I have said that many small and insignificant businesses have become the unicorns of the industry. Today I will talk about a case of drying racks .
I really didn't expect that a small drying rack, in such a subdivided field, could actually make an invisible unicorn, a company with an annual revenue of 1 billion, and the company was just listed on the A-share market.
This invisible unicorn is a good wife , the main drying rack, yes, that is the kind of commonly used on your balcony.
You can think of all kinds of drying racks, hand, smart, landing, floating outside... they all do. On December 1st, the good wife was listed on the Shanghai Stock Exchange. As of today, she has continuously brushed out five daily limit boards.
This is the first "hanger stock" of A shares.
Drying the hanger, this thing gives you the first impression is what?
I estimate that many people's first impressions are "this stuff, can you make money?" However, not only can you make money, but also 40% of gross profit, not only that, but also can achieve 10 billion in one year.
Directly on the data:
In 2014-2016, it had revenues of 594 million, 688 million, and 808 million, with non-net profit of 103 million, 129 million, and 138 million. Net operating cash flow was 156 million, 164 million, and 142 million. 37.47%, 39.82%, 40.25%.
Not only has the performance increased year after year, but also the gross profit has increased steadily. Accounts receivable accounted for less than 1% of revenue. The right to speak in the industry chain is extremely strong. It is called Maotai in the racking industry.
However, what is embarrassing is that compared with the various emerging concepts, the industry of drying racks is too traditional, too subdivided, too inconspicuous, or even covered by brokerage research reports. If you want to query industry data, You will find: simply can't find it!
This is nothing, but more importantly, the helm behind it is also a strange person - this is already his second company to go public!
The real wife of the good wife, named Shen Hanbiao, is a typical 70-year-old born in 1972. He is a low-key person in Guangdong Province. He does not show up in the mountains and rarely shows up in the media.
He and his wife Wang Miaoyu, the first listed company, named Hao Laike, went public on February 17, 2015, and the main wardrobe.
In addition, according to media reports, in addition to the two listed companies, the couple actually controlled nearly 20 homes including Guangzhou Dingjia Network, Hanyin Investment Holdings, Yueshang Venture Capital, Guangdong Merchants Investment, and Zhongchuangxing. The company, conservatively estimated that the total net worth will exceed 17 billion.
This “post-70s†listed professional households, two listed companies, one for hangers and one for wardrobes are all traditional industries and are extremely fragmented businesses, but they also make a product deep, thorough and extreme. Thereby achieving A-share IPO.
Moreover, what is even more interesting is that the two companies are extremely conservative in their operations and never borrow money from outside.
Yes, there is no money for a penny, and there are no short-term loans or long-term loans.
You have to be emotional: this year, such business ideas are really rare.
- 1 -
Drying rack business
Revenue of 800 million, net profit of 100 million
Hangers, which are the kind of furniture that appeared earlier in China, have been implemented since the Zhou Dynasty, and there have been shelves dedicated to hanging clothes.
During the Spring and Autumn Period, the wooden poles of the cross frame were used to hang clothes and æ›° "æ¡", also called "木施".
Two thousand years later, in 1947, entrepreneur and inventor Walter Steiner invented the drying rack "Stewi".
The drying rack is a bracket that can be folded and rotated. The bracket is made up of a 60-meter clothesline, which was extremely popular at the time.
Since then, an industry has really been born.
Good wife, the main drying rack, this business accounts for more than 95% of its total income, its drying rack products can be divided into four series of hand-shake, intelligent, landing, and floating.
After more than 2,000 years of development in human society, the drying rack has evolved from the earliest wooden pole to this:
In the first half of 2014-2017, it relied on the sale of drying racks. It had revenues of 5.94, 6.88, 8.08, and 470 million, and the net profit of non-returning mothers was 1.03, 1.29, 1.38, and 61.86 million. Net operating cash flow. It is 1.56, 1.64, 142 million, and 114 million.
Pay attention to this data, the performance growth is very stable, and the cash flow is also very healthy. Among the more than 3,000 listed companies in the A-share market, there are not many companies that can make such stable growth in profits and stable growth in gross profit.
Due to seasonal factors, the performance in the first half of the year usually accounts for less than 40% of total revenue, so no surprise, we estimate that in 2017, its revenue is likely to exceed 1 billion.
It mainly uses dealers and e-commerce sales models. Based on regional distribution and direct sales, in recent years, it has begun to vigorously expand the e-commerce channel.
As of June 30, 2017, the good wife has more than 410 dealers, 1448 dealer stores, and 8 e-commerce shops.
