As Mengtian Home Furnishing, which was listed on the main board of , Shanghai Stock Exchange at the end of 2021, finally took the IPO bus in the early stage of the industry's downturn. It may be more difficult for such companies to go public in the future.
The reason is of course the downward trend in the real estate industry, which will sooner or later be transmitted to the "decoration and decoration" industry. If there are difficulties in operation and revenue continues to fall, there is no need for listing financing, and it is not easy to pass relevant procedures.
Mengtian Home Furnishings is quite interesting. In the first few years of its listing, its revenue was in a period of adjustment. After increased by 23.9% year-on-year in 2021, it finally exceeded the temporary peak in 2017. In the first three quarters of 2022, revenue fell slightly again. We can see that their home products are still seasonal, and the fourth quarter is generally the peak sales season. So the performance of the first full year after its launch depends on the performance of the last quarter.
Judging from the revenue structure of the products in the first half of the year, "domain" products are the main products of Mengtian Home Furnishing, accounting for 63.2%, and the total "cabinet" and "wall panels" are close to 30%, and there are some other products.
and revenue decline slightly, in the first three quarters of 2022, its net profit increased by 22.5% year-on-year. Although Mengtian Home Furnishing's revenue fluctuated significantly in the past few years, its net profit was generally on an upward trend. However, after reaching a peak of 190 million yuan in 2019, it could not make a new breakthrough. Can we make a breakthrough in 2022 with the halo of listing? It still depends on whether the halo can withstand the downward pressure of the industry.
2019 had the highest gross profit margin, reaching 38.3%, which is also an important reason why the net profit hit a temporary peak that year. Gross profit margin has continued to decline in recent years, reaching 30.5% in the first three quarters of 2022, only higher than the level in 2017.
But 2017 was the year with the highest return on net assets of Mengtian Home Furnishing . In those years, they were all experts with their own "Sunflower Book" tricks. With the increase in net assets, martial arts have gradually been abandoned; after listing, net assets have further increased, and it has become the most popular in the first three quarters of 2022.
From the years when it achieved a high return on net assets in 2017, we can see that its net assets are very small, with an asset-liability ratio of up to 82.6%. More than half of long-term assets rely on current liabilities to provide an asset source, and current ratio and quick ratio are extremely low. Although this way can be used with a smaller net profit, if you encounter certain accidental factors in your business, you may experience vicious events such as capital chain breakage. In other words, I was really helpless at that time and no one was willing to do this on his own initiative.
However, after its listing, it was obviously at the other extreme at the end of 2021 and the end of the third quarter of 2022, that is, there is too much money, how much more? There is a serious liquidity surplus. The reason is that after listing financing, about 800 million yuan in cash was added. Judging from the announcement of some of the raised funds to replace early investment projects, this kind of loose state should be maintained for a long time in the subsequent period.
's first two current assets are cash assets, with an amount of 1.14 billion yuan, twice its total liabilities. The contract liabilities in their liabilities are still prepaid, which does not require cash consumption at all. Life is so relaxed. They have come to a world of ice and fire in five years, and I don’t know if they can stand it psychologically.
operating long-term assets have not increased significantly, but the projects under construction still have increased by 80 million yuan, which means that some small projects are still under construction, and obviously these will not consume too much resources.
From the cash flow statement, this is almost the case. Fixed asset investment activities have been large in the past few years, and have been slowing down this year. This is the mismatch in this world. When money is needed, there is no listing financing. It has been almost built. The market has changed, and financing is here.
The net cash flow of its operating activities performed normally, with positive net inflows in each period, and the amount was basically higher than the current net profit.The larger net investment in in the first three quarters of 2022 is mainly to develop trading financial assets , with fixed assets investments of only 80 million yuan.
Finally, let’s look at its cost and expense composition and profit margin. Although the gross profit margin has declined, by gradually reducing the proportion of sales expenses to revenue, Mengtian Home Furnishing has stabilized its profit margin at around 15%, which is quite powerful. A few years ago, I often saw advertisements for Mengtian Mumen on TV. Now, there may not be many people watching TV. The investment in this area can indeed be reduced. Although
has little need to expand the production capacity of after it is launched, it is not easy to predict how deep the subsequent industry will be adjusted. With a large amount of cash assets in hand, Mengtian Home Furnishing always seems more calm than its peers. As for the decline in the rate of return on net assets, there is no need to care about that much. Isn’t a well-known entrepreneur saying that everyone’s task now is to survive?
Statement: The above is a personal analysis and does not constitute investment advice to anyone!
