Big sales hit! Net profit fell by nearly 50 million in 2022

In the post-epidemic era, more and more consumers are flocking to the outdoors, driving a rapid increase in sales of related products . The outdoor leisure furniture industry has ushered in rapid development , and more and more companies going overseas are beginning to seize overseas market share.

Zhejiang Yayi Technology has targeted the niche market of outdoor leisure furniture - fire pots and gas stoves. It has actively expanded its overseas business by relying on its own advantages and has become a leader in this field .

However, in 2022, Yayi Technology's performance suddenly declined sharply.

Net profit fell sharply in 2022, and Yayi Technology revealed three major reasons!

Recently, Yayi Technology released its 2022 performance forecast report.

The report shows that from January 1, 2022 to December 31, 2022, Yayi Technology's net profit attributable to shareholders of listed companies is expected to be 43 million yuan to 53 million yuan, compared with 93.8031 million yuan in the same period of 2021 , a decrease of 43.50% to 54.16%.

Net profit after deducting non-recurring gains and losses was RMB 38 million to RMB 48 million , a decrease of 46.82% - 57.90% compared with RMB 90.2605 million in the same period of 2021 .

It is surprising that Yayi Technology 's performance in 2022 has declined sharply.

Yayi Technology said that there are three main reasons for the decline in the company's performance in 2022. First, with the adjustment of overseas epidemic control policies, especially in the US market, local consumers have spent less time at home and online shopping demand has declined. The second reason is that the adjustment of overseas economic policies has a certain impact on the economy. The third reason is that with the recovery of shipping logistics, the goods piled up at the storage terminal have entered the customer's warehouse, and the customer 's inventory has increased.

In fact, in the first half of 2022, Yayi Technology 's revenue showed a significant decline.

According to the semi-annual report data released by Yayi Technology , Yayi Technology's revenue fell by 56% to 100 million yuan in the first half of 2022. Net profit fell by nearly 30% to 35.47 million .

In terms of sales model, the company's export and domestic sales revenues both declined, by 55% and 99% respectively.

However, in the first quarter of 2022 , the company's net profit was still growing.

Yayi Technology was founded in 2005. Its main business is the development, production and sales of outdoor leisure furniture such as outdoor fire pots and gas stoves. The company 's main markets are the United States, Canada and other countries, and its products are mainly sold on platforms such as Walmart and Home Depot. With years of experience accumulation, Yayi Technology's sales have increased year by year, and it was successfully listed on the Shenzhen Stock Exchange at the end of 2021 .

However, in the past two years, with the changes in the market environment , the company's performance growth began to slow down , and its net profit in 2022 plummeted by nearly 50%.

The reason is that Yayi Technology is highly dependent on overseas markets, especially the US market.

In the past two years , Yayi Technology's sales in the United States accounted for more than 90%. Currently, Yayi Technology's main customers are large retailers such as Wal-Mart and Home Depot. The cooperation has lasted for more than ten years, and the sales market is relatively stable . However, this model is too dependent on the US market. The company's sales performance is very vulnerable to trade frictions and exchange rate fluctuations , which is not conducive to the company's long-term development . Moreover , Yayi Technology has long relied on Wal-Mart and Home Depot as two major customers. Once the company 's products are replaced by competitors , it will have a huge impact on the company 's operations .

On the other hand, Yayi Technology’s product R&D capabilities are insufficient and there is a gap in branding .

At present, there are still many doubts in the industry about Yayi 's R&D capabilities . Yayi's cooperation model is mainly the ODM model, which is to design independently according to customer needs, that is, OEM sales, and has not yet established its own trademark brand. However, the transition from OEM to own brand is also the final destination of many such companies.

Moreover, the products currently sold by Yayi Technology are slightly unpopular. However, as the outdoor leisure furniture and supplies market gradually moves towards personalization and fashion, the updating and iteration of outdoor leisure furniture and supplies is accelerating. Only by continuously improving the quality and speeding up product research and development can we maintain a stable foundation in the market.

With strong momentum, outdoor giants are focusing on IPO!

Although Yayi Technology's net profit declined in 2022, overall, the heat of the outdoor products market in the United States continues to grow, consumer demand remains at a high momentum, and many outdoor products that rushed for IPO last year sold well.

On September 19, 2022 , Zhejiang Zhengte Co., Ltd., a big seller of Amazon outdoor furniture, was officially listed and traded on the Shenzhen Stock Exchange.

As a veteran seller in the outdoor furniture industry, Zhejiang Zhengte’s predecessor, “Zhengte Co., Ltd. ”, was established in September 1996, and at that time it mainly dealt in parasols and wooden products.

At present, Zhejiang Zhengte mainly focuses on two product lines: sunshade products and outdoor leisure furniture. Sunshade products mainly include awnings and parasols; outdoor leisure furniture mainly includes pet houses, outdoor furniture and drying utensils.

In the first three quarters of 2022 , Zhejiang Zhengte 's revenue reached 1.109 billion yuan. Its prospectus also disclosed that from 2019 to the first half of 2021, Zhejiang Zhengte's revenue was 675 million yuan, 910 million yuan and 673 million yuan respectively; the total profit in the same period was 48.1392 million yuan, 94.3576 million yuan and 65.28 million yuan respectively.

Another outdoor products giant, Xiamen Duyuan Outdoor Products Co., Ltd. (hereinafter referred to as "Duyuan Outdoor"), is striving to be listed on the GEM. Its GEM IPO application was accepted on June 8, 2022. On December 26, 2022, Duyuan Outdoor updated its prospectus (draft) and responded to the second round of review inquiries.

Xiamen Duyuan Outdoor's product business includes RV and yacht supporting products and water leisure products, and its products are sold to economically developed regions such as the United States, Australia, Canada and Europe.

In 2019-2021 and January-June 2022 , Duyuan Outdoor 's operating income was RMB 119 million, RMB 193 million, RMB 352 million and RMB 180 million, respectively, of which the main overseas business income was RMB 93.9189 million, RMB 158 million, RMB 287 million and RMB 154 million, respectively.

Overseas sales accounted for 79.58%, 82.84%, 82.37% and 86.39% of the main business income in the current period respectively , and the proportion of overseas sales income was very high.

The U.S. outdoor products market continues to be hot

With the development of economy and the improvement of people's living standards, various forms of outdoor leisure life experiences are also favored by people.

It is worth noting that the United States is one of the main consumption areas of outdoor leisure products , and American consumers have a stable and high demand for outdoor products.

Data shows that 68% of American consumers are currently using outdoor spaces for recreational activities .

The Strategic Insights team found that Generation Z is the youngest consumer group in the outdoor products market. Their preferred product when shopping online is outdoor furniture, of which 47% prefer to buy single chairs, 40% buy group chairs, and 43% buy storage tables.

Millennials’ top choices when shopping online are dining chairs, outdoor lighting and rugs, while Generation X and baby boomers tend to buy patio umbrellas.

For sellers, they can seize this opportunity and plan related products based on understanding the needs of overseas consumers .

Yayi Technology

Outdoor Products