Don't look at a small business that is inconspicuous. Once you do it, you can have a strong voice:
Under the dealer mode, it has strict requirements for the dealer's store site selection, decoration, sales personnel, etc. The cooperation mode with the dealer is “first payment after the goodsâ€, the goods are delivered in advance before the goods are delivered. Dealers bear, almost no return replacement.
In the first half of 2014-2017, the return value was only 289,200, 168,800, 0.39 million, and 0.06 million.
In addition, in 2014-2016, its gross profit margin was 37.33%, 39.95%, and 40.34%, which is still steadily increasing.
- 2 -
"De-leveraging" advanced individuals
Holding two listed companies, do not borrow one share
Strong upstream and downstream
Good wife, is the second listed company of Shen Hanbiao. What's interesting is that if you take the financial data of the two companies, Lai Ke and Hao Tai, and carefully compare their business models, there will be different discoveries.
The first is borrowing.
Looking at the earnings of the two companies, there is one place that is quite interesting – no borrowing.
Yes, there is no money for a penny, and there are no short-term loans or long-term loans. Hao Laike has an annual revenue of 1.4 billion and a net profit of 250 million. There is no loan. Mrs. Good 2016 has a revenue of 808 million and a net profit of 138 million. There is no loan.
Of the 2,189 manufacturing companies in the A-share market, only 222 companies have no borrowings in the past three years. Some of these companies may be familiar with you, such as Wuliangye, Haitian Weiye, Luzhou Laojiao, and Fuling mustard.
Shen Hanbiao does not look for a bank loan. What is the tone? The answer is awkward operating cash flow.
During the reporting period, the operating cash flow of Mrs. Hao and Hao Laike was higher than that of non-net profit.
The second is the accounts receivable.
In the first half of 2014-2017, the good wife's accounts receivable were 2.953 million, 3.012 million, 6,125,300, and 3.064 million, accounting for 0.53%, 0.47%, 0.82%, and 0.72% of revenue.
Paying attention to this data, accounts receivable accounted for less than 1% of revenue, and the account turnover rate reached about 200.
Of the more than 3,450 listed companies in the A-share market, only 265 are below 1%.
Coincidentally, another company controlled by Shen Hanbiao, Hao Laike, is also extremely low.
In 2014, Hao Laike's accounts receivable amounted to 7,737,700, 8,,654,400, and 10.294 million, accounting for 0.78%, 0.83%, and 0.7% of revenue.
Third, the gross profit margin.
In 2014-2016, the gross profit margin of the good wife was 37.47%, 39.82%, and 40.25%; the gross profit margin of Hao Laike was 37.35%, 38.17%, and 39.98%.
The gross profit margins of the two listed companies have continued to increase, maintaining a 40% line.
The data speaks for itself, we translate it:
Shen Hanbiao's business strategy is stable and heavier, belonging to risk aversion, never borrowing money; pursuing the "cash is king" business strategy, the quality of profit is very high; the industry chain has strong voice, due to the dispersion of downstream customers, and very few customers owe paragraph.
— 3 —
Home industry consumption upgrade wave
Shen Hanbiao's choice
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China's modern drying rack industry was born more than 20 years, but because it is too ordinary, the capital market has never been interested.
Among the A-shares, there is no listed company that specializes in this. There are no brokers who have studied this industry. When the sponsors write the prospectus, they are even embarrassed to find the research data.
As a result, there was a wonderful scene in the prospectus: no industry data, no comparable company.
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However, standing on the cusp of consumption upgrades, the industry has actually grown very badly.
The drying rack industry belongs to the home industry. In this field, Sofia and Ou Pai's homes, which are familiar to people, have grown rapidly in recent years.
The so-called consumption upgrade is actually a very illusory word. In the home industry, the property of consumption upgrade is nothing more than two words: functionality and aesthetics.
The gross profit of this industry is related to these two attributes.
Taking the wardrobe industry as an example, Hao Laike has experienced rapid growth in the past three years, relying on the aesthetics.
The drying rack industry is completely different: consumers' “functionality†requirements for drying racks are much higher than “appearanceâ€.
This time, the good wife IPO, as the absolute leader in the industry, its IPO fundraising investment, is the development of smart home. Pay attention to this investment, it seems that the functionality is to be the ultimate.
One is the ultimate in aesthetics, and the one is functionally perfect.
If the business operation is likened to a river and lake, then the martial arts tricks of Shen Hanbiao are small businesses, which are quite different in the present, but after all, China's 1.3 billion people, in any field to achieve the ultimate, have a broad market.
If you are an investor, don't despise traditional business or small business in the future;
If you are an entrepreneur, don't think that it is very good to talk about "artificial intelligence", "blockchain" and "mobile Internet" every day. It is the best business to do what you can and do well.
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