After the release of the 2021 financial report, Easyhome (000785. SZ) has become one of the most discussed companies in the secondary market.
According to the annual report data, in 2021, Easyhome achieved revenue of 13.071 billion yuan, a year-on-year increase of 44.88%; net profit attributable to shareholders of listed companies was 2.325 billion yuan, a year-on-year increase of 71.36%; non-net profit deducted was 2.229 billion yuan, a year-on-year increase of 75.72%.
There is no doubt that through this set of core growth data, it is not difficult to observe that the actual home has returned to the growth track before the epidemic. As a result, the market capital flowed rapidly, and the daily turnover exceeded 220 million yuan, breaking away from the previous continuous downturn and hitting the daily limit.
High-quality growth is always the excitement of the capital market. Especially in this weak market, the effect is immediate in boosting investor confidence. Investors in the secondary market are more than excited, and forums and post bars share their joy: some investors posted that "there are still two daily limits", and the message replied "four more", and the enthusiasm is evident.
Such a scenario was unimaginable not long ago. After all, the staged ups and downs of the new crown epidemic, the in-depth regulation of the upstream real estate industry, the stricter "dual carbon" strategy, and environmental protection requirements have objectively increased the market's fear of uncertainty.
However, Easyhome is still able to get out of the haze and achieve beautiful growth by consolidating its fundamentals, accelerating digital transformation, and realizing the integration of large consumption and large home furnishing. Combining various performance data indicators, Easyhome can prove that the bearish view of the home furnishing industry and enterprises is just a matter of panic. The home furnishing trading model centered on the store is still evolving. Further development, which in turn quickly restores industry confidence.
For a real home that is advancing at full speed, will the 44.88% revenue growth rate and the 71.36% net profit growth rate be the ceiling? Not necessarily, or maybe this is just the beginning.
01|The illusion of descending
Looking back on 2021, the most obvious changes of Easyhome can be summarized as "one more and one increase" in scale.
The so-called "one increase" is the increase in volume: during the reporting period, Easyhome added 5 directly-operated home furnishing stores (3 owned and 2 leased), 44 franchised home furnishing stores, and 43 department stores, shopping centers, and supermarket stores. A total of 753 stores have been signed-in 29 provinces, autonomous regions, and municipalities in China, and 421 home furnishing stores have been operated, including 95 directly-operated stores and 326 franchised stores.
During the same period, the number of national chain brands and regional chain brands of Easyhome increased by 162 and 572 respectively compared with 2020. To this end, a new operating area of 1.5 million square meters has been opened to introduce and develop new products for hot categories such as software, customization, smart home, and electrical appliances. More than 3,400 booths have been adjusted - these new faces constitute "one more".
Many companies are shrinking, making the expansion of Easyhome seem abrupt. This is the performance of its "step by step". According to the company's expansion speed in recent years and the development strategy of "hundreds of malls in one hundred counties, one thousand stores in one thousand towns" proposed in 2021, the scale expansion has not yet reached the terminal.
Perhaps in the eyes of many people, the risk factor of a series of actions by the house is very high. After all, the policy regulation of the real estate industry in the past two years has lowered the industry expectations of investors and has also affected the upstream and downstream of the industrial chain represented by home furnishing. Is "one increase and one more" driving force for continued growth, or is it more cost pressure?
The data from the National Bureau of Statistics finally revealed the answer: in 2021, the retail sales of furniture consumer goods will be 166.7 billion yuan, a year-on-year increase of 14.5%; the retail sales of construction and decoration materials consumer goods will be 196.7 billion yuan, a year-on-year increase of 20.4%. The industry growth is still there, so 33% of the stores are raising rents.
From this point of view, many people think that the home furnishing industry model is outdated, the increment is limited, and the profit is thin... The hat of lack of imagination space is a lack of factual support, and the downside is just a subjective illusion.
Based on the growth in scale, Easyhome did not sacrifice profits but realized a significant increase in the profit margins of leasing and franchise management business, decoration services, and loan factoring. The development of the industry has entered a new stage, showing completely different characteristics from the past. ; However, the capital market has not kept pace with the times, and is still using traditional valuation models to delineate the value coordinate system.
