Edit | Yu Bin
Produced by | Chaoqi Network "Yu see column"
Since February this year, the market has been circulating the voice of "Shenzhen second-hand housing reference price will be raised". As a first-tier city in China, Shenzhen's series of policies related to social and people's livelihood have also aroused widespread concern. Recently, a "Shenzhen second-hand housing reference price will be raised by 3%-5%" news, but also triggered a fierce discussion.
Although as of now, the Shenzhen Housing and Urban-Rural Development Bureau has not made a clear statement on the news. However, in the downward environment of the real estate market, such news may not be empty. According to the data of Shell Research Institute, the transaction volume of second-hand residential buildings in Shenzhen in 2021 was 40,699 units, down nearly 60% compared with 2020.
It can be seen that the "price increase" of second-hand housing has brought about a "blow" to the real estate second-hand housing stock market, and it is also a stimulus to the incremental market for newly built commercial housing. Looking at the essence through the phenomenon, this is a "helpless move" that the commercial housing market continues to be sluggish and can only be rescued through macro policies.
The downturn in the real estate market has also brought about a crisis for the downstream home improvement and home furnishing industry. Taking Dongyi Risheng, a listed company in the home improvement industry, as an example, you can peek at the leopard and have a clear understanding of the wind direction of the entire home improvement industry.
Mom-and-pop shops started, and it was difficult to solve the dilemma of profitability when going public
In the 90s of the last century, because of the introduction of friends, Yang Jin, president of Dongyi Risheng Home Decoration Group Co., Ltd. (hereinafter referred to as Dongyi Risheng), met Chen Hui, who was in Beijing and had a background in the decoration industry, and gave up the plan to develop in the United States or Shenzhen, but fell in love with Chen Hui briefly and flashed marriage in Beijing.
At that time, Beijing's decoration market was very chaotic, various consumer complaints were not uncommon, and the market was moving towards standardization, and it was urgent. The attentive Yang Jin found such a business opportunity, so he and her husband Chen Hui together founded Dongyi Risheng in 2016. It is said that the origin of the company's name is also very dramatic, and "Dongyi" is composed of half of the two people's own surnames.
However, on September 30, 2021, after 25 years, Dongyi Risheng issued an announcement that chen hui and Yang Jin, the co-actual controllers of the company, have gone through divorce procedures, dissolved the marriage relationship, and completed the division of equity and property after friendly consultation, and the actual controller of the company has changed from the two joint actual controllers to Chen Hui as the only actual controller. As a result, Dongyi Risheng, a veritable "mom-and-pop shop", eventually disintegrated.
It is understood that after the completion of the Equity and Share Division Agreement, the shareholding ratio of the two parties in Dongyi Tianzheng became 68.24% held by Chen Hui and 31.76% held by Yang Jin. At the same time, Yang Jin resigned from all the positions of director and general manager of Dongyi Risheng Company.
Although the marriage of Chen Hui and Yang Jin ended in the final parting of ways, the two started a business together, went public together and rang the bell, and the entrepreneurial story of you as the chairman and me as the president has become a good story in the home improvement circle.
In mid-February 2014, Dongyi Risheng was successfully listed on the Shenzhen SME Board and involved in the field of home e-commerce, and Dongyi Risheng also began to enter a new journey of transforming Internet home decoration.
However, the road to the listing and transformation of Dongyi Risheng is not easy. Moreover, after the listing of Dongyi Risheng, it did not make rapid progress, and its operational problems had early signs.
For example, the results of 2016-2018 show that the revenue and profit of Dongyi Risheng are in the process of continuously rising, but the profit growth rate continues to slow. At that time, according to industry analysis reports, Dongyi Risheng did not take advantage of the momentum, on the one hand, because the overall decline of the home improvement industry in recent years, industry weakness has become the norm. On the other hand, perhaps because Dongyi Risheng also has potential business problems.
Especially in 2019, the company not only declined in revenue, but also turned profits to losses, and the performance can be described as plummeting. Affected by multiple factors, the proportion of design revenue with higher gross profit margins has declined, and labor costs and brand promotion expenses have increased sharply. At the same time, the increase in costs brought about by the expansion of Dongyi Risheng stores has also caused its profits to decline.
"Disaster is not alone", 2020 coincided with the epidemic, the original performance of the pressure, heavy dependence on offline home improvement industry is also worse, almost "uprooted". In particular, Beijing, where its company headquarters is located, was also the hardest hit area of the epidemic at that time, and the impact on Dongyi Risheng greatly hurt the vitality of Dongyi Risheng.
Therefore, how to optimize internal management and reduce staff and increase efficiency has also become a difficult problem in front of Dongyi Risheng. It should be known that the strength of Dongyi Risheng before was design, and how to retain high-level excellent designers while streamlining and improving efficiency is also the key point that Dongyi Risheng needs to seek balance.
At that time, the difficulty of the development of Dongyi Risheng can be seen from its third quarterly report. Although the company's revenue in the third quarter increased by 3.81% over the same period, and the net profit attributable to listed shareholders in the quarter was also 32.256 million yuan, up 145.23% year-on-year, the overall revenue in the first three quarters was only 1.809 billion yuan, down 34.94% year-on-year, and the net loss was also 213 million yuan, down 60.44% year-on-year.
It is understood that the delay in the progress of the project and the reduction in the number of newly signed orders due to the epidemic are important factors that lead to the decline in dongyi risheng's revenue. It is precisely because the financial performance of Dongyi Risheng has been somewhat unsatisfactory for several consecutive quarters, and Dongyi Risheng has also fallen into the crisis of being about to be ST due to continuous losses.
