Revenue exceeded 4 billion in 9 months! Another Amazon seller is about to go public

After the epidemic, the scale of the home furnishing market in many regions around the world has shown exponential growth, especially smart home continues to be popular overseas. A large number of Chinese brands have joined this popular track, and the development momentum continues to be positive.

The listing progress bar +1, leading to the explosion of European and American products overseas!

Recently, the top-selling Zhiou Home Furnishing submitted its registration and its shares are about to start trading.

Zhiou Home Furnishing Technology Co., Ltd. (hereinafter referred to as Zhiou Home Furnishing) was established in 2010 and is headquartered in Zhengzhou. It is mainly engaged in the research and development, design and sales of its own-brand home furnishing products. It is one of the largest cross-border e-commerce companies in Henan and a well-known home furnishing seller on Amazon.

As the largest B2B and B2C cross-border e-commerce export company in Henan Province, Zhiou Home mainly deals in furniture, home furnishings, pets, gardens and other categories, and owns three independent brands: SONGMICS, VASAGLE and FEANDREA. Its products are mainly sold through Amazon, eBay, Cdiscount, ManoMano and its own website. Online platforms are the company's main sales channels. In addition to third-party platforms, Zhiou Home has also expanded its independent website. Zhiou Home mainly sells its products in countries and regions such as Europe, North America and Japan.

According to the latest data, in the first three quarters of 2022, Zhiou Home Furnishing expects to achieve operating income of 4.1 billion yuan to 4.3 billion yuan, a decrease of 6.03% to 10.4% compared with the same period last year. The net profit attributable to the parent company's owners is expected to be 150 million yuan to 170 million yuan, a decrease of 13.60% to 23.77% compared with the same period in 2021.

According to statistics, Zhiou Home Furnishing 's total revenue from January to June 2022 reached 2.809 billion yuan, a decrease of 12.22% compared with the same period last year. The net profit attributable to the parent company's owners was 110 million yuan, a year-on-year decrease of 21.4%.

In its prospectus, Zhiou pointed out that its operating income in the first half of 2022 declined compared with the same period in 2021, which was related to the high base of operating performance boosted by the peak of overseas epidemic consumption in the first half of 2021. The operating performance level after the peak of epidemic consumption declined in the first half of 2022 still maintained a significant growth trend compared with the first half of 2019 and the first half of 2020.

With the decline in shipping prices and the recovery of market demand, although Zhiou Home Furnishing's profit level in the first half of 2022 has declined year-on-year, the decline has gradually narrowed significantly, and the future development prospects are still very bright.

It is worth mentioning that the three major categories of products of Zhiou Home Furnishing have made a significant contribution to the sales revenue in the first half of this year. The sales revenue of the three major series of products, namely furniture series, home furnishing series and garden series, accounted for more than 98% in Europe and the United States, but the combined share in Japan and other regions was basically around 1%.

From 2019 to 2021, the company achieved operating income of RMB 2.326 billion, RMB 3.97 billion and RMB 5.967 billion, respectively, and realized net profit attributable to shareholders of the parent company of RMB 108 million, RMB 380 million and RMB 240 million, respectively.

From 2019 to 2021, the proportion of sales revenue achieved by the company's online channels to its main business revenue was 86.99%, 82.93% and 80.81% respectively.

Among all online platform sales, Amazon accounts for the highest proportion. From 2019 to 2021, the sales revenue achieved by Zhiou Home Furnishing through Amazon's B2C platform accounted for 81.13%, 71.8% and 67.87% of its main business revenue respectively.

Zhiou's three independent brands, SONGMICS, VASAGLE and FEANDREA, are responsible for the research and development, design and sales of home products, furniture and pet home products respectively. This is an important reason for it to become a popular home brand among consumers in the European and American markets. The sales performance of its various product series has achieved steady growth in the past three years.

Furniture series: divided into living furniture and office furniture, with representative products including coffee tables, TV cabinets, hallway racks, office desks, etc. The revenue in 2019-2021 was RMB 1.007 billion, RMB 1.969 billion, and RMB 3.092 billion respectively.