Brands can still obtain market increments, stores can continue to grow by taking advantage of scale, suppliers and distributors still maintain a fish-water relationship of mutual dependence and common growth, and the logic of value-added has not changed. Therefore, implementing more active strategies and more proactive decision-making, and the expansion of the actual home scale is the underlying driving force for high-quality growth.
It is worth noting that the revenue and non-net profit of Easyhome in 2019 was 9.268 billion yuan and 2.092 billion yuan respectively; affected by the fluctuation of the epidemic and the regulation of the real estate industry, the two sets of data in 2020 fell by 2.65% and 39.37% respectively; In 2021, both the revenue of 13.071 billion yuan and the deduction of non-net profit of 2.229 billion yuan will exceed that of 2019, showing that the growth of Easyhome is quite solid.
With the development of scale and the consolidation of the fundamentals, the grasp of business growth can be further consolidated. During the reporting period, the net cash flow generated by Easyhome's operating activities reached 5.701 billion yuan, an increase of 178% over 2020. With sufficient liquidity, the ability to resist risks has been further improved.
This point can be concerned with the performance of the ROE indicator: at present, the ROE of Easyhome is 12.43%, which is much higher than the 4.12% of Macalline (601828. SH), another leader in the home furnishing industry.
02|Looking for certainty
Of course, the scale doesn't shine on its own. Spacious stores and rich brands always need to be filled with sufficient user traffic to drive performance growth. With traffic, there is always a need for conversion.
Over the years, Easyhome has integrated a lot of "Internet genes" and collected a lot of traffic. Data from the annual report shows that, through the deployment of localized sales service organizations, Easyhome’s “same city station” has acquired 758,000 online customers. In addition, 234 stores held 29,000 live broadcasts throughout the year, and a total of joint marketing activities were carried out throughout the year. 140 games, a year-on-year increase of 87 games.
According to the marketing model of "stores grab traffic, merchants grab content (products and services)", the stores have fully mobilized the market vitality. However, traffic and attention should not be pretentious. Marketing to attract traffic is only the first step. The key is to improve conversion efficiency.
"Our development can no longer be limited to the expansion of scale and the pursuit of quantity, but should focus on the enterprise itself, focus on the improvement of the quality of operation and management, and focus on jointly regulating the market and jointly solving the pain points of consumers."
Just as Wang Linpeng, chairman of Easyhome, said that leading companies are the first to hear the glaciers melting. With the change in the external environment, many small and medium-sized stores that do not adapt to the times have withdrawn from the historical stage, and the opportunities given up have also become the "nutrient" for "big fish" to be raised in the industry reservoir. The underlying logic of the strategy.
Grasp this "certainty", based on consolidating the service reputation of first- and second-tier core cities, Easyhome will continue to firmly export brand resources, management system, and investment promotion system to the low-tier market through the franchise model.
Regardless of the 5 newly added directly-operated stores or the 44 franchised stores, Easyhome did not choose the advantageous regions such as Beijing, Shanghai, Guangzhou, and Shenzhen, and began to tap the potential of "cost reduction", but Changchun, Suzhou, Shaoxing, Yibin and other new blue ocean markets expanded. Not only does it avoid internal wrestling, but it also takes advantage of the cost advantages of low-tier cities to expand network coverage.
Fortunately, the energy of low-tier cities is far more powerful than imagined. An agency once surveyed 41 third- and fourth-tier cities. The year-on-year growth rate from January to May was more than 10%. In the second half of the year, it fell to single digits but still maintained positive growth. Low-tier cities have gradually formed urgent home improvement demands.
At the same time, data from the National Bureau of Statistics show that in 2021, the per capita disposable income of residents across the country will be 35,128 yuan, an increase of 9.1%; especially the disposable income of residents in low-tier cities and rural areas has increased significantly. "It has accumulated a strong consumption power.
On the one hand, the consumer group continues to decline, and on the other hand, the consumption power continues to rise. A set of asset-light strategies implemented by Easyhome enjoys a two-way growth dividend.
The data shows that in 2021, its leasing and management business is 7.415 billion yuan, an increase of 22.7%; its franchise management business is 792 million yuan, an increase of 39.58%. You must know that the gross profit margin of the two is as high as 59.77%, and the leading effect is very obvious.
