news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Recently, Leggett, the "first ergonomics stock", released its mid-year report card.

In the first half of 2024, Lechuang Holdings achieved revenue of 2.427 billion yuan, a year-on-year increase of 44.64%; the non-net profit attributable to shareholders of the listed company was 107 million yuan, an increase of 29.95% over the same period last year.

In 2023, the company achieved revenue of 3.902 billion yuan. Considering that the second half of the year is the peak season for cross-border e-commerce sales, it is a foregone conclusion that the annual revenue in 2024 will exceed that in 2023.

Dual-wheel drive, huge increase in performance

According to official website information, Legao Holdings was established in 2002 and was listed on the Shenzhen Stock Exchange's Growth Enterprise Market on December 1, 2017 with the stock code 300729. It has two mature industries, smart home and public overseas warehouses. It is the first A-share listed company in the health and ergonomics industry, and the first cross-border e-commerce stock to be listed through an IPO.

In the first half of 2024, Lejia Holdings achieved operating income of 2.427 billion yuan, an increase of 44.64% over the same period last year; the net profit attributable to shareholders of the listed company was 160 million yuan, a decrease of 63.86% over the same period last year, mainly due to the sale of overseas warehouses in January 2023, which resulted in large non-recurring gains and losses, and increased the income from current asset transfer and untransferred income tax by approximately US$73.52 million; the non-net profit attributable to shareholders of the listed company was 107 million yuan, an increase of 29.95% over the same period last year.

Among them, ergonomic products are still the main source of the company's operating income. The overall situation is stable, and the growth rate has accelerated. In the first half of the year, the company achieved revenue of 1.337 billion yuan, accounting for 55.07% of the operating income. The public overseas warehouse business has developed rapidly, with revenue of 851 million yuan, and the proportion of operating income has increased to 35.07%.

Overseas warehouses are a form of transnational logistics in which logistics companies, cross-border e-commerce platforms or large cross-border e-commerce sellers build or rent warehouses abroad, and send goods to foreign warehouses in batches to achieve local sales and local distribution.

In 2013, due to the need to develop cross-border e-commerce business, Leggett Holdings began to build its first overseas warehouse. In 2020, it began to launch public overseas warehouse cross-border logistics services, and its customers are mainly medium and large-sized cross-border e-commerce sellers.

As of June 30, the company has 16 self-operated overseas warehouses around the world, covering an area of ​​460,100 square meters. In July, a new warehouse was opened, increasing the number of self-operated overseas warehouses to 17, with a total area of ​​482,100 square meters. It has served 778 foreign trade companies and handled more than 4 million parcels in the first half of the year, an increase of more than 120% year-on-year.

Lejia Holdings stated that the storage capacity utilization rate of newly opened warehouses in the first quarter was basically at 60-70%, and the available storage capacity on the ground was basically used up. At present, it is necessary to speed up the construction of shelves and release the storage capacity of existing warehouses. Depending on demand in the second half of the year, 50,000 to 100,000 square meters of storage capacity may be added. The overall pace of opening warehouses and filling warehouses is in good condition.

In 2023, the company's self-use and third-party use accounted for approximately 20% and 80%. In the first half of 2024, this proportion has reached 10% and 90%. The proportion of third parties is expected to continue to increase in the later period.

Going overseas to “pan for gold” is a long and arduous journey

At present, the development of China's cross-border e-commerce is gradually transforming from an extensive distribution model to a vertical category branding model, becoming an important breakthrough in promoting the transformation and upgrading of foreign trade and creating new economic growth points. In the first half of the year, my country's cross-border e-commerce imports and exports reached 1.22 trillion yuan, a year-on-year increase of 10.5%, which fully reflects the prosperity of the cross-border e-commerce industry.

As the foundation of the integrated warehousing, distribution and return service model of the "last mile" of cross-border e-commerce, overseas warehouses will inevitably become more and more densely distributed around the world.

It is worth noting that Amazon is currently the leading company in the US overseas warehouse industry, with overseas warehouses covering 30 to 40 million square meters. In contrast, although a number of overseas warehouses that entered the market after the epidemic, such as Leckey, have developed rapidly in recent years, their size is still very small. With the significant increase in warehouse rents, many small overseas warehouse service providers have been forced to withdraw, and sellers are more inclined to choose leading overseas warehouses. The competition landscape of overseas warehouses is gradually shifting from dispersion to concentration.

At present, about 50%-60% of the package orders of Leggau Holdings' overseas warehouses come from the Amazon platform. With the rapid development of cross-border e-commerce platforms Temu and TikTok, the package volume of both has increased rapidly.

As of the end of the first half of the year, parcel orders from the above two platforms increased to about 10%, and the remaining orders came from independent sites and e-commerce vertical platforms, including Home Depot, Office Depot, Wal-mart, etc.

In addition, due to the structural impact of rising shipping costs and the increase in the proportion of overseas warehouses, Legg Group's operating costs have increased significantly in recent years.

Lechuang Holdings is also actively responding.

From 2022 to 2023, during the process of "converting small warehouses to large warehouses", the company reserved 5,000 acres of industrial logistics land in the core port area of ​​the United States at a lower price in advance to meet future self-warehouse needs.

According to its analysis, the holding cost of self-built overseas warehouses is one-third to one-half of the cost of leasing overseas warehouses. By increasing the proportion of self-built overseas warehouses, the property cost of overseas warehouses can be effectively reduced.

On June 17, Lecang Holdings announced that its wholly-owned subsidiary Ellabell Bryan Lecangs LLC plans to sign a construction contract with Clayco, Inc. for the "Ellabell Overseas Warehouse Project in Georgia, USA". The total construction price is estimated to be US$78 million (equivalent to approximately RMB 550 million).

Although overseas warehouses can improve logistics efficiency and customer satisfaction, initial investment and operating costs will also affect the company's gross profit margin. In addition, due to the impact of the epidemic and other macroeconomic factors, shipping costs have increased significantly, further compressing profit margins.

In the first half of the year, Lechuang’s gross profit margin was 31.4%, a year-on-year decrease of 4.4 percentage points; the net profit margin after deducting non-recurring items was 4.4%, a year-on-year decrease of 0.5 percentage points.

From the perspective of the secondary market performance, the share price of Lechuang has fluctuated downward this year, especially in the past month, with a significant decline. The latest share price is less than 15 yuan per share.

Industry analysts believe that Lejia shares is a company with a reflexive gene. If the demand for overseas warehouses of cross-border e-commerce can be maintained, and the port land price and storage price continue to rise, the company's early layout of low-priced land as a starting point, coupled with the strategy of replacing small warehouses with large warehouses, can bring about further appreciation of assets. When the cycle starts running smoothly, then driven by reflexivity, the stock price will be self-fulfilling.