ZBOM(SH:603801)2025-05-08 15:31Summary of Zhibang Home's Conference Call Company Overview - Company: Zhibang Home - Industry: Home Furnishing and Interior Design Key Points and Arguments Domestic Retail Business - In Q1 2025, domestic retail business continued to decline, but the rate of decline narrowed both year-on-year and month-on-month due to management adjustments and a flattened organizational structure implemented in 2024 [2][4] - The company has adjusted the pricing system for franchisees based on province-level management, improving store quality [2][4] - Retail orders in April showed a reduced decline, primarily driven by retail contributions, although the mass market remains a significant drag [2][11] Domestic Real Estate Engineering Business - The domestic real estate engineering business saw a significant drop in signed orders in Q1 and April due to order reassessment and changes in payment conditions [2][5] - The company is exploring a shift towards corporate clients, apartments, and other sectors to mitigate the decline [5][6] Overseas Business - The overseas business is impacted by US-China tariffs, but the Middle East market is developing rapidly, with expected growth exceeding initial estimates [2][7] - The Australian market remains stable, contributing positively to overall overseas business growth [2][7] National Subsidy Policy - National subsidy policies primarily benefit franchisees with local subsidies, while inter-provincial subsidies are limited and discreet [2][8] - The company has confirmed sufficient total subsidy quotas for the year, but the release pace will be adjusted based on government assessments [8] Market Competition and Pricing - The industry is experiencing intense price competition, but national subsidy policies are expected to stabilize prices after a rebound in sales [3][13] - Economic downturn has led to a decline in unit prices for cabinets and wardrobes, with the company aiming to increase average transaction value and customer traffic to achieve revenue growth in 2025 [3][20] Franchisee Participation and Challenges - In Hefei, the subsidy policy is not fully open, leading to about 50% participation from franchisees, with some opting for other companies' policies [9][10] - Franchisees are considering costs and may withdraw from inter-provincial subsidy policies if local order issues can be resolved [10] Profitability and Margin Analysis - Q1 gross margin fluctuations were linked to store adjustments and support measures, with full payment contracts leading to lower gross margins [12] - Despite sales price stability, increased revenue has resulted in lower gross margins, but net profit levels remain unchanged [12] Strategic Initiatives - The company is focusing on enhancing core competitiveness through internal improvements, business structure adjustments, and expanding product categories [27][28] - Efforts are being made to improve the quality of stores and restore franchisee confidence while accelerating overseas market expansion [27][28] Future Outlook - The company is optimistic about future growth despite current challenges, believing that adjustments in B-end business structure and enhancements in C-end business will lead to improved operational quality and reduced risk exposure [28] - Plans for 2025 include increasing retail revenue through higher average transaction values and customer traffic, with a focus on integrated store layouts [20] Supply Chain Collaboration - Zhibang Home is open to sharing supply chain resources with capable partners to enhance market competitiveness and drive overall performance growth [29][30]