Research on annual report of decoration and home decoration industry in 2021

The following is the Research on annual report of decoration and home decoration industry in 2021 recommended by recordtrend.com. And this article belongs to the classification: Life data.

The decoration and home decoration industry has a long service path and many links. The cost structure is mainly composed of labor cost, site rent, marketing expenses, various commissions and other parts. It has been in a state of unbalanced cost structure and low profitability for a long time.

In the past two years, the life of home decoration companies has become more difficult. The frequent thunderstorms in the upstream real estate market have made the accounts receivable of many decoration companies that rely on bulk business keep rising, resulting in a sharp increase in bad debts, which has gradually brought down the cash flow and seriously affected their daily operations. On the other hand, the rising prices of raw materials have pushed up costs, further depressing the already low profitability of the decoration industry.

Recently, Leju finance conducted a multi-dimensional analysis on the 2021 annual reports of seven listed decoration and home decoration enterprises. In previous years, the gross profit margin of the industry was mostly maintained between 35% and 45%. However, in 2021, only one company has a gross profit rate of more than 30%, and three companies have a gross profit rate of less than 10%, of which the lowest gross profit rate is less than 1%.

In contrast, the net interest rate is more “dismal”, which has remained between 2%-5% in previous years. However, by 2021, only 2 of the 7 listed home decoration companies have positive net interest rates, and the rest are negative. Under this situation, even though three of the seven home decoration companies have a revenue of more than 10 billion yuan in 2021, the highest net profit is less than 100 million yuan.

The lack of profitability is a big test for the cash flow of home decoration companies. By the end of 2021, the monetary capital of five of the seven companies had decreased year-on-year, with a maximum decline of more than 50%.

If we look at the value of the asset liability ratio, the indicator of home decoration companies is also at a high level in each segment of the large home furnishing industry. Among them, only one company’s asset liability ratio is lower than 60%, and Guangtian, with the highest debt ratio, has approached 98%.

More than 70% of losses, Guangtian’s net interest rate at the bottom

Among the 7 listed enterprises of home decoration, 3 enterprises’ revenue exceeded 10 billion yuan, but 3 enterprises’ revenue fell year-on-year, and another enterprise’s revenue grew by less than 2%, almost standing still.

Although the revenue of Golden Mantis fell by nearly 20% year-on-year, it is still the one with the largest revenue and the only one with more than 25billion yuan. In 2021, Jianghe group achieved a year-on-year increase of 15.18%, ranking the second in the growth rate, and it was also the first time that its revenue exceeded 20billion yuan.

In 2021, the revenue growth of Dongyirisheng was eye-catching, the largest among the seven enterprises, with a year-on-year increase of nearly 25% to 4.292 billion yuan, reaching its highest revenue in the past five years. Mingdiao’s revenue almost stood still, with a year-on-year increase of 1.99% to 884million yuan. It is the smallest of the seven enterprises and the only one with a revenue of less than 1billion yuan.

In terms of net profit indicators, in 2021, 7 listed companies of home decoration performed poorly, including 5 companies with net losses and 5 companies with net profits falling year-on-year. Among them, Guangtian’s net profits fell by nearly 70% to a net loss of 5.588 billion yuan, making it the one with the largest loss and the largest decline.

The loss of Golden Mantis also reached 4.95 billion yuan, a year-on-year decrease of 19.5%. For the huge losses of the two companies, they both said in their annual reports that they were mainly affected by Evergrande, the largest customer.

Jintanglang made provision for impairment of Evergrande’s receivables totaling 7.73 billion yuan; Guangtian group has made a total provision for impairment of various assets of about 5.337 billion yuan for its partners including Evergrande.

Quanzhu also attributed the loss of RMB 1.293 billion in 2021 to Evergrande. However, even excluding the impairment of RMB 877million accrued by Quanzhu to Evergrande, the net profit attributable to shareholders of the listed company was RMB -416million, still a loss.

Mingdiao and Dongyi Risheng both achieved positive net profit growth, but the growth rate was only single digits. Among them, Dongyirisheng increased by 1.82% year-on-year to make a profit of 78million yuan, which is also the company with the highest net profit.

In terms of profit indicators of main business, except that Quanzhu Co., Ltd. did not disclose relevant data, the ranking of main business revenue of the other six enterprises was basically consistent with the ranking of total revenue, but the proportion of main business revenue and gross profit margin were quite different.

Among them, Jianghe group, which accounts for the highest proportion of main business revenue, reached 95.41%, followed by jintanglang and Dongyirisheng, accounting for 88.59% and 87.04% respectively. The three companies rely heavily on their main businesses.

Guangtian accounted for the smallest proportion of main business revenue, only 47.28%, less than half. However, according to Leju finance, its main business of decoration construction is divided into assembly and non assembly, accounting for 47.28% and 45.41% respectively. When the two are added together, Guangtian’s total decoration construction business accounts for more than 92%.

In terms of the gross profit margin of its main business, Dongyirisheng, the highest, achieved a gross profit margin of 31.51% in its main business of engineering construction. The gross profit margin of mingdiao’s main business decoration construction reached 34.05%, which was the highest among the six enterprises, but it was also the smallest in terms of its main business revenue, only 477million yuan. In addition, it was disclosed that the sales revenue of its building materials and wood products reached RMB 339 million, accounting for 38.37% of the total revenue.