Home series: divided into storage, appliances and decoration categories, with representative products including storage cabinets, shoe boxes, coat racks, dressing mirrors, etc. The revenue in 2019-2021 was RMB 891 million, RMB 1.363 billion and RMB 1.877 billion respectively.

Courtyard series: divided into courtyard home, leisure and sports categories, representative products include courtyard rattan tables and chairs, outdoor hammocks, swings, etc. The revenue in 2019-2021 was 239 million yuan, 386 million yuan and 633 million yuan respectively.

Pet series: divided into pet furniture and pet home furnishings, representative products include cat climbing frames, pet mats, dog cages, etc.

The revenues in 2019-2021 were RMB 161 million, RMB 235 million and RMB 342 million respectively.

Judging from the revenue of Zhiou Home Furnishing’s several major product series in the past three years, annual sales have been steadily increasing.

In recent years, Zhiou Home Furnishing has developed steadily in overseas markets. In order to have better market competitiveness, Zhiou has also been continuously increasing its investment in product research and development.

From 2019 to 2021, Zhiou Home Furnishing's R&D expenses were RMB 10.4295 million, RMB 12.7693 million and RMB 24.5104 million, respectively, with an annual compound growth rate of 53.30%.

From 2019 to the first half of 2022, the proportion of Zhiou's independently developed products increased from 17.34% to 28.21%.

It is understood that Zhiou's product research and development is mainly divided into independent research and development, cooperative development and product selection models. The company explores the product construction "mushroom model" theory, which divides the product development process into three stages: the first stage is the basic level, building a product component platform; the second stage is the combination molding stage; finally, when the combined product is placed in the use scenario, a different product matrix is ​​constructed, ultimately achieving the advantages of shortening the product development cycle, raw material procurement and production scale.

At the same time, Zhiouhui has formed a multi-series product matrix including small household items, large indoor furniture and courtyard outdoor furniture of different styles and materials based on the functions of the products in different usage scenarios such as bedrooms, kitchens, living rooms, foyers, courtyards and outdoors.

Home furnishing sales usher in a new wave of listings

In recent years, many companies specializing in home furnishings have developed steadily, with revenue and profits growing significantly, and many home furnishing companies in the industry have begun to rush to go public.

On September 30 this year , Zhiou Home Furnishing submitted an A-share IPO registration application to the China Securities Regulatory Commission, aiming to be listed on the Growth Enterprise Market . This time, Zhiou Home Furnishing plans to issue no more than 40.15 million new shares and raise 1.486 billion yuan, which will be mainly used for the construction of R&D and design center projects, the expansion of warehousing and logistics systems, the construction of Zhengzhou headquarters operation and management center projects, and to supplement working capital.

In addition to Zhiou Home Furnishing, many home furnishing companies are also rushing for IPO.

Smart home companies Kaadas and Leelin Technology launched IPOs, Oreebo and Meiji Optoelectronics restarted IPOs, and Dessmann has completed its Series D financing.

This year, several home furnishing companies have successfully listed.

On June 23, De Rucci Co., Ltd. was successfully listed. The issue price was 38.93 yuan per share, the issue quantity was 40.01 million shares, and the funds raised were 1.558 billion yuan.

On August 12, Qushui Technology was listed on the ChiNext for the first time. The sponsor is CICC. The IPO plans to raise 805 million yuan.

On October 26, Arrow Home Furnishings successfully listed on the Shenzhen Stock Exchange's main board, issuing a total of 96.6095 million new shares, with an IPO price of 12.68 yuan per share, raising a total of 1.225 billion yuan.

In recent years, the smart home market has ushered in rapid growth. It is estimated that by 2026, the shipment volume of smart homes may increase from 895 million in 2021 to 1.44 billion in 2026. Such a huge market size will inevitably attract more powerful sellers to enter the market.

However, the market is changing rapidly. In the post-epidemic era, if home furnishing companies want to achieve long-term development, going public is indeed a very effective way to occupy the top position and raise funds for expansion. However, a successful listing does not mean that it can be "once and for all". The limitations of the company's own development process are also worthy of attention. At the same time, it is also very necessary to face consumers directly and continuously innovate products based on consumer needs.

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