At the beginning of 2011, the first-tier cities in China were severely squeezed by the strict restrictions on real estate purchases, restrictions on loans, and price restrictions. The market space of the downstream home building materials industry was severely squeezed. With the accelerating pace of life in the first-tier cities and the increasing awareness of people's health, Buyers have increased their demand for hardcover homes and environmentally friendly energy-saving building materials.
ChinaVenture Investment Group believes that with the established partnership with domestic real estate developers in the public sector, building and decoration companies can take the opportunity to enter the first-tier urban residential decoration sector to seek new profit growth points; at the same time, residential Fine decoration also provides a good opportunity to focus on individual home improvement enterprises to increase market share. However, because the decoration company takes the designer as its core competitiveness, the number and quality of the designer team are difficult to expand year by year, which makes the company model difficult to replicate across regions, the designer team faces management difficulties, the quality of the refined decoration is difficult to standardize, and the second and third tier cities The current situation of limited decoration needs still needs to attract investors' attention.
Industry development is limited by strict regulation of real estate
China's architectural decoration industry started in the 1980s. In the mid-to-late 1990s, with the rapid development of the national economy, the improvement of residents' urbanization, and the implementation of the housing privatization policy, China's architectural decoration industry entered a stage of high growth. At present, domestic architectural decoration enterprises have the ability to undertake the decoration and decoration of large-scale buildings, and the development level of the industry has reached a relatively mature stage.
From the point of view of the value chain, the building decoration industry is located in the downstream of the construction industry. It belongs to the sub-sector of the construction industry, which is the same as the civil engineering construction and construction equipment installation industry. It is mainly under the premise of keeping the main structure of the building unchanged. The physical performance of the space is perfect and beautified. Unlike the one-time construction of other sub-sectors, the building decoration industry can often repeat the decoration during the main use period of the building. Consumers still have certain repetitive decoration needs for the decorated houses.
As the downstream industry of real estate, the construction and decoration industry mainly needs the number and area of ​​new buildings. Since the beginning of 2011, the State Council has implemented strict restrictions on purchases, restrictions on loans, and price limits in some first-tier cities with high housing prices in the country. So far, there have been no obvious signs of loosening. This has greatly inhibited the demand for real estate investment. The sales volume of first-tier cities in the first-tier cities fell sharply year-on-year. The decline in the volume and price of the real estate market has caused some buyers and consumers who are looking to improve the existing housing environment to take a wait-and-see attitude. The home furnishing industry located downstream of the industry has also experienced “cooling downâ€.
Building decoration enterprises usually need to pay bidding deposits, advance payment materials and quality guarantees after construction. Especially when undertaking some large-scale projects, whether the flow of funds is smooth or not is an important factor for the smooth operation of industrial enterprises. With reference to the conditions, therefore, building and decoration companies have certain entry barriers in terms of funding. At the same time, the building decoration industry is another enterprise with obvious brand effect. Whether it has the decoration experience of large-scale projects in the industry, the quality of past renovation projects, ranking in the industry, and the level of corporate decoration design is its bidding in new projects. The key factor.
From the perspective of sales channels, the sales channels of home building materials are mainly divided into traditional channels and e-commerce channels. Red Star Macalline is the first large-scale traditional retail chain retailer in China. It is mainly targeted at medium and high-end brands. The strategic promotion of “full brand branded operation†has become the leader of the traditional channels of home furnishing and building materials industry. The home and the Oriental home are close behind. At the same time, IKEA and B&Q from Europe have been favored by young consumers in recent years due to their advantages of fashion, space saving and younger store layout, and they are constantly encroaching on the market share of traditional channels of China's home building materials industry.
Faced with the impact of e-commerce, the field of home building materials is not to be outdone. At present, there are professional home building materials, e-commerce, Qijia.com, I love my family, and also have professional third-party platforms such as Taobao, Jingdong, Paipai.com, and some traditional channels or Enterprises join such as Oriental Home, Ailang bathroom and so on. From the point of view of market share, professional home building materials e-commerce has the highest market share in e-commerce channels due to its professionalism, complete brand coverage and large room for comparison.
Fine decoration and environmentally friendly building materials will lead the industry trend
According to CVSource statistics of ChinaVenture Investment Group's financial data products, a total of 77 home building materials companies have received VC/PE injections since 2006. The cumulative financing scale is 9.518 billion yuan, and the average single financing scale is 124 million yuan. Among them, under the influence of the real estate industry adjustment and the slowdown of the construction industry in 2008, the financing scale of the VC/PE industry in the household building materials industry fell to 280 million yuan in financing scale in 2009, which is the lowest financing scale in the past five years; As the real estate market continues to heat up, the home decoration and decoration enterprises have accumulated a total of 2.823 billion yuan of financing in 20 years, reaching the highest value in the past five years.
From the perspective of segmentation, the financing scale of traditional building materials for home building materials was 2.894 billion yuan, accounting for 31.9%, ranking first in all sub-sectors. The flooring industry and design and decoration companies financed 2.439 billion yuan and 1.525 billion yuan respectively. The scale accounted for 26.9% and 16.8%, ranking second and third in the sub-sector.
