Reinvesting in South China! The headquarters of the company with a sales volume of 1.5 billion has started construction

Buying land, building headquarters, and mergers and acquisitions, Huakai Yibai is getting bigger and bigger ...

With 380 million yuan of project funds, the headquarters project started

According to Huakai Yibai's announcement, recently, its wholly-owned subsidiary Guangdong Huakai Yibai Technology Co., Ltd. (hereinafter referred to as " Guangdong Huakai ") signed the "Contract for the Transfer of the Right to Use State-owned Construction Land" with the Zhongshan Municipal Natural Resources Bureau and completed the relevant ownership certificate procedures and obtained the corresponding "Real Estate Certificate".

At the same time, Guangdong Huakai and China Construction Fifth Engineering Bureau Co., Ltd. (hereinafter referred to as "China Construction Fifth Bureau") signed the "Huakai Yibai South China Headquarters Project Construction General Contracting Engineering Contract", stipulating that China Construction Fifth Bureau will contract the "Huakai Yibai South China Headquarters Project" construction project with a contract amount of 380 million yuan .

The outside world first learned about the South China headquarters project in February this year, when Huakai Yibai issued an "Announcement on Overseas Investment to Establish a Wholly Owned Subsidiary and Purchase Land Use Rights."

In the announcement, Huakai Yibai mentioned that it would set up a Zhongshan project company and purchase land in Zhongshan to build its South China headquarters. The total investment in the project was initially planned to be 1.5 billion yuan (which may increase later) .

Subsequently ( February 29), its new wholly-owned subsidiary Guangdong Huakai was established with a registered capital of 150 million yuan. Its business scope includes but is not limited to sales of household appliance parts and components, hardware product manufacturing, Internet sales, daily necessities wholesale, household appliance research and development and sales, etc.

On September 30, Guangdong Huakai and Zhongshan Municipal Natural Resources Bureau officially signed a land purchase contract. The land area is approximately 55,300 square meters, the purchase price is approximately 87.03 million yuan , and the use period is 50 years.

At the same time, Guangdong Huakai signed a relevant construction agreement with China Construction Fifth Bureau .

Previously, Huakai Yibai announced that the total construction scale of its South China headquarters is approximately 220,000 square meters (gross floor area) , which will cover design and R&D offices, IT technology centers, core product production and assembly lines, smart warehousing, as well as product experiments, testing, and inspection rooms, and other supporting facilities .

The construction agreement disclosed that the total construction area is approximately 184,300 square meters, including five buildings (two six-story factory buildings, a 20-story R&D office building, a one-story gatehouse, and a 10-story living service building), a car ramp, a basement and supporting rooms.

The project officially started on October 18, and the construction period is approximately one year and nine months, that is, the planned completion and joint acceptance date is July 8, 2026 .

In the future, this project will become a large-scale, clustered, innovative, and branded cross-border export e-commerce industry demonstration base with independent intellectual property rights, advanced technology, and a certain scale.

Huakai Yibai said that the smooth progress of the construction of the South China headquarters project will help the company expand its business areas, optimize supply chain management, and improve overall operational efficiency, and will help the company further enhance its sustainable operating capabilities and overall competitiveness.

Performance continues to improve, and revenue is expected to exceed 9.3 billion yuan this year

The investment of 1.5 billion to set up the South China headquarters in Zhongshan shows how confident Huakai Yibai is in its long-term development in the cross-border market.

Last year, it also announced that it would spend 700 million yuan to buy Tongtuo, which was sold for the second time. As of July this year, the merger and acquisition had been completed.

Like Huakai Yibai, Tongtuo also sells a wide range of products. In layman's terms, it is a general-purpose seller.

Through third-party e-commerce platforms such as Amazon, AliExpress, Meikeduo, eBay, Walmart, Shopee and independent websites, Tongtuo sells dozens of categories including 3C electronics, photography and audio-visual, home and outdoor, instruments and tools, model toys, beauty and clothing, health management, and auto accessories.

In terms of the number of stores, Tongtuo will have a total of 9,086 and 10,856 stores on various platforms in 2022 and 2023. Among them, Amazon store revenues were 1.556 billion yuan and 1.659 billion yuan, accounting for 45.43% and 48.87% respectively; AliExpress is its second largest revenue platform, bringing in 458 million yuan and 485 million yuan in revenue, accounting for 13.36% and 14.29% respectively.

Let's take a look at Yibai Network, which is responsible for cross-border business under Huakai Yibai. As of June this year, Yibai Network had 868 Amazon stores, with 83 new stores. In the first half of this year, its total Amazon orders were 18.423 million, with revenue reaching 2.56 billion yuan, accounting for 72.75% of Yibai Network's total revenue.

However, except for Amazon, the sales revenue achieved through other third-party platforms will not exceed 13.50% of its operating income in the first half of 2024.

From this point of view, the acquisition of Tongtuo will also allow Huakai Yibai to leverage the former's market share in other third-party platforms to reduce its dependence on Amazon and ease the pressure of excessive platform concentration.

In addition, mergers and acquisitions will inevitably expand the scale of operations, enhance overall competitiveness and industry status . Huakai Yibai can also achieve category complementarity, enrich product lines, integrate supply chains and thus control costs through Tongtuo.

In the past two years, Tongtuo's main business revenue reached 3.425 billion yuan and 3.395 billion yuan, with the European and American market revenue accounting for more than 75%, of which the European market revenue accounted for more than 46%. Huakai Yibai can use this to expand its European market.

By establishing its South China headquarters in Zhongshan , the city of home appliances, Huakai Yibai has also made early preparations for the expansion of the home appliance and other categories of markets. More categories will also be able to benefit from the advantages of the supply chain with the help of this project.

In the third quarter of this year, Huakai Yibai's quarterly revenue reached 2.596 billion yuan, a year-on-year increase of 47.72% , and its net profit was 54.75 million yuan. As of the end of September, its total revenue this year has reached 6.115 billion yuan, a year-on-year increase of 28.75%, and its net profit has exceeded 189 million yuan.

In the cross-border e-commerce business segment, Yibai Network achieved revenue of 1.697 billion yuan, 1.824 billion yuan, and 1.912 billion yuan in the first three quarters, respectively, a quarterly increase of 4.86%; the corresponding net profit attributable to shareholders was 102 million yuan, 83 million yuan, and 71 million yuan .

Since July, Tongtuo has also been included in the consolidated financial statements of Huakai Yibai. The financial report shows that Tongtuo's revenue in the third quarter was 677 million yuan . Although it did not disclose specific profit data, it stated that it has successfully turned losses into profits .

In order to reduce its dependence on Amazon, Huakai Yibai has continuously deployed platforms such as Temu, Tik Tok, and Walmart in recent years, and has achieved good results. As of September this year, Temu, Tik Tok, and Walmart contributed 92 million yuan, 109 million yuan, and 100 million yuan in revenue to it respectively .

Especially since the third quarter, Huakai Yibai's sales on these new platforms have grown faster and it is expected to usher in a significant improvement in performance.

Based on this, many securities companies are optimistic about Huakai Yibai. Guolian Securities predicts that its revenue this year will reach 8.078 billion yuan and its net profit will reach 342 million yuan; Minsheng Securities predicts that its revenue will reach 9.148 billion yuan and its net profit will reach 297 million yuan; Kaiyuan Securities predicts that its revenue will reach 9.344 billion yuan and its net profit will reach 385 million yuan .

There is only one quarter left this year, and it is still unknown how much Huakai Yibai can earn , but its profitability has always been excellent and it is in its peak season, so good results are expected.

Big Sell

Headquarters

South China