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The trend of Future Furniture - Furniture Circle

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In the furniture market suffusing a rise, the national building materials index rose 15.51 percentage. Industry insiders said that the price increase would eliminate a number of low end enterprises.In addition, real estate growth is expected to decline, which will make the whole category of large customized enterprises upgrade less than expected.

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The trend of Future Furniture

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2017-11-08
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    In the furniture market suffusing a rise, the national building materials index rose 15.51 percentage. Industry insiders said that the price increase would eliminate a number of low end enterprises.In addition, real estate growth is expected to decline, which will make the whole category of large customized enterprises upgrade less than expected.

   Furniture enterprises performance in the first quarter has not been affected by the industry price.

    Although the furniture industry began to appear overall price increases before the Spring Festival , but in March the national building materials (BHI) was 94.48, an increase of 15.51 percentage compared with last month. Some people in the industry believe that the index is only data phenomenon because the surge in prices to the industry generally has a huge impact on transaction and investment.Some worried the market will show this negative impact in the second quarter because of the lagged data effect. The insiders find that the current major furniture stores on one hand increase the price but on the other hand , they are making different range of promotional activities, by which  they hope that through this way to digest some of the prices and benefit consumers, so that they can adapt to the larger industry prices surge and make the market gradually accept the new pricing.

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    The furniture industry observers Xie Ruibiao believes that the relatively stable furniture enterprises, will not be too concerned about changes in the industry index and macro market, because the furniture industry demand is huge, especially there is rigid demand in this industry.To furniture enterprises,at present,the most important part is to develop in accordance with their own steps, "The big brand in this industry currently are doing so",he said.

    According to the data from a number of well-known furniture enterprises in the first quarter of 2017 report,  the performance has not been affected by the overall industry price increases. Sophia (002572) first quarter data shows, the company in 1~3 months achieves income of 954 million yuan, an increase of 48.3%; net profit attributable to shareholders of listed companies 7.772263 million , an increase of 46.75%. Qumei Home in the first quarter got income of 340 million yuan, an increase of 38%; net income of 24.92 million yuan attributed to the mother company, an increase of 59%.Oppein's first quarter operating income of 1.449 billion yuan, increase of 20.49%; net profit attributable to listed companies 55.521 million yuan, an increase of 33.31%. Holike 1~3 operating income of 263 million yuan, an increase of 35.19%; net profit attributable to shareholders of listed companies 25.6659 yuan, an increase of 86.09%.

Forecast 1: Furniture industry benefit from potential renovation market

   According to relevant data, in recent years, the furniture industry tends to grow steadily. In 2016, the main business income of Enterprises above Designated Size reached 855 billion 950 million yuan, an increase of 8.61%, up slightly to the growth rate of 8.35% in 2015. GF Security analysts found that there was lagged effect for the demand in furniture industry under the effect of real estate and furniture industry fluctuation is significantly lower by using regression analysis of  furniture manufacturing industry growth rate year-on-year growth and real estate sales since 2012.

Analysts said the 2016 real estate sales grew 22.46%, in view of the time lag, it is believed that   2017 will see furniture industry sales will continue to benefit from it. "custom furniture as a sub branch of the furniture industry, because of its consideration of individual needs and scale of production advantages, in recent years the growth was significantly higher than the overall level of the furniture industry." It is learned that average increase speed of the main custom furniture factories(Oppein,Sophia Shangpinzhipei,etc),  far higher than the main furniture industry listed companies (total of 18 listed companies) and furniture manufacturing industry growth.

At this stage, the main source of growth for the tailored furniture factory is from the replacement of finished furniture and hand furniture.  GF Securities analysts of light industry  analyzed that the huge marriageable population brings lasting motive force, plus the two child policy liberalization, the demand for improving house also brought decoration demand.In addition, concluded based on that old house need renovation around ten years period ,the house  bought from 2005 to 2009 has already entered the renovation market.

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Forecast 2: some low end enterprises will be eliminated

According to analysts forecast, with more and more enterprises landing capital market, in the next few years, the customized furniture industry will face reshuffle.  The furniture industry has ended the era of "no worry for selling", and shifted from "seller's market" to "buyer's market"." Xie Rui concludes, nowerdays the furniture market is increasingly refined with the hot focus custom furniture,high price mattress,new Chinese furniture.The furniture industry is tending to be more and more comfortable, color diversified and personalized.With the increasing of industrial concentration and universal price rising, some low end enterprises will be eliminated at the end: "the reason is that in the market there is no right to voice for them and they are not qualified to increase the price.The profit is squeezed,difficult to survive."


    Xie Ruibiao said that for large brands, because of the larger size and ability to digest part of the rising cost, they must sacrifice part of the profits. Insiders keep wait-and-see attitude to the performance of listed furniture companies in the second quarter, but bearing the idea that  the overall performance may be worse than expected. Industry analysts believe that the development of the furniture industry may still risk, because the real estate growth is not as good as expected.the whole category of customized product upgrades slowly than expected progress.   




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