Huadi first half of the year due to the epidemic profits cut! Epidemic: this pot I do not all back?

Article: Internet Jianghu

The epidemic black swan's outbreak of the economy shrouded in the shadow of the bleak, all walks of life are y affected, especially in the field of home appliances, breaking a lot of the company's business planning.

But with the "epidemic" as an opportunity, some companies take advantage of the situation to launch new products, some companies can go with the flow, cross-cutting into new business directions ....... This has also given rise to a number of business opportunities, but Huadi does not seem to be one of them.

Recently, Huadi shares disclosed the 2020 semi-annual results forecast, is expected to the first half of the attributable net profit year-on-year decline of 48.12% -60.78% to 155-205 million yuan, of which the second quarter year-on-year decline of 39.60% -58.64% to 109-159 million yuan.

Kitchen appliances of the "opportunity", Huadi's "danger"

The impact of the epidemic on the home appliance industry is undoubtedly huge, the first quarter of the overall downtrend of home appliance retail is obvious, but for the home appliance industry kitchen appliances, in fact, is also a hidden opportunity. Why?

Because the epidemic is not only affecting home appliances, for the catering industry is the same, in the isolation of the closed period, dine-in has become a luxury, and even takeout want to send users to the hands of the user to go through a barrier, a large number of restaurants can not withstand the pressure of capital and closed down. What happens when people don't have the means to satisfy their stomachs through the outside world?

The answer is: Transform into a little Chinese pawn.

In this extended version of the Chinese New Year segregated holiday, people regained their long lost cooking skills and started the cooking game of upgrading to fight monsters, cakes, doughnuts, roasted chicken, a dish of food was placed in the people's circle of friends.

No matter how handicapped people have been attracted, hoping to ascend to the throne of cookery. Even in the after the stall fire, people lamented: the original heaven has been arranged, the first half of the home hard to practice the cooking skills, is not for this day?

During the quarantine dietary needs coupled with the spread of social fission effect, the trend is also the oven, electric pie pan, air fryer and other types of kitchen appliances pushed to the high point, the original kitchen appliances wear and tear as well as people for the emerging kitchen appliances hot rod, so that during the epidemic there is a small outbreak of the trend.

To cost-effective "small appliances" as the main products of small bear appliances, released in April 2020 the first quarter of the report earnings forecast shows that attributable net profit of 89,782,400 yuan - 107 million yuan, an increase of 60% -90%.

During the epidemic, Xiaomi Youpin's small home appliance category ushered in more than 85% growth; wall-breaker, baking category has more than three times the growth, kitchen appliances in the field of products related to disinfection and sterilization also successively became the platform of explosive models.

And Huadei preview of the huge decline in net profit of nearly 50%, for the reasons of performance changes, Huadei shares in the preview pointed out that: "the performance of the company during the reporting period declined, mainly due to the new Crown Pneumonia epidemic and its preventive and control measures on the company's production and operation impact.

The epidemic did have an impact, but the epidemic is an important factor, not an absolute factor. By observing the development of the epidemic in the country, we can find that in mid-February, the epidemic has been strongly controlled by the government, and in March, the government has begun to promote the orderly resumption of work and production in various places, and people's panic about the epidemic has gradually dissipated, and the public has begun to resume consumption activities under reasonable protection.

It can be said that the second quarter of this year is significant for the appliance industry, after all, people's consumer demand has always existed, after a period of repression, should usher in an outbreak. But from the second quarter of Huadi's performance preview did not see this sign, its net profit decreased year-on-year, and the decline is still not small.

Household kitchen appliances is a very cyclical industry, the emergence of this epidemic clearly hit Huadi a surprise, especially for Huadi so large scale, it is inevitable that will meet the "boat is difficult to turn around" problem. Through its last year's financial report seems to see that Huadi is not fully prepared for the winter, in the face of the trend more or less insensitive.

Huadi channel predicament?

In the view of Internet Jianghu (ID: VIPIT1), net profit plummeted in addition to the impact of the epidemic, Huadei should look for reasons from their own business model.

What is known is that Huadi's dependence on the channel is very strong, because in the past it has made its fortune mainly by relying on the model of agency distribution, relying on large chain companies to sell. And Huadi's relationship with distributors has been heavily criticized by the industry. From the information retrieved from the eye of the sky, Huadi's own risk of how much 271 articles, many of which are related to the dealer's contradictions.

Last year, during the World Cup, the second largest distributor of Huadei, Beijing, Wang Wei, the person in charge of the run is the dealer stubbornness to the climax.

However, from another point of view, Huadei is too dependent on and lacks management of the channel. There have been a lot of people pointed out that the daily management of Huadi dealers less involved in the control ability is limited, but the degree of dependence is higher, which has also formed a hidden danger.

Take e-commerce as an example, why are major e-commerce platforms now starting to self-manage logistics? Why do many brands have to strengthen their own channel construction outside of mainstream platforms and shopping malls? This is actually the infrastructure firmly in the hands of the initiative. Outsourcing barriers to initiative is not on their side, the defense is limited, and self-owned infrastructure in the hands of the enterprise, the initial investment may be larger, but with the development of time the marginal cost will be decreasing.

