According to the 2012 quarterly report of Mengjie Home Textiles , the company achieved operating income of RMB 268.81 million during the reporting period, a year-on-year decrease of 9.93%; net profit of RMB 23.14 million, an increase of 17.69% year-on-year. A shares of two other home textile listed companies Fu Anna (002327.SZ) and Luolai Home Textile (002293.SZ) have not disclosed the first quarter report for 2012, but the chairman of Luolai Home Textile also told reporters that the sales in the first quarter of this year were lower than the company's expectations .
"Roller Home Textiles and Fu Anna's sales revenue in the first quarter of this year has not been negative growth, but the slowdown in growth rate is a high probability event," the aforementioned researcher pointed out to reporters. "Home textiles belong to the big brands in the small category. They do not need to be purchased every year, and it is easy to reach supply saturation. In 2011, stimulated by the fierce promotion and price increase factors, the industry-wide sales were very high, and the channel also accumulated a certain amount of inventory. These conditions will affect sales in 2012. In addition, the negative impact of the macroeconomic downturn on terminal consumption and real estate market regulation on the final consumption of home textile products has also begun to appear. The negative growth in sales revenue of Mengjie Home Textiles in the first quarter is due to the combined impact of the above factors. Other companies can't escape the impact, and 2012 will be a small year for home textile product sales. "
It is worth noting that the net profit of Mengjie Home Textiles increased by 17.69% year-on-year in the first quarter of this year. On the surface, negative revenue growth did not affect profits. However, Huatai United pointed out in a research report released on April 13 that the company passed the high-tech company qualification review and determined that the tax rate for 2011-2013 was 15%. The company's 2012 first quarterly report has not adjusted the final tax rate of the previous year, resulting in a net profit growth rate that is significantly higher than the income growth rate. If this factor is deducted, the company's actual profit growth rate in the first quarter was 2.3%.
"Other companies may not be as lucky as Mengjie Home Textiles. The slowdown in revenue growth will impact profits," the researcher noted.
Zhang Qiwen also pointed out that the subsequent lack of growth in the main market in Central China is another important reason for the negative revenue growth of Mengjie Home Textiles in the first quarter. "The main market in Central China is already at the end of the crossbow, and the network effect of the newly expanded area has not yet come out. It is estimated that this trend will continue for a while." According to the 2011 annual report, Central China contributed 49% of the company's main business sales revenue.
Too much sales and reliance on a certain area is not a problem faced by Mengjie Home Textiles. The annual report shows that in 2011, the East China region contributed 45% of the main business sales revenue for Luolai Home Textiles; the South China region contributed 42% of the main business sales revenue for Fuanna. On the whole, the main battlefield of the home textile industry is still in the central and southern parts of China, and each company has its own focus on the region. In the future, the greater potential for the development of the furniture market in the northern region will also be the focus of home textile companies. On March 30, 2012, Luolai Home Textiles announced that the North China headquarters project was officially settled in Tianjin Binhai New Area. The company hopes to use Tianjin's location and resource advantages to tap the sales potential of the northern market.
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