I. Discussion and analysis of the operating situation
At the beginning of 2020, the new Crown Pneumonia epidemic swept through the country, the national economic growth rate slowed down, and the sanitary ware industry is facing greater pressure. The company did a good job of epidemic prevention at the same time, rapid resumption of production, assistance to Vulcan Mountain, Xiaotangshan hospital construction, through the implementation of brand strategy, active marketing, promote project construction, optimize internal management to reduce the adverse impact of the epidemic on the company. During the reporting period, the Company realized an operating income of RMB 1.317 billion, a year-on-year decrease of 11.16%; net profit attributable to shareholders of listed companies of RMB 128 million, a year-on-year decrease of 9.99%. The Company mainly carried out the following work during the period:
(I) Increase brand investment and enhance brand image
During the reporting period, the Company invested in branding on an unprecedented scale, including the joint filming of branding movie with China Women's Volleyball Team, epidemic chasing, being selected as a major country's brand, etc., and became one of the three enterprises that were inspected by Premier Li Keqiang on his online tour in the cloud opening ceremony of the 127th Canton Fair. At the same time, the company integrates the form of brand promotion, focusing on the target consumer groups, mainly focusing on the national mainstream media such as "Voice of CCTV" radio advertisement, CCTV advertisement and other high-end traffic media such as airports and high-speed railways, combining with the mainstream Internet new media forms and the self-media matrix such as double micro and a jitter, to promote the brand publicity in all-round and three-dimensional, which has effectively This has effectively enhanced the awareness of the new generation of mainstream consumers, further strengthened the impression of the brand "Huida" in the minds of consumers, and continuously and steadily improved the company's brand influence.
(2) Domestic sales recovery and growth, foreign sales resistance to pressure forward
Domestic and foreign sales is a major feature of the company different from other enterprises in the same industry. During the epidemic, the company's domestic sales and international sales complemented each other and moved forward.
1. Domestic sales recovery and growth
During the reporting period, domestic sales basically stagnated in February-March due to the impact of the epidemic, the company focused on the wisdom and efforts of all parties, and actively promoted the development of new retailing, increased the expansion of terminal sales capacity, optimized and adjusted the offline stores, carried out online retail business, integrated resources, and realized the interoperability of online and offline resources. As of June 30, 2020, the company has a total of 2,831 stores in China, with a total area of 484,800 square meters, including 1,799 "Huida" brand sanitary ware stores, with a total area of 332,400 square meters; 396 "Huida" brand tile stores, with a total area of 396 square meters; 396 "Huida" brand ceramic tile stores, with a total area of 3,000 square meters; and 396 "Huida" brand tile stores. Tile products stores 396, a total area of 91,300 square meters; "Dufeni" brand stores 636, a total area of 61,100 square meters.
At the same time, the company insists on "internal and external cultivation", in product design and development, market demand-oriented, adhere to independent innovation. During the reporting period, 75 new patents were authorized, including 24 utility model patents and 51 appearance patents, and the company now has 395 valid patents***. As of June 30, 2020, the company has participated in the preparation of a cumulative total of 36 current valid standards, including 13 national standards.
The engineering channel adopts the model of the company's self-operated plus dealer regional landing. The company has reached a strategic cooperation with Fuli Real Estate, Poly Development Holdings, Kangqiao Real Estate, Aoyuan Group, Wanda Group, Sino-Ocean Holdings, Shouchuang Property, Zhong'ang Real Estate and other well-known real estate. In addition, the company signed a cooperation agreement with Jiangsu Jinma Transportation, Xinjiang Huayuan Holdings (002787) and other construction and real estate industry enterprises to officially launch Huida Sanitary Ware. New infrastructure industry alliance, help to create upstream and downstream industry **** the same interests of the cooperation platform, open multi-channel all-round strategic cooperation.
