Net profit of 75 million yuan a year! Fujian outdoor giant aims to go public

Under the epidemic, people's lifestyles have undergone tremendous changes. In early May, the trend of camping quietly emerged in China, and almost all places with grass were "filled" with campers. At the same time, the search volume of camping-related terms on major platforms increased significantly, and camping-related equipment was even more popular on the entire Internet.

As the origin of camping, Europe and the United States have a great demand for outdoor equipment. Thanks to the love of outdoor sports among European and American people, many outdoor product companies exporting overseas have also achieved good results.

Net profit reaches 75 million! Xiamen Duyuan Outdoor is going public

Recently, Xiamen Duyuan Outdoor Products Co., Ltd. (hereinafter referred to as "Xiamen Duyuan Outdoor") has submitted a prospectus to the Shenzhen Stock Exchange and plans to list on the Shenzhen Stock Exchange's Growth Enterprise Market. The sponsor is Dongxing Securities Co., Ltd., which is currently in the "inquiry" status.

Different from conventional outdoor companies that sell tents and clothing, Xiamen Duyuan Outdoor focuses on two major market segments: RV and yacht supporting products and water leisure products . It mainly drives its own brand Seaflo and ODM/OEM business, and sells small and micro water pumps, portable oil drums, yacht RVs, kayaks, paddle boards and related supporting products to economically developed regions such as the United States, Australia, Canada and Europe.

According to the prospectus, the company's main business revenue products are mainly divided into two parts:

RV and yacht supporting products : small and micro water pumps, special toilets for yachts and RVs, portable oil drums, deck covers, control switches, cleaning kits, etc. At present, this category of products has become a steady and rising source of income for the company, contributing 63.36% of the company's revenue in 2021, reaching 221 million yuan. Small and micro water pumps are the most profitable products in this subcategory, with revenue of 163 million yuan in 2021, accounting for 46.82% of the total revenue.

Water sports products : kayaks (blow-molded children's boats, blow-molded single-person platform boats, etc.), paddle boards and their supporting products. This category accounted for 34.83% of the company's revenue in 2021, which was 121 million yuan. Among them, kayaks accounted for the highest proportion of total revenue in this category, which was 31.14%, reaching 109 million yuan.

At present, the company has established good cooperation with large supermarkets such as Anaconda, Super Retail Group, and Birgma; RV and yacht manufacturers such as Lippert, Rongcheng Compass, and SAIC Maxus; dealers such as Seaflo Marine and Sea River; and well-known brands such as Alfred Kärcher and KD, and has a stable source of overseas income.

At the same time, its own-brand sales have opened up in foreign markets, and its brand Seaflo has long been among the best sellers of marine water pumps on Amazon in the United States . In 2021, its own-brand business revenue accounted for 55.79% of the total revenue, reaching 194 million yuan.

Although the scale of the outdoor market has shrunk to a certain extent due to the impact of the epidemic in the past two years, it is precisely this opportunity that has made non-gathering outdoor activities such as boating, camping and fishing become the first choice for people's activities during the epidemic, and it has also allowed Duyuan Outdoor to make a small profit.

The prospectus shows that from 2019 to 2021, Xiamen Duyuan Outdoor's operating income was 191 million yuan, 193 million yuan and 352 million yuan respectively, of which the net profit attributable to the parent company was 19.1053 million yuan, 53.8274 million yuan and 75.50 million yuan respectively. It can be seen that Xiamen Duyuan Outdoor's revenue and net profit have been growing in recent years, with the average annual compound growth rate of operating income reaching 72.34%.

The surge in revenue is naturally inseparable from the support of products, and the best-selling products are small and micro water pumps, whose sales have doubled from 715,200 units in 2019 to 1,599,100 units in 2021. In addition, the sales of water leisure sports products such as kayaks have also achieved good growth, from 50,500 in 2019 to 189,200 in 2021.

Specialization, precision and innovation have become the mainstream. Can a “small and beautiful” business have lasting competitiveness?

Unlike ordinary companies, Xiamen Duyuan Outdoor has strong R&D and design capabilities. As of the date of signing of the prospectus, it has registered a total of 190 domestic and foreign patents. From 2019 to 2021, the company's R&D expenses were 4.88 million yuan, 9.23 million yuan and 13.24 million yuan respectively, and the proportion of the company's revenue has also been increasing, with an average annual compound growth rate of 64.81%.

At present, its wholly-owned subsidiary Fujian Ai has been recognized as a high-tech enterprise and has won titles such as "Fujian Science and Technology Little Giant Enterprise" and "Fujian 'Specialized, Specialized and New' Small and Medium Enterprises" . There is no doubt that Xiamen Duyuan Outdoor, as a hidden champion in the vertical category, has a high advantage today when big sellers are transforming into "specialized, specialized and new".

So far, well-known companies such as Pathfinder, Mogod and Sanfu Outdoor have been listed in the outdoor camping sector, but in the domestic market, the RV and yacht markets started relatively late and are still in their infancy. From another perspective, there are no listed companies in the domestic A-share market that can compare with them. For Xiamen Duyuan Outdoor, if this listing is successful, it is very likely to become the "first RV and yacht stock" in China.

However, for Xiamen Duyuan Outdoor, the company's costs are greatly affected by the macroeconomic environment. It is understood that the main raw materials for the company's RV yacht supporting products and water leisure sports products are plastic particles, motors and hardware. During the reporting period, the proportion of material costs in the main business costs was 76.97%, 76.53% and 72.97%.

Not only that, due to its high dependence on overseas income, the company also faces multiple risks such as rising shipping costs, changes in export tax rebate policies and the impact of the global epidemic.

Of course, Xiamen Duyuan Outdoor's prospectus also disclosed many internal irregularities, such as working capital loans from suppliers or related parties, bill discounting and fund borrowing from unqualified third parties, collecting payments on behalf of employees, collecting and paying with personal cards, and paying in cash, and other irregularities in financial internal controls.

In terms of equity structure, the company has a strong family color . For example, Lin Xizhen is the actual controller of Duyuan Outdoor, directly holding 53.60% of the company's shares, and controls 10% of the company's shares through Liancheng Huili, which is equivalent to controlling 63.60% of the company's shares. Lin Xizhen's brother-in-law and cousins ​​also have indirect holdings in Xiamen Duyuan Outdoor.

In addition, there are many well-known companies in the field where Xiamen Duyuan Outdoor is located, such as Zhejiang Shiyuan Technology Co., Ltd., Hangzhou Winnie Kayak Manufacturing Co., Ltd. and other companies that conduct business around water sports products. As the market scale of RVs, yachts and water sports expands, competitors will continue to pour in to compete for the market, and even cause dimensionality reduction attacks on them.

According to Statista, the number of campers in the United States (6 years old and above) reached 47.94 million in 2020, an increase of more than 6 million over the previous year. In addition, according to data from the camping review platform The Dyrt, one in five Americans participated in camping activities in 2021. From January to April this year , Americans' demand for outdoor and camping supplies has been the same as in 2021. The products that rank high in demand among American consumers are mostly: tents, water filters, wilderness survival equipment, multi-functional convenient tents for bathing and changing clothes, knives and forks, lamps, outdoor tables and chairs, etc.

Under such demand, the market cake is also being snatched up. For Xiamen Duyuan Outdoor, expanding product categories, continuously improving technology and enhancing its competitive advantages while continuously optimizing its own products are the cornerstones that help it to win steadily under the intensified market competition.

outdoor

Fujian

Net Profit