Research on the real estate industry: Monthly observation of the post real estate cycle in January (issue 7) - increasing income without increasing profit, and customized home furnishing enterprises meet the "storm tide"

Key investment points:

Tracking of driving factors: the transaction was dismal in January, and the policy signal on the demand side has been shown

In January 2022, the sales area of commercial housing in 40 cities monitored by Yihan think tank was 17.723 million square meters, a year-on-year decrease of 38.6% and a month on month decrease of 27.7%. Overall, the downward trend of the property market is not over. From the survey of Spring Festival sales, the sales performance of some typical real estate enterprises decreased by about 60%, and the market was cold. On the whole, the poor market sales on the one hand is the reason for purchasing power, and more importantly, the market's expectation of the future property market is still uncertain, so we need to pay attention to the policy signals on the market demand side. As some banks in some cities such as Chongqing have reduced the down payment ratio of the first house loan to 20%, the policy signal on the demand side may have gradually appeared.

As for the credit problem of real estate enterprises concerned by the market, with the arrival of the debt repayment peak in the first quarter, the credit crisis of real estate enterprises is still burning. January Risesun Real Estate Development Co.Ltd(002146) and Yuzhou real estate realized the smooth extension of US dollar bonds with the support of investors. "Guaranteed building" and "guaranteed subject" may become the priority options of enterprises. In the game, creditors and suppliers are in a weak position, and relevant interests may be sacrificed.

Industry prosperity tracking: the furniture manufacturing industry has increased revenue without increasing profits, and customized home furnishing enterprises have ushered in a "Thunderstorm"

From the enterprise side, the monthly operating revenue rose to 88.2 billion yuan in December, with a year-on-year growth rate of 12.01%, and the business ended successfully in 2021. However, in terms of profit, the total profit of a single month in December decreased significantly by 39.67% year-on-year. The profit decline of furniture enterprises is more obvious, and increasing income does not increase profit.

In terms of specific listed enterprises, some enterprises have successively disclosed the performance forecast of the annual report in 2021. The differentiation of different types of enterprises is more obvious, showing a situation of "ice and fire". Overall, the performance of customized home furnishing enterprises that have disclosed the performance forecast is generally poor in 2021, dragged down by the decline of real estate. Except that the net profit of the leader Oppein Home Group Inc(603833) can still maintain a relatively rapid growth rate, other companies that disclose their performance generally have a sharp decline in performance or loss. The risk events of real estate enterprises have been exposed since the second half of 2021 and have not ended yet. We believe that it may be too early to judge the end of the credit impairment process of customized home enterprises, and there may still be impairment pressure in the future. In addition to the pressure of credit impairment, the thunder of a large number of private real estate enterprises also means that the choice of customized home customers has narrowed to a certain extent, and the gross profit margin of bulk business is expected to continue to decline. After this round of thunderstorm, customized home furnishing enterprises will be more cautious in developing bulk businesses, and the growth rate of operating revenue of bulk businesses is expected to decline. Relatively speaking, enterprises that rely more on retail growth, such as Oppein Home Group Inc(603833) , may have relative benefits in this round of crisis. The industry reshuffle will accelerate and the industry concentration will rise.

In contrast, due to the decline of the hard-working and simple living habits of the new generation of consumer groups and the continuation of the trend of consumption upgrading, the previous high-speed growth trend of sweeping Siasun Robot&Automation Co.Ltd(300024) 2022 is still continued. The sweeper Siasun Robot&Automation Co.Ltd(300024) leader Ecovacs Robotics Co.Ltd(603486) also released the performance forecast of the annual report of 2021 on January 21. Thanks to the rising sales price and sales volume of new products, the net profit attributable to the parent company in 2021 was 2 ~ 2.05 billion yuan, with a year-on-year increase of 211.9% ~ 219.7%, and the performance was eye-catching. In the long run, the overall penetration rate of sweeping Siasun Robot&Automation Co.Ltd(300024) is still at a low level, the brands and channels of leading enterprises still need to be built, and the growth of sweeping Siasun Robot&Automation Co.Ltd(300024) in 2022 is still expected.

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