China Taojun checked the annual financial report and learned that as of the end of 2021, the total ceramic tile inventory of listed ceramic companies such as Dongpeng Holdings, Diou Home Furnishing, and Mona Lisa exceeded 100 million square meters, and the inventory of one of them increased by more than 40% year-on-year. %. At the same time, as raw material and energy prices continue to rise and the proportion of engineering channels increases, the gross profit margins of the three listed ceramic companies have declined to varying degrees, which shows that the operating efficiency of ceramic companies has been increasingly affected.
On the one hand, due to the continued sharp rise in prices of natural gas and other energy and raw materials, many leading ceramic companies have announced product price increases; on the other hand, ceramic companies have accumulated large inventories due to poor product sales. How to optimize inventory and improve inventory turnover has become an urgent issue facing ceramic enterprises.
01 What is the reason for the sudden increase in inventory of ceramic companies?
Judging from the financial reports of listed ceramic companies, inventory generally increases with the growth of production and sales. In some ceramic companies, the inventory growth rate even exceeds the growth rate of production and sales.
Diou Home's ceramic tile sales volume in 2021 will be 131.7478 million square meters, a year-on-year increase of 3.04%; production volume will be 139.4817 million square meters, a year-on-year increase of 6.10%; inventory will be 26.9344 million square meters, a year-on-year increase of 40.28%.
Dongpeng Holdings’ ceramic tile sales volume in 2021 was 153.7452 million square meters, a year-on-year increase of 13.17%; production volume was 119.2281 million square meters, a year-on-year increase of 1.27%; inventory was 34.759 million square meters, a year-on-year increase of 2.63%.
Mona Lisa's ceramic tile sales volume in 2021 was 152.6952 million square meters, a year-on-year increase of 51.93%; the production volume was 160.6699 million square meters, a year-on-year increase of 41.06%; the inventory was 48.7103 million square meters, a year-on-year increase of 19.58%.
The inventory of the above three listed ceramic companies has increased in 2021, among which the inventory of Diou Home Ceramics has increased by more than 40% year-on-year.
The main reasons for the increase in inventory are the increase in production capacity, the increase in raw material prices, and the slowdown in the construction progress of cooperative housing development companies. For example, Diou Home Furnishing said that the ending inventory of ceramic tile products increased by 40.28% year-on-year, mainly due to increased stocking in response to the rise in upstream raw material prices, and at the same time, the construction progress of downstream real estate developer customers slowed down, and the pace of shipments slowed down.
By comparison, it can be found that the growth rate of Mona Lisa's ceramic tile production and sales is much higher than the growth rate of inventory. MongolianNa Lisa said that the production volume in 2021 will increase by 41.06% compared with the previous year, mainly due to the commissioning of 3 intelligent production lines in Section 2 of the first phase of Guangxi Tengxian Base, the commissioning of 3 ultra-high board production lines at Guangxi Xiqiao Production Base, and the commissioning of 9 production lines at Jiangxi Gaoan Production Base The production line was put into operation and the production capacity was significantly increased. The sales volume increased by 51.93% compared with the previous year, mainly because Mona Lisa adhered to the strategy of sinking distribution channels, strengthened strategic cooperation with real estate, opened up new channel business, and strengthened cooperation with core home improvement channels. In addition, as large-sized products such as ceramic slabs and rock slabs have gained wide recognition in the market, Mona Lisa has increased its inventory of rock slabs and large-sized ceramic tiles.
Achieving zero inventory is a fantasy for ceramic companies. Generally speaking, in order to maintain the continuity of production, ceramic companies will produce a certain batch and style of products in advance to form stock and inventory, thereby shortening the sales cycle. Sometimes, reserves are also needed for promotional stocking, channel distribution, etc. A certain amount of inventory. However, excessive inventory of ceramic enterprises means greater capital turnover risks and takes up a large amount of working capital, which means that the ability to resist risks will be reduced accordingly.
