A complete analysis report of China's furniture industry

Sina furniture 2020-03-18 10:54

  1、 The impact of the epidemic on the furniture industry

This paper analyzes the supply end, demand end, import and export end and production end of furniture manufacturing industry, and comprehensively expounds the impact of the epidemic on the furniture industry chain.

[supply end] the impact on the supply of raw materials is small, and the price is generally stable

1. There is no obvious cut-off of timber supply, and the overall price is relatively stable

The raw materials used in China's furniture industry mainly include wood (including logs and plates), leather, fabric, rattan, metal, glass, chemical raw materials, etc., of which wood is the main one.At present, the main sources of logs in furniture industry are domestic forest felling and overseas import.

There are fixed planning indicators for deforestation in domestic forest areas every year, mainly economic forest and fast-growing forest, which are relatively less affected by the epidemic.However, in the near future, the supply of imported logs such as high-end rosewood may be affected by the epidemic (such as Vietnam customs clearance).

There is no obvious shortage of plate supply.Domestic plate production enterprises are mainly distributed in Zhejiang, Fujian, Guangxi and other provinces, which are not key areas of the epidemic, and are now returning to work.

From the perspective of the dynamics of the listed companies (rabbit baby, Fenglin group, Yong'an Forestry, etc.), no notice of suspension has been issued.The overall board production and supply are normal, and the market supply is stable. The trading price and volume of each wood trading center fluctuate mainly with a small drop.

2. Polyurethane: affected by the recent oil price, the price has declined

Polyurethane is a chemical product, which is an important raw material for sofa and bed furniture production. MDI (diphenylmethane diisocyanate) is used for making leather for sofa or bed, and TDI (toluene diisocyanate) is used for making mattress.

There are many domestic polyurethane manufacturers with stable supply. The price is mainly affected by the upstream oil price and the production plan of large factories.At the same time, polyurethane is widely used, most industries have procurement, and the procurement of furniture industry is mostly on the market.Due to the recent decline in the oil market, polyurethane prices fell slightly.

On March 9, the domestic TDI market price in East China was 11000 yuan / ton, down 4.06% compared with December 31 of last year; the MDI price was 14866 yuan / ton, down 7.08% compared with December 31 of last year.

3. Equipment and auxiliary material manufacturers return to work in order, with little overall impact

Domestic furniture equipment manufacturers are numerous and widely distributed, mainly in Guangdong, Henan, Zhejiang and other provinces. The above areas are returning to work in an orderly manner and the supply is gradually restored.

Hardware, paint, veneer and other manufacturers are also numerous, most of which are located in Guangdong, Zhejiang, Fujian and other places. At present, they are also returning to work orderly.

In general, the epidemic has little impact on the supply of equipment and auxiliary materials in the furniture industry.

[demand end] the downstream market has declined seriously in the short term, which restrains the demand for furniture

1. Serious short-term decline in the real estate market, curbing the demand for furniture

One of the major impacts of the epidemic on the economy is to curb real estate sales, thus affecting furniture demand.Since 2020, the average daily sales of first-hand houses in 36 cities across the country have declined by 38% year-on-year, of which 75% in February and 35% in March.

In terms of second-hand housing, the transaction decline is also serious. According to the data of 19 cities across the country, the average transaction volume from the beginning of the year to today fell by 27% year-on-year, of which 66% fell in February.

Obviously, the epidemic will have a serious impact on the sales of commercial housing in the first quarter, thus directly impacting the furniture industry.

2. Store opening and people flow restrictions affect furniture sales

Although the development of furniture e-commerce is rapid in recent years, the main sales channels are still offline, including specialized furniture market, furniture and building materials market, direct selling stores, etc.Some large furniture enterprises have thousands of offline stores, for example, there are about 7000 European style home furnishing stores and 2300 Xilinmen stores.

Local prevention and control of the epidemic directly led to the failure of relevant stores to open normally during the Spring Festival holiday, the delay in opening stores after the festival, and the blocked flow of personnel, which had a huge impact on furniture retail.

From the current situation, before the outbreak is completely lifted, even if the retail end is normally back to work and open, consumers will also reduce to store behavior, which has a significant impact on the retail sales in the first quarter or even the first half of the year.

3. Delay of exhibition, affecting orders of furniture enterprises in the first half of the year

Affected by the epidemic, the large domestic furniture exhibitions planned to be held after the Spring Festival were basically postponed.For example, Shenzhen International Furniture Fair will be postponed to June, and China (Guangzhou) International Furniture Fair will be postponed until further notice.

The delay of the exhibition will directly affect the order acquisition of furniture enterprises. From the perspective of the delay date, the exhibition order in the first half of the year will be affected at least.

[import and export] from January to February, the export dropped by 22.8% year on year, and will continue to bear pressure in the first half of the year

China is a big country in furniture production and export, and export is an important source of income for a considerable number of furniture enterprises.According to customs data, in 2019, China's furniture and spare parts export reached 54.226 billion US dollars, of which 8.225 billion US dollars were exported from January to February, accounting for 15.17% of the whole year.

Affected by the epidemic this year, the export of furniture and spare parts from January to February reached 6.349 billion US dollars, down 22.8% from the same period last year, with a very significant impact.Recently, the epidemic continues to spread overseas, and furniture exports may continue to be under pressure in the first half of the year.

[production end] furniture manufacturing enterprises return to work orderly, with limited impact on production

1. The output of furniture in Hubei is small, and the impact of shutdown is limited.From the perspective of furniture production in various regions in 2018, the proportion of furniture production in Hubei Province in China is only 0.61%.Therefore, it is difficult for enterprises in Hubei to return to work, which has limited impact on the national furniture production.

