(Original title: Ingenuity Home Furnishing’s first annual report after listing: gross profit margin dropped by 87%, main business income comes from the United States)
Financial Associated Press, April 22 (Reporter Chen Ye)Ingenuity Home Furnishing (301061.SZ) officially released its first annual report after its listing.
The 2021 financial report shows that the sales revenue of Ingenuity Home Furnishings last year was 1.925 billion yuan, a year-on-year increase of 46.04%; the net profit was 298 million yuan, a year-on-year increase of 45.15%.
In terms of revenue, the company’s first core product, the smart electric sofa, had a sales revenue of 1.342 billion yuan, accounting for 70.2% of its main business revenue, a year-on-year increase of 73.74%; the multi-seat sofa sales revenue increased by 138.46% year-on-year.
Despite the double increase in profit, the gross profit margin of Ingenuity Home Furnishing’s main business in 2021 will decrease by 6.78 percentage points year-on-year to 28.41%. Among them, the gross profit margins of smart electric sofas, smart electric beds, accessories, and other businesses were 28.64%, 31.75%, 22.2%, and 59.75%, down 7.73%, 1.46%, 9.56%, and 0.72% year-on-year, respectively.
According to the information released by Ingenuity Home Furnishing’s financial report, factors such as increased costs, rising freight costs and exchange losses caused by production capacity transfer have lowered the gross profit margin to a certain extent.
Ingenuity Home Furnishings stated in its 2021 financial report that the company’s products exported to the United States were subject to a 10% tariff in September 2018 and a 25% tariff in May 2019. In order to avoid high tariffs, maintain its own competitiveness, and increase the production capacity required for development, the company went to Binh Duong Province, Vietnam in June 2019 to set up a wholly-owned Sun Company Ingenuity Vietnam.
The company further stated that various anti-dumping policies are currently introduced in different countries, and low product prices are no longer the magic weapon for exports; at the same time, sea freight, various expenses in the United States have skyrocketed, and procurement costs and terminal prices have risen, which will also affect demand.
In addition, after the third quarter of last year, due to the impact of the epidemic, the shortage of labor in the United States has led to a large bottleneck in the supply chain. Various expenses (port fees, truck fees, labor fees, container detention fees, etc.) in the United States have risen sharply, and customer procurement costs have risen sharply. .
Ingenuity Home Furnishing also disclosed in its financial report that the company will receive a total of US$293 million in foreign exchange from sales of goods and provision of labor services in 2021, resulting in an exchange loss of 16.09 million yuan, which affects the company’s profitability to a certain extent.
It is worth noting that Ingenuity Home Furnishing has an unprecedented high inventory of finished products in the fourth quarter of last year.
“Continued high sea freight to the United States, shortage of containers, high inflation rate in the United States and the ‘labor shortage’ after the epidemic in Vietnam led to the value of the company’s finished products reaching 67.2233 million yuan at the end of the fourth quarter, a year-on-year increase of 68.38%. Affected by this, the fourth quarter Sales decreased by 8.5415 million yuan year-on-year, a decrease of nearly 2%.” Ingenuity Home Furnishing added.
In terms of business layout, the company’s main customers and markets are overseas, and its overseas revenue will account for 97% of its total revenue in 2021. Among them, the company’s sales revenue in the US market in 2021 will be 1.68 billion yuan, accounting for 87.65% of its main business revenue, a year-on-year increase of 43.43%. It developed 13 new clients last year, 10 of which are headquartered in the US, including COSTCO (Costco) and Miskelly’s Furniture.
Compared with overseas revenue, Ingenuity Home’s main business revenue in the domestic market accounted for only 1.63%, and sales were mainly concentrated on smart furniture accessories.
In this regard, the company stated that it has not fully opened up in the domestic market, has no marketable products, lacks sales channels, and has limited brand influence.
Since last year, Ingenuity Home Furnishing intends to increase its influence in the domestic market, and plans to launch its own brand in China in 2022. However, the current domestic software home furnishing industry is quite competitive, and it is not easy for Ingenuity Home Furnishing to successfully develop the domestic market.