In addition, in 2021, Easyhome will also fully open the stage of integrated development of "big home" and "big consumption", creating a shopping mall that integrates supermarkets, entertainment, catering, and other life services and household services, catering to the diversified consumption power of customers. The demand for transformation has driven the sales revenue of goods to 3.68 billion yuan, an increase of 88.13%.
The strong purchasing power of the sinking market can bring sufficient nutrition to companies that cater to this consumption trend.
As long as enterprises can realize that the underlying logic of market changes is adjusted with the improvement of consumption power, and user needs are changing from a residence-centered, survival-oriented form to a people-centered, internal transformation of the pursuit of life experience, the Find certainty in change.
03|Unlimited future
With scale and transformation, another growth guarantee of Easyhome is the continuous improvement of operational efficiency. This is also a key indicator of its future competitiveness.
Let’s first look at a set of data: In 2021, Easyhome will achieve GMV (Gross Merchandise Volume, total merchandise sales) of 104.03 billion yuan; of which, 758,000 customers will be acquired online, leading to a transaction of 13.3 billion yuan, a year-on-year increase of 57%. At the same time as the performance of physical stores has grown, the actual home has opened up an online channel with considerable growth potential.
Compared with the broader market, the scale of 13.3 billion yuan is not outstanding, but the 57% growth rate is a signal that cannot be ignored: Easyhome needs to establish a way to connect with the future - scale expansion cannot be sacrificed to reduce operating efficiency, and must be Sync boost.
This is a complex problem, and it is necessary to solve the three demands of C-end customers, B-end brands, and their development at the same time: it is difficult for users to personalize their choices through standardized products, and their insight must be improved; brands need to complete ordering and settlement. , logistics and transportation, and other complex processes; as a bridge, Easyhome also needs to embed pre-sale, in-sale, and after-sale value-added services throughout the life cycle.
When the whole system operates quickly, it can achieve the effect of improving efficiency. Of the three roles, the "bridge" is the most important. In response to this, the actual home has already begun its layout.
For clients, Easyhome will develop and launch the "Dongwo" APP in the first half of 2021. Users can complete the entire consumption process of online product selection, in-store experience, out-of-store decision-making, and after-sales service. Public data shows that the average decision-making cycle of consumers exceeds 3 weeks, and the average comparison brand exceeds 3.6. At present, Dongwo is eliminating this pain point through technical means.
"The direction of household consumption is extremely clear, so for general users and precise users, we still choose a relatively precise operation strategy." As Li Jie, vice president of Easyhome New Retail Group, said, the one-stop service in Dongwo not only helps users It simplifies the process and improves the user experience of the C-side.
After launching the brand's digital transformation in 2018, Easyhome completed the interconnection between Alibaba's retail POS transaction system and the store's sales system, order system, and cash register system, and through the "Easy Home" intra-city station based on e-commerce localization, to achieve accurate matching between consumers and local products.
So far, Dongwo has become the axis of the value chain. On the one hand, it accumulates user data and information to paint a portrait of user needs for brands; on the other hand, it establishes a service window to provide users with services covering the entire value chain of the home furnishing. Build the S2B2C ecological infrastructure of "line + platform services", thereby driving more upstream and downstream enterprises in the industrial chain to "common prosperity".
With the launch of platforms such as Every Flat and Every House Designer, Easy Smart Home, and Smart Logistics Services, more home elements—designers, smart homes, logistics management, etc., are gathered on the large platform of Easy Home at the same time, and finally, build a platform covering design and decoration. , closed-loop digital consumption of furniture and building materials sales, smart home, logistics and distribution, and home-delivery services.
As of 2021, there are more than 90,000 cooperative merchants per floor and every house designer; Dongwo has accumulated 2.17 million registered users and 750,000 monthly active users; the first phase of Tianjin Baodi Smart Logistics Park, built according to the concept of smart logistics, has already covered the business. Tiles, bathroom, doors, custom home furnishing, finished furniture, home appliances 6 categories...
Comprehensive use of innovative technologies such as big data, cloud computing, and artificial intelligence can more accurately restore user portraits externally and accurately identify consumer preferences; internally, it can coordinate the online ordering and offline distribution of foreman to improve service efficiency. Open yourself a window into the future.
It can be seen that the image space of the home furnishing industry is still large enough; with the continuous release of digital dividends, the real home will inevitably be revalued by the capital market.