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company quick review | how should dongyi risheng, the "first home improvement stock", deal with the troubles it is facing?

2024-09-12

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jia yunke, commentator of meijing

as the leader of the home improvement industry, dongyi risheng (sz002713, previous closing price 2.43 yuan, market value 1.019 billion yuan) is now mired in litigation and debt crisis, facing difficulties such as tight cash flow, large-scale store closures and increasing losses. the company’s announcement released on the evening of september 11 showed that the amount of new accumulated litigation and arbitration matters has exceeded 10% of its net assets. in the current economic environment and industry background, how to deal with this crisis will not only determine the future of dongyi risheng, but will also provide a useful reference for other home improvement companies.

first, dongyi risheng should quickly stabilize its cash flow. the company's cash flow crisis is the direct cause of the increase in lawsuits and overdue bank loans. to restore cash flow, the company can take a series of emergency measures, such as speeding up the collection of accounts receivable, adjusting its asset structure, and introducing strategic partners through financing channels. these measures will not only help the company survive the crisis in the short term, but also ease the market's concerns about its debt repayment ability.

secondly, dongyi risheng needs to re-examine its business model and strategy. although the company's decision to close inefficient stores reduced operating costs in the short term, it also triggered negative public opinion, further hitting the company's market image and business revenue. therefore, the company must improve profitability and customer satisfaction through more refined operational management.

on this basis, dongyi risheng should actively restore market trust. frequent lawsuits and arbitration cases have dealt a huge blow to investor and consumer confidence. the company urgently needs to rebuild its reputation through open and transparent communication. for example, the company can disclose more progress and details of the debt resolution plan to ensure that creditors and consumers know that it is fulfilling its promises. in addition, dongyi risheng should negotiate with creditors to seek flexible repayment methods and commit to actively repay debts during the strategic adjustment period.

finally, dongyi risheng can consider introducing external resources to help its transformation. in the current industry environment, if home improvement companies want to get out of trouble, they can deeply integrate with other industries. by integrating resources, it can not only enhance the company's service capabilities, but also provide customers with more diversified value, thereby improving the company's market competitiveness.

in general, if the "first home improvement stock" dongyi risheng wants to get out of trouble, it must solve the financial pressure in the short term and adjust its strategy in the long term to improve the adaptability of its business model. at the same time, the company needs to reshape its brand image through transparent communication and market cooperation. although the challenges in the home improvement industry are great, dongyi risheng still has the opportunity to regain its foothold in the fierce market competition through effective countermeasures.