Last year, Huadi changed the dealer program, is the original function is simple, just goods delivery agents, transformed into a combination of operators and traditional agents, retail channel changes do not lie in a simple regional division, but the function is further upgraded. Before some eat the price difference between the purchase and sale, the follow-up will be based on the service to earn commissions.

Dealers into service providers, for consumers, is a good thing, I have to say, Huadi's consumer thinking is correct, the new retail channel to explore the process, the agent has been transformed into a service provider, this piece of the channel is currently only the United States, Haier, Huadi three, kitchen appliances, Chinese emperor is the only one. The company wants to do is to upgrade agents, rather than cutting agents. But for dealers, the profit row first, dealers become service providers, take on more responsibility, whether the income can also rise, this is a problem.

Therefore, for Huadi, with reference to the direction of the development of the kitchen appliance industry, trends and lessons learned in the past, perhaps to strengthen channel management has become an inevitable part of its future development.

Huadi "outdated"?

Society is developing at a rapid pace, and times are changing. Many once successful companies are facing the dilemma of innovation and relying on past successes. However, is the past successful experience still work today? Is it an impediment to business development? All of this requires in-depth thinking, or else the original rules of success will fail in the face of disruptive technologies and changes in the consumer market, resulting in a loss of competitive advantage and market position.

For Huadi, it is still the leading echelon of the domestic kitchen appliance market, but at the same time, Huadi seems to be falling behind.

# Main business withered

In the past, people are more concerned about food and drink, the traditional kitchen appliances are only to meet the basic needs of the people. With the changes in lifestyle and consumption upgrading, the kitchen appliance market is now moving towards the trend of health, intelligence and diversification. New consumption scenarios, new technologies have brought a new incremental market, the kitchen appliance industry is also undergoing structural changes.

For example, the kitchen small appliances category, due to the installation-free, low unit price, high value and small size, etc., in the kitchen appliances industry has accounted for a considerable proportion, compared to the traditional kitchen and bathroom market today a wail.

According to AVC (AVC) omni-channel push total data and monitoring data, from January to September 2019, China's hood market retail sales of 25.5 billion yuan, down 8.3% year-on-year. Retail volume of 17.76 million units, down 6.2% year-on-year; gas cooker market retail sales of 14.3 billion yuan, down 5.3% year-on-year. Retail volume of 21.65 million units, down 3.0% year-on-year, the kitchen and bathroom industry downward pressure further increased.

Users are concerned about the practicality of kitchen appliances, but also increasingly also concerned about the non-rigid demand for products. On the one hand, kitchen appliances companies began to not exist or did not realize the consumer scene on the power, on the one hand, in the original product to do some, in line with the market demand for upgrading, to achieve the people do not have I have, I have my own superiority.

The track has changed, new market opportunities have been born, who first seize the market boss position, who will become the future king of the kitchen and bathroom market.

#Brand aging

In the past, people get information through a very single channel, advertising channels are few, nowadays information channels are becoming more and more diversified, but also more and more dispersed, and TV ads grow up in the era of users are different, the younger generation of consumers to get information through more dispersed in the social media and the various content communities, the recognition of the traditional brand gradually fade, the traditional home appliance brands such as Huatei, and so on, have become more and more popular. The trust and recognition of traditional home appliance brands such as Hattie's is not as strong as before.

Huadi is targeting the high-end market, but the brand recognition is not as high-end as that of the boss and other brands, and Huadi has implemented the dual-brand operation of "Huadi" and "Baidu". Among them, "Huadi" brand positioning kitchen and bathroom high-end market, "Best" brand positioning kitchen and bathroom mid-range market.

Huadei through high-end positioning in the first and second-tier cities to stand firm, now the stock market, to rely on the mid-range market, "Byte" to strike, as C-end supplies, brand awareness is extremely important, and Byte popularity is not too high, the overall decline in the kitchen and bathroom market, the core reason for the real estate cycle is the impact of the fact that the vast number of the sinking market, there is still a strong demand, the low-end brand layout! The sinking market may be able to open up sales.

#Extrusion effect

Kitchen appliances market gross margins are higher, which also attracts a lot of peripheral areas players coveted. In addition, relative to other categories of the home appliance industry, its lowest household ownership per 100 households, there is further room for growth in the sinking market. As a result, many color TV, small home appliances, white goods, and even Internet companies have entered the kitchen market.

And this also further aggravates the competitive environment of the kitchen appliances market, so many players flock to the inevitable occupation of a portion of the market share, which for the industry, including Huadi, including the "indigenous" giants to a certain extent to produce extrusion, which may be one of the factors affecting the decline of its business revenue.

For Huadi, although they have been in the kitchen appliance industry for a long time, but also need to strengthen the vigilance. Especially in the face of millet and other Internet companies, they are different in business thinking and general home appliance companies, may play a small less than the effect of the Internet TV is a good example.

Nowadays, the kitchen appliance market is also facing a major trend of intelligent transformation, which in fact also provides the "barbarians" airborne timing conditions, in addition to the previous we mentioned, kitchen appliances in the sinking market there is still a huge value-added space, and many color TV, small home appliances, white goods, as well as millet, such as the Internet brand in the three or four cities and the majority of the rural areas have already established a certain channel base, Huadi has to Defense .

In the future of the variable kitchen appliance market environment, the only variable factor that Huadi can master may only be itself.