2. Furniture manufacturing enterprises return to work orderly, with relatively small impact.

Most furniture manufacturing enterprises have been back to work orderly since the middle of February. At the beginning of March, they basically put into normal production and operation, with short downtime and limited impact.At the same time, the first quarter is usually the off-season of sales, with limited impact on the whole year.

2、 Industry operation analysis

Affected by the lag of data release, the data used in this section is the data of the whole year of 2019. In the next period, the industry data released for the first time after the epidemic hit the industry will be analyzed in depth.

[industrial scale] the overall scale keeps stable growth

As of December 2019, there are 6410 furniture manufacturing enterprises above Designated Size nationwide, 110 more than in 2018.The total assets, liabilities and profits of the enterprise increased by 5.3%, 5% and 10.8% year on year respectively, reaching 589.180 billion yuan, 311.240 billion yuan and 46.270 billion yuan, reflecting the stable growth of the overall scale of the industry.

[production] the growth rate of output value has fallen

From January to December 2019, the added value of furniture manufacturing industry increased by 2.50%, 0.3 percentage points higher than that of January to November 2019, but 3.4 percentage points lower than that of the same period last year.The growth rate of industrial added value fell year on year, which is consistent with the trend of industry investment, indicating that the growth momentum of furniture manufacturing industry production slowed down.

[investment] negative growth in industry investment

In 2019, the fixed asset investment in the furniture manufacturing industry in China decreased by 0.70% year-on-year, and the growth rate fell by 23.9 percentage points compared with the same period of last year.The sharp drop in investment growth and the shift from positive to negative is a warning signal of the industry's slowdown.The main reason is that the regulation of real estate is becoming more and more strict, and furniture manufacturing enterprises, as the post link of real estate chain, are directly affected;

At the same time, environmental protection standards are becoming increasingly strict, and enterprises lack confidence in sustainable development.In recent years, the trend of domestic furniture enterprises to expand overseas investment and transfer production capacity has appeared, which has affected the enthusiasm of domestic investment.

[export situation] the export scale decreased in the whole year

As of December 2019, the cumulative export delivery value of the national furniture manufacturing industry is 169.180 billion yuan, down 2.40% from the same period last year, accounting for 1.45% of the total export delivery value of 31 manufacturing industries, ranking 27th.

However, in the fourth quarter of 2019, the export delivery value was 44.87 billion yuan, an increase of 26.63 percentage points compared with the third quarter, and showed a trend of monthly increase, indicating that the easing of Sino US trade war and other factors had a certain positive impact on the furniture industry.

[benefits] small increase in revenue and increase in profitability

1. Revenue.

In 2019, the operating revenue of the national furniture manufacturing enterprises above the designated size was 711.72 billion yuan, an increase of 1.5% year-on-year. There was still a small increase, but the growth rate was 2.9 percentage points lower than that in 2018, with a significant decline.

In combination with the three major phenomena of the decline in the growth of new fixed asset investment, the weakness of real estate sales and the slowdown of macroeconomic growth, we believe that the furniture manufacturing industry has begun to suffer from overcapacity.

2. Profit situation.

In the fourth quarter of 2019, the sales profit margin of national furniture manufacturing enterprises above the designated size was 6.5%, continuing the slight upward trend of the previous two quarters.The gross profit margin of sales for the whole year is 17.4%, showing a quarterly continuous upward trend, 1 percentage point higher than that in 2018.

The three expenses (management expenses, financial expenses and sales expenses) account for 10% of the main business income, a slight decrease of 0.6 percentage points compared with 2018.Overall, the industry's profitability has improved.

3. Loss situation.

As of December 2019, there are 6410 Enterprises above the designated scale in the furniture manufacturing industry in China, 902 of which are in the state of loss operation, with a loss area of 14.07%.Compared with 2018, the number of loss making enterprises increased by 114, and the loss area increased by 1.56 percentage points, reflecting that more enterprises in the industry are facing operating pressure.However, in the quarter of 2019, the number of loss making enterprises decreased quarter by quarter.

4. Assets and liabilities.

In December 2019, the asset liability ratio of enterprises in the national furniture manufacturing industry was 52.8%, falling for two consecutive quarters.However, compared with the previous year, the asset liability ratio is still in a high position, reflecting a decline in the overall solvency.

[operating capacity] accounts receivable and inventory increase, turnover rate decrease

Inventory turnover days and accounts receivable turnover days reflect the operation ability of the enterprise.According to the data of the National Bureau of statistics, in December 2019, the net receivables of Enterprises above the national furniture manufacturing industry were RMB 96.06 billion, an increase of 3.3% year on year; the total inventory was RMB 82.06 billion, an increase of 2.8% year on year.

At the same time, the inventory turnover days and accounts receivable turnover days are 40 days and 42 days respectively. Compared with historical data, from 2017 to 2019, the inventory turnover and accounts receivable turnover days of the whole industry are continuously increasing, indicating that the growth rate of revenue is less than the growth rate of inventory and accounts receivable, reflecting a certain decline in the industry's operation level, so enterprises should pay close attention to it to prevent overstocking of inventoryCapital occupation and bad debt losses erode profits.

[prosperity index] in December, the business prosperity index was 124.9, which was at the historical median level

In December 2019, the prosperity index of national furniture manufacturing enterprises was 124.9 (last year = 100), down 0.8 points compared with the previous quarter, but up 5.5 percentage points compared with the same period in 2018.In the same month, the index of entrepreneur confidence and prosperity of furniture manufacturing industry was 125.2 (last year = 100), basically the same as that of last year.

Furniture manufacturing is mainly affected by the real estate industry.Under the influence of blocked real estate financing channels, weak sales and continuous high pressure of policies, the prosperity of real estate is difficult to recover significantly, and as a highly correlated furniture manufacturing industry, the prosperity is not optimistic.(source: furniture industry)