In October 2021, a video from digital blogger he Xuexue once made a fire in the sales of Loctek Ergonomic Technology Corp(300729) ( Loctek Ergonomic Technology Corp(300729) , SZ) lifting tables in China. From the traditional B2B OEM business to the independent brand of healthy home and the overseas warehouse business of cross-border e-commerce, Loctek Ergonomic Technology Corp(300729) on the road of “going to sea”, is constantly seeking transformation.
In 2020, affected by the epidemic, the demand for home office in overseas markets surged, and Loctek Ergonomic Technology Corp(300729) ushered in explosive growth. The revenue increased by 98.42% year-on-year, and the net profit attributable to the parent increased by 244.70% year-on-year. On the evening of April 12, Loctek Ergonomic Technology Corp(300729) disclosed the annual report of 2021. The revenue increased by 47.95% year-on-year, while the growth rate of net profit attributable to the parent company decreased by 14.93% year-on-year compared with 2020. However, compared with 2019 before the epidemic, the net profit still maintained a high growth rate.
On April 14, Loctek Ergonomic Technology Corp(300729) chairman Xiang Lehong told the daily economic news that the slight correction of the profitability of Listed Companies in 2021 was mainly due to the continuous rise of raw material prices and high consolidation in 2021, which led to the rise of product manufacturing costs, the appreciation of RMB reduced the company’s gross profit margin by about 3 points, and the sharp rise of sea freight prices pushed up the cost of cross-border e-commerce shipping. In view of the continuous spread of covid-19 epidemic in the world, Xiang Lehong believes that the digital trend of retail online is irreversible. In terms of the layout of cross-border e-commerce industrial chain, the construction of overseas warehouses will be invested next.
chairman Xiang Lehong: increasing income and reducing profit due to rising costs
Loctek Ergonomic Technology Corp(300729) main business focuses on healthy smart office and smart home products with linear drive as the core. According to the data of the annual report, in 2021, Loctek Ergonomic Technology Corp(300729) revenue totaled 2.871 billion yuan, a year-on-year increase of 47.95%, and the net profit attributable to shareholders of listed companies was 185 million yuan, a year-on-year decrease of 14.93%p align=”center” style=”text-align:center;”> Loctek Ergonomic Technology Corp(300729) 2021 main financial indicators, picture source: screenshot of annual report
However, from a longer time line, the performance of Loctek Ergonomic Technology Corp(300729) has not seen explosive growth until 2020 since its listing in 2017. In 2020, the net profit attributable to the parent company increased by 244.70% year-on-year, and the net profit excluding non attributable to the parent company increased by 277.30% year-on-year.
In 2020, the epidemic stimulated the surge of overseas home office consumption, driving the growth of Loctek Ergonomic Technology Corp(300729) lifting tables and other products. Why did the situation of increasing income and reducing interest appear in 2021?
Loctek Ergonomic Technology Corp(300729) chairman Xiang Lehong told the daily economic news on April 14 that the increase of income and the decrease of profit were mainly affected by three factors. First, the price of raw materials continued to rise in 2021, which led to the increase of product manufacturing cost. After the company reduced the cost, optimized and moderately adjusted the product price, the gross profit margin of the final product decreased by about 5 points. Second, the RMB appreciated in 2021, and the average exchange rate of the US dollar against the RMB decreased from 6.90 in 2020 to 6.45, reducing the gross profit margin of the company by about 3 points. Third, in 2021, the sales expense was 690 million, accounting for 25.57% of the operating revenue (excluding overseas warehouses), and in 2020, the sales expense was 469 million, accounting for 24.33% of the operating revenue (excluding overseas warehouses). The sales rate increased year-on-year, mainly due to the increase in the cost of the company’s cross-border e-commerce caused by the sharp rise in sea freight prices in 2021.
From the perspective of revenue structure, ergonomic workstation is the main revenue source of Loctek Ergonomic Technology Corp(300729) , accounting for about 75.34%. Ergonomic large screen stents accounted for 7.95%. From the market point of view, Loctek Ergonomic Technology Corp(300729) 9072% of the revenue comes from overseas regions, while domestic regions account for only 9.28%.
