Furniture sector hits "cold flow" in summer, and royal family stock price plummeted

Recently, the Dynasty Furniture, which was listed on the Hong Kong Stock Exchange, issued an annual interim warning. The announcement shows that the unaudited consolidated profit for the six months ended June 30, 2012 will fall by more than 90% year-on-year. On the day of the announcement, the royal family's share price plummeted 10%.

Similar to the furniture of the dynasty, Zhongfu Industrial, which belongs to the same furniture sector in the Mainland, also warned in the semi-annual performance announcement issued earlier that it faced a dilemma of large losses. The forecast shows that the company's expected loss in 2012 ranged from -219% to -247%.

In fact, the overall operating dilemma of the furniture industry was a warning in the first quarter. According to the statistics of the new financial reporters, in the Shanghai and Shenzhen stock markets, several furniture companies that announced a quarterly report, except for Yihua Wood and Zhejiang Yongqiang, which earned 2.71% and 8.04% respectively, the net profit of the remaining companies from January to March this year was all year-on-year. Sliding down.

The reason is that the slowdown in domestic economic growth and the continuous regulation of real estate have become the main reasons. In addition, the rising price of the timber market, the sluggish overseas market and the high rent of the store are also the main “pushing hands” for the decline in the profit of the furniture sector.

Furniture industry "cold winter"

Among the listed companies in Shanghai and Shenzhen, Zhongfu Industrial expects net profit for the first half of 2012 to be -17 million yuan to 21 million yuan, compared with 14.34 million yuan in the same period last year. In the half-year performance forecast, Zhongfu Industrial indicated that the shortage of timber market supply led to a sharp decline in performance.

The company's half-year performance forecast said that due to the continuous rainfall weather in the first half of the year, the forestry subsidiaries were difficult to transport to the mountain sales after harvesting, and the operating income decreased. At the same time, due to the limited cutting policy and the rainy weather, the shortage of timber supply in the market made the MDF. The supply of wood raw materials is seriously insufficient, resulting in high purchase prices of raw materials, and some of the wood industry subsidiaries have stopped production and reduced operating income.

The seagull sanitary ware, also belonging to the furniture industry, was disclosed in the table statistics of the semi-annual report. During the reporting period, the company realized operating income of 80,305,540 yuan, an increase of 9.32% over the same period of the previous year, of 734,590,200 yuan; realized operating profit of 9,918,700 yuan, compared with the same period of the previous year. The net profit attributable to shareholders of listed companies was 1,405.91 million yuan, a decrease of 31.69% compared with the previous year's 20.518 million yuan.

The company’s mid-year report believes that in the context of the slow recovery of the world economy and the continued sovereign debt crisis of the euro, as a member of export-oriented manufacturing enterprises, the main reason for the decline in net profit during the reporting period was the increase in labor costs and R&D. The rise in expenditures and the sharp fluctuations in the exchange rate caused by the depreciation of the renminbi against the US dollar. The company will reduce costs, increase production efficiency, and minimize external adverse effects.

"The furniture industry is experiencing the worst winter in 2008," Li Yinlin, an analyst at GF Securities, told reporters that "50% to 60% of China's furniture is dependent on exports. In the first half of this year, exports were not good. The impact of real estate regulation and control policies, the decline in profits in the furniture industry is not surprising."

Another analyst who did not want to be named pointed out that domestic sales are diversified and highly competitive compared to the mass production of exports. In addition, the tight supply of timber in China this year has increased the cost of the furniture industry and has a certain impact on sales.

The person said that due to the global protection of the ecological environment, the introduction of the cutting-edge policy, the timber production has declined sharply; in recent years, the abnormal changes in the climate have also caused the overall amount of wood felled. Zhongfu Industrial's half-year profit pre-loss is an example. In addition, the Southeast Asian region of China's traditional timber importation has not completely subsided by the 2004 tsunami. The export volume of timber is still unsatisfactory, and it has a greater impact on the price of imported timber in China.