Domestic household building materials traditional channel financing is relatively large, mainly due to the two financings of the same company Red Star Macalline, which was the investment of 220 million US dollars in 2007, and the investment of 2.6 billion yuan by Huaping Bohai Fund in 2010. Case. In 2007, CVC acquired the domestic production and sales of laminate flooring companies in Asia for $175 million. The transaction created by Asia has become another case of large scale financing for the home building materials industry.
Since 2006, there have been 8 VC/PE financing transactions in domestic household building materials e-commerce enterprises, involving 4 enterprises, with a disclosure financing of 154 million yuan and an average single financing scale of 19.25 million yuan. The largest case of financing was in January 2008, HaoCapital and Redstone Capital's $10 million investment case for the e-commerce company Julong, which developed and researched the overall home solution.
In 2011, the major domestic real estate developers such as Vanke, Poly Real Estate, Gemdale Group, China Merchants Property and other major projects began to significantly improve the decoration rate, and the long-term cooperative relationship between building decoration enterprises and large real estate developers has become the norm in the industry. ChinaVenture Investment Group is open to the public. According to statistics, as the leading enterprises in the decoration and decoration industry, Jinlu, Yaxia, Guangtian and Hongtao had net profit of 727 million yuan, 448 million yuan, 285 million yuan and 136 million yuan respectively in 2011, respectively. It is 87.1%, 70.99%, 33.2% and 40.25%, and its net profit increase mainly comes from the field of public decoration.
Along with the limited time and energy of home decoration for first-tier city buyers, the purchase of fine-decorated houses has gradually entered the consumer's field of vision, and the home decoration industry has quietly emerged. Its one-time interior design, batch decoration, effectively save material loss, cooperate with brand decoration company, select brand sanitary ware, cabinets and other supporting facilities, and have excellent conditions such as inspection of relevant departments to meet the convenience of buyers. And with certain quality assurance, in recent years, the first-tier cities in China have been widely welcomed by new buyers.
ChinaVenture Investment Group believes that by using the established partnership with domestic real estate developers in the public sector, public utilities can take the opportunity to enter the first-tier urban residential hardcover field to seek new profit growth points; at the same time, residential The decoration also provides a good opportunity to focus on individual home improvement companies to increase market share. However, because the decoration company's designer resources are its core competitiveness, the number and quality of the designer team are difficult to expand year-on-year, which makes the company model difficult to replicate across regions, the designer team faces management difficulties, the quality of the refined decoration is difficult to standardize, and the second and third tier cities are fine. The current situation of limited decoration needs still needs to attract investors' attention.
In terms of flooring, domestic wood flooring is mainly divided into four categories: solid wood flooring, solid wood composite flooring, laminate flooring, and bamboo flooring. The first three categories are the current mainstream consumer preferences in the flooring market. Due to the high price and physical properties of solid wood flooring, bamboo flooring is often limited in domestic consumption due to its short service life. At present, most of the domestic market share is solid wood composite flooring and laminate flooring with good physical properties, convenient installation, long service life and good comfort. The two mainly use secondary fuelwood to reduce waste of forest resources. The moderate price has gradually become the preferred floor for consumers.
From the perspective of sanitary ware, with the increase of national income and the continuous improvement of living standards, consumers' demands for sanitary ware products have gradually shifted from pure use functions to sanitary ware style integration, energy saving, fashion entertainment. Driven by consumer demand, sanitary ware products are constantly undergoing technical updates. New technologies such as ceramic valve core technology, water-saving technology and constant temperature and constant pressure technology have gradually become a new trend in the development of sanitary ware market.
In April 2012, the “Twelfth Five-Year Plan†of China's architectural decoration industry was released. The article stated that the “Twelfth Five-Year Plan†period will be an important period for China to transform its economic growth mode, establish a circular economy framework, and initially establish a low-carbon economic operation structure. The requirements for low-carbon cities, building energy conservation and emission reduction, and development of low-carbon buildings will continue to increase. At the same time, as people's consumption concept continues to escalate, and the harmful effects of materials containing a large amount of harmful substances on the human body are becoming more and more serious, consumers' demand for environmentally-friendly building materials is also increasing. Therefore, energy-saving and environmentally-friendly basic building materials have become the future of the industry. The mainstream development trend.
As of May 10, the list of companies to be listed disclosed by the China Securities Regulatory Commission, a total of two home building materials enterprises intend to land in the A-share market, which is mainly based on sliding doors, ecological doors, wardrobes, etc. Home design decoration and environmental protection building materials company Dongyi Risheng home decoration, Dongyi Risheng had previously received capital injections such as Hetai Growth, Yonghua Investment, and Shishi Capital. Previously, in July 2011, I thought that the decoration of the home decoration enterprise that provided the integrated decoration service for the large-sized residential customers of Zhongda was not approved because of the income recognition method and the handling of subcontracting.
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