Yihua Wood Industry blames 3 billion gambling on the prospect of pan-home exports to domestic sales

"Either embrace the Internet or die." Under the "Internet +" rumor, Guangdong Yihua Wood Industry Co., Ltd. (hereinafter referred to as "Yihua Wood") paid more than 3 billion M&A costs for building a pan-home Internet ecosystem. yuan.

Recently, Yihua Wood released a major asset purchase report (draft), detailing the plan to acquire a 100% stake in Singapore-listed Huada Li with a total investment of 1.83 billion yuan. This has also become the largest equity acquisition in the closed loop of Yihua Wood's “Y+ Ecosystem”.

The "China Business News" reporter found that since the launch of the pan-home strategy in 2014, Yihua Wood has initiated at least 9 equity investment mergers and acquisitions in more than a year, involving more than 3 billion yuan. According to Liu Zhanchao, general manager of Yihua Wood Industry, Yihua Wood has successively made a number of acquisitions in the past one or two years, which is to build a “Y+ ecosystem” to realize the traditional furniture brand manufacturer to the platform. Home service provider transformation.

Behind the gambling pan-homes reflects the urgent need for Yihua Wood to accelerate the cultivation of the domestic market. According to the data, as of September 2015, the proportion of domestic and foreign sales of Yihua Wood products was only 3:7. Due to the sluggish export of traditional furniture industry, how to quickly realize “export to domestic sales” and increase the domestic market share is becoming a company. Difficulties and pain points of strategic transformation.

Hao gambling pan home

Driven by the strategy of building a “pan-home” strategy, Yihua Wood has once again made a big move: it has invested more than 1.8 billion yuan in cash to acquire all the shares of Singapore-listed company Huadali.

According to the acquisition plan, Yihua Wood has acquired all the shares of Singapore-listed company Huadali through cash payment through the Singapore Company Law through the Singapore Company Law through the acquisition of the ideal home of a wholly-owned subsidiary in Hong Kong. Huadali is delisted from the Singapore Stock Exchange and becomes a wholly-owned subsidiary of Ideal Home.

The transaction price of the transaction was S$399,783,218 (approximately RMB1,830 million). The company plans to fund the project according to self-raised funds and bank loans of 1:1, specifically for the company's own funds to invest 915 million yuan, through bank loans 915 million yuan. Among them, the listed company's own funds are mainly the balance of the company's monetary funds at the end of the period. At present, there is no guarantee or guarantee for the book currency funds, which leads to limited liquidity.

Yihua Wood's plan shows that Huadaoli's revenue in January, 2014 and 2015 from January to September was 534 million US dollars, 501 million US dollars and 339 million US dollars respectively, and the net profit was only US$758,000 and US$5.306 million respectively. And $-23.62 million. In the terms of the acquisition, Huadali promised three financial cycles from July 1, 2016 to June 30, 2019, with net profit after tax of not less than US$25 million, US$27.5 million and US$30.25 million, respectively.

Some analysts said that Huada Li, whose main business is a sofa, has made a high performance promise in the past three years of declining business and unprofitable profits, that is, the net profit in the next three years will change from a loss of more than 2 million US dollars. It is more difficult to achieve profit after tax of more than 30 million US dollars.

In fact, the large-scale acquisition of Huadali's equity is only a key part of Yihua Wood's strategic system of building a “pan-home”. The reporter found that since 2014, Yihua Wood has successively carried out 9 equity acquisitions involving more than 3 billion yuan, including investment of 238 million yuan to hold Haier home and US$84.02 million to participate in Melaleuca.

Behind the “crazy” investment, Yihua Wood is planning a home ecosystem, the “Y+ Ecosystem”. At present, in this "Internet + Pan-Home" system, including Merlot, Ai Fu Wo, You live, Haier home, multi-dimensional Shangshu, Wo Wei home design, financial No. 1 shop and other Internet platforms.

