In the past two years, the development of home furnishing companies has become increasingly polarized. Some companies have been eliminated from the market one after another, and the companies that have successfully listed have embarked on the road of internationalization, and the eyes of mergers and acquisitions continue to target overseas companies. Corporate mergers and acquisitions are a double-edged sword. With good application, the enterprise develops extremely fast and the competitiveness of the enterprise is enhanced. On the contrary, there are many problems and pitfalls. In the recently released performance bulletin of listed companies, we can feel a few happy and a few worried.
Among the large home furnishing companies, the most dazzling one is Diou Home Furnishing (002798). The company announced on February 14 that its total operating income in 2018 was 4.308 billion yuan, an increase of 707.31% from the same period last year; the net profit attributable to shareholders of listed companies was 382 million yuan, an increase of 601.46% from the same period last year. The significant increase in operating results was due to the completion of the acquisition of 99.99% equity in Oshino by Diou Home Furnishing in January 2018. Since then, the main business of Diou Home Furnishing has expanded from acrylic sanitary ware to sanitary ware and architectural ceramics.
In sharp contrast to this, a previous overseas merger in the industry known as the Snake Elephant Elephant caused the parties concerned to fall into a trough. It was Qumei Household.
In September last year, Qumei Household completed the acquisition of 90.5% of Ekornes ASA's shares, which may cost 3.677 billion yuan, and huge financial risks will follow. At present, Qumei Household's liabilities have approached 5 billion, and the asset-liability ratio has reached 72%.
Since its listing in April 2015, Qumei Home's shares have reached a new low. The current stock price is around 7 yuan, which is close to the issue price of more than 6 yuan. The overall market value is only 3.5 billion yuan, which is not as good as 10% of the market value of Oupai's 39.1 billion One. While the stock price was sluggish, Qumei Home once again released bad news. On the evening of January 30, Qumei Home announced that its 2018 annual results are expected to suffer losses, and the net profit attributable to shareholders of listed companies is between 83 million yuan and 56 million yuan. This is the first annual expected performance loss of Qumei Home since its listing in 2015. Its net profit attributable to shareholders of the listed company in the same period in 2017 was RMB 245,565,600.
The reasons for the loss announced by Qumei Household are listed below.
(1) The company completed the merger and acquisition of Norway's Ekornes ASA company in 2018, and the costs related to the merger are about 31.3 million to 33,000 million , of which:
1. The interest expense related to M & A loans is about RMB 130 million;
2. Expenses due to exchange rate are estimated to be 68-85 million yuan;
3. M & A financial consultant fees, lawyer fees, evaluation fees and Other intermediary fees of about 80 million;
4. Asset evaluation value-added amortization expenses are about 35 million.
(2) In 2018, the company's direct business was affected by the accelerated store opening and decoration suspension, and its net profit fell :
1. The company's Beijing market saw a net increase in the number of direct sales stores in 2018. As of the end of 2018, the number of direct sales stores in Beijing reached 21, resulting in a rapid increase in operating costs such as store rent and staff salaries;
2. The company cooperated with JD.com to build Qumei JD.com Living Pavilion, which led to the closure of the Beijing North 5th Ring Road flagship store during the decoration period for 135 days and a significant decrease in revenue.
It can be clearly seen that the huge expenditures caused by this cross-border M & A have dragged the already prosperous Qumei home into a loss-making quagmire. For a while, the media faintly sang.
Qumei Home has paid a huge price, but for Zhao Ruihai, Chairman of Qumei Home, there are good reasons for acquiring this overseas company. Zhao Ruihai believes that, first of all, Norwegian Ekornes ASA has a stable profit, and its gross profit margin is much higher than the industry average. The second point is that intelligent manufacturing has been achieved and has truly reached the level of Industry 4.0. The third point is super channel capacity. Norway Ekornes ASA has more than 4,000 sales outlets worldwide. Zhao Ruihai once said that Qu Mei has a serious lack of export channels, and even if it takes ten years to complete, it will be difficult to complete.
Judging from the above points of view, if the process technology of Qumei Home Furnishing and Ekornes ASA can learn from each other and integrate the sales channels between the two, then from a long-term perspective, Qumei Home Furnishing has broader development prospects and future performance. The possibility of a great improvement.
We have mentioned before that the concentration of home furnishing companies will become stronger and stronger, and the bigger the company, the more advantages it has for development. However, the current domestic home furnishing industry is faced with not only small challenges, not only the channel is in a surplus state, but also the macroeconomic downward pressure. Therefore, for the current listed home furnishing companies, not aggressively means almost to wait and die, and to embark on an international road is almost an inevitable choice.
Suzhou Furniture Net informed that on the road of enterprise mergers and acquisitions, there are countless failures, but there are also very good cases. For example, in the year of the 2008 economic crisis, Zhengwei Group bought a series of depreciated European and American copper processing companies on a bargaining day, and then suddenly became an international copper mining giant. And when the economic crisis broke out in Hong Kong in 1985, Li Ka-shing boldly made a bargain and bought a lot of real estate and land at one time. These companies also suffered a lot of criticism when they made these moves, but in fact proved that they were the winners.
The current Qumei Home Furnishing has opened up sales channels in overseas markets and combined the advantages of Chinese and foreign companies. Although it is currently in trouble, this company's future has reason to be worth looking forward to!
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