Basic conclusion
Summary of 21-22q1 home furnishing sector: the revenue / profit of the overall home furnishing sector in 21 years was + 32.9% / + 25.6% respectively, and the revenue / profit of 1q in 22 years was + 13.1% / – 7.5% respectively. The growth of revenue was slowed down quarter by quarter due to the superimposed epidemic of bulk business, and the overall profit of the sector was under pressure due to the superimposed price rise of raw materials and intensified channel competition. However, the leading company, HENGQIANG, has a year-on-year revenue of + 38.7% / + 44.8% and a year-on-year net profit of + 29.7% / + 32.7% respectively. In addition, in 1q of 22 years, under the influence of the epidemic and the downturn of real estate prosperity, the revenue of europay / Gu family is still + 25.6% / + 20.1% year-on-year respectively. The leading toughness is prominent, and the intensification of differentiation will still be the main theme of 22 years.
Customized home furnishings: the sector has four characteristics: 1) the growth of the revenue side of the sector has gradually slowed down since 2q in 21 years, and the growth rate of 1q in 22 years has dropped to 10.1%. While europay shows its leading strength, the growth of 1q is higher than expected, and the pattern of “one super and many strong” in the industry is becoming more and more obvious; 2) The “top companies” are still actively catching up, with bright spots. After two years of adjustment, Suofeiya Home Collection Co.Ltd(002572) after two years of adjustment, 1q retail revenue increased by 20% in 22 years, reaching the fastest growth rate in recent two years, and the adjustment effect is beginning to appear; 3) The contribution of bulk channels to the growth of enterprises as a whole continues to decline, and the difference in the ability of retail channels is the key to the intensification of differentiation. The driving force for the growth of leading enterprises has gradually shifted to the improvement of store efficiency. 4) On the profit side, the gross profit margin of the sector has been gradually under pressure since 3q in 21 years due to the rise of raw material prices. The cost pressure of 1q in 22 years has not been significantly relieved, but the profit can still be gradually repaired after that.
Software Home: the sector has three main characteristics: 1) the share of all leading enterprises has increased smoothly in 21 years, Jason Furniture (Hangzhou) Co.Ltd(603816) / Healthcare Co.Ltd(603313) / Xlinmen Furniture Co.Ltd(603008) revenue is + 44.8% / 24.6% / 38.2% year-on-year respectively, but the growth driving force is different. When the overall growth of 1q in 22 years slows down, the leading growth is more resilient. In the past 21 years, gujia’s physical store has only increased by 97 stores, and gradually began to focus on the optimization and improvement of store efficiency. It has driven its own growth through multi category + multi brand, with strong growth sustainability. The 1q revenue in 22 years is still + 20.1% year-on-year. While Xlinmen Furniture Co.Ltd(603008) / Healthcare Co.Ltd(603313) due to its large blank area, the growth driving force is still mainly from channel development, with a net increase of 590 / 511 in 21 years respectively; 2) The differentiation of profit stability is obvious. Although each company has been affected by the price rise of raw materials in 21 years, Healthcare Co.Ltd(603313) due to its large proportion of export OEM, the fluctuation is more obvious due to the influence of external factors. The net profit deducted from non parent company in 21 years is – 260 million (350 million in 20 years); 3) The profit of 1q sector began to repair with the decline of raw material prices in 22 years. 1q Jason Furniture (Hangzhou) Co.Ltd(603816) / Healthcare Co.Ltd(603313) / Xlinmen Furniture Co.Ltd(603008) month on month + 1.0 / + 0.5 / + 1.0pc, and the profit of the whole year can be repaired.
Fundamental outlook of the home furnishing sector: looking forward to the fundamentals of the home furnishing industry in the future, in the short term, the impact of the epidemic on the annual demand is limited. In the long term, under the extremely pessimistic expectation, we calculate that under the different renewal cycles of 10 / 15 / 20 years, it is still expected to meet the decoration demand of 2690 / 2070 / 17.4 million units in 2025, and the stock demand is still broad. And we believe that under the background of the industry gradually entering the era of big home, the test of the comprehensive ability of enterprises will be significantly improved. The industry is expected to usher in the period of accelerated improvement of concentration, and the increase of share will support the continuous growth of leading enterprises. In terms of customized home, with the trend of traffic fragmentation and front-end closure becoming more and more obvious, the strategic positioning of large home and the expansion of decoration channels will be the key to the medium and long-term victory of enterprises, and the leading enterprises have taken the lead. In terms of software home furnishing, leading enterprises have built three-dimensional advantages of “brand + channel + manufacturing + capacity layout” in domestic and foreign sales, and the pattern optimization has continued.
Investment advice
The valuation of the sector has fallen to the lowest level in history, and the layout opportunities of head enterprises are highlighted. We are optimistic about [ Oppein Home Group Inc(603833) ], [ Zbom Home Collection Co.Ltd(603801) ] with outstanding retail capacity and [ Suofeiya Home Collection Co.Ltd(002572) ] with positive change effect. We are optimistic about [ Jason Furniture (Hangzhou) Co.Ltd(603816) ] with the leading layout of large home furnishings and [Minhua holding] with the advantage of integrated production.
Risk tips
Real estate sales are lower than expected; The price of raw materials has risen sharply; Trade frictions intensified.
