Net profit in the third quarter surged by 170%! East China made a lot of money from the big sales

Affected by inflation and the turbulent global economic situation, many cross-border sellers are having a hard time. However, some leading sellers are growing against the trend and continue to lead the industry.

Ousheng Electric's third-quarter net profit soared 170.16%

Recently, the cross-border giant Oushen Electric handed in its third quarter report card, with impressive performance.

Data shows that Oushen Electric 's operating income in the third quarter of 2022 reached 353 million yuan, down only 6.4% from the same period last year . However , the net profit attributable to shareholders of the listed company reached 50.57 million yuan , a surge of 170.16% compared with the third quarter of 2021 .

Overall, Oushen Electric 's performance shows a good development trend .

In the first three quarters, Oushen Electric's operating income reached 1.033 billion yuan, and the net profit attributable to shareholders of the listed company was 134 million yuan, a year-on-year increase of 34.93%. The net cash flow generated by operating activities was 109 million yuan, a year-on-year increase of 1.80%.

In 2021, Ousheng Electric's operating income was 1.315 billion yuan, a year-on-year increase of 32.61%, and the net profit attributable to shareholders of the listed company was 116 million yuan, a year-on-year decrease of 15.41%.

Founded in 2009, Oushen Electric was initially established as a limited company in Hong Kong. Currently, it is headquartered in Jiangsu Province and is one of the leading sellers with relatively strong comprehensive strength in East China . The company's main business includes the research and development, production and sales of air power equipment and cleaning equipment. Small air compressors and wet and dry vacuum cleaners are the company's "ace products".

At present, the company's two flagship products are divided into household and commercial, including more than 100 small air compressors for household use and more than 50 commercial models; more than 150 wet and dry vacuum cleaners for household use and more than 20 commercial models. The main application areas include automobile maintenance, building decoration, indoor and outdoor cleaning of homes, and cleaning of cars.

The export products of Osun Electric are mainly sold to overseas markets such as North America and Europe, among which the United States is an important export destination . It is worth mentioning that the overseas sales revenue of Osun Electric accounts for more than 99%.

In view of the differences between domestic and overseas markets, Oushen Electric has adopted targeted and diversified sales models such as ODM model, brand licensing model, OEM model, and OBM model based on market characteristics and promotion effects.

Through diversified sales models, OSUN Electric has established stable cooperative relationships with many world-renowned retailers, including Amazon, Walmart, Lowe's, Home Depot, Costco, Canadian Tire Corporation, etc.

On Amazon and Walmart platforms, Oushen Electric sells its own brand Stealth as well as OEM products authorized by brands such as Stealth.

It is worth mentioning that the licensing model of this brand is different. Osun Electric signs a trademark use rights agreement with the brand licensor. Osun Electric leads the development and design of products , selects customers to sell within the specified region within the agreed period of the agreement, and pays the trademark license fee. In other words, Osun Electric is still responsible for the company's products and operations.

On the basis of maintaining long-term stability in overseas sales channels, Oushen Electric also has a wide range of overseas customers.

Currently, Europe and the United States are the key markets for Oushen Electric . The company's small air compressors and wet and dry vacuum cleaners are widely welcomed by local consumers.

On the basis of stabilizing its business in Europe and the United States, Oushen Electric is also vigorously expanding mid-to-high-end markets in Asia, Latin America, Australia and other countries. Its overseas marketing network is currently widely distributed in more than 20 countries and regions around the world, and has formed retail terminals covering the world's major small air compressor and wet and dry vacuum cleaner consumer countries and regions.

Oushen Electric's road to listing has been full of twists and turns, and it still faces multiple risk factors

On April 22 this year, Oushen Electric was successfully listed on the Shenzhen Stock Exchange's Growth Enterprise Market, issuing 45.652 million shares at an issue price of 21.33 yuan per share, raising 974 million yuan.

However, Oushen Electric's road to listing was full of twists and turns. After two suspensions in the past two years, it was finally successfully listed.

On November 23, 2020, due to the update of financial information by the issuer and the sponsor, Ousheng Electric voluntarily applied to suspend the issuance and listing review procedures; on February 22, 2021, the financial information update was completed and the listing review was resumed.

On September 30, 2021, Ousheng Electric suspended its listing review again because the financial information recorded in the IPO application documents had expired and needed to be supplemented and submitted; on December 7, 2021, the financial information was updated and the listing review was resumed.

After two financial updates, Oushen Electric was finally successfully listed on the Shenzhen Stock Exchange.

Despite the successful listing of Oushen Electric , the company still faces many uncertainties.

The United States is an important market for Oushen's products. Currently, Oushen Electric is facing the risks of declining gross profit margins and rising costs in this market.

Long-term home isolation during the epidemic has driven a rapid increase in market demand for household tool products such as small air compressors and wet and dry vacuum cleaners . However, as the United States relaxes its epidemic control policies and more and more people return to normal work and social life, the demand for such products is also decreasing.

On the other hand, OSUN Electric's customer base is relatively concentrated on major mainstream e-commerce platforms in the United States, including Amazon, Walmart, Lowe's, The Home Depot and Costco . According to the financial report data released by OSUN Electric , the top five sales channels account for a very high proportion of revenue, reaching more than 70%. If the demand of the main customer base decreases in the future, it will directly affect OSUN's business scale and operating performance.

Therefore, Ousheng Electric must explore the next potential market and new customer base to reduce the adverse impact of customer concentration on the company's business. At present, Ousheng Electric's revenue is too dependent on major overseas customers, which may affect the company's own bargaining power and financial data.

At present, Oushen Electric has realized the relevant market risks and started to save costs in the production process and build factories in Southeast Asia.

On June 1, Oushen Electric issued an announcement stating that the company reviewed and approved the "Proposal to establish Oushen Investment (Hong Kong) Co., Ltd. in Hong Kong and to establish an electromechanical equipment production project of Oushen Technology (Malaysia) Co., Ltd. in Malaysia through it."

It is understood that the project plans to invest US$50 million, equivalent to RMB 340 million, for the self-construction of the electromechanical equipment production project of Oushen Technology (Malaysia) Co., Ltd. The construction period is 6 months, and it is planned to start in July 2022 and is expected to be completed by the end of December 2022 .

As we all know, Southeast Asia has certain advantages in labor costs and manufacturing costs. Oushen Electric's transfer of production and manufacturing links to Southeast Asia will be beneficial to the company's future development.

The market is changing rapidly. Oushen Electric must improve its ability to explore new markets and its ability to withstand market risks in order to promote better development of the company and maintain its leading edge in the future.

Hot sale in East China

Third quarter financial report