IPO Reform: Dividends of Taowei Enterprises

The ceramic sanitary ware industry in China in 2013 was an extraordinary year. It recalled many landmark events that occurred in marketing, business operations, and capital operations. For example, Dongpeng’s successful listing in Hong Kong and the arrest of the sole sanitary director. All have a long-term and profound impact on the development of the industry.

The IPO consulting agency forward-looking investment consultants (mainly intending listed companies to provide pre-IPO market segmentation research and project feasibility studies) expects that as the global financial crisis gradually fades out and the economy stabilizes and recovers, the downstream of the domestic ceramic sanitary industry Demand will rebound. At the same time, with the acceleration of domestic IPO renewals and the reform of the new share issuance system in 2014, the domestic ceramic sanitary ware industry is expected to develop in a more prosperous and healthy direction under the guidance of capital.

IPO Reform Expected to Accelerate the Financing of Sanitary Companies

Before 2000, when international brands such as American Standard, Kohler, and Toto entered China, locked coastal open cities, and cut high-end hotels, office buildings, and high-end residential markets, domestic ceramic sanitary ware companies operated under the OEM model with labor cost advantages. Consciousness is quite weak.

Although China is already the world's largest producer of ceramic sanitary ware, and can match international brands in technology and equipment, it still has not formed a strong sanitary brand in the world. The ceramic sanitary ware brand industry in China has a large gap with the well-known ceramic sanitary ware companies in many aspects such as product R&D, innovation, brand management, marketing management, enterprise scale, and financial strength.

In recent years, domestic ceramic sanitary ware companies are eager to get listed, listing ** can not only meet the needs of corporate development strategy, but also high-quality companies to shape their brands involved in domestic and foreign high-end ceramic sanitary field of strong help, so that companies can effectively respond to the current The short-term fluctuations and cash flow problems in the ceramic sanitary ware industry under the circumstances of uncertain macroeconomic environment have maintained adequate investment in product R&D and environmental protection in the overall industry downturn.

With the deepening and advancement of the restart of the domestic IPO in 2014 and the reform of the issuance system, forward-looking investment consultants analyzed that from the management point of view, the reform is in the transition from IPO audit to compliance review, and the corporate value and risk Investors and the market autonomously judge that administrative intervention will gradually withdraw. This "decentralization to the market" reforms opened the bright prospects for the A-share listing of the sanitary ware industry.

Therefore, in the face of the major reforms that the regulators actively took off and the excellent listing opportunities for the restart of the IPO, forward-looking investment consultants believe that domestic sanitary companies should actively seek changes, comply with the major reforms released by the regulatory authorities, and break their own development bottlenecks. To achieve the standardization and transparency of the financial system, development model, and internal management, and stepping on the rhythm of the downstream demand in the sanitary ware industry, making full use of the capital supply in the domestic capital market to lead the industry A-share market.

Global ceramic sanitary industry downstream market demand stabilized

According to the type of raw materials used in the production process, sanitary ware products can be divided into two categories: ceramic products and non-ceramic products. Among them, ceramic sanitary ware includes: toilets, washbasins, urinals, squatting pans, bidets, mop pools and other products. Non-ceramic sanitary ware includes: bathtubs, bathroom cabinets, shower enclosures, faucets, flushers, hand dryers and electronic components.

Forward-looking investment consultants believe that at present, China is one of the world's largest ceramic sanitary ware products market, accounting for more than 37% of global ceramic sanitary ware production value. Family homes are the largest consumer groups, and commercial and public properties also occupy a large market share. Despite the rapid development of China's ceramic sanitary ware market, China's per capita expenditure on ceramic sanitary ware products lags far behind that of developed countries.

With the rapid economic growth in China, accelerating urbanization, rising disposable income of residents and increasing demand for housing in cities and towns, the market size of ceramic sanitary ware products in China has rapidly increased from 85 billion yuan in 2011 to 2013. Of the 1080 billion yuan, it is expected to reach 169 billion yuan in 2017***, with a compound growth rate of 11.8%.

In addition, in non-ceramic sanitary ware, jacuzzis and spa pools are important components and have a large market in Europe and North America. Affected by the global financial crisis, the number of manufacturers of jacuzzis and SPA spa pools has dropped sharply, and the industry concentration has risen rapidly.

