At the same time that contemporary hitters suffer from backaches, the market for massagers has taken advantage of the trend.
The head player of portable massager, Beijiao, has opened 153 direct-operated stores with a revenue of more than 100 million yuan. After submitting the prospectus in June last year and officially hitting the Sci-tech Innovation Board IPO, on September 29, Shenzhen Beijiao, a smart portable massager manufacturer Technology Co., Ltd. (hereinafter referred to as "Bei Easy") changed its review status to Inquired on the Shanghai Stock Exchange.
If there are no accidents, BED will be listed on the Sci-tech Innovation Board in the future, becoming the "first smart portable massager". In addition to the positive factors in the health industry, what other factors are driving the easy going public? What will be the future prospects of Beitong if it succeeds in listing?
There are so many massager players, why can Bianguang take the lead in IPO?
Established in 2000, BED is mainly engaged in the design, research and development, production, sales and service of smart portable massagers. According to the prospectus, BED is mainly engaged in its own brand "breo" and "Bei" series products, as well as other products. Companies provide ODM customized products. It has gradually formed a product system focusing on four types of smart portable massagers for eyes, neck, head and scalp.
The main source of income of BED is its own brand "breo" and "BED" series products, which contribute more than 90% of the operating income of BED. The prospectus data shows that from 2017 to 2019, the proportions of the revenue of the core products of the four types of self-owned brands of Beijiao accounted for 73.76%, 76.35%, and 80.13% of the main business revenue respectively, showing an upward trend year by year.
Among them, the eye massager, as the stepping stone to enter the massage appliance industry, has accounted for nearly 30% of the main business income for many years. At the same time, the proportion of neck and scalp massage products has also increased significantly.
Due to the impact of the epidemic, Become is also actively transitioning to online, and Become has successively entered e-commerce platforms such as Tmall and JD.com. According to the prospectus, the proportions of online and offline sales revenue of Beijiao in 2019 were 40.26% and 54.03%, respectively, and the two are becoming increasingly balanced.
So, there are so many massager players, why can Baike take the lead in IPO? Why did you choose this time to IPO?
(1) Grasp the massager market segment and form differentiated competition. At the beginning of its establishment, Beijiao used the portable massager as an industry incision, focusing on the subdivisions of the eye, head and smart portable massager, and used "ancient Chinese medicine + modern technology" as its selling point to highlight the portability of the product. It forms differentiated competition with leading domestic massage appliance companies such as Aojiahua, Rongtai Health, and Aosheng.
(2) Rapid development of performance, becoming the head player of massager. In recent years, thanks to the early differentiated competition and high marketing, Pei Easy has ushered in rapid growth in performance. The prospectus released by Beijiao shows that from 2017 to 2019, its operating income was 357 million yuan, 508 million yuan and 694 million yuan, respectively, with an average annual compound growth rate of 39.35%.
In the fiercely competitive massager industry, Baike can also occupy a place. According to a research report released by GF Securities, Baike accounted for about 5% of the market share of Chinese massage home appliances in 2019.
(3) The gross profit margin is higher than that of its peers, which makes it easier to enjoy industry dividends. Compared with other brands, Beijiao is in the high-end market. It has strong independent pricing power in the portable massager market, and its gross profit margin is significantly higher than that of its peers.
During the reporting period, the comprehensive gross profit margin of Beijiao was 55.29%, 58.19%, and 60.93%, which increased year by year. The industry leader Aojiahua’s gross profit margins in the past three years were 37.00%, 36.26%, and 37.22%, while listed company Rongtai Health’s gross profit margins in the past three years were 38.22%, 34.07%, and 31.28%.
It can be seen that Beason has taken the lead in portable massagers, with a revenue of over 100 million and high performance. This is the reason for Beason to IPO at this time. Moreover, Beida has stepped on the two outlets of health and technology at the same time, and it belongs to the current target of the capital market.
Moreover, most of the brands in the industry have not yet become a climate, and Bei Easi can be the first to go public to get the help of capital and strengthen its position. Is it really easy to be so easy?
The future of heavy marketing, light model and more relaxed future is not easy
In the matter of "selling massagers", Beida adopts the "light assets" model with commissioned processing as the main focus and independent production as a supplement, and sells the goods to the C-end through direct sales and distribution channels. The business model is simple and lightweight, but compared with other massage companies, Bei Qingnian has many problems in its operations.
(1) Marketing investment is far more than research and development, and technology content is insufficient. Although it claims to be a technology company, its financial investment is far less than marketing investment. From 2017 to 2019, Beijiao's R&D expenses were 18.6114 million yuan, 25.578 million yuan, and 40.056700 yuan, and the R&D expense ratios were 5.22%, 5.04%, and 5.86%.
In contrast, the sales expenses of Become during the same period were 129 million yuan, 183 million yuan, and 287 million yuan, totaling 599 million yuan, which is 7 times that of R&D expenditures, and the sales expense ratio has shown a significant increase. Compared with its peers, Aojiahua’s sales expense ratios from 2017 to 2019 were only 18.94, 18.29%, and 19.73%. Rongtai Health's sales expense ratios in the past three years were as low as 13.73%, 12.35%, and 11.51%.
