Luolai Home Textile'S Interim Report Is Expected To Decrease, And Its Performance Suffers A Cold Spell

Home textile stocks, which have always been regarded as a haven for bear markets, are suffering from poor performance. As the first unit of home textile, Luolai Home Textile [62.10 -1.71%] (002293, closing price 64.70 yuan) Yesterday (July 11), the announcement on the revision of the 2012 semi annual performance forecast was released. The announcement pointed out that the company's net profit in the first half of the year changed from an increase of 0~30% to a decline of 0~30%. As soon as the announcement was made, Luolai Home Textile suffered a limit decline. Driven by Luolai Home Textile, home textile stocks such as Fuanna [44.45 - 0.11%], Mengjie Home Textile [19.91 - 0.85%] and Vico Essence [6.14 - 0.32%] suffered heavy losses.

An executive of a home textile enterprise revealed to the reporter, "The decline of Luolai's performance has a lot to do with the extension expansion proposed earlier."

Luolai Home Textile disclosed its 10 billion yuan plan in the 2011 annual report, expecting to achieve sales revenue of 10 billion yuan in 2016. From 2011 to 2016, the main brand Luolai and other brands will achieve sales of 4.8 billion yuan and 5.2 billion yuan respectively.

Wang Liping, an analyst at Shenyin Wanguo [2.20 0.00%], pointed out that in the case of low revenue growth, the "counter trend expansion" plan formulated by the company at the beginning of the year led to prominent expense pressure, which was the main reason why the performance was lower than expected. Against the background of the slowdown in the growth rate of the industry this year, the company plans to speed up the pace of channel expansion instead, opening 600~900 new stores throughout the year, with the number of stores increasing by 25%~40%, and actively reserve human resources accordingly, and recruit a large number of new employees at the beginning of the year.

"The cost growth is too fast, exceeding the performance growth," the staff of Luolai Home Textile Securities Department also explained to the reporter that the company has invested a lot in talent reserves and sales expenses since this year.

At the same time, "our sales accounts in the first half of the year have not been recovered," said the staff member, resulting in a year-on-year decline in net profit due to two effects.

Not only Luolai home textiles, but also other home textiles listed company We also face the same dilemma.

An insider of Mengjie Home Textile told the reporter, "We also choose to expand externally to compete with the other two leading enterprises." In the case of industry slowdown, home textile enterprises all hope to improve their revenue through extensive growth of horse racing enclosure. "But our base is small, so we are less affected than Luolai Home Textile."

An analyst who did not want to be named pointed out to the reporter, "It was originally expected that the performance of home textile in the third quarter might recover, but now it seems not optimistic." The performance forecast of Luolai Home Textile directly pointed out the objective problem of the slowdown in the growth of the home textile industry. Although home textile enterprises have hoped to resist the curse of the industry slowdown through extensive expansion, it can be seen from Luolai Home Textile that, The disadvantages of extensive expansion have begun to emerge.

Wang Qianjin, chief editor of the First Textile Network, said in an interview: "The cyclical adjustment has come, and the industry will enter a period of medium speed development."

It is worth noting that after the announcement of the performance of Luolai Home Textile yesterday, many institutions began to sell a large number of home textile shares. According to the Dragon and Tiger List data, all the sellers of Luolai Home Textiles were institutions yesterday, and five institutions sold more than 65 million shares in total. At the same time, three institutions are listed in Mengjie Home textiles The list of sellers sold nearly 10 million yuan of shares.