Gross profit margin difference exceeded 66 times, and roe fell by more than 70%

In the gross profit index, the amount of 7 companies varies greatly.

Among them, the gross profit margin of Dongyirisheng is 34.99%, ranking first. The gross profit margin of Quanzhu Co., Ltd., which ranked last, was only 0.53% in 2021, with a year-on-year drop of 96.01%, and the gross profit margin difference between the two companies exceeded 66 times.

The gross profit margin of Yasha and Guangtian is less than 10%, 7.22% and 6.43% respectively. In 2021, the average gross profit margin of the seven enterprises is 16%, which is far from the 35% – 45% gross profit margin range of home decoration companies in previous years.

Analyze the share price potential of 7 companies. In terms of the total market value, only the Golden Mantis has a market value of more than 10 billion yuan, 13.998 billion yuan. However, according to the analysis of its share price trend, the share price of Golden Mantis fell by 42% in the past year, and the total market value evaporated by more than 10 billion yuan.

Mingdiao shares, with the lowest total market value, is only 1.313 billion yuan, a difference of more than 10 times compared with Golden Mantis. It can be seen that the scale gap between home decoration companies is still large.

In terms of Roe (return on net assets) indicators, the seven home decoration enterprises also “howled”. Only two companies, Dongyirisheng and mingdiao Co., Ltd., achieved positive growth, with single digit growth rates of 8.28% and 4.47% respectively.

The roe of the other five enterprises was negative, of which the roe of Guangtian, the largest, plummeted 1248.92 to -161.87% year-on-year. According to the data, the roe of Guangtian group has declined for four consecutive years, with a sharp increase year by year, namely -49.6%, 59.14%, -676.92% and -1248.92%.

The roe of Quanzhu also plummeted, down 1376.01% year-on-year to -76.05% in 2020.

Guangtian has a capital gap of over 2billion yuan, and jintanglang’s receivables exceed 10billion yuan

The debt ratio index of home decoration enterprises is also at a high level in the whole large household industry.

Among the seven companies in this comparison, the debt ratio of the top six companies in debt ratio exceeded 66%. The debt ratio of Guangtian reached 96.71%. According to the data, the debt ratios of Guangtian group from 2017 to 2021 were 56.64%, 65.98%, 71.13%, 72.83% and 96.71% respectively, rising all the way in the past five years.

In addition, in 2021, the current liabilities of Guangtian group also reached 14.56 billion yuan, which is under great pressure compared with its annual revenue of 8.036 billion yuan.

Mingdiao has the lowest debt ratio, which is 58.98%, and its current liabilities are also the lowest, which is 924million yuan. At the same time, mingdiao’s revenue scale is also the smallest among the seven enterprises.

The debt ratios of Jianghe group and Dongyirisheng are close, 70.4% and 70.1% respectively. However, in 2021, the total assets of Jianghe group will reach 28.179 billion yuan, while the total assets of Dongyirisheng will only reach 3.711 billion yuan in the same period. There is a large gap between the two.

The short-term cash debt ratio can better reflect the short-term capital status of the enterprise. In the annual report of 2021, six enterprises disclosed their monetary capital and short-term borrowings.

Dongyirisheng has the highest cash short debt ratio, reaching 15.93. By the end of 2021, its monetary capital was 892million yuan. Although it was less than 1billion yuan, its short-term loan was only 56million yuan, which was the least short-term loan among the six enterprises.

Golden Mantis had the most abundant monetary capital, reaching 7.49 billion yuan, a year-on-year increase of 17.53%. Its short-term borrowings also remained at a relatively low level of 882million yuan, with a cash short-term debt ratio of 8.49, ranking second. Although the Golden Mantis suffered serious losses due to the constant wave, the enterprise capital chain is still relatively abundant in the short term.

The only short-term cash debt ratio less than 1 is Guangtian group, whose monetary capital is 1.054 billion yuan, ranking fourth. However, its short-term loan reaches 3.153 billion yuan, which is the highest among the six enterprises and more than three times more than the monetary capital. There is a large short-term capital gap.

The cash short debt ratio of Quanzhu is 1.24, and the capital flow is also tight.

Affected by the thunderstorm of real estate enterprises, a number of listed decoration and home decoration enterprises have high accounts receivable. Among them, the accounts receivable of Golden Mantis and Jianghe group, the top two, exceeded 10 billion yuan, with 12.113 billion yuan and 10.67 billion yuan respectively.

Mingdiao Co., Ltd. has maintained a good status in terms of accounts receivable. Not only is the accounts receivable the least among the seven enterprises, only 3.5 million yuan, but also its accounts receivable turnover rate ranks first, 391.42 times, which is more than 32 times higher than that of Dongyirisheng, which ranks second, with strong asset liquidity.

Jintanglang, Quanzhu Co., Ltd., Guangtian group and Jianghe group all have a turnover rate of accounts receivable of 1.5%-2%. In the face of their hundreds of millions or even billions of accounts receivable, there is a great pressure on collection.

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