Since the IPO reopened, with the wave of a collective listing of household enterprises, Yazhen Furniture Co., Ltd. (hereinafter referred to as “Ya Zhen Furnitureâ€) also launched a sprint to the capital market.
However, the reporter found that about 70% of the fundraising amount of Yazhen Furniture is about 70% of the funds is planned for the expansion of the marketing network, while the company has a high proportion of inventory. In the case of the company, the company still plans to use nearly 100 million yuan for fund-raising for furniture expansion. The expansion of the company is of great concern to the industry.
The proportion of inventory is high
On April 19, 2014, Yazhen Furniture issued a prospectus, which stated that it plans to issue 54.749 million shares. It is estimated that the raised funds will be 602 million yuan, of which 416 million yuan will be used for the expansion of the marketing network and 98.35 million yuan for the expansion of sofas and furniture. The remaining funds are used for the technical transformation of the furniture production line and the construction of the information system.
According to the information disclosed in the prospectus, nearly 100 million yuan of the funds raised by the company are planned to be expanded to the sofa and furniture. After the production, the annual production capacity will increase by more than 40,000 pieces.
However, the reporter also found that Yazhen Furniture's inventory ratio has remained high. The first “inventory risk†of Yazhen Furniture's prospectus “financial risk†suggests that at the end of 2011, the end of 2012 and the end of 2013, the company's net inventories were 116,268,200 yuan, 154,061,700 yuan and 152.1082 million yuan, accounting for total assets. The ratios were 35.26%, 35.07% and 30.82%, respectively, and the net inventory remained at a high level.
On the one hand, there is a large inventory backlog, while on the other hand, it seeks the expansion of production capacity, which is especially surprising in the industry.
Some experts believe that the company will use nearly 100 million yuan to expand production capacity and then use more than 400 million yuan to digest production capacity when the net inventory level is maintained at a high level. This may run counter to the needs of consumers and the market. The market risks that exist in it cannot be ignored.
In the interview with the reporter of China Enterprise News, Ji Xiongfei, secretary of the Board of Directors of Yazhen Furniture, said, “At present, many furniture companies like Qumei are preparing to go public. The expansion plans of these furniture companies are even bigger than ours. Our production capacity The expansion plan is based on market conditions."
Furniture industry
Facing the risk of market downturn
With the regulation of real estate in the past two years, the downturn in the real estate market has been transmitted to the home sector. According to data from the China Building Decoration Association, after a period of more than 10 years of rapid growth, the turning point in the home industry has already appeared in 2012, and the trend has continued to deteriorate in the past two years.
Recently, the reporter went to the Jimei Furniture City in Fengtai District, Beijing for investigation. A Guangdong brand furniture agent told the "China Enterprise News" reporter that the furniture industry has been in a bad mood for the past two years. "At present, our monthly sales are different from the target by several hundred thousand yuan. The sales volume is declining year by year. Signs of warming up." The agent told reporters.
Manager Zhang of Guangdong Yinghua Furniture Factory also told reporters that since 2012, the company's sales have shrunk quite sharply, and sales have fallen by almost 30%. "The overall situation of the furniture industry is not good, and the prospects are not optimistic."
In addition, the rising price of raw materials has a great impact on the furniture industry.
Four years ago, the whole group engaged in the furniture industry moved their furniture factory from Jiaxing, Zhejiang to their hometown in Sichuan, which was mainly difficult to bear the rising cost of raw materials and labor. "In the past two years, the labor costs in the mainland have also been rising, coupled with rising raw materials and industry downturns, the company's profits have continued to decline." The group told reporters.
According to the prospectus of Yazhen Furniture, the raw materials for the production of furniture products of Yazhen Furniture are wood, board and leather. The cost of raw materials accounts for more than 50% of the production cost. The change of raw material price has a direct impact on the change of production cost of the company. If the prices and expenses of major raw materials continue to rise sharply in the future, and the company's sales expansion and strategic adjustments cannot be followed up in time, the company will face greater cost and cost pressures, which will affect the company's profitability.
Therefore, some experts in the industry pointed out that the large-scale expansion plan of Yazhen Furniture will go against the trend and will face the risk of continuous downturn in the entire industry market.
In fact, the prospectus of Yazhen Furniture also suggests that with the risk of falling real estate demand brought about by real estate regulation and control, as the downstream industry closely related to the real estate industry, the demand for furniture market is inevitably affected. If the country continues to strengthen macroeconomic regulation and control in the future, resulting in a long-term downturn in the real estate market, the company's orders may shrink, which will adversely affect the company.
"Electric shock" is not optimistic
The reporter found that Yazhen Furniture's 416 million yuan marketing network expansion project, construction investment of 297 million yuan, mainly used for offline purchase, leasing, decoration and operation of offline stores and online e-commerce platform research and development and electricity Marketing promotion of the business platform.
Yazhen Furniture believes that the establishment and improvement of online and offline marketing network system is an inevitable measure to achieve the company's development goals and sustainable development. However, for the "electric shock" of Yazhen Furniture, the industry is not particularly optimistic. The main reason is that furniture e-commerce faces many bottlenecks in China.
2011 is the first year of home e-commerce, and many furniture companies have “touched the netâ€. However, a few years later, this e-commerce heat wave is slowly fading, and some powerful furniture companies have built an e-commerce platform, but in the end it is difficult to sustain.
In October 2013, it was said that the three-billion-do home furnishing of the home electronics business from the launch to the end, just a little more than three months, which gave the furniture companies intending to open up the online platform.
According to industry insiders, the construction of e-commerce systems and department building should be operated in accordance with the rules of e-commerce, which is a great challenge for traditional furniture companies. Not only that, furniture e-commerce still has the problem of lack of professional team, large investment and small income in the early stage. Consumers generally only choose some furniture in a supplementary way. The low unit price directly causes the loss of e-commerce.
On July 4th, the China Securities Regulatory Commission issued the “Basic Information on the Suspension Review and Termination of Review of Enterprise Initial Informationâ€. What makes the home industry quite embarrassing is that the home business is completely annihilated. 14 home furnishing enterprises including Yongyi Furniture, Qumei Furniture, Yazhen Furniture, Gujia Home, and Hengkang Home were listed in the “Stop Review†list.
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