In addition to real estate regulation and rising timber prices, a furniture company's general manager revealed that compared to the above two points, the increase in cost of sales is the last Straw to crush them.

“Large environmental factors such as real estate purchase restrictions and rising timber prices have a certain impact on sales, but what really makes us sad is the increase in sales costs,” the general manager said. “The cost of sales is mainly reflected in the store rent, now the business. Not good, it has fallen by more than 60% compared with last year, but the monthly rent has risen from the previous 150 yuan / square meter to the current 280 yuan / square meter, the profit margin is too small, we are already considering whether to withdraw."

Furniture "self-help" new road

In response to the sluggish situation in the furniture industry in the first half of the year, Huatai Securities Research Report pointed out that the recovery of furniture export sales in June was a major positive. In June this year, the growth rate of furniture exports recovered to above the historical average. According to analysts, more than 50% of domestic furniture is exported, and the recovery of export growth will bring about a rebound in the profits of the furniture industry.

In terms of domestic sales, Li Yinlin believes that China's real estate control policy has so far been loose, and now China's urbanization has not yet been completed, and there is a certain need for housing, so the future development of the furniture industry may be warming up.

According to a report released by the China Index Academy on July 26, in the first three weeks of July this year, the real estate transaction volume of 10 representative cities was 6.5 million square meters. Compared with the year-on-year in 2011, it increased by 63% in the first three weeks of July. Compared with the same period of 2010 and 2008, the growth rate is also about 90%. Although it is still down 24% from the historical high in the same period of 2009, as the traditional off-season, The volume is still outstanding.

Li Yinlin said that in the first three weeks of July, with the improvement of the policy environment such as loosening of the first-home loan policy and interest rate cuts, the real estate transaction volume of first- and second-tier cities rebounded, but at the same time, the State Council supervised the real estate regulation and control of 16 provinces and cities, the property market. The regulation has entered a sensitive period, and the swing of the real estate policy is not conducive to the short-term recovery of the furniture market. From the trend point of view, the worst period of the furniture industry has passed, and the sector is waiting for the right investment opportunity.

In addition, the Ministry of Commerce recently stated that it is expected to clearly promote the "old-for-new" policy of furniture.

The research report of GF Securities shows that with the hot-selling promotion activities of real estate developers, various furniture stores actively carry out various promotional activities to compete for customers. The “trade-in” policy and the accelerated construction of affordable housing implemented by the Ministry of Commerce will also bring a lot of domestic demand to the furniture industry.

According to the research report, as far as the current industry dynamics are concerned, the government has given sufficient support to promote policy implementation and has more detailed and in-depth guidance on specific implementation issues. As the largest subject opportunity in the furniture industry, once the old-for-new policy is implemented smoothly, a large number of rigid domestic demand will be expected to be released, which will bring benefits to the furniture industry in the second half of this year, which will lead to a turning point in performance.

In this regard, analysts said that the "old-for-new" policy is currently being piloted in Beijing. If it can be extended, it will have a certain effect on the overall performance of the furniture industry.

In fact, many furniture brands are already in the process of finalizing new strategies. “Removing favorable policies and improving the rigid demand of the home environment is not affected by real estate regulation. In addition, second- and third-tier cities are relatively less affected by the property market, and the furniture industry can completely transfer sales centers to second- and third-tier cities.” Li Yin Pro told reporters.

In this regard, the person in charge of a furniture brand said: Vanke's net time has increased by 600 billion in half a year. Where does its income come from? Mainly from the third- or even fourth-tier cities, the way out and the future of the furniture industry are here.

The good news is that as of last Friday, 10 of the 13 stocks involved in the furniture business in the Shanghai and Shenzhen stock markets have outperformed the market, which brought a touch of warmth to the furniture sector in the winter. Winter is about to pass, will spring be far behind?

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