This article was originally published by wumiancaijing
Author: Yang Yixuan
Editor: Chen Jian
Design: Lan Sheng
After 28 years of fighting, the "first home improvement stock" is full of crises.
Since April, Dongyi Risheng (002713. SZ) continued to have negative news, including branches running away in many places, arrears of wages, and protection of suppliers' rights, etc., and people were panicked for a while.
At the performance briefing in mid-May, Chen Hui, chairman and general manager of Dongyi Risheng, personally explained that the closure of the store was just a normal adjustment and optimization, but it still attracted inquiries from the Shenzhen Stock Exchange, asking for an explanation of whether a series of negative news was true.
On May 31, Dongyi Risheng's reply letter was a few days late, but the response was detailed, and "it's not a big deal" between the lines. It probably means that since last year, 28 stores have been closed, all of which are losses and are normal adjustments; Promise not to evade debts and not to default on debts.
However, the reply letter said that in addition to selling assets, it is also looking for external strategists. This is tantamount to acknowledging that the company has financial difficulties.
Dongyi Risheng shares have fallen by nearly 20% in the past three days, and investors who have been trapped by Dongyi Risheng stocks hope that Lei Jun will lend a hand. It's just that Xiaomi, as the third largest shareholder, has not only lost investment, but has not even recovered tens of millions of advertising costs.
Dongyi Risheng, which has experienced the ups and downs of the real estate cycle, ranked first in the home improvement industry with a brand value of 39.527 billion at the beginning of this year, but it has come to the step of "thunderstorm" in just a few months.
13 stores were closed in four months, and the WeChat public account of the headquarters was suspended
May is the peak season for decoration, but Dongyi Risheng has repeatedly closed stores.
▲The closure of the store announced by Dongyi Risheng, the picture is taken from its announcement.
According to media reports, on May 15, Wuhan's Dongyi Risheng flagship store was empty. At the same time, Dongyi Risheng's branches in Zhengzhou, Shanghai, Hefei, Ningbo, Wuxi, Shenzhen and other places have successively reported the closure of stores and arrears of payment to main material merchants.
On May 27, a number of consumers in Changsha complained to the media that they had spent hundreds of thousands or millions to sign a home improvement agreement with Dongyi Risheng Changsha flagship store, and had recently encountered a shutdown, and some owners had not even entered the site.
According to the person in charge of the engineering department of Changsha Dongyi Risheng flagship store, "the company in Changsha was running very well, because another city was hit by various runs after the 'thunder', and after the run, we can't turn now." It said that if the customer wants a refund, the time given by the headquarters is before September 30.
However, on social media, many consumers questioned that the refund before September 30 was just a delaying tactic for Dongyi Risheng. Because the amount of money owed by Dongyi Risheng is not small.
According to a report by 36Kr in May, there are nearly 300 people in the Zhengzhou area alone, and the amount involved exceeds 10 million.
According to Dongyi Risheng's reply to the Shenzhen Stock Exchange, as of now, incomplete statistics show that 1,792 customers who failed to perform according to the original process due to the closure of stores, with an amount of about 163 million yuan, and 716 suppliers and manufacturers, with an unpaid purchase amount of about 85.6 million yuan.
The closure of Dongyi Risheng did not happen suddenly.
According to media reports, employees at Dongyi Risheng's Beijing headquarters have received only one salary since October last year, and have not been paid again since.
According to Dongyi Risheng's reply letter, it closed 15 stores last year and 13 stores in the first four months of this year. Funding pressures are clearly mounting.
However, Dongyi Risheng did not admit that there was a break in the capital chain, "the company does not have a situation where production and business activities have been seriously affected and is not expected to return to normal within three months", and also said that it will actively solve the problems caused by the closure of stores to consumers and suppliers.
To solve the problem, to put it bluntly, you have to have money, but Dongyi Risheng should not be able to come up with money now, otherwise it would not say that it would raise funds by selling office buildings, factories, warehouses, and mortgaging the assets of subsidiaries.
Consumers and suppliers still have hope and certainly don't want Dongyi Risheng to fall, but some employees don't want to wait any longer.
▲Screenshot of the last tweet on the WeChat public account of Dongyi Risheng headquarters.
On May 31, on the day when Dongyi Risheng issued a reply letter, the WeChat public account of the headquarters "Dongyi Risheng Home Decoration Group" issued a farewell article "To: We who will eventually go to a new journey", which said in the tone of the editor that they wanted to say goodbye to the place where they had struggled for 9 years, and finally "thank the fans who have paid attention to and supported us". The official account has also been suspended.
Xiaomi quilt cover, private equity losses also have to flee
Dongyi Risheng used a reply letter to convey the posture of not lying flat and not running away, and its stock price was directly limited on May 31, but continued to decline in the next three trading days, with a cumulative decline of about 20%.
The confidence of the capital market has long been almost consumed.
Dongyi Risheng was listed in 2014, and caught up with the bull market the next year, and the stock price once exceeded 34 yuan, but soon began to decline, hovering below 10 yuan for a long time in the past five years. As of June 5, its share price was 2.59 yuan, and its market value was about 1.087 billion yuan, down more than 90% from its peak.
The stock price has been sluggish for a long time, and shareholders are miserable.
▲As of March 31 this year, the top ten shareholders of Dongyi Risheng held shares. The picture is taken from Oriental Fortune Network.
In October 2020, Xiaomi Technology (Wuhan) Co., Ltd. acquired 21 million shares of Dongyi Risheng, accounting for 5.01% of the latter's total share capital, thus becoming the third largest shareholder.
I thought that I had hugged my thighs, and investors were also looking forward to the cooperation between the two sides. However, every time in the face of investors' inquiries, Dongyi Risheng's reply is to "actively explore cooperation in the field of home improvement".
