One of Asia's largest furniture manufacturers - Shun Cheng Holdings Co., Ltd. (Guo Shanhui's Taisheng Furniture listed on the Hong Kong Stock Exchange with "Shuncheng Holdings", hereinafter referred to as Shuncheng Holdings) has touched the attention of the furniture industry. .
Recently, Shuncheng Holdings announced that the sales volume of brand products in the first half of the year increased despite the increase in labor costs, and the net profit margin increased from 1.7% in the same period of 2011 to 2.8%. However, the OEM business of Shuncheng Holdings was higher than that of previous years. There was a reversal in the same period.
Domestic market sales expanded
For Shuncheng Holdings, the industry may be somewhat strange, but when it comes to Taisheng Furniture, Dongguan furniture companies are very familiar.
At the end of 1991, Guo Shanhui set up a factory in Dalingshan, Dongguan, and established Taisheng Furniture Manufacturing Co., Ltd. At the end of 2005, Taisheng Group was listed on the Hong Kong Main Board in the name of Shuncheng Holdings.
Since the beginning of this year, due to the impact of domestic real estate regulation and the global economic downturn, the situation of the entire domestic furniture industry is grim. What is the trend of Shuncheng Holding Market as the industry leader?
Recently, Shuncheng Holdings announced the 2012 mid-term announcement. According to the announcement, although the United States and the United Kingdom have no obvious signs of economic recovery, the company's branded product sales still increase. At the same time, the gross profit margin of Shuncheng Holdings in the first half of this year increased from 24.8% in the same period of 2011 to 26.7%, and the net profit margin increased from 1.7% in the same period of 2011 to 2.8%.
This stems from the brand strategy of Shuncheng Holdings. According to Shuncheng Holdings, the brand business has expanded as the company launched new projects and launched new divisions in the US and successfully expanded sales in mainland China.
It is understood that Shuncheng Holdings has ten international home furnishing brands, among which the main brands sold in the domestic market are Huanmei Home, Aitewu and I Shang sofa.
Yu Xida, the brand director of Taisheng Group, said in an interview with the reporter at the 28th International Famous Furniture (Dongguan) Exhibition that Taisheng Furniture has started the domestic market. The main target market is the second-class market, and the price of 80% of the product portfolio is two. The city is the main consideration, and the product line will continue to dive into the mainland market.
OEM again appears backwards
However, compared to the brand business, Shuncheng Holdings said that its OEM business has regressed again compared with the same period of the previous year.
According to the announcement, Shuncheng Holdingsâ€™ net sales for the first half of the year were US$205.4 million, a decrease of US$1.3 million from US$206.7 million in the same period last year. According to the analysis, this is due to the downturn in the US and UK markets, and the turnover was hit by the decline in sales of medium-priced products, resulting in a decrease in net sales.
On the other hand, rising labor and raw materials are also challenges for OEMs. It is understood that the total operating expenses of Shuncheng Holdings in the first half of this year increased from US$50 million in the same period in 2011 to US$50.3 million. The increase in expenses was mainly due to the payment of high factory severance payments. In terms of capital expenditure, it is mainly used to renovate plants and equipment in Mainland China and to install IT equipment in the United States.
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