With the steady recovery of the global economy in recent years and the resumption of global consumer confidence and the rising number of Chinese tourists traveling abroad, the demand for luxury bathing spas and spa pools from overseas luxury hotels has been strongly promoted. In 2012, the sales volume of the global jacuzzi and spa pool was approximately 333,100 units, and in 2018 it will reach 689,800 units.

Due to the rapid increase in the urbanization rate in China, the penetration rate of ceramic sanitary ware products in China lags behind that of developed countries. In 2012, China's annual per capita consumption was 0.13 sets of ceramic sanitary ware products, while the average American consumption was 0.26 sets. In addition, the penetration rate of Chinese ceramic sanitary ware products rose rapidly from 42.4% in 2008 to 45.7% in 2012. With the acceleration of urbanization in China in the future, forward-looking investment consultants expect that the penetration rate of ceramic sanitary ware products in China will reach 59.3% in 2017. The increase in penetration rate will effectively boost sales of related ceramic sanitary ware products.

In the domestic ceramic sanitary ware market, ceramic toilets are the largest part of the product, accounting for 47.7% of the domestic ceramic sanitary ware market in 2012. It is expected that the sales volume of ceramic toilets will reach 38.292 billion yuan in 2015, ** ceramic sanitary ware The market share is 48.4%. In addition, the ceramic basin is the second largest product in the market. In 2012, sales were approximately 18.143 billion yuan, accounting for 34.2%, and it is expected to reach 28.456 billion yuan in 2015, accounting for 35.5% of the total.

The market share of domestic ceramic sanitary ware manufacturers is relatively decentralized, and the sales of the top ten manufacturers accounted for 20% of the entire ceramic sanitary ware industry. At present, the top ten manufacturers are: Koehler of the United States, Toto of Japan, Wrigley of Guangdong, Faenza of Italy, Hengjie of Guangdong, Fujian Hangkong, Anwar of Guangdong, Taiwan Hecheng, Guangdong Ying Sanitary, Guangdong Dongpeng. Among them, Fujian Hangbiao Sanitary and Guangdong Dongpeng Sanitary were listed on the Hong Kong Stock Exchange on July 13, 2012 and December 9, 2013, respectively.

Capital operation boosts brand promotion of domestic high-quality sanitary companies

Through more than 20 years of development, the domestic sanitary ware market has experienced a process from scratch, from disorder to scale. The booming real estate industry and building decoration industry provide a strong foundation for the rapid growth of sanitary companies. Nowadays, China has developed into the world's largest producer and consumer of sanitary facilities. The output of sanitary ware in the country accounts for more than 30% of the world total, and related accessories account for 35% of the world total.

At the same time, due to the rapid development of the ceramic sanitary industry, its competition has become increasingly intense, but the competitive landscape is still in a more fragmented state. Some sanitary ware companies adopt strong and strong alliances, celebrity endorsements and other measures to show that the industry has entered the stage of branding.

In spite of this, only a few advantageous enterprises in the domestic ceramic sanitary ware industry focus on the branding of ceramic sanitary ware products. Most of the rest of the companies are not well-known "junkies." Enterprises involved in high-end areas are even rarer, and the industry is facing a lack of leading companies. Enter the international high-end market and other issues.

Faced with this status quo of the ceramic sanitary industry, some competitive companies have announced IPO plans, leveraging the capital markets to achieve their own transformation and upgrading, and further build themselves into the industry's leading brands.

Prospective investment consultants with extensive IPO consulting experience in the home sector found that in early 2013, the emperor wares announced high-profile IPOs. Subsequently, Shenluda, Jiumu Kitchen, and brilliant plumbing also announced their listing plans. In addition, in 2012, it has been listed in Hong Kong's HangBi Sanitary Ware. The surge in the listing of the sanitary ware industry highlights the company's enthusiasm for listing.

On November 30, 2013, the China Securities Regulatory Commission issued the “Opinions on Further Promoting the Reform of the New Share Issuance System” and clarified the timetable for the restart of the IPO in January 2014. As of January 6, there have been nearly 30 official enterprises Launched the IPO prospectus, which also announced the suspension of the 14-month A-share IPO.

Against this background, with the bottoming out of the downstream demand of the ceramic sanitary industry, more domestic ceramic sanitary ware companies are expected to undertake the enthusiasm of this listing, setting off a wave of A-share listing in a relatively long period of time.