Another big IPO, with annual revenue exceeding 1 billion

Recently, Jiangxin Home Furnishing has passed the review of the Shenzhen Stock Exchange's Growth Enterprise Market Listing Committee and is about to make its initial public offering.

Jiangxin Home Furnishing's annual revenue exceeds 1 billion

Changzhou Jingxin Unique Smart Home Co., Ltd., located in Changzhou, China, is an important ODM supplier in the global smart electric sofa and smart electric bed industry. It is mainly engaged in the research and development, design, production and sales of smart electric sofas, smart electric beds and their core accessories. Its ODM business is based in the United States and covers countries and regions such as Australia, France, the United Kingdom, Italy and Canada. It is worth noting that the United States accounts for up to 95% of its main business.

Its products are mainly aimed at the mid-to-high-end furniture market in the United States . It has established long-term strategic partnerships with many well-known international and American furniture companies, such as Ashley Furniture, Pride Mobility and other internationally renowned home furnishing companies, and its products are sold both online and offline. In addition, Jiangxin Home also owns MotoMotion, MotoSleep, HHC, Yourway and other independent brands with certain international reputations.

The prospectus shows that the operating income of Jiangxin Home Furnishing from January to June 2020 was 457.7684 million yuan, a year-on-year decrease of 11.09%; the net profit was 87.8188 million yuan, a year-on-year increase of 33.50%. The full-year revenue in 2020 is expected to be about 1.32 billion yuan , a year-on-year increase of about 12%; the full-year net profit is expected to be about 220 million yuan, a year-on-year increase of 98%.

There are reasons for the change in the revenue of Jiangxin Home Furnishing. In the first half of 2020, the epidemic was followed by rising corporate bankruptcy rates in Europe and the United States, economic downturn, trade frictions, and various national policy changes, which led to a decline in the company's operating income. In the second half of 2020, due to the loose monetary policies adopted by many countries, the real estate market has steadily risen , and the demand for consumers to improve their living conditions due to long-term home stays has exploded, which has boosted the overseas home furnishing market and driven furniture exports .

The United States accounts for nearly 90% of the main business income of Jiangxin Home Furnishing

Data shows that from 2017 to 2019, the sales revenue of Jiangxin Home Furnishing in the United States was RMB 816.8953 million, RMB 960.987 million and RMB 996.0148 million, respectively. Its sales revenue accounted for 91.8%, 88.38% and 88% of the operating income in each period, respectively. It can be seen that the United States accounts for a relatively high proportion of Jiangxin Home Furnishing's main business income.

During the reporting period, Jiangxin Home Furnishing mainly engaged in export business , and the domestic terminal market had little impact on its performance. However, there are reports that Jiangxin Home Furnishing is likely to re-explore the domestic market, but domestic listed home furnishing companies are also strong in exports . According to statistics from the General Administration of Customs, in 2020, China's exports of furniture and parts products reached 403.856 billion yuan, a year-on-year increase of 8.27%, among which many domestic listed home furnishing companies have export sales.

According to the company, the 1 billion yuan raised this time will be mainly used to build a smart furniture production base, a new R&D center , a marketing network and other projects. In addition, it is worth noting that when the bank deposits of Jiangxin Home Furnishing reached 500 million yuan, it still needed to raise 1 billion yuan, which also became the focus of everyone's attention. In addition, it faced many product safety issues that needed to be solved urgently.

In the listing application, issues such as product quality and safety, financing, etc. are required to be disclosed by the Shenzhen Stock Exchange. The relevant specific circumstances have yet to be verified, and the future development layout and performance trends of Jiangxin Home Furnishing will take time to verify.

Home Furnishing

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IPO