Overview: the growth rate of furniture industry has slowed down and the cost has increased since 2024. The year-on-year growth rate of retail sales of social furniture continued to decline during the year and fell year-on-year in December. The completed area of the real estate side has turned negative year-on-year, the newly started area has continued to decline year-on-year, and the real estate data remains depressed in the short term. The cost of raw materials continued to rise in the fourth quarter, in which the sector required for customized furniture increased relatively greatly, and customized furniture faced high cost pressure in the short term.
Performance summary: the profitability of furniture enterprises is generally under pressure, and the credit impairment risk of customized furniture has been released. According to the situation of 19 furniture companies that disclosed the performance forecast or performance express, 12 companies had the performance pre reduction and the first loss, of which 7 said they were affected by the provision of credit impairment. In addition, the profit growth rate of the pre increased companies was generally lower than the income. According to the performance forecast and express report, we believe that the furniture industry presents three characteristics: 1) the gross profit margin is under pressure due to the rise in the prices of raw materials and sea freight; 2) Credit impairment increased significantly year-on-year, mainly reflected in the customized furniture sector; 3) The growth rate of head companies is better than that of the industry, showing a centralized trend. Customized furniture and upholstered furniture show different characteristics, which we will analyze separately below.
Customized furniture: the cost pressure is obvious, and the risk of credit impairment is basically released. In the fourth quarter, due to the slowdown of real estate and the impact of high base, the revenue growth of key companies slowed down, but still maintained a growth rate exceeding the industry, and the concentration continued to improve. The profit margin was affected by raw materials and decreased. Some companies have the risk of credit impairment, which has been basically released in the fourth quarter. We believe that the growth of bulk business in the fourth quarter still maintained a slowdown trend, and retail business is the focus of development. We continue to be optimistic about the leading enterprises with channels all over the country, good supply chain management and control ability and brand influence, and able to establish advantages at the retail end.
Upholstered furniture: the industry maintained a high boom, and the decline in sea freight eased the pressure on profit margins. From the pre increase of major companies, we speculate that the revenue side of the company also maintains high-speed growth. Domestic sales business is the main driving force for revenue growth. Each company maintains a high growth rate and continuously improves the level of concentration. On the profit side, the small increase of raw material cost, the decline of shipping price, strong consumption attribute and excellent price raising ability are the main reasons for the profit growth. We continue to be optimistic about leading enterprises in the software industry, and continue to improve their concentration by relying on brands and channels.
Investment suggestion: from the perspective of 21q4, in the low growth stage of the furniture industry, the leading enterprises can continue to improve the concentration, and the recovery of the real estate end in the future can bring flexibility to the performance of furniture listed enterprises. Since the end of 2021, a series of positive real estate policies have been issued, and the recovery trend is expected to continue, thus promoting the recovery of real estate data. We are optimistic about the soft furniture industry with stronger consumer products and higher prosperity. Leading companies are expected to continue to achieve revenue growth through channel expansion and category expansion; In the short term, the improvement of store efficiency of new stores, the decline of sea freight and raw material prices and the decline of tariffs are expected to bring profit elasticity. It is recommended that Jason Furniture (Hangzhou) Co.Ltd(603816) and Minhua holdings. In terms of customized furniture, the credit impairment risk of some enterprises has been released. We believe that retail business is the main focus of the industry. We continue to be optimistic about the leading enterprises with channels all over the country and good supply chain control ability and brand influence. We recommend Oppein Home Group Inc(603833) , Suofeiya Home Collection Co.Ltd(002572) .
Risk tip: the epidemic control time exceeded expectations, the decline of real estate exceeded expectations, and the economic growth slowed down.