2. Outside the sales pressure to move forward
During the domestic epidemic raging, international sales to carry the burden of expanding the market, grab orders, open a new sales situation. With the outbreak of overseas epidemic in mid-March, the international trade environment was complicated and volatile, the company stabilized sales and expanded channels by doing promotions for existing customers and using online resources to develop new business, which in turn stabilized the international business. As of June 30, 2020, the company obtained 15 certifications related to products, packaging and accessories in the United States, Canada and Europe, and 3 engineering certifications.
3. Sales
During the reporting period, the company realized an operating income of 1.317 billion yuan, of which the sales revenue of sanitary ceramics was 712 million yuan, accounting for 54%. Sanitary ceramics, intelligent sanitary ware sales revenue of 0.93 billion yuan.
By region and channel, the sales of the following table:
Unit: 100 million yuan
(C) Promote the project construction, improve the overall strength
During the reporting period, the company has steadily pushed forward the construction of the project, in order to improve the level of automation in the production of sanitary ware, to protect the quality of the product, and at the same time, through the enhancement of the scale effect, to further reduce the production costs
In the report period, the company steadily pushed forward the construction of the project.
Huida actively responded to the national "13th Five-Year Plan" assembly building action plan, is committed to promoting the development of the overall sanitary intelligent, standardized industrial revolution, to provide customers with the overall bathroom design, product manufacturing and supporting, installation and after-sales service as one of the systematic overall bathroom solutions. According to the needs of the company's business development, Huida will successively launch the tile system of the overall bathroom products and the overall kitchen products, in order to enrich the product system at the same time, to improve the comprehensive competitiveness of the market. During the reporting period, the sales revenue of the whole bathroom was 11.66 million yuan.
The sanitary ceramic production line with an annual output of 800,000 pieces of intelligent sanitary products in the first phase of the Chongqing project is under intense construction according to the plan, and the project adopts a series of automated equipment such as production automation and intelligence, and the production data of the equipment in each process can be collected and analyzed in real time, which is convenient for the management of the production data and the quality traceability.
(D) optimize internal management, stimulate the vitality of the enterprise
1. Enhance the level of automation, promote the construction of information technology
The company is committed to the mechanization of equipment, automation research, the use of equipment to replace manual operation to reduce the intensity of labor of employees after more than a decade of development, the level of equipment is in the industry's leading, the production process, a large number of high-pressure grouting molding machines, robots, robot glazing, robot repair, automatic billeting, and other automation equipment. Glazing, robot repair, automatic loading and unloading kiln, automated library, AGV, automated production line, robot box palletizing, product RFID identification technology and other automated intelligent production equipment, currently has a variety of types of robots 202 sets, in recent years, with the rise of information technology in the production of some of the company's automated equipment has been equipped with information technology management system, the future of the company's MES system is completed, you can directly complete the production data, quality and quality of the product. In recent years, with the rise of production informationization, some of the company's automated equipment has been equipped with information management systems, and the future completion of the company's MES system can directly complete the production data, quality and other aspects of information docking.
The company's information technology is strictly in accordance with the content of the fusion of two management system for daily work management and business development, in early 2020 to set up and carry out more than 10 information technology projects. As of June 30, 2020, the company has completed the construction of intelligent warehouse management system, the system on-line to promote the standardization of factory warehousing, standardization of control, the mobile end of the system is enabled to enhance the management efficiency and accuracy of the warehouse. During the reporting period, the company independently developed ceramic production system in the capacity balance system, and put into use, to promote the production plan of fine control, for rapid response to market demand to play a good effect.
2. Focus on the introduction of talent, adhere to the comprehensive training
June 2020, the company launched the next three years of talent strategic planning project, for domestic and foreign key universities to recruit outstanding graduates, the formation of a team of management trainees for the company's middle and senior managers to plan for the talent ladder, to achieve the comprehensive upgrading of the company's talent strategy. At the same time, the company has always adhered to the overall talent training strategy, build college students, reserve cadres, skilled workers of the full range of training mechanisms, and constantly optimize the structure of the company's talent echelon, to reserve more young excellent backbone.
