Lechuang sold overseas warehouses again and made a profit of more than 10 million US dollars!

When it comes to cross-border smart home products, one company that cannot be ignored is Loctek. As a leader in the field of smart ergonomic office products, Loctek has made rapid progress in recent years. There is even a story in the industry that the Prime Minister met with Loctek twice in one year.

After years of development, Leckey has formed two mature industries: smart home products and public overseas warehouses. It has four manufacturing bases in Ningbo, Guangxi and Vietnam, focusing on the production of smart lifting tables, smart electric beds, smart study tables, smart lifting platforms, fitness chairs and other products.

Among them, LECANGS is the brand of LECANGS for LECANGS public overseas warehouse project. As of 2002, LECANGS Overseas Warehouse has 12 years of cross-border e-commerce and 10 years of overseas warehouse operation experience. It has currently deployed 17 overseas warehouses around the world with a total area of ​​nearly 350,000 square meters.

While its overseas warehouse business is developing rapidly, Leckey has been selling its overseas warehouses recently.

Lege sells overseas warehouses, the real intention may be to "build a large warehouse"

On February 27, Lechuang announced that the 38th meeting of the 4th Board of Directors held on February 25, 2022 approved the proposal of its subsidiary 1151 COMMERCE, LLC to sell its overseas warehouse located at 1151 Commerce Blvd., Logan Township, New Jersey (Block 2803, Lot 1.02).

On April 15, Lechuang released an announcement stating that as of the date of disclosure of the announcement, the two parties to the transaction had completed the delivery procedures agreed in the transaction contract, the subsidiary had received the full transaction price paid by the purchaser, and the transaction had been completed.

It is reported that the transaction price of this asset transaction is determined to be US$23 million through negotiation between the two parties . The proceeds from the sale of the assets have been deposited into an escrow account to be used for the subsequent construction of a large overseas warehouse . According to Leckey's calculations, the completion of this asset transfer will increase the current pre-tax asset transfer income by approximately US$10.76 million.

Yienjun learned that between 2013 and 2020, Lechuang purchased 7 overseas warehouses in the core hub port areas of the United States, and from early 2019 to 2020, it began to systematically plan and fully promote the Lechuang cross-border e-commerce public overseas warehouse innovation service complex project . The project has developed well since its opening.

In fact, this is not the first time that LOGO has sold its overseas warehouse. On September 2, 2021, LOGO's overseas subsidiary 212 Markham, LLC sold its overseas warehouse located at 212 Markham St, Perris, CA 92570, California, USA to Dalfen Industrial LLC for a transaction price of US$17.313 million.

As for why Lechuang sold its overseas warehouse, Yi En Jun learned that it bought another larger warehouse in California with lower unit operating costs. In addition, Lechuang will use the funds from the sale of overseas warehouses to rent and build larger overseas warehouses, further improve its overseas warehousing and logistics system, and deepen the scale operation barriers of the cross-border e-commerce public overseas warehouse innovation service complex project.

It can be seen from the fact that Lechuang has sold its overseas warehouses twice that it has been systematically planning and fully promoting the Lechuang cross-border e-commerce public overseas warehouse innovation service complex project.

As of the end of 2021, in addition to the overseas warehouses purchased and leased by LEAC in the core hub port areas of the United States, LEAC also has overseas warehouses in Germany, Japan and other places, with a total of 15 warehouses worldwide and a delivered area of ​​260,000 square meters. In the first half of 2021, LEAC's cross-border e-commerce public overseas warehouse innovation service complex project achieved operating income of 68.1102 million yuan, with good profitability.

In addition to the profitability of its overseas warehouse projects, Lechuang's main cross-border e-commerce business is also going smoothly. According to the annual report recently released by Lechuang Holdings, Lechuang's revenue increased by 47.95% in 2021, and its financial data performance was very impressive.

2021 financial report released, Lechuang revenue increased by 47.95%

Due to the impact of the epidemic, the number of people working from home has increased. In addition, the concept of healthy office has gradually gained popularity, and the demand for smart office home products is strong. 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 smart office and home market is huge, and Loctek, which specializes in ergonomic smart homes, is also developing rapidly. In 2021, Loctek's total revenue was 2.871 billion yuan, a year-on-year increase of 47.95%. Ergonomic workstations are still the main source of Loctek's operating income, with revenue reaching 2.163 billion yuan , a year-on-year increase of 51.52%, accounting for 75.34% of operating income.

As a long-standing cross-border seller in East China, Leckey has been working hard in the fields of healthy office and smart home for many years, and has accumulated a high brand awareness and competitive advantage. Its main products are healthy office and smart home products, including linear drive smart office lift tables, smart lift workstations, smart screens, smart lift children's study tables, smart fitness chairs, smart electric beds, etc.

Leckey's online sales are mainly conducted through independent websites and large e-commerce platforms , such as Tmall, JD.com, Xiaomi Youpin in China , Amazon, Walmart, Home Depot, Rakuten, Yahoo, Wayfair and other e-commerce platforms and independent websites such as flexispot.com.

According to the financial report data released by Loctek, its independent website is in a period of rapid development. In 2021, the revenue of Loctek's independent website reached 527 million yuan, a year-on-year increase of 89.19%, accounting for 18.35% of the total operating income. Loctek said that the company's independent website has ushered in steady and rapid development in recent years , and the Google search ranking and Alexa global ranking have continued to improve.

Amazon is still the main source of revenue for Loctek's online sales. In 2021, Loctek's sales revenue on the Amazon platform reached 837 million yuan, a year-on-year increase of 16.19%, accounting for 29.16% of total operating income. At the same time, Loctek's operating income on Rakuten, Tmall, JD.com and other platforms also increased by 88.61%, 71.27% and 50.18% respectively.

Leckey stated that the main performance drivers are as follows : 1. The concept of healthy office continues to deepen, consumers have strong demand for linear drive ergonomic products, and the market continues to mature.

2. R&D investment continues to increase . In 2021, Lechuang's R&D expenses increased by 53.4% ​​year-on-year .

3. International strategic layout. During the epidemic , the advantages of the international strategic layout of LEACHA’s transnational manufacturing were apparent. Although the overseas epidemic spread, LEACHA ’s domestic and foreign production bases were operating normally, and its own overseas warehouses had smooth delivery.

4. Adhere to the development of independent brands and enhance brand power. In 2021 , the sales revenue of Leckey's independent brand products accounted for 64.66% of the main business revenue (excluding overseas warehouse revenue) .

5. Adhere to the development of independent channels, and the advantages of independent website layout are prominent. During the reporting period, Lechuang's cross-border e-commerce sales revenue increased by 38.76% year-on-year , of which the sales of independent websites increased by 89.19% year-on-year .

When talking about the business plan for 2022, Lechuang said that it will combine the macro environment, on the one hand, accelerate technology upgrades and iterations and reserves; on the other hand, develop new platforms and new formats to achieve long-term sustainable development. It will focus on key tasks such as product upgrades, channel upgrades, brand building, information construction, talent training and international market layout.

From the case of Leckey, we can find that it is still very feasible to deploy multiple platforms to disperse business risks in the field of cross-border e-commerce. At the same time, sellers and enterprises should increase their efforts in innovation and research and development when producing products to provide consumers with more high-quality products that meet their needs.

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