Steadily forging ahead against the odds! Zhang Yutao of Sanxiong Aurora: Fully sprinting toward 2023!
09 May,2023
Steadily Moving Forward Against the Trend! Zhang Yutao of Sanxiong Aurora: Fully Charging Ahead in 2023
Category: News Center
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Source: Ancient Town Lighting News
Release Date: 2023-04-24
[Summary Description]
On April 22, Sanxiong Aurora released its 2022 annual report. The financial report showed that the company achieved total revenue of 2.264 billion yuan for the year, a year-on-year decrease of 16.42%; net profit was 99.9588 million yuan, up 338.48% year-on-year, and net profit after deducting non-recurring items was 54.9985 million yuan, up 415.44% year-on-year.
Compared to the sluggish performance of previous years, Sanxiong Aurora’s overall performance last year was remarkable. While its full-year net profit remained stable, how did it manage to significantly improve its profitability? Is this recovery sustainable?
01
Improved Strategic Layout Drives Higher Gross Profit Margin
Since its IPO, Sanxiong Aurora has maintained steady development. After a period of dormancy and market research, in 2021—on the occasion of its 30th anniversary—Sanxiong Aurora resolutely embarked on a new journey of “second entrepreneurship,” formally setting five-year strategic goals:
1. Become a first-class comprehensive lighting enterprise in China, with total domestic market revenue ranking among the top three in the industry;
2. Maintain its leading position in the domestic commercial lighting sector;
3. Cultivate a group of champions in specific segments of commercial lighting.
In 2021, Sanxiong Aurora achieved total operating revenue of 2.71 billion yuan, up 15.7% year-on-year; net profit attributable to shareholders reached 26.356 million yuan, down 88.8% year-on-year. Looking at quarterly performance, the fourth quarter saw a significant drop in operating profit due to the impact of the “Evergrande default.”
From a financial perspective, the results weren’t particularly impressive.
However, upon closer analysis, under the guidance of the new strategic goals in 2021, thanks to the implementation of these new changes, all eight project departments under Sanxiong Aurora’s commercial lighting business achieved varying degrees of revenue growth. By the end of 2021, Sanxiong Aurora’s commercial lighting segment had a total of 2,420 sales outlets nationwide.
To some extent, this marked the beginning of a new journey toward achieving its five-year strategic goals.
Looking at the 2022 financial results, Sanxiong Aurora’s revenue growth slowed down in 2022. However, in terms of gross profit margin—a key indicator of corporate profitability—the gross profit margin for its “lighting fixtures” products increased by 1.95% compared to the same period last year, while the “lighting control and others” category grew by 7.57% year-on-year, both showing clear signs of recovery.
02
Home Lighting Business Steadily Advances Against the Trend
In recent years, as the post-90s and post-00s generations have become the main force in home buying and renovation, consumer demand has become more personalized, younger, and diversified, leading to significant changes in market demand and decoration styles. Sanxiong Aurora has placed great emphasis on its home lighting business segment and launched the “Yingling” series of no-main-light products.
According to financial data, due to shrinking market demand, Sanxiong Aurora’s commercial lighting business revenue declined overall by 21.16% in 2022. However, its home lighting business segment achieved phased progress.
In 2022, despite a decline in retail channel sales revenue, Sanxiong Aurora’s home lighting segment saw substantial growth through designer channels and whole-house renovation companies. Among them, sales revenue from the Yingling series sold through designer channels rose by 88% year-on-year. As the whole-house renovation business had just started and its base was relatively small, its growth rate exceeded double-digit figures.
It is reported that in 2023, Sanxiong Aurora will focus on the Yingling no-main-light series as its core, use lighting and electrical products as a key driver, and rely on basic lighting fixtures as support, comprehensively strengthening its product portfolio.
In terms of channel layout, Chen Songhui, Vice President of Sanxiong Aurora, pointed out in 2022, “The Home Lighting Division of Sanxiong Aurora has officially launched the promotion of new whole-house renovation channels, deepened store construction and operations, and continued to advance new media communication and terminal traffic generation.”
By the end of 2022, the proportion of new product sales in Sanxiong Aurora’s home lighting segment had reached 33%, reflecting not only its strong capability in developing new home products but also the market’s rapid pace of new product iteration in the home lighting industry.
Currently, while accelerating the optimization of home lighting business channels, Sanxiong Aurora is also adopting a relatively proactive strategy in terminal store construction. In 2022, Sanxiong Aurora’s home business department opened 193 new sales outlets (including 185 specialty stores and 8 specialty zones) and optimized or closed 60 sales outlets (including 20 specialty stores and 40 specialty zones).
In 2022, the Russia-Ukraine war, real estate defaults, recurring epidemics, and rising material costs posed enormous challenges and uncertainties across the entire industry, resulting in the worst downturn in a decade.
Based on changes in the market environment, Sanxiong Aurora conducted scientific assessments of distributors and terminal channels, phasing out and optimizing sales channels and outlets with poor operating performance and high service costs. It fully promoted digital transformation to enhance operational efficiency across the entire value chain.
2023 marks the third year of Sanxiong Aurora’s five-year strategic plan. Whether it can achieve the “three ones” goal within the planned timeframe and create new brilliance makes this year especially crucial.
According to the Q1 2023 report released on the same day, Sanxiong Aurora’s performance was average. Q1 revenue was approximately 390 million yuan, down 6.98% year-on-year; net profit attributable to shareholders of the listed company was about 11.71 million yuan, down 49.57% year-on-year; basic earnings per share were 0.04 yuan, down 50% year-on-year.
But we believe that after two years of internal reform and improvements—optimizing marketing management systems, product market systems, market management systems, channel management systems, team management systems, and information management systems—2023 will be the time when Sanxiong Aurora, as President Zhang Yutao put it, “is now ready to make a full-speed sprint.”
Next, as Sanxiong Aurora moves toward its 2023 goals, what kind of performance will it deliver in 2023? Let’s wait and see!
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