Furniture manufacturing is mainly influenced by the real estate industry. In the real estate financing channels blocked, sales weakness, policy continued high pressure, the real estate boom is difficult to significantly pick up, as a highly related furniture manufacturing boom is not optimistic. (source: people at home)

Due to the delayed release of the data, the data used in this section are for the whole year of 2019. The next issue will provide an in-depth analysis of the industry data for the first time since the epidemic hit the industry.

[ performance ] small increase in revenue and improved profitability

1. Revenue.

In 2019, the National Furniture Manufacturing Industry Regulation on enterprise operating income of 711.720 billion yuan, up 1.5% year-on-year, still a small increase, but the growth rate compared to 2018 decreased by 2.9 percentage points, a more significant decline.

Combined with the decline in the growth rate of new fixed-asset investment in furniture manufacturing, the weakness of real estate sales, and the slowing down of macro-economic growth, we believe that the furniture manufacturing industry has begun to appear the problem of overcapacity.

2. profitability.

In the fourth quarter of 2019, the profit margin on sales of enterprises in the national furniture manufacturing industry was 6.5%, continuing the slight upward trend of the previous two quarters. The annual gross profit margin of sales was 17.4%, showing a continuous quarter-to-quarter upward trend, a percentage point higher than the 2018 gross profit margin.

Three expenses (management expenses, financial expenses, and sales expenses) accounted for 10 percent of the main business income, down 0.6 percentage points from 2018. Overall, the industry’s profitability has improved.

3. losses.

As of December 2019, there were a total of 6,410 enterprises in the furniture manufacturing industry, 902 of which were operating at a loss level of 14.07%. Compared with 2018, the number of loss-making enterprises increased by 114, and the loss area expanded by 1.56 percentage points, reflecting more enterprises in the industry are facing operating pressure. But in the 2019 quarter, the number of loss-making companies has been shrinking from quarter to quarter.

4. Balance sheet.

In December 2019, the National Furniture Manufacturing Enterprises’balance sheet ratio was 52.8%, falling for the second consecutive quarter. However, compared with the previous year, the asset-liability ratio is still in a high position, reflecting the overall solvency has declined.

Operating capacity accounts receivable and inventory growth, the turnover rate decreased

Inventory turnover days and accounts receivable turnover days reflect the operating capacity of the enterprise. According to data from the National Bureau of Statistics of the People’s Republic of China, in December 2019, the net accounts receivable of enterprises in the country’s furniture manufacturing industry totaled 96.060 billion yuan, up 3.3 percent year on year; the total amount of inventory was 82.060 billion yuan, up 2.8 percent year on year.

At the same time, inventory turnover days and accounts receivable turnover days were 40 days and 42 days respectively, compared with historical data, from 2017 to 2019, the entire industry inventory turnover and accounts receivable turnover days continued to rise, it shows that the growth rate of revenue is less than the growth rate of inventory and accounts receivable, which reflects a certain decline in the operating level of the industry.

[ Business Climate Index ] December Business Climate Index 124.9, at the historical median level

In December 2019, the National Prosperity Index for furniture manufacturers was 124.9(last year = 100), down 0.8 percentage points from the previous quarter, but up 5.5 percentage points from the same period in 2018. During the month, the furniture manufacturing entrepreneur Confidence Boom Index was 125.2(last year = 100), basically the same as the previous year.

Furniture manufacturing is mainly influenced by the real estate industry. In the real estate financing channels blocked, sales weakness, the policy continued high pressure, the real estate boom is difficult to significantly pick up, as a highly related furniture manufacturing boom is not optimistic. (source: people at home)