The inventory pressure on ceramic companies in 2021 is not a sudden outbreak, but stems from the cumulative effect. In fact, from the financial reports of listed ceramic companies in 2020, we can find that the problem of excess inventory had already occurred at that time. In 2021, affected by factors such as thunderstorms among real estate companies, the inventory problem has become more serious. Some industry insiders said that if the inventory cannot be digested in time, once it turns into the off-season and the accumulation of new inventory, liquidation will be inevitable, which will be a fatal blow to the enterprise. Therefore, the balance between production and sales is very important for ceramic enterprises.
02 Profit margins shrink again and again
Some ceramic companies have announced that they will suspend their kilns for a holiday< /p>
Affected by the rising prices of raw materials and energy and the impact of the COVID-19 epidemic, the business and production costs of ceramic companies have also increased. Diou Home's ceramic tile operating costs in 2021 will increase by 9.2% year-on-year, with a gross profit margin of 25.52%, a year-on-year decrease of 4.65%; Dongpeng Holdings' tile operating costs in 2021 will increase by 15.85% year-on-year, with a gross profit margin of 30.83%, a year-on-year decrease of 3.46%; Mona Lisa's tile operating costs in 2021 increased by 56.32% year-on-year, and the gross profit margin was 29.20%, a year-on-year decrease of 5.46%.
Financial reports show that the gross profit margins of these three listed ceramic companies have declined for three consecutive years. It can be seen that the construction and ceramics industry has been continuously affected by unfavorable factors in the industry such as rising prices of raw materials and energy in the upstream, disruptions in midstream production due to energy consumption restrictions and shutdowns, and rapid changes in the downstream market.
Energy prices have risen sharply, the average production cost in the building and ceramics industry has increased significantly, and the real estate industry has continued to deteriorate. Ceramics companies are under increasing operating pressure. At the same time, under the background of carbon peak and carbon neutrality policies, all major ceramic production areas have been affected to varying degrees by power and production restrictions. Competition in the ceramics industry has accelerated, backward production capacity has continued to be eliminated, and industry concentration has further increased. promote.
Profit margins have shrunk again and again, and many ceramic companies have announced closures of kilns and holidays. For example, a large ceramic company in Guangdong issued a notice to suspend some kiln production operations starting from June 2. Production line and related department personnel will take a holiday from the date of suspension of production. At the same time, employees on vacation are required to keep communications open and be ready to resume work at any time, and Systematic arrangements were made for salary payment during holidays. It is understood that the ceramic company is at the forefront in terms of the number of production lines in the field of rock slabs.
If the leading ceramic companies in the industry are still like this, the operations of small and medium-sized ceramic companies will face greater difficulties.
03 Leading ceramics companies announce price increases< /p>
Is it "increasing prices to remove inventory"?
A few days ago, the five leading ceramic companies including Hongtao, Xinmingzhu, Mona Lisa, Marco Polo and Dongpeng Holdings under Hongyu Group have successively announced increases in ceramic tile prices, with increases of up to 10%.
Rising energy, increased raw material costs, and increased freight charges have all become the main reasons for this price increase. Because the profit margins of ceramic tiles have been further compressed, the five major ceramic companies said they cannot withstand the pressure of operating costs and can only retain profit margins by raising prices.
Even if the price increase comes, the terminal price war will not stop. Some dealers said that the current market conditions are not as ideal as expected, and due to the influence of the real estate industry, there are currently not many new properties, coupled with the renovation of old propertiesThe rate is not high and the demand for decoration has dropped. In addition, frequent terminal sales activities and intensified market competition have led to sluggish demand in the terminal market.
Many people in the industry speculate that this may be because many ceramic companies have high inventory pressure, and it is difficult to sell ceramic tiles this year. In order to clear inventory or improve sales and performance, they announced price increases and used this as a reason to urge distribution. Merchants purchase goods and prepare inventory.
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Affected by factors such as repeated epidemics, the construction and ceramics industry's sales continued to slow down, and poor production and sales caused inventory pressure to surge. This means that ceramic enterprises must not only optimize production capacity layout as an important way to improve competitiveness, but also expand marketing and warehousing logistics networks, increase distribution outlets, continuously optimize inventory, and reduce inventory risks while ensuring sales response speed.
