QM HOME(SH:603818)2019-12-26 16:00Financial Performance - The company's operating revenue for 2018 was CNY 2,891,634,687.72, representing a 37.88% increase compared to CNY 2,097,176,220.32 in 2017[23]. - The net profit attributable to shareholders for 2018 was a loss of CNY 59,064,206.62, a decrease of 124.04% from a profit of CNY 245,650,562.86 in 2017[23]. - The net cash flow from operating activities was CNY 312,331,427.60, which is a 15.25% increase from CNY 271,006,759.26 in 2017[23]. - Total assets at the end of 2018 amounted to CNY 7,286,800,347.81, a significant increase of 246.40% from CNY 2,103,602,813.09 in 2017[23]. - The basic earnings per share for 2018 was -CNY 0.12, a decline of 123.53% compared to CNY 0.51 in 2017[24]. - The net assets attributable to shareholders decreased by 15.15% to CNY 1,349,638,336.25 at the end of 2018 from CNY 1,590,572,236.95 at the end of 2017[23]. - In Q4 2018, operating revenue reached 1,202,110,170.23 RMB, while net profit attributable to shareholders was -154,118,800.30 RMB[27]. - The company reported a net loss in 2018 due to increased competition and costs associated with the Ekornes acquisition, despite the revenue growth[62]. Acquisition and Expansion - The company completed the acquisition of Ekornes ASA, holding 90.5% of its shares, becoming the controlling shareholder[36]. - The acquisition of Norwegian company Ekornes ASA was completed on August 31, 2018, significantly impacting the company's asset structure[53]. - The company reported overseas assets amounted to approximately 3.61 billion RMB, accounting for 49.56% of total assets[54]. - The acquisition of Ekornes allowed the company to form a diversified brand matrix, enhancing its presence in both domestic and global markets[57]. - The acquisition of Ekornes ASA expanded the company's global retail presence to over 6,400 stores[69]. - The company completed the acquisition of 36,892,989 shares of Ekornes ASA, resulting in 100% ownership of the target company[156]. Product and Market Strategy - The company maintains a strong product design and R&D capability, focusing on high-end furniture and home products[35]. - The introduction of new product lines, such as New Nordic and New Fanxi, continues to enhance the company's competitive edge in the market[35]. - The company’s product design follows a "three determinations and five reviews" principle, ensuring competitive pricing, style, and quality[42]. - The company has integrated nearly a hundred domestic and international designers since 1997, enhancing its brand reputation for original design[58]. - The company continues to optimize its product lines, including home decor and soft furnishings, to improve cost-effectiveness[58]. - The company launched the "Qu Mei+" strategy to deepen existing business and explore new retail models, particularly for the Stressless and IMG brands in the Chinese market[63]. Financial Management and Shareholder Policies - The company plans not to distribute profits or issue dividends for 2018[6]. - The company plans to distribute at least 20% of the distributable profits in cash dividends each year[125]. - The company prioritizes cash dividends over stock dividends when conditions allow, ensuring a stable and continuous profit distribution policy[124]. - The company will review its shareholder return plan at least every three years, with adjustments requiring independent board approval[123]. - Cash dividends will be distributed only if the company has made profits and has no significant investment plans or cash expenditures[124]. - The company aims to maintain a cash dividend ratio of at least 80% during mature phases without major capital expenditures[125]. Operational Efficiency and Cost Management - The company implemented a "reduce SKU, lower costs" plan, eliminating ineffective SKUs to optimize production costs[68]. - The new order pool system improved the material utilization rate to over 85% for customized furniture production[68]. - The company has a strong order-based production model for finished furniture, providing consumers with extensive customization options[58]. - The company has established a mature supply chain system, benefiting from the global supply chain resources acquired through the Ekornes acquisition[59]. Risks and Challenges - The company has outlined potential risks in its report, which investors should be aware of[8]. - The company faces risks from rising raw material costs, which could adversely affect profitability due to the high proportion of direct material costs in production[116]. - The company anticipates challenges from increasing labor costs, which may impact operational performance and profitability[116]. - The real estate market's regulatory environment poses a risk to consumer purchasing behavior, potentially affecting home furnishing demand[117]. - The furniture industry is experiencing intensified competition, with many companies accelerating capacity investment and store openings, leading to price wars[118]. Corporate Governance and Compliance - The company has a governance structure that complies with the Company Law and Securities Law, ensuring the protection of shareholders' rights[197]. - The independent directors have actively participated in decision-making, ensuring the protection of all shareholders' interests without raising objections during board meetings[199]. - The board's specialized committees have effectively improved decision-making efficiency and the scientific nature of strategic decisions[199]. - The company has appointed a new secretary of the board following the resignation of the previous one due to personal reasons[190]. Research and Development - Total R&D expenditure for the period was ¥82,244,581.42, accounting for 2.84% of operating revenue[84]. - The number of R&D personnel was 282, representing 7.86% of the total workforce[84]. - R&D expenses grew by 29.92% year-over-year, mainly due to the inclusion of Ekornes' R&D expenses for 4 months[74]. Employee Management and Development - The total number of employees in the parent company and major subsidiaries is 3,589, with 1,929 in the parent company and 1,650 in major subsidiaries[191]. - The company has implemented a performance-based incentive mechanism to improve employee income through salary increases, bonuses, and benefits[192]. - The company has established a complete training system focusing on different management levels and job positions to enhance skills and knowledge[194].