According to 36 Krypton, there are Dongyi Risheng employees who said that there has been no substantive cooperation between the two sides, only at the beginning of Xiaomi's shareholding, Dongyi Risheng promised to place advertisements on ecological chain devices such as Xiaomi TV, the employee said: "The advertisement was indeed broadcast, but Dongyi Risheng did not pay the advertising fee of Xiaomi on time, and the amount of arrears involved was more than 40 million." ”
From this point of view, Xiaomi's deal has essentially become a pure financial investment, but the benefits are a bit miserable.
When it became a shareholder, Dongyi Risheng's share price was at least 7 yuan or more, but now the stock price is less than 3 yuan, and the market value of Xiaomi's stock has shrunk by at least nearly 90 million. However, for the current Xiaomi and Lei Jun, losing a small target is nothing.
It's just that investors are still looking forward to it, and in April, some people asked on the investor platform that Xiaomi Auto was on the market, and I don't know if Dongyi Risheng has cooperated with it. Now, some investors are hoping that Xiaomi can lend a hand.
Unlike Xiaomi's persistence, Zhongyue Capital, which came to make money from the beginning, began to increase its holdings in Dongyi Risheng in the third quarter of last year, and held more than 5% of the shares in February this year.
Unexpectedly, since coming in, Dongyi Risheng's stock price has not risen much, and Zhongyue Capital can't stand it. On May 25, according to Dongyi Risheng's announcement, Zhongyue Capital reduced its holdings by 2.3859% from May 22 to 23, with an average trading price of 3.58 yuan per share, while the average purchase transaction price at that time was about 5.67 yuan per share, a decrease of nearly 40%. It's a loss, and you have to run.
Behind the sluggish stock price is the sluggish performance of Dongyi Risheng.
The financial report shows that after Dongyi Risheng's revenue reached 4.291 billion yuan in 2021, it fell to below 3 billion, and the net profit was also more than 950 million yuan, and it lost 116 million yuan in the first quarter of this year.
▲Dongyi Risheng's performance in recent years.
As of the end of the first quarter of 2024, Dongyi Risheng has total assets of 2.739 billion yuan, total liabilities of 2.661 billion yuan, net assets of only 78.6879 million yuan, and an asset-liability ratio of 97.13%, which is higher than that of real estate companies. Solvency is a real concern.
Branch centrifugal, does the boss of incense still have a trick?
The crisis of Dongyi has been brewing for a long time.
As early as the end of 2020, due to continuous losses, Dongyi Risheng shares faced ST, at that time, the company sold 19 properties in Beijing and returned about 84 million funds, so that the performance turned around.
As the first listed home improvement company, Dongyi Risheng started with high-end home decoration and is a leading enterprise in the traditional home improvement industry. However, with the rise of Internet home improvement, as early as 2019, Dongyi Risheng's performance was impacted. After three years of the epidemic and the cold winter of real estate, the decline of Dongyi Risheng seems to be expected.
After all, in the past two years, more than 120 home improvement companies have declared bankruptcy. However, in the face of the stock housing decoration market with a scale of more than 1.7 trillion yuan, the crisis of Dongyi Risheng cannot be blamed only on external pressure.
Dongyi Risheng was co-founded by Chen Hui and his ex-wife Yang Jin, Chen Hui is from the construction industry and is responsible for technology and business, while Yang Jin is responsible for management. But in September 2021, the two divorced, and Yang Jin withdrew from the company's operation and only retained shares.
According to the "Consumer Report", the long-term front-line analysis in the decoration business, after Yang Jin withdrew, Chen Hui took over the management, drastically expanded the store, engaged in digital home decoration, invested more in science and technology, and did not manage the business very much, which may have led to the current crisis of Dongyi Risheng.
Management problems have been revealed in the current store closure crisis.
According to Chen Hui's previous disclosure, as of now, Dongyi Risheng has a total of 22 branches across the country. In addition, Dongyi Risheng also has 64 directly operated stores and 34 franchised stores. But Dongyi Risheng's cohesion of these hundreds of stores does not seem to be strong.
Taking the Zhengzhou branch, which ranks among the top in the country, as an example, according to 36 Krypton, a number of consumers in Zhengzhou said that a month before Dongyi Risheng stopped working, Yu Jubin, general manager of Zhengzhou branch, held a signing meeting on March 30 to induce consumers to place orders, and also promised that some consumers who signed the order could enjoy a greater degree of preferential treatment if the pre-sale money was paid to the remaining private account.
In addition, according to a screenshot of a chat obtained by Jiemian News, in the decoration customer service group of Dongyi Risheng, a material supplier sent a "list of arrivals" in the group, but the consignee was not Dongyi Risheng, but displayed as "Ruigao". This is a newly established decoration company, and it may be related to the personnel of Dongyi Risheng Zhengzhou Branch.
It is not known whether other branches of Dongyi Risheng have engaged in such behavior, but it is certain that the branch is trying to draw a line with the head office. After the news of Dongyi Risheng Branch's "running away" came out, branches in Beijing, Xi'an, Tianjin and other places all stated that they had nothing to do with themselves and emphasized their independence.
Under the financial crisis, some branches choose to close their stores and run away, and some branches may start anew and fall apart.
According to a previous report by 36 Krypton, before May 8, at the Beijing headquarters of Dongyi Risheng, Chen Hui would burn three incense sticks for Guan Gong every morning when he went to work.
Now it seems that the incense burned by Chen Hui does not seem to have worked. Dongyi Risheng, who was standing on the edge of the cliff, needed strong external assistance, but he didn't know if Chen Hui could find it.