(V) Social responsibility, demonstrating corporate responsibility
During the reporting period, the Company actively fulfilled its social responsibility, reflecting the social responsibility of a major brand. On the first day of the Chinese New Year, the company donated 5,931 pieces of sanitary ware products to Wuhan Vulcan Mountain Hospital, becoming the first enterprise in the sanitary ware industry to arrive in Wuhan. During the epidemic, the company *** counted 47 emergency hospitals to help the national epidemic prevention and control, donated a total of 15,843 pieces of sanitary ware products, sent 15 engineering service teams to help aid the construction of Xi'an, Beijing, Tangshan and other more than 10 cities "Xiaotangshan" hospital emergency project. 2020 February 1, the company donated 500,000 yuan to the Red Cross of Fengnan District, Tangshan City, in connection with the new crown epidemic. On February 1, 2020, the company donated RMB 500,000 to Tangshan Red Cross for the Xinguan epidemic. On May 12, International Nurses' Day, the company joined hands with Xilin Gol League Central Hospital and other units to donate intelligent toilets to 30 medical team members in Eritrea, to safeguard the health of healthcare workers.
Second, the possible risks
1. Macroeconomic risks
In the first half of 2020, the new coronavirus epidemic spread globally, causing an all-round impact on the world. Although China has achieved milestones in the prevention of neocoronavirus, the global spread of the virus is still relatively severe, posing a huge challenge to the Chinese economy as well as the global economy. Although governments around the world have intensively introduced economic stimulus policies to stabilize economic development, the short-term economy will still be affected by the virus, and economic activities will be significantly inhibited.
2. Market competition risk
Under the influence of the economic downturn, the slowdown in new home sales, the existence of uncertainty in the export of the external environment, small and medium-sized sanitary ware enterprises from the brand, channels, product quality, service, management and so on, do not have the ability to compete with the leading enterprises. In order to maintain survival and development, some of the less competitive enterprises in the short term may take the low price dumping, substandard and other strategies, resulting in the decline of the industry's average profitability, thus adversely affecting the company's production and operation.
The company will continue to develop and design high-quality products to lead the industry trend, introduce high-quality dealers in various regions to enhance channel competitiveness, and carry out online and offline joint marketing to enhance brand influence. By providing better quality products and services as well as a more recognized brand, the Company will maintain a higher than average profit margin in the industry and increase its market share.
3. Exchange rate risk
The company's products are exported to a number of overseas countries, in the export trade the company takes the main foreign currency settlement currency for the U.S. dollar, due to fluctuations in the exchange rate of the U.S. dollar will affect the company's profitability, the company has a certain exchange rate risk.
4. Management risk
With the further expansion of the company's assets and business scale, the company's personnel will increase accordingly, the organizational structure and management system is becoming more complex. The company's marketing services, resource integration, product technology development, quality control, human resource management, financial management and other aspects have put forward higher requirements. If the company's technical management, marketing management, quality control and other capabilities can not adapt to the requirements of the rapid expansion of the company's scale, talent training, organizational model and management system can not be further improved and perfected, it will lead to the corresponding management risk. In this regard, the company will continue to improve the corporate governance structure and internal control system, standardize the company's operating system, and improve the competitive incentive mechanism to attract talented people, stabilize the talent team, and ensure the sustainable and healthy development of the enterprise.
5. Overseas Litigation Risk
There are related litigations between Ayers and Ayers USA and F&C, but the company's sales to F&C have not been affected by the above litigations, and the cooperation relationship between the two parties is still relatively stable; at the same time, due to the years of good performance in product quality and delivery capacity, the company has been fully recognized by F&C's major end-customers in the U.S. and Canadian markets, and has established a good relationship with F&C. The company has been fully recognized by the major end-users in the U.S. and Canadian markets due to its good performance in product quality and delivery capability over the years, and has established a good reputation.
Even so, it cannot be ruled out that the above litigation may affect the future business cooperation between the Company and F&C, which may adversely affect the Company's sales performance in the U.S. and Canadian markets.
