customer and channel resources, and its operating performance increased significantly in the first half of the year. </p
