Where is the 80,000 furniture company “China IKEA”?

In the classification of the furniture industry of the Shenzhen Stock Exchange, there are only four listed companies, and the total output value does not exceed 10 billion yuan. Sweden's IKEA sales revenue in fiscal 2009 reached 21.5 billion euros.

Is it the use of capital to achieve qualitative change, or will it continue to be a small star in the night? After hundreds of years, Red Star Macalline, Huayuanxuan and other batches of furniture companies lined up, everyone is vying for a long-awaited "opportunity. For many Chinese furniture companies that are trying to "long the door", the capital pusher has an irresistible temptation.

In fact, VCs and PEs are already sending them "the autumn wave." Capital docking may make them fly to the sky, however, they may also let them lose their helmets.

The boom in the listing

At the 2010 CCTV Advertising Tendering Conference, known as the “China Economic Barometer”, Red Star Macalline, Cobo Bolognese, Zhongzhixin Furniture and other large-scale furniture and building materials industry “dark horses” frequently appeared, and more than 400 million yuan broke into 2010. CCTV home advertising, the overall growth rate of more than 200%, grabbing the limelight in the traditional industries such as automobiles and home appliances.

This situation has been interpreted by the industry as part of the signal that Chinese home furnishing companies have entered the “listing” fast track. "At present, Red Star Macalline, Real Home, Cobo Boloni and other companies have basically completed the national distribution of the store network, Red Star has received a $200 million injection from Huaping Fund, and Bologna has also received Morgan Stanley's $18 million capital injection. The listing process is in full swing. Zhongzhixin Furniture and the House of Reality will also put 'listing' on the agenda." Market source Mr. Wang told reporters that many furniture companies now want to go public, some want to circle money, there are I want to extend the brand, and some want to expand the strategy. The motivation may be different.

An example is that the US-based Meike International Furniture Company, with its capital leverage, has expanded its share capital by four times in just five or six years, and its assets have expanded more than 20 times, despite the origin of Meike furniture. The market advantage is not really obvious.

On June 22, 2009, Xingli (Hong Kong) Holdings Co., Ltd. was successfully listed on the main board of the Hong Kong Stock Exchange. When the market opened on the same day, the stock price rose more than 20%. The market closed up 39% higher than the offer price. The furniture market injects a strong heart.

For a time, the furniture companies that have always been "not bad money" and almost all of them for private capital seem to change their minds and rush to move from pure industrial operation to capital operation. The regional brands such as Haobai, Huayuanxuan, etc., which are not too big, are listed on the GEM. Dafuhao Furniture and Jinsheng Home also have information on the listing. National brands such as Hongxing Meikailong and other Rio Tinto mainboards are listed. Not only the distribution channel field, manufacturing field, and even service field, but also the Shenzhen Furniture Industry Association's attempt to rely on the exhibition, store, industry education college, furniture newspaper and other projects listed.

Family business development track

Why do you want to go public?

"We are listed, just to be a century-old enterprise. The key to a century-old enterprise is to set up a reasonable shareholding structure. We are not in a hurry to spend a lot of money, we are pursuing team competitiveness." Huang Weiye, executive director of Hong Kong Xingli Group, believes that Chinese furniture The gross profit of the industry is relatively high, but it is difficult to connect with finance and make a difference in the capital market. This is a problem that Chinese furniture companies must consider.

Prior to this, “the history of Chinese furniture companies is almost identical. Generally, small workshops and husband and wife files set up production lines themselves, and they rely on foreign brands for OEM processing to make profits. Thus, Chinese furniture companies have hundreds of More than 90% of the private capital has been low-key and unconstrainedly expanded outside the mainstream vision." Yuan Weidong, founder and executive editor of "True Love. Furniture Time", said, "According to incomplete statistics, the overall output value of China's current furniture industry. It is about 670 billion yuan, comparable in size to real estate, automobiles, home appliances and other pillar industries. Unfortunately, in the past two decades of China's two wave of industrial development, the furniture industry lacks domestic and international financial capital, the industry chain Without effective integration and lack of channel layout and shaping of the modern circulation industry, it is difficult to cultivate large enterprises with output value of tens of billions."

To put it bluntly, "China's furniture industry is generally the 'boss has the final say'. Under this privately owned business model, the size of the boss's ability and knowledge largely determines the level of enterprise development." If it is analysis.

From this perspective, listing may be the best way for Chinese furniture companies to upgrade their industries. Because the enterprise enters the capital market, the property rights structure will change greatly, which in turn determines the different organizational structure of the enterprise, which determines the different corporate governance structure and ultimately determines the behavior and performance of the enterprise.

Therefore, “we had already distributed some shares to the executives within the company before the listing, and issued some options to them after the listing.” Huang Weiye’s statement is quite representative. “Our company does not want to move towards the family business. The way to go, if they are all their own, after we quit, there will be no one."

The crux of the Chinese furniture industry

Indeed, the status quo of the Chinese furniture industry is embarrassing.

Dongguan and Shenzhen are the birthplaces of modern industrialized production of Chinese furniture. Among them, there are only 20 companies with an annual output value of more than 1 billion yuan, and public information shows that furniture companies listed on the Shenzhen Stock Exchange total 4 Home, the total market value of 4 companies does not exceed 10 billion yuan. To make a comparison, in fiscal year 2009 (September 1, 2008 to August 31, 2009), IKEA in Sweden received sales of 21.5 billion euros.

It can be seen that the weight of Chinese furniture companies in the capital market is still very slight. Bright furniture (s*st bright), once listed in the furniture industry, has gone to the founder's detention, the bankruptcy of the company, and the delisting. The Hong Kong Dynasty furniture, which was listed as early as 2003, has a stock price of about 1 yuan. Even if it is quite favored by the industry, its share price is only 1.02 Hong Kong dollars per share, and eventually raised more than 100 million yuan of effective funds.

The crux of the problem lies in the fact that "China's furniture industry is almost a purely private economy that has accumulated and developed. Its development path reflects the ills of local enterprises. For example, furniture circulation evades tax evasion, no one can count the total annual sales of Chinese furniture. Real data, how can we calculate the market value of listed furniture companies?" A furniture industry person who asked not to be named said bluntly.

In addition, there are problems such as the strong control of the founders brought by the family business and the difficulty of coordination with listed companies. In addition, “the plagiarism of the Chinese furniture industry is very prosperous. Even if the original design is adhered to, the fashion trend is changing rapidly. It is difficult to estimate the market benefits for each product development. All of these have become the constraints of the industry development.” Manager Wang Zhiming said.

It is not difficult to understand that in the case of a small number of furniture companies listed, most of them are not based on furniture management, but on the development of real estate, chemicals and other "related diversification" business.

Where is “China IKEA”?

Then, where is the path for Chinese furniture companies to break through the “star pattern”? Where is “China IKEA”?

"There are actually two propositions involved here, one is to do billions of dollars or even hundreds of billions of large-scale enterprises, and the other is to be a big brand enterprise of a hundred-year-old store. If it is to be large-scale, the combination of industry and finance should be a kind of Trends; if you want to be a strong brand, take a market segment, focus on the service sector should be more feasible. The industry reshuffle has just begun, everything is possible, it is difficult to determine who will become 'China IKEA'." Wang Zhiming said.

However, "One thing is certain, the injection of new forces will inevitably promote the upgrading of China's furniture industry. The Chinese furniture industry needs benchmarking companies to break through. Moreover, Chinese furniture culture has a long history and can condense the independent innovation capability of enterprises, and should become a country. The pillar industry." Yuan Weidong is calling.

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