6. Bills receivable risk
The company's business development and credit approval has led to a larger amount of bills receivable. At present, the risk of notes receivable mainly comes from the fact that the notes receivable held by the enterprise may not be able to cash the monetary funds during the encashment period stipulated in the notes, causing the enterprise to suffer losses, resulting in financial risks and legal risks.
C. Analysis of core competitiveness during the reporting period
(a) Brand advantage
After 38 years of precipitation and development, the company has become a promoter and practitioner of China's sanitary ware to build a world-class brand, and the "Huida" brand has become one of the leading brands of national sanitary ware. The company adheres to the "design for life" brand concept, with strong consumption power of high-end consumers as the core target group, formed a good visibility and credibility. The company has been recognized by the World Brand Lab as one of China's 500 Most Valuable Brands for 17 consecutive years, and in 2020, the company ranked first in the industry with a brand value of 39.298 billion.
(B) technology research and development advantages
The company has been adhering to independent research and development since its inception, and is at the forefront of technological innovation, industrial design, etc. The company has established the industry's first post-doctoral workstations, a national industrial design center, the provincial technology innovation center. The company's technology center has been jointly recognized by the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation, five ministries and commissions as a "nationally recognized enterprise technology center". The company is actively involved in the development of national and industry standards, and has become the drafting unit of a number of national and industry standards in the sanitary ware industry, actively promoting the development of the industry.
The high hardness nanometer self-cleaning glaze technology independently developed by the company is at the leading level in China, and the manufacturing technology of fine ceramic sanitary ceramics is the project of Hebei Provincial Science and Technology Support Program and the project of transforming major scientific and technological achievements in Hebei Province, which has won the first prize of National Building Materials Industry Technological Innovation Award and the Second Prize of Hebei Provincial Science and Technology Progress Award. At the same time, the company to technology center as a platform, continue to strengthen the ceramic technology and intelligent toilet technology and other intelligent sanitary ware investment and research and development, investment projects based on intelligent manufacturing, combined with its own technological advantages, the use of the latest production process, research and development, the introduction of the latest domestic equipment, to achieve the automation of various processes, intelligent production.
(C) product advantages
The company has always implemented the "fine work, optimize the function, the pursuit of the best, customer satisfaction," the quality policy, product quality is stable and reliable, with a comprehensive quality control system stricter than the national standard so that the company's products are superior. The company has passed ISO9001 quality management system certification, ISO14001 environmental management system certification, ISO45001 occupational health and safety management system certification, ISO50001 energy management system certification, GB/T23001 informationization and industrialization fusion management system, and also obtained the CUPC of the United States and Canada, the CE of the European Union, the British WRAS, ACS of France, KIWA of Netherlands, SASO of Saudi Arabia, KS of South Korea, CIDB and SIRIM of Malaysia, WATERMARK and WELS of Australia, SNI of Indonesia, etc.
At present, our company has obtained the ISO50001 energy management system certification, GB/T23001 informationization and industrial integration management system certification.
At present, the company's product range covers a full range of sanitary products, to meet the different needs of customers at all levels, to provide consumers with one-stop comprehensive solutions for sanitary products. The company's diversified production capacity and supply chain integration capabilities, in the overall sanitary ware has a strong competitive advantage.
(D) Marketing Advantage
In the domestic market, under the company's continuous investment, the company has formed a marketing network system that radiates across the country, with a comprehensive sales channel covering multiple channels such as standard stores, KA stores, cabinet stores, e-commerce channels, engineering channels, Internet home improvement and alliances. The company's products are mainly sold by offline dealers, supplemented by sales in engineering channels, e-commerce, overall home furnishing and Internet home furnishing channels, while carrying out online and offline marketing activities.
International market, the company actively explores the international market, and has established a marketing network covering more than 100 countries and regions, such as the United States, the United Kingdom, Australia and so on.
(E) location advantages
The company is located in Tangshan, located in Beijing-Tianjin-Hebei and the Bohai Sea economic zone, is connected to North China, Northeast China, the two major regions of the throat, the market is vast; railroads, highways, roads, ports intertwined with a network of convenient transportation; coupled with the support of the policy, the location advantage is obvious.