Judging from the financial reports of most companies in the first half of the year, cost reduction and efficiency increase are still the main theme. Among them, Beiding Co., Ltd. has stepped out of its own style, launched hot topic activities on e-commerce platforms such as Xiaohongshu, and completed product promotion with the help of users. Beiding Co., Ltd. has maximized the value of consumers.
The same is true from the performance report for the first half of the year disclosed by Beiding on July 19, 2023. According to the financial report data, Beiding shares achieved a total operating income of 321.4165 million yuan in the first half of 2023.
During the same period, Beiding also realized a net profit of 37.6345 million yuan attributable to shareholders of listed companies, a year-on-year increase of 66.76%. It can be seen that Beiding's "ingenuity" in reducing costs and increasing efficiency has greatly enhanced its profitability.
Now that it has entered the second half of the small household appliance market stock competition, it is very rare for Beiding to still achieve a net profit growth of over 60%. So, how long can the high growth of Beiding's net profit last? From the semi-annual financial report data of Beiding shares, perhaps we can find some answers.
Net profit soared by 66.76%. Cost reduction and efficiency increase are the biggest contributors?
According to data from Shangpu Consulting Group, the performance of the home appliance market as a whole (including color TVs, white appliances, kitchen appliances and small household appliances) in 2022 will be lower than expected, with retail sales of 850.81 million units, a year-on-year decrease of 10.8%; retail sales of 685 billion yuan, a year-on-year decrease of 5.4% %.
Among them, the retail volume of the small household appliance market totaled approximately 677.75 million units, a year-on-year decrease of 10.4%, and the retail sales volume was 236.2 billion yuan, a year-on-year decrease of 4.9%.
Against the backdrop of slightly weak domestic demand in the small household appliance market, Beiding’s revenue in the first half of 2023 will be affected to a certain extent, but its net profit performance is very impressive.
In terms of net profit, Beiding achieved a net profit of 37.6345 million yuan attributable to shareholders of listed companies, a year-on-year increase of 66.76%. Among them, in the first quarter of 2023, the company as a whole realized a net profit of 17.62 million yuan attributable to the parent company, a year-on-year increase of 7.0%. Overall, throughout the first half of the year, Beiding's net profit performance was outstanding.
Even more so than in 2022. According to the financial report data, Beiding Co., Ltd. will achieve an operating income of approximately 805 million yuan in 2022, a year-on-year decrease of 4.98%; the net profit attributable to shareholders of listed companies is approximately 46.97 million yuan, a year-on-year decrease of 56.71%.
The net profit of Beiding Co., Ltd. continues to rise. Songuo Finance believes that it is mainly because Beiding Co., Ltd. is continuing to reduce costs and increase efficiency, resulting in the improvement of the company's various costs.
From the officially disclosed record table of investor relations activities of Beiding shares, we can see that Beiding shares will continue to adjust and integrate all channels at home and abroad from the end of 2021. Inefficient links are gradually optimized.
Not only that, the company has also carried out the control of fixed costs at the manufacturing end, including fixed assets for production, site warehouses, inventory, etc. are all being reduced.
In addition, the company also linked life notes with purchased users in Xiaohongshu, and launched hot topics such as "My Beiding Food Diary". This move also played a role in reducing costs and increasing efficiency.
The real sharing of users on Xiaohongshu has brought Beiding continuous output of high-quality content, not only allowing users who have purchased to enjoy benefits, but also allowing users who have not purchased to see the charm of Beiding’s products.
Behind the real sharing, the design concept, convenience of use and functional innovation of the product are fully reflected. This is very good advertising and marketing, which not only captures the hearts of users, but also showcases products, and helps each other, forming a flywheel effect.
It is worth noting that in recent years, Beiding’s revenue has entered a stage of continuous decline. In the first half of this year, its total operating income was 321.4165 million yuan, a year-on-year decrease of 12.86%; the revenue in the first quarter fell by 6.6% year-on-year. Compared with the average year-on-year growth rate in the first three quarters of 2022, it will be -1.3%.
In response to this phenomenon, Beiding shares said that there are two reasons. First, based on the fact that domestic consumers tend to be rational as a whole, the company puts safety and efficiency first in the operation process, and is relatively cautious in spending and marketing. Therefore, the business income of independent brands in China has been affected to a certain extent.
Second, the company continues to follow the adjustment strategy since the end of 2022 in terms of overseas self-owned brand business channels and operating models. A considerable proportion of the business has been adjusted from the self-operated model to the distribution model. This change has had a structural impact on revenue.
Facing the continuous decline in revenue, what can Beiding do? In today's consumer market, cost reduction and efficiency increase are still the main theme, but how to catch the declining revenue has become the next focus.