The so-called "Y+ Ecosystem", according to the official of Yihua Wood Industry, will integrate the "four-way" superior resources, connect the "three major" platforms, and realize the open ecosystem of "human and service" effective connection, forming online and offline. Five major entrances for tooling, finance, and logistics.

However, as a “latecomer” to the domestic market, it is clear that there is no online channel to increase the market share. Some industry insiders who do not want to be named analyzed that in the current competitive situation of the domestic furniture industry, the construction of brand image and own channels has become more and more important. For the home industry, in the current uncertain future of O2O, attention, follow-up and not advance is the "degree" that enterprises should grasp.

Can "export to domestic sales" break?

Yihua Wood is the largest exporter of solid wood furniture in China. It is headquartered in Shantou City, Guangdong Province. Its main products include solid wood furniture, solid wood and laminate flooring. The products are mainly exported to the United States, Australia, Europe and other regions. The United States is the largest overseas. The market has more than 2,000 dealerships.

The reporter found that Yihua Wood, which has long used overseas markets as its main sales strategy, experienced a period of serious imbalance in sales at home and abroad. The highest sales in overseas markets accounted for 99% of the company's total sales.

However, in recent years, due to the increase in wages, electricity bills, other raw material prices in China, the reduction in export tax rebates and the impact of anti-dumping duties, the export competitiveness of Chinese furniture companies has weakened, most notably in the major exporting countries. The market share is slowly decreasing.

Especially in 2014, the company’s export market suffered an unexpected event, which was affected by the company’s largest export site in 29 ports on the west coast of the United States, which had been hit by a half-year strike since July 2014. Furniture shipments were severely blocked, eventually leading to annual exports. The growth rate is only 0.58%. In this context, Yihua Wood has started “export to domestic sales” and hopes to tap the potential of the domestic market to offset the impact of export obstruction on the company's performance.

In the initial domestic market, Yihua Wood chose a large-scale merger and acquisition method to rapidly expand its online business, and at the same time, it continued to open an experience store online.

In terms of channel construction, Yihua Wood relies on the domestic marketing model of “Home Experience Center + Dealer”, with the experience hall as the core, and the distributors in the surrounding areas are radiated by points. Currently, the company has been in Shantou, Guangzhou, Beijing, Nanjing, Shanghai, Wuhan, Chengdu, Urumqi, Dalian, Shenzhen, Zhengzhou, Tianjin and Shenyang have opened 13 large-scale home experience centers, with more than 300 dealers in more than 200 large and medium-sized cities across the country.

The data shows that after more than two years of development, the proportion of domestic and foreign sales of Yihua Wood products has also increased from 12%:88% in 2012 to 70%:30% in September 2015.

“Focus on online layout, the implantation of Internet genes in the early stage of domestic sales expansion is the biggest highlight of the company's domestic sales business.” China Merchants Securities analysis believes that since 2014, we believe that the company's strategic direction has gradually changed fundamentally, from the past export-oriented , low-cost center, gradual change for domestic sales, industrial chain layout. After two years of accumulation and a series of mergers and acquisitions cooperation, Yihua Wood Company has changed from the original simple solid wood export company to the domestic market positioning of the Internet home company.

Judging from the various actions of Yihua Wood's close integration of domestic online and offline integrated marketing channels, it is hoped to create its own "League of Legends" through mergers and acquisitions, and build a whole industry from manufacturing, sales, logistics and finance. Chain, the cornering of the domestic sales business. The above industry insiders said. However, as a traditional furniture enterprise, whether it can keep up with the transformation rhythm of the Internet in terms of experience, technology, management talents and ideas, and further expand the market share of the domestic market remains to be seen.

For more questions, the reporter sent a letter to the relevant person in charge of the Yihua Wood Brand Department, and no further reply has been received until the press release.

Gaming Chair

Gaming Chair,Gaming Office Chair,Swivel Gaming Chair,Luxury Gaming Chairs

Taihe Fangyuan Muye Co.,Ltd , https://www.fyofficefurniture.com