Holding Xiaomi's "thighs", it is difficult to turn the tide
In the middle of 2020, the development of Dongyi Risheng was struggling, so it also tried to introduce Xiaomi Technology (Wuhan) Co., Ltd. to solve the company's difficulties. According to Dongyi Risheng, the cooperation with Xiaomi Technology will be expected to deepen in the field of intelligent Internet of Things and carry out digital transformation, while relying on intelligent consumption scenarios to form a more extreme and satisfactory home experience for consumers.
At the same time, in the field of residential decoration, Dongyi Risheng will also work with Xiaomi Technology to develop smart home package products and supporting smart home appliances. Cooperation will also be carried out in areas such as supply chain finance cooperation.
Some insiders said that the above cooperation is conducive to the layout of the custom hardcover market for both sides. For example, Dongyi Risheng can incorporate smart home appliances and household products adapted by Xiaomi Technology into the home improvement product system and sales channels, and Xiaomi Technology can also open up business markets through coordinated channels and resources, and the two sides can achieve mutual benefit and win-win results.
At that time, Dongyi Risheng also had such expectations for Xiaomi's cooperation. It is believed that in addition to the cooperation in business transactions, the two will also be more conducive to the optimization of the company's equity structure because of the new capital inflow, and the dilemma of cash flow will be alleviated. However, more than 1 year has passed, it seems that there is little cooperation between the two, presumably holding the thigh of "millet", and it has not added much points to the development of Dongyi Risheng.
At the end of 2020, under the decline of continuous losses and being on the verge of being labeled ST, Dongyi Risheng also used the "killer skill" to supplement the company's earnings by selling 19 properties in Beijing. It is understood that according to the two consecutive net profits announced by Dongyi Risheng, the 19 properties sold brought a total of about 84 million yuan of net profit income to Dongyi Risheng.
There is no doubt that under such a wave of operations, if the profits from the sale of these two houses are attributed to the company's revenue in 2020, then the benefits of selling houses will also help Dongyi Risheng's profit growth in 2020, and even let Dongyi Risheng turn losses into profits.
However, it should be known that after all, by selling houses to supplement profits, you can avoid being warned by risks for a while, but for the long-term operation of the enterprise, it is not a long-term solution. Therefore, if Dongyi Risheng cannot go out of the circle to seek a new business model and cannot completely eradicate the problem of internal operation and management, how to achieve profitability is probably still an unsolved mystery.
Quality problems are frequent, and high-end positioning is questioned
It is understood that since its inception, Dongyi Risheng has been positioned as a high-end decoration, and the main projects it undertakes are high-end mansions, villas, etc. However, because of the quality of its decoration projects, it has also been frequently complained about by consumers, and its high-end positioning has also been questioned.
For example, in 2020, according to Interface News, Mr. Han handed over his mansion in Shanghai and his mansion in Shanghai to Dongyi Risheng Decoration Shanghai Branch for decoration in an all-inclusive manner. As a result, not only was the renovation project postponed for 4 months and not completed, but there were frequent quality problems, which were completely inconsistent with the quality of the decoration funds that cost nearly 3 million yuan.
What is even more outrageous is that according to Mr. Han, the size of the external wall of the bathroom in his mansion is wrong, and the bathroom facilities such as toilets and bathtubs cannot be installed. The location of the hole in the kitchen water pipe is also wrong, the water heater water pipe is wrong; the cabinet door cannot be opened due to the forgotten base layer in many rooms in the basement during construction, and so on.
On the Internet, there is no shortage of netizens complaining that the building materials used by Dongyi Risheng are "shoddy", and most consumers are not familiar with the decoration process and other information problems, urging consumers to pay as soon as possible, and then refusing to refund on the grounds of rules, which is complained by many consumers, believing that this is "deceiving consumers".
According to the investigation, Dongyi Risheng has accumulated dozens of complaints on the black cat complaint platform, and most of the complaints are decoration deposits, undeturbed decoration funds, poor construction quality, and suspected false publicity.
It is understood that Dongyi Risheng also cooperated with Qiu Deguang Studio to launch products for the high-end decoration market, and in order to seize the Internet channel, launched the Sumei Super Home, which is also positioned as a "high-quality" Internet home decoration. But even this has not changed the reality that its reputation has declined and the situation has not yet been reversed. Moreover, in addition to consumer complaints, Dongyi Risheng also has constant disputes with suppliers and customers.
Judging from the complaints of consumers on the Internet, Dongyi Risheng has many obvious deficiencies in terms of decoration quality, construction management, staff training, and external cooperation. Therefore, under the two-way influence of its poor performance and declining reputation, Dongyi Risheng seems to have entered a vicious circle, and if it cannot be reversed in time, the impact on its brand and goodwill will not be ignored.
epilogue
Husband and wife are in the same heart, and their profits are broken. In the early years of Dongyi Risheng, because of the joint efforts of husband and wife, the perfect partner, so it also created a sky in the industry, leaving a good story. Eventually, it also formed a certain influence in the home improvement industry, until it was successfully listed and put on the halo of glory.
It is undeniable that the early Dongyi Risheng had the feelings and ambitions to change the chaos of the home improvement industry and formulate industry standards. However, decades later, the former "mom-and-pop shop" has become a listed public company, and the home improvement industry does not seem to have become so flawless because of the entry of Dongyi Risheng.
On the contrary, Dongyi Risheng himself has also fallen into the "chain of contempt" that he has placed himself outside the matter in the past, and has become the object of complaints and complaints by consumers, which is very ironic. I hope that Dongyi Risheng can find its original dream and return to the original intention of entrepreneurship in the cruel market game. I believe that this is not only the heart of Dongyi Risheng, but also the urgent expectation of the majority of investors.