In the era of stocks, how long can Beiding rely on "online"?
The plight of revenue decline stems from the market, and Beiding shares still need to find answers from the market if they want to find a way to improve. With the continuous improvement of consumers' pursuit of living standards, as well as the growing demand for refinement, quality, health, modernity, etc., consumers' willingness to buy high-quality products has gradually increased.
The increase in demand further promotes the intensification of competition. In the current market, traditional home appliance brands and emerging brands coexist. According to data from Aoweiyun.com, from the beginning of 2019 to the end of 2020, the number of online kitchen small appliance brands increased from 700 to about 1,100, while the number of brands in offline channels remained below 200, and the long-tail category of small appliances The rapid growth has also attracted traditional small home appliance manufacturers, such as Midea, Joyoung, and Supor.
Although there are many competitors, the overall homogeneity of small household appliances is serious, and the growth rate of the industry has slowed down. According to data from Shangpu Consulting Group, the retail volume of the small household appliances market in 2022 will decline by 10.4% year-on-year. It can be seen that the overall market Has entered the stock competition.
In such a market environment, the performance of Beiding shares in the first half of the year is also under continuous pressure. According to the financial report data for the first half of 2023, Beiding's own brand "Beiding BUYDEEM" achieved a revenue of about 246 million yuan in the domestic market, a year-on-year decrease of 7.01%.
So, in the second half of the year, Beiding shares should make use of its strengths and avoid weaknesses. First of all, what is worthy of recognition is the differentiated route of Beiding Co., Ltd., which aims at the high-end small home appliance track and focuses on young users who pursue high-quality life. This market positioning and user positioning are in line with the future development trend of small home appliances.
Pinduoduo 618 digital home appliance consumption trend shows that the younger trend of home appliance consumption is further highlighted, and the proportion of post-90s and post-95s in the consumer group has increased by 11% year-on-year. Moreover, the younger consumer groups have also changed consumption patterns. Therefore, the entire main battlefield is concentrated on the line.
Corresponding to online shopping and e-commerce channels, Beiding Stock also has a relatively mature model. In recent years, Beiding shares have continued to attract traffic through short videos. On e-commerce platforms such as Douyin and Xiaohongshu, they have built a loyal fan base with purchasing power. The honor of buying second place on the list.
On Xiaohongshu, Beiding shares created a membership system. Its membership system includes three major directions: traffic operation, event operation and content operation. This system is in line with its product and user positioning and has long-term value; content productivity. It not only provides benefits to users, but also effectively magnifies marketing benefits.
Although the prosperity of the online channel has expanded the brand influence of Beiding, but to completely break through the plight of declining revenue, the channel and marketing effect alone may not be significant, which is the crux of the first half of the year.
Judging from the consumer evaluations of the Douyin e-commerce platform and the Xiaohongshu Planting Grass platform, users’ evaluation of Beiding’s products is divided into two levels. On the one hand, because the company followed the industry trend in the early stage, focused on marketing, cooperated with video bloggers of Xiaohongshu, and the behavior of "self-produced food" by members, the company's products received rave reviews, and product sales increased in the past few years.
On the other hand, "passers-by" who have purchased the products believe that the product quality and after-sales service of Beiding shares do not match their high prices. Questionable entries on Xiaohongshu have been viewed 34,000 times. At the same time, the company’s inventory has increased, prompting price reduction promotions on various platforms, and many products worth 1,000 yuan are sold at a 50% discount. It can be seen that in the second half of the year, while focusing on reducing costs and increasing efficiency, Beiding shares still need to work hard on products.
What is worthy of recognition is that Beiding shares have shown their attitude. In the first quarter of this year, Beiding’s research and development expenses totaled 1,124,000 yuan, a year-on-year increase of 42.11%. The investor relations activity record of Beiding shares on April 25 shows that the increase in research and development expenses in the first quarter report is due to the increase in research projects compared with the same period last year.
At the same time, the official also stated that it has expanded product-related resource investment, including the reserve of product research and development personnel and investment in new product research and development projects. In addition, the focus of product research and development is also on the individual investment in personnel, molds, and research and development processes corresponding to electrical products.
epilogue
The growth rate of the market is slowing down, and small household appliances may enter the era of stock. Beiding shares have not yet stood out from the competition, and still need to face the dilemma of continuous decline in revenue. In the first half of the year, from the surge in net profit, we saw Beiding’s strong execution in reducing costs and increasing efficiency.
However, as consumers lose their sense of freshness of "novel appearance", the value positioning of products returns more to quality. Then, how to catch the attention of consumers in the future, whether Beiding will continue to increase research and development, pay more attention to product quality, or find another way to seek breakthroughs, we will wait and see.
Author: Jing Song
Source: Songuo Finance