QM HOME(SH:603818)2020-04-29 16:00Financial Performance - The company's operating revenue for 2019 was CNY 4,279,355,737.80, representing a 47.99% increase compared to CNY 2,891,634,687.72 in 2018[24]. - The net profit attributable to shareholders of the listed company was CNY 82,155,263.70, a significant increase of 239.09% from a loss of CNY 59,064,206.62 in the previous year[24]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 68,683,500.22, reflecting a 294.34% increase from a loss of CNY 35,341,796.98 in 2018[24]. - The net cash flow from operating activities was CNY 700,731,674.56, which is a 124.36% increase from CNY 312,331,427.60 in the previous year[24]. - The total assets at the end of 2019 were CNY 7,716,772,279.37, up 5.90% from CNY 7,286,800,347.81 at the end of 2018[25]. - The net assets attributable to shareholders of the listed company increased by 11.23% to CNY 1,501,183,094.11 from CNY 1,349,638,336.25 in 2018[25]. - The basic earnings per share for 2019 was CNY 0.17, compared to a loss of CNY 0.12 in 2018, marking a 241.67% increase[26]. - The weighted average return on net assets was 5.78%, an increase from -3.87% in the previous year[26]. - The increase in operating revenue was primarily due to the consolidation of Ekornes AS's revenue during the reporting period[26]. - The increase in net profit was attributed to the consolidation of Ekornes AS's net profit and a decrease in merger expenses compared to the previous year[27]. - In 2019, the company's total revenue for the four quarters was approximately CNY 4.28 billion, with the highest revenue in Q4 at CNY 1.27 billion[29]. - The net profit attributable to shareholders for the entire year was CNY 73.25 million, with a significant drop in Q4 to CNY 2.04 million[29]. - The company reported a net cash flow from operating activities of CNY 700.73 million for the year, with Q3 showing the highest cash flow of CNY 200.83 million[29]. - Non-recurring gains and losses for 2019 totaled CNY 13.47 million, a significant recovery from a loss of CNY 23.72 million in 2018[32]. - The company reported a significant decrease in non-operating income from CNY 21.69 million in 2017 to CNY 6.34 million in 2018[32]. - The company achieved a revenue of 4.279 billion CNY in 2019, representing a year-on-year growth of 47.99%[61]. - The net profit for 2019 was 97.6581 million CNY, marking a turnaround from previous losses[61]. - The company reported a cash dividend of 82,155,263.70 RMB for the year 2019, with a profit distribution ratio of 0%[123]. Market Position and Strategy - The company has a strong focus on high-end furniture and home products, emphasizing design and environmental quality as core competitive advantages[36]. - In 2018, the company acquired 90.5% of Norwegian company Ekornes ASA, enhancing its global market presence and product offerings[38]. - The company aims to target the fashion home market, focusing on the preferences of the post-80s and post-90s demographics[38]. - The company’s product line includes finished furniture, customized furniture, and soft decoration products, catering to a one-stop shopping experience[36]. - Ekornes has a diversified brand matrix including Stressless, IMG, Svane, and Ekornes Contract, covering various market segments and consumer groups[39]. - The company operates nine factories globally, with five for Stressless located in Norway and one in the USA, achieving high levels of production automation[41]. - The company employs a mixed sales model, primarily through distribution channels, with over 5,000 retail terminals globally, enhancing its market reach[42]. - The company has diversified its product matrix through the acquisition of Ekornes, enhancing its market presence both domestically and globally[55]. - The company plans to introduce four additional fashion home product series in 2020, focusing on high aesthetic value and environmental friendliness[63]. - The company plans to promote the store upgrade initiative globally in 2020 to enhance channel quality and increase sales per store[74]. - The company is actively engaging in online marketing through short videos and live streaming to attract younger consumers[69]. Production and Operations - The company operates nine factories globally, with five for Stressless located in Norway and one in the USA, achieving high levels of production automation[41]. - The theoretical production value and capacity utilization rates for various factories are as follows: Custom Factory 1 (94.21%), Custom Factory 2 (81.38%), and Sofa Factory (78.15%)[40]. - The overall capacity utilization rate across all manufacturing centers is 62.95%, indicating room for improvement in production efficiency[40]. - Custom furniture production increased by 21.85% to 290,178 units, while sales rose by 21.97% to 290,041 units[83]. - The main business cost for the home furnishing sector was CNY 2,335.81 million, a 46.07% increase from the previous year[85]. - Sales expenses increased by 50.85% to CNY 1,060.11 million, largely due to the integration of Ekornes AS's sales expenses[87]. - The company’s inventory levels for finished furniture increased by 14.97% to 88,017 units, indicating a strategic adjustment in inventory management[83]. - The gross margin for the Stressless product line surged to 39.74%, up from 19.49% the previous year, reflecting a significant improvement in cost management[86]. - The company successfully eliminated inefficient SKUs, leading to improved production efficiency and reduced costs[71]. Environmental Responsibility - The company is the first in China to use water-based paint across its entire product line, adhering to high environmental and quality standards[55]. - The company emphasizes sustainable manufacturing practices, being a leader in the use of water-based paints and VOC environmental equipment[60]. - The company has invested approximately 40.5 million RMB in environmental protection measures, including around 30 million RMB for water-based paint, 7.5 million RMB for explosion-proof modifications, and 3 million RMB for online monitoring equipment[161]. - The company has established a comprehensive environmental protection management system, with the factory head as the first responsible person for environmental protection[161]. - The company has achieved compliance with local air pollutant discharge standards, as confirmed by environmental monitoring reports[163]. - The company has developed an emergency response plan for environmental pollution incidents, ensuring preparedness for potential environmental crises[166]. - The company maintains real-time online monitoring of air pollutant emissions, making it the only furniture company in the industry to do so[161]. Shareholder and Governance - The company has established a shareholder return plan for the next three years (2018-2020), ensuring a stable and sustainable return mechanism for investors[117]. - The cash dividend policy stipulates that at least 20% of the distributable profits must be distributed in cash each year[119]. - The company prioritizes cash dividends over stock dividends when conditions allow, ensuring a focus on investor returns[119]. - The company has a structured decision-making process for profit distribution, involving the board, independent directors, and the supervisory board[120]. - The company aims to maintain continuity and stability in its profit distribution policy while considering sustainable development[118]. - The company has not distributed any dividends in 2018 and 2019, indicating a focus on reinvestment or addressing previous losses[124]. - The company will communicate with minority shareholders to gather their opinions before finalizing profit distribution plans[121]. - The company has implemented a restricted stock incentive plan, granting 7.63 million shares at a price of 6.76 CNY per share to 57 incentive recipients[150]. - The total compensation for all directors, supervisors, and senior management was 7.3889 million yuan[197]. - The company has maintained a good integrity status for its controlling shareholders and actual controllers[149]. Risks and Challenges - The company is facing risks from rising raw material and labor costs, as well as increased competition in the furniture industry[113]. - The company's debt level significantly increased due to the acquisition, leading to financial pressure and interest costs[125]. - The company plans not to distribute cash dividends, issue bonus shares, or increase capital reserves for the fiscal year 2019 to ensure stable future development and enhance risk resistance[125]. - The company has not faced any penalties from securities regulatory agencies in the past three years[199]. - The company has not reported any penalties or rectifications for its directors, supervisors, senior management, or controlling shareholders[149].