Lechuang received a cash subsidy of 30 million!

The home furnishing giant Lege has been making a lot of "good news" recently. First, it set up a RMB 3 million interest-free loan fund pool for company employees to use for home purchase loans. Later, it launched a new employee stock ownership plan, giving company managers and core staff the opportunity to subscribe for equity, with a total equity subscription fund of up to RMB 59.5 million.

Recently, Lege shares have good news again ...

Loctek subsidiary receives 30 million yuan in government subsidies

Lechuang Holdings announced that its wholly-owned subsidiary Guangxi Lechuang Smart Home Co., Ltd. recently received a subsidy of RMB 30 million from the Guangxi Hepu Industrial Park Management Committee. This government subsidy was issued in cash, and Lechuang Holdings has actually received the relevant funds.

It is reported that this subsidy belongs to the 2021 Autonomous Region Industrial Revitalization Fund ("This Winter and Next Spring" project), with a total project fund of 2.35 billion yuan, which will be used to support the development of 58 industrial projects including automobiles, high-end green home furnishings, new generation information technology, new materials, and biomedicine.

The RMB 30 million received by Lechuang Holdings was mainly used for the construction of the first phase of the Guangxi Lechuang Intelligent Healthcare Western Industrial Park. The subsidy is related to Lechuang Holdings' daily operating activities and accounts for 16.24% of Lechuang Holdings' latest audited net profit.

In 2021, the operating income of Lechuang Holdings was 2.871 billion yuan, an increase of 47.95% compared with the same period last year, and the net profit attributable to shareholders of the listed company was 185 million yuan, a decrease of 14.93% compared with the same period last year. Ergonomic workstations are still the main source of revenue for Lechuang Holdings. In 2021, this business achieved revenue of 2.163 billion yuan, a year-on-year increase of 51.52%, accounting for 75.34% of revenue.

Lechuang's online sales are mainly conducted through independent sites and large e-commerce platforms such as Amazon . In 2021, Lechuang's cross-border e-commerce sales revenue increased by 38.76% year-on-year, of which the sales revenue of independent sites increased by as much as 89.19%, and the advantages of independent site layout are becoming more prominent.

In the first quarter of 2022, Lechuang Holdings achieved operating income of 764 million yuan, a year-on-year increase of 15.83%, and net profit attributable to shareholders of the listed company was 18.015 million yuan, a year-on-year decrease of 43.64%.

Lechuang said that the company's net profit in the first quarter fell sharply compared with the same period last year, mainly due to two factors: one is the continued increase in R&D investment and self-branded marketing expenses, and the other is the impact of external macro factors (such as the surge in shipping costs and exchange rate fluctuations). These impacts have put some pressure on Lechuang's net profit in the short term. Although Lechuang has moderately raised the price of its products, it is still difficult to cover the above impacts.

It is reported that in the first quarter of 2022, the weighted average price of 40HQ high cabinets increased from about US$6,000/container in the first quarter of 2021 to about US$15,000/container. In the first quarter, sea freight accounted for 14.45% of Legg's cross-border e-commerce business revenue, an increase of 8.43%.

Despite a series of risk factors, Lechuang shares are full of confidence in the future. Lechuang said that with the increase in R&D and marketing investment, the company's sustainable development capabilities will continue to increase. In order to cope with the impact of the surge in shipping costs and exchange rate fluctuations, Lechuang has also taken a series of measures such as shipbuilding and increasing foreign exchange hedging business when the opportunity arises.

I believe that with the efforts of Lechuang to improve quality and efficiency, its profitability will improve. At the same time, with the vigorous development of the smart home industry in which Lechuang is located, its future development prospects are still very bright.

Current status of healthy office and smart home industries

With the development of the economy, people's living standards continue to improve, consumers' requirements for office and home products have also increased, and they pay more and more attention to the performance of products in terms of health, intelligence and Internet of Things.

At the same time, driven by factors such as the rapid development of 5G, the Internet of Things, and the Internet home improvement market, the global smart home market is showing a booming development trend.

According to relevant data, the scale of China's smart home market grew to 435.4 billion yuan in 2020, with an annual compound growth rate of 15.8%, and is expected to exceed 800 billion yuan in 2025. At present, China's smart home industry is in the Alot (artificial intelligence + Internet of Things) empowerment period, and is expected to develop rapidly after 2023.

In addition, according to Statista's forecast, the scale of the global office home industry is expected to grow from US$104.9 billion to US$132.3 billion from 2019 to 2025. The booming development of the office home and smart home industries has promoted the widespread application of related products and services.

Influenced by the level of economic development and consumption concepts, the consumer market for healthy office and smart home products is mainly concentrated in developed countries such as North America, Europe and Japan. However, with the rapid development of emerging market economies, the market capacity and penetration rate of healthy office and smart home products in these countries and regions are also increasing.

The health consumption industry is an industrial system related to human physical and mental health . Moreover, the products in this industry have strong consumer product attributes, and generally speaking, there is no cyclicality or seasonality in the products.

According to relevant data , the health industry accounts for more than 15% of GDP in the United States , more than 10% of GDP in countries such as Canada and Japan , and only 4%-5% of GDP in China.

The next ten years will be the golden period of development for the health industry . People's pursuit of healthy office and comfortable life concepts will drive the development of the health industry, and the health consumer products industry will usher in good development opportunities.

At present, the concept of healthy consumption has penetrated into the field of daily office work. Products represented by linear-drive intelligent office lifting systems are widely used in daily office , medical, finance, IT, e-sports and other professional fields. In the future, the application fields and scenarios of these products will be more abundant.

Against the backdrop of the current situation and good future development trends of the healthy office and smart home industries, Leckey also gave its development plan for 2022.

Lechuang said that in 2022, the company will combine the macro environment and accelerate technology upgrades, iterations and reserves by grasping the development trends of the healthy office and smart home consumer products markets .

At the same time , we will keep pace with the rapid growth of the cross-border e-commerce industry, continue to promote the public overseas warehouse innovative service complex project, develop new platforms and new business formats, and achieve long-term sustainable development.

While doing the above work, we will focus on key tasks such as product upgrading, channel upgrading, brand building, information construction, talent training and international market layout to achieve the company's strategic goals.

In general, cross-border retail is a major trend in the future development of international trade. In 2020, affected by the global epidemic, cross-border e-commerce has become an important breakthrough in promoting the transformation and upgrading of foreign trade and creating new economic growth points, and policies are constantly supporting the development of cross-border e-commerce.

Governments in many places have issued subsidies to cross-border e-commerce companies, which is of great significance to the development of these companies. These funds are not only used to help companies overcome the difficulties of the epidemic, but also represent the recognition and support of the country and government for the entire cross-border industry.

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