In addition, sales expenses also compressed its net profit margin. With the gross margin far exceeding that of its peers, the net profit margin of Beijiao still lags behind. According to the data, during the reporting period, the net profit margins of Beijiao were 5.74%, 8.88%, and 7.89%, respectively, while the net profit margins of TaiHealth were 11.81%, 10.89%, and 12.45% during the same period.
It is worth mentioning that the sales staff of BEIJING in 2019 accounted for as high as 71.19%. The sales staff of Aojiahua and Rongtai Health accounted for only 16.87% and 16.39%), sales staff were more than 4 times higher than their peers, but R&D staff accounted for less than 10%.
(2) Relying solely on marketing to stimulate development, the growth rate of Beijiao slowed down. In terms of revenue, from 2017 to 2019, the operating revenue growth rate of Become was 42.3% and 36.6%, showing a clear slowdown, and the net profit margin was significantly lower than the gross profit margin of around 60%. The "magic" of marketing is declining significantly.
(3) Offline is affected by the epidemic, and online development is unfavorable. With the epidemic this year, offline massage shops have been blocked, and offline sales channels in airports, high-speed railway stations, and mid-to-high-end shopping malls in Beijing, Shanghai, Guangzhou and other cities have been blocked. A series of epidemic control measures have led to substantial sales revenue from its direct-operated stores. The decrease will adversely affect the company's operating performance in 2020.
In order to relieve stress, Bian easily went online. But it has already lost the opportunity to fight online, and the result is not ideal.
(4) The inventory turnover has slowed down, and there is a great risk of impairment. Another point worth noting is that inventory turnover is an important indicator for judging the operating efficiency of an enterprise. It represents the market competitiveness of the company's products and the company's precise grasp of the balance of supply and demand, while the ease of inventory turnover has slowed down.
From 2017 to 2019 and the first half of 2020, the inventory turnover rate of Beijiao was 3.7, 3.41, 2.94 and 1.28, showing a downward trend year by year. The accumulated inventory has affected the liquidity of Beijiao, and also brought considerable risk of impairment.
How to quickly turn the products in the warehouse into cash and reduce the risk of bad debts, there is still a lot to think about. So, can IPO fundraising bring an easy way for the company?
How to deal with the future where technology investment is not easy enough?
With the increase of sub-healthy population and the improvement of people's awareness of maintenance, the domestic massager market has developed rapidly in recent years. According to data released by the Foresight Industry Research Institute, the scale of China's massager market increased from 4.9 billion yuan to 13.9 billion yuan from 2010 to 2019, with a compound annual growth rate of 12.3%.
Beijiao has positioned itself as a "high-tech enterprise" early on, but its investment in technology is far from enough. How much is the technology content of massage equipment? Is it cutting leeks under the sign of technology?
As mentioned above, the investment in technology research and development of Beida is far less than the investment in sales, which makes Beida look more like a marketing-driven company, rather than relying on technical strength to form a barrier to competition. What needs to be pointed out is that for consumers, despite the emphasis on the operating intelligence, convenience and comfort of the product, consumers have a poor experience in actual use. They think that the massager does not Not that easy to use.
In addition, as a leading enterprise in the field of smart portable massagers in China, Beasy has had many product problems. According to the State Grid Corporation of China, during the reporting period, the massager products of Beijiao and its subsidiaries were named several times, and many of them were punished by the Market Supervision Bureau.
According to the information released by the Dongguan Municipal Market Supervision and Administration Bureau in June this year, the 3D kneading massage shawl produced by Beijiao did not meet the national standards and was ordered to stop production and fined 89,100 yuan. In addition, the small massager product quality supervision spot check report issued by the Shanghai Municipal Bureau of Quality Supervision in September 2018 showed that the Beitong Meridian massager involved unqualified safety performance. The main unqualified item was the structure and was classified as a substandard product.
The product threshold is low, and there are plenty of players on the track. In terms of massager brands, as of March this year, the number of massager companies in my country has reached 3,375. The competition in the industry has become fierce, and the technology "concentration" of BEIJING is insufficient and a moat has not yet been formed.
Companies with supply chain resources can also make similar products. Aojiahua and Rongtai Health have long been eyeing them. In addition, small home appliance companies Zhongxiaoxiong Electric has also launched related products, and industry players continue to increase.
The market is vast, and giants have already entered this track. Internet players such as Jingdong-made, NetEase Yanxuan, and Xiaomi Youpin have all entered the portable massager field. Xiaomi Youpin has put on the shelves portable massager products that can be controlled through the Mijia APP; Jingdong-made has launched eye, scalp, Massage products for neck, cervical spine, waist, feet, etc.
Moreover, in terms of price, the price of small massage electrical products launched by giants is mostly 200-400 yuan, and the product price is higher. It is worth mentioning that according to a research report released by GF Securities, in the massage industry, consumers are The brand perception is relatively vague. From this point of view, BEIJING has no obvious advantage as a pioneer of portable massagers.
So, how does Beida respond to this situation? As the head player of portable massager, Beida will have a period of industry dividends in the future, but if you want to make long-term profit, Beida will still need to increase investment in technology and become a veritable expert of smart portable massager.
The brilliance that only relies on marketing will soon be wiped out. When there are supply chain resources and at the same time "bring your own traffic" enterprises enter the field of convenient massagers, the easy future is worrying. How to form a strong product barrier is a need for continuous thinking.
Author: rather lack
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