Developed from traditional B2B foreign trade enterprises, up to now, Loctek Ergonomic Technology Corp(300729) vigorously develops independent brands and arranges cross-border e-commerce business. The annual report data shows that during the reporting period, the sales revenue of the company’s independent brand products accounted for 64.66% of the main business revenue (excluding overseas warehouse revenue).
epidemic impact, but logistics is basically not affected
Loctek Ergonomic Technology Corp(300729) promotes linear driven household products, and focuses on the incremental market of smart home and healthy office Loctek Ergonomic Technology Corp(300729) said that the sub-health status represented by cervical vertebrae, lumbar vertebrae and cardiovascular and cerebrovascular diseases currently plagues the people who use computers for a long time and work for a long time. People pay more and more attention to their own office health, and the demand for linear driven ergonomic products, especially ergonomic linear driven intelligent office lifting table, intelligent lifting workstation, intelligent little secretary workstation, intelligent computer support and other products, continues to be strong, The market continues to mature.
According to statista’s prediction, from 2019 to 2025, the scale of the world office and home furnishing industry is expected to grow from 104.9 billion US dollars to 132.3 billion US dollars. The two hundred billion dollar markets of office home and smart home are showing a pattern of competition, promoting the wider application of related products and services in the field of office and home.
when Loctek Ergonomic Technology Corp(300729) independent brands go to sea, they put more weight on the channels of cross-border e-commerce. According to the data disclosed in the annual report, during the reporting period, the company’s cross-border e-commerce sales revenue increased by 38.76% year-on-year, including the company’s independent station sales increased by 89.19% year-on-year. In the future, the company will further continue to invest in and develop the cross-border e-commerce model, maintain the company’s industry leading position under this business model and ensure the effective digestion of new production capacity.
In the past two years, listed companies have also raised funds through issuing convertible bonds, fixed increase and other ways for multiple raised investment projects. In terms of capacity release, Xiang Lehong introduced that the raised investment projects of convertible bonds have fully reached production capacity by the end of 2021. By the end of 2021, the production capacity of linear drive products will reach 150000 sets / month, and 1.3 million sets of linear drive products will be sold in 2021, with a capacity utilization rate of about 80%. In 2022, the company’s fixed value-added projects were steadily promoted, in which 150000 sets of technical transformation in Jiangshan plant were put into operation every year, and the overall linear drive product capacity of Binhai plant was increased to 200000 sets / month through product structure adjustment.
In order to improve the layout of cross-border e-commerce supply chain, overseas warehouse is also a business that Loctek Ergonomic Technology Corp(300729) is vigorously promoting in recent years. The annual report shows that Loctek Ergonomic Technology Corp(300729) has built 15 overseas warehouses around the world, with a total storage construction area of 260000 square meters and nearly 1000 truck and container berths.
With regard to the business plan for 2022, the listed company mentioned that in 2022, the company will accelerate the iteration and reserve of technology upgrading by grasping the development trend of healthy office and smart home consumer products market in combination with the macro environment; On the other hand, keep up with the rapid growth of cross-border e-commerce industry, continue to promote the innovative service complex project of public overseas warehouse, develop new platforms and new business forms, and realize long-term sustainable development. Focus on product upgrading, channel upgrading, brand building, information construction, talent training and international market layout to achieve the company’s strategic objectives.
As for the recent multi-point outbreak in China, whether the production base and logistics transportation of Loctek Ergonomic Technology Corp(300729) are blocked, Xiang Lehong responded: “Lege has always been proactive in the layout of the supply chain. In 2016, it invested and built a factory in Vietnam. The core components are made in China and the finished products are exported to Vietnam. From the perspective of logistics supply chain support, although the epidemic situation in China is more widespread and the company is backed by Beilun port, it has basically no impact under the closed-loop management of port transportation in China, and the shipping space in Vietnam is also guaranteed. The sea freight rate has dropped slightly, but the overall situation continues to be high and consolidated, There is great pressure on export-oriented enterprises. To this end, we actively negotiate long-term negotiation prices with shipping companies to reduce the impact of shipping prices on the operation of enterprises. “
