The debt crisis of Chinese real estate companies has impacted various industries, including the home furnishing sector. Recently, the leading custom home furnishing company in China, Oppein Home, released its third-quarter report, showing a rare double-digit decline in both revenue and net profit, with a reduction of 536 stores compared to the end of last year.
According to reports from “Securities Times” and “The Paper,” on the evening of October 28, Oppein Home published its 2024 third-quarter report, achieving operating income of 13.879 billion yuan in the first three quarters, a 16.21% year-on-year decrease; net profit attributable to shareholders of the listed company was 2.031 billion yuan, down by 12.08%.
Looking at the third quarter alone, Oppein Home recorded an operating income of 5.296 billion yuan, down by 21.21% year-on-year; net profit attributable to shareholders of the listed company was 1.041 billion yuan, a decrease of 11.56%.
Oppein Home has always been a leader in China’s custom home furnishing industry, with its revenue and net profit ranking at the top of the industry for a long time. Since its listing in 2017, Oppein Home has seen positive annual growth in net profit.
However, starting from 2024, the company has experienced rare double-digit declines in both revenue and net profit. In the 2024 interim report, Oppein Home mentioned factors such as the fading real estate dividend, changing consumer preferences, insufficient consumer driving force, and intensified industry competition as severe challenges for the custom home furnishing industry.
By channel, Oppein Home’s main channels are distribution stores and bulk business. In the first three quarters, there was an expanded decline in revenue from distribution stores and a shift from growth to decline in bulk business. The operating income from distribution stores was 10.393 billion yuan, down by 18.90% year-on-year; the revenue from bulk business was 2.348 billion yuan, a 12.33% decrease.
Regarding the number of stores, as of the end of September, Oppein Home had 8,180 stores, which is 536 fewer than the 8,716 stores at the end of last year.
Another home furnishing industry giant affected by the Chinese real estate market is DIO Home, which reported losses in their third-quarter results. According to reports from Red Star News, on the evening of October 29, DIO Home announced a total loss of 140 million yuan in the first three quarters of this year, a 115.89% decrease compared to the same period last year.
The announcement explained that the significant decline in company profits was due to drag from the real estate industry. Influenced by the macroeconomic environment, the real estate development prosperity index remained low this year, leading to inadequate consumer motivation for home renovation, weak overall demand for building ceramics and bathroom products, and intensified competition in the oversupplied market.
In the first three quarters of 2024, the company achieved operating income of 2.047 billion yuan, down by 25.40% year-on-year. The impact was twofold: on one hand, the company was affected by the continuous dynamic adjustments in the real estate market, and on the other hand, the company proactively abandoned some high-risk project channel businesses with slow payments, resulting in a significant year-on-year decline in project channel business during the reporting period. Moreover, due to insufficient overall demand and the continued internal competition in the industry, the company’s sales through renovation channels were somewhat affected, leading to a certain proportion of decline in distribution channel business in the third quarter as well.