From huge losses to a 300% increase in net profit! Cross-border sales "changed fate"

Recently, many cross-border sellers released their performance reports for the third quarter of 2024. Many of them saw their revenue and net profit soar, making a lot of money.

What’s more, the big seller escaped from the vortex of losses, doubled its net profit, and staged a great counterattack!

Chervon Holdings' big comeback! Net profit surges 300%

Recently, cross-border retail giant Quanfeng Holdings released a positive profit forecast.

(Photo source: Chervon Holdings)

The report data shows that in the first three quarters of 2024, the group expects to achieve a net profit of approximately US$100 million, a significant increase of more than 300% compared to the net profit of US$23 million achieved from January to September 2023.

After the report was released, Quanfeng Holdings' share price rose by more than 9% during trading.

Quanfeng Holdings Co., Ltd. (hereinafter referred to as "Quanfeng Holdings"), known as the "No. 1 Power Tool Stock in China", is a major brand in the Amazon tool category headquartered in Nanjing. It is mainly engaged in the research and development, production and sales of power tools and outdoor power equipment (OPE) and related industry products, focusing on the field of lithium battery system technology innovation. The company's main markets are North America (accounting for nearly 70% of its business) and Europe (accounting for nearly 30% of its business).

In terms of details, Quanfeng Holdings owns the high-end EGO brand in the outdoor power equipment market , and its products mainly include snow blowers, lawn mowers, hair dryers, grass trimmers, etc.; the company's power tool business owns four brands, FLEX, SKIL, Dayou and Xiaoqiang, and its products mainly include electric drills, angle grinders, etc.

On the Amazon platform, E GO (high-end market) and SKIL (mass market) under Chervon Holdings are both BSR-level brands with many best-selling products and are highly praised by consumers.

In the past few years, the company's revenue has been in a state of rapid growth, from US$690 million in 2018 to US$1.76 billion in 2021, with a compound annual growth rate of 36.5%.

On December 30, 2021, Chervon Holdings was officially listed on the Hong Kong Stock Exchange.

After Chervon Holdings successfully listed on the Hong Kong Stock Exchange, the company's revenue growth began to slow down and later fell into a loss-making situation.

In 2022, Chervon Holdings' revenue was US$1.989 billion, a year-on-year increase of 13.17%.

In 2023, Chervon Holdings recorded revenue of approximately US$1.375 billion, a decrease of 30.9% compared to 2022, and a net profit loss of US$37.15 million, a year-on-year decline of 126.7%.

Regarding the reasons for the company's losses, Chervon Holdings stated that this was due to macroeconomic uncertainty causing the group's customers to adopt a more conservative inventory policy, resulting in a decline in the company's revenue. On the other hand, the group's continued investment in infrastructure also put pressure on the company's performance.

In order to reverse the unfavorable situation of losses, when the 2024 semi-annual report was released, Quanfeng Holdings stated that it planned to expand its sales network to achieve full coverage of high-end and mass-market OPE, consumer and industrial power tools.

At the same time, the company's brand EGO has performed quite well in the market, and the end of the inventory reduction cycle has also driven the company's revenue growth in the third quarter of 2024. In addition, the recovery of scale and the improvement of operating efficiency have led to an increase in product gross profit margin. Under the influence of multiple factors, Chervon Holdings' net profit has also seen a substantial increase, soaring 300%.

Lechuang sold nearly 4 billion yuan of goods in the first three quarters!

Another cross-border big seller, Lechuang Holdings, also recently released its third-quarter financial report .

According to the financial report data released by Lechuang Holdings, the company's operating income in the third quarter of 2024 was approximately 1.547 billion yuan, an increase of 53.67% compared with the same period last year; net profit was approximately 105 million yuan, an increase of 43.01% compared with the same period last year .

(Photo source: Lechuang Holdings)

Overall, in the first three quarters of this year, Lechuang ’s total operating income was approximately 3.975 billion yuan , a year-on-year increase of 48.03% ; its net profit was approximately 265 million yuan , a year-on-year decrease of 48.64%.

Lechuang Holdings stated at the performance briefing that in the first three quarters of this year, Lechuang's overseas warehouse business continued to maintain a high growth trend, and new smart home products gradually gained volume. However, at this stage, for the company's sustainable growth, some strategic layouts have had an impact on overall profits, such as distribution business, new product cultivation, increasing overseas warehouse market share, and introducing R&D and marketing teams, etc. Upfront investment. On the other hand, in order to attract and retain talent, the company has also adjusted its salary and welfare policy, and the growth of various expenses has also affected profits. In general, Lechuang's various businesses have maintained a stable growth trend, the main product business has shown a clear recovery trend, new products are constantly gaining volume, and the overseas warehouse business has become Lechuang's second growth curve.

When it comes to Lejia Holdings, I believe everyone is familiar with it.

Founded in 2002, Loctek Ergonomics Technology Co., Ltd. is headquartered in Ningbo, Zhejiang. It mainly engages in smart home and healthy office products, and has launched various ergonomic products such as smart office lift tables, smart home tables, and electric children's study tables. The combined application scenarios of the products mainly cover the fields of healthy office, smart home, and professional application.

At present, Lechuang has built a complete sales channel, forming a multi-channel diversified sales model covering domestic, overseas, online, offline and independent channels. Among them, Amazon and independent websites are Lechuang's two main cross-border revenue channels.

Leckey's core categories, such as smart height-adjustable tables, are industry leaders both at home and abroad. Its overseas flagship "FlexiSpot" brand height-adjustable tables rank first in sales in the height-adjustable table category on e-commerce platforms such as Amazon, Home Depot, Walmart, Rakuten, and Yahoo. Its self-built independent website "flexispot.com" is in the first echelon among global independent vertical e-commerce websites for linear drive application products. The company's U.S. independent site traffic ranks first among major competitors and maintains a stable leading position.

Starting from 2020, LEAC launched cross-border logistics services for public overseas warehouses, and developed overseas warehouses and optimized warehouse layout in a rolling manner by "exchanging small warehouses for large warehouses". At present, LEAC has deployed multiple public overseas warehouses across the United States, with tens of thousands of high cabinets circulating each year. LEAC's UK warehouse and Canadian warehouse are also about to open. With the opening of the UK warehouse and Canadian warehouse, LEAC's overseas warehouses have deployed 21 overseas warehouses around the world, with a total storage area of ​​more than 7 million square feet.

In addition to buying land and building overseas warehouses, Lejia also builds ships and engages in shipping logistics.

In 2022, Lejia Co., Ltd. issued an announcement stating that it plans to sign a contract with a domestic first-class shipyard to build an 1,800TEU container ship with a total price of US$32.6 million. The container ship is now in use.

Shipping prices have skyrocketed this year, and the operating profit margins of many sellers' cross-border e-commerce businesses have been affected to a certain extent. However, the 1,800TEU container ship owned by Leckey has begun to "return positively". Through leasing, Leckey said that the container ship has hedged part of the shipping costs.

In general, if sellers want to break through the fierce market competition, achieve rapid growth in revenue and net profit like cross-border sellers, cope with market crises, and turn danger into safety, they must find the right breakthrough.

Cross-border sales

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