The home industry has recently witnessed a renewed wave of interest in going public, driven by a recent announcement from the China Securities Regulatory Commission (CSRC). At the end of February this year, ten prominent household enterprises, including Red Star Macalline and Qumei Furniture, submitted their initial public offering (IPO) applications. Two years later, the sector is once again experiencing fluctuations, signaling a potential new phase in its development.
Currently, several companies are at different stages of the IPO process. Red Star Meikailong Home Group and Guangdong Mei Tushi Building Materials are in the "initial review" stage, while Qu Mei Furniture Group, Guangdong Top-Level Chuangchuang Household, Zhejiang Yongyi Furniture, Sichuan Imperial Sanitary Ware, Guangzhou Haolai Ke Creative Household, and Sankeshu Coatings have entered the "implementing feedback" phase. Meanwhile, Dongyi Risheng Home Decoration Group and Zhejiang Youbang Integrated Ceiling have passed the trial meeting and are moving closer to their listing goals.
Red Star Macalline, a leading player in the domestic home furnishings sector, has made headlines by entering the IPO audit list for the first time. The company had previously expressed its intention to go public as early as 2007, with its CEO stating the goal of listing within two to three years. After a six-year delay, the company is now on track, and if successful, it would become the first listed home retail company in China.
Following the listing of several home companies in 2011, the industry accelerated its pace toward going public, with clear strategic intentions. According to Shen Nampeng, founder and managing partner of Sequoia Capital China, the number of listed companies in the home furnishing sector is still relatively low, indicating significant growth potential. He also noted that the current trend of concentrated listings is an inevitable part of the industry’s development.
While listing isn’t the only path to success, it offers substantial benefits, such as access to capital, enhanced brand visibility, and improved corporate governance. However, not all companies benefit equally. Some see rapid growth after going public, while others face challenges or even decline.
This year, many home-related stocks have seen strong performance, with shares of companies like Sofia, Yihua Wood, and Meike exceeding market indices. However, individual stock gains don't always translate into real profits. For example, Meike Co. announced a projected 90% drop in net profit for 2012, and Del.com reported a 14.33% decline in revenue and a 14.63% drop in net profit for the same period.
In the home textiles sector, which has more listed companies, the outlook is not optimistic. The “Home Textiles Three Musketeers†— Rollei, Mengjie, and Rich Anna — saw sharp declines in both share prices and performance, falling below expectations.
Amid the excitement around IPOs, industry leaders urge companies to think carefully about whether going public is the right move at this stage. A chairman of a Shenzhen furniture company, who chose to remain anonymous, noted that today's home-based companies can be broadly categorized into three groups: those actively planning for an IPO, those already listed, and those that have delisted or are struggling to survive without one.
He added that while many companies are rushing to the market, most have underperformed in the capital market. “Whether to go public or not depends on what the company wants,†he said.
Industry experts believe that regardless of whether these companies succeed in their IPOs, the shift toward the capital market represents a significant change in the industry. It shows that companies are exploring new strategies for growth and development.
However, the overall development of the home industry remains uneven. Challenges such as weak brand recognition, high fragmentation, limited core competitiveness, and poor industrialization levels continue to hinder progress. These issues also affect investor confidence and the industry’s ability to attract long-term capital.
For companies aiming to go public, they must meet strict environmental standards, improve management practices, and ensure sustained profitability. Once listed, financial performance becomes transparent, and any hidden issues are exposed. This adds pressure but also provides an opportunity for greater accountability and long-term growth.
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