For small home appliance company Flytech, 2017 is another bumper harvest year. In the first three quarters of 2017, Flytech's net profit increased 42.77% over the same period of last year, and the return on net assets in the past two years even exceeds Gree. It is understood that Flytech Has been using the commercial mode of light assets, but maintaining the rapid growth in the past few years, Flyco's outsourcing production model, a single product and low research and development R & D investment has slowly begun to appear concerns.Experts said the high-speed Growth comes mainly from the light asset model and price positioning, but as the product continues to raise prices, and Philips, the main rival, the overall strength of the showdown will also decide whether the future of Flyco's model can be sustained.
Growing rapidly
Earnings report, Feicheng Electric in the first three quarters of 2017 revenue of 2.663 billion yuan, up 14.4%, net profit of 599 million yuan, an increase of 42.77%; year-on-year report in 2017, the first half of the flying company to achieve operating income 17.23 billion yuan, an increase of 19.04%; net profit of 379 million yuan, an increase of 53.93%; second quarter operating income of 782 million yuan, an increase of 17.5%, net profit of 178 million yuan, an increase of 75.89%.
Data show that the Flying Branch Electric was founded in 1999, is a professional Razor small home appliances R & D, manufacturing and sales of non-regional group of enterprises. In 1999, the company independently developed the first double-headed domestic rotation Type razor in 2008 annual sales of over 1 billion yuan; 2009, in the context of the international financial crisis, Flying Branch achieved an annual growth of 80% year-on-year, Flying Branch brand electric shaver honors the national market of similar products The first comprehensive possession rate, ranked the same product sales in the national market first.
As China's income levels increase, consumers pay more attention to quality of life, are also willing to increase spending on personal care, which brought the electric shaver, hair dryer, barber and other personal care appliances market prosperity, Electrical performance is a microcosm of the development of the entire industry.
Currently, electric razors and hair dryers are still the main products of Flyco. According to Flyco's announcement, the sales of electric razors in 2016 were RMB2.6 billion, accounting for 67.18 of Flyco's main business income %; Hair dryer sales of 540 million yuan, accounting for the main business income ratio of 16.05%.
Some analysts said that the reason why flying Branch appliances later, thanks in part to the huge price gap between domestic and international brands in the late 90s of last century, Yiwu market, Hanzhengjie Wuhan and other commodity distribution center is the domestic brand Of the main sales channels, through these distribution centers, the products are distributed to the national third and fourth tier markets.Because of backward technology, the wholesale price is usually below 20 yuan, few products sold over 100 yuan.
Beijing Commercial Daily reporter tried to interview the performance of the issue of Branch Electric, but the company's secretary general secretary of the office has been unable to get through.
Three major worries
Despite the rapid growth in performance, there are three main hidden worries in the development of Flying Electric: high proportion of outsourcing, single product of fists and low R & D investment.
Feike electrical appliances in product development investment is extremely 'stingy' .2011-2013, Feikai electrical R & D costs were 11,334,600 yuan, 12,687,700 yuan and 15,685,600 yuan, three years to Branch Branch R & D investment in operating income Are less than 1% in 2016 cost 36.79 million yuan, accounting for only 1.09% of operating income.
Compared with another giant razor market, Philips, R & D investment reached 1.7 billion euros, R & D investment accounted for 7.29% of operating income. With technological advantages, Philips firmly occupy the lucrative high-end electric shaver market, and fly Section Electric can only control the hundred or so low-end electric shaver market.
Produced by observers, staple Ding Ji, editor-in-chief said that in this case, the high growth of Feike may be difficult to sustain long-term, the more low-tech industries, the more easily subverted later, the product is the core, no To support the brand's technology, the brand is difficult to go.
Beijing Commercial Daily reporter noted that although the research and development investment is limited, but flying science and technology products in financial products but no less invested.On January 2, 2018, the company announced that the company and its subsidiaries intends to continue to use the amount of not more than 1.5 billion Yuan's own funds to buy less risky short-term bank financial products.In contrast, the company's R & D expenses pitifully poor.
Speaking of products, Feike Electrical R & D investment is not only less, the fist products are relatively simple.As the earnings report of the Flying Branch, as shown in the company's main source of profits is the shaver and hair dryer.Industry analyst Liang Zhenpeng that Branch The market risk of the appliance, a more concentrated product, is very big. The market of hair dryer has become saturated. The development speed of itself is relatively slow. The market competition faced by the razor is quite fierce. Brand inherent in the technical disadvantages, it is difficult to compete with foreign companies such as Panasonic, Philips.
In addition, there are still flying over the proportion of outsourced products.It is understood that the production mode of Flychel for independent production and outsourcing production, part of the product for production, some outsourced to other manufacturers.Data show that, The company outsourced production of small household electrical appliances in 2016 by purchasing cost of 1.39 billion yuan, accounting for 66.61% of the total cost.
'Outsourcing a large proportion of products, Feicheng Electric difficult to control the quality of the factory and design capabilities, which may lay the hidden dangers to the brand in the future. "Major General Ding said the increased risk of product outsourcing, on the one hand business-to-product Process quality control is low; the other hand, the company's lack of upstream industry chain, once the supply chain problems may lead to a chain reaction, resulting in out of stock. In addition, it will also restrict the industry's design capabilities and brand appeal Feicheng upgrade. , Outsourcing products and its own brand of premium ability vary greatly, Flychel this mode of production is not conducive to brand premium.
The road ahead is uncertain
Perhaps it is precisely because of a larger proportion of product outsourcing, Flyco electrical products on the quality of black list .In June 2017, Guangdong Provincial Bureau of Quality and Technical Supervision announced the "Guangdong Province in 2016 skin and hair care appliances and other 6 kinds of product quality special Supervision and spot check results "show that Feichang curlers in the continuous harassment voltage of this project failed; the same year in November, Shanghai Consumer Protection Commission issued a test on 25 intelligent sweeping robot test results, flying a section of the electrical model FC9601 Of the products in the testing process failed; the same year in December, Ganzhou City Administration of Commerce released the 2017 annual circulation of small household electrical appliances quality sampling results showed that flying razor sampling failed.
Major General Ding pointed out that if you can not speed up the solution to the above three issues, the gap between Flyco and Philips brands may be growing.
Of course, the Flying Branch Electric did not sit still.FIECC pointed out in the annual report, in order to enhance the company's core competitiveness, seek new profit growth point, the company vigorously expand the household electrical appliances product categories, humidifiers, air purifiers, health Scales, vacuum cleaners and other new product design and development has achieved initial results.
However, some analysts believe that the level of competition in the small home appliance market, the strength of too many companies, professional small appliances have nine positive, integrated small appliances have the United States, Galanz, small appliances can open up the blank space have been occupied, Flying Branch Electric future if you want to open a wide range of situations will be difficult.
It is worth noting that the reason for the surge in performance of Flying Branch, and the company is closely related to price increases.The company's earnings report, the first quarter of 2017 razor, hair dryer, hair clippers and other products were price increases, superposition Product structure upgrade, the overall product price increase of about 10%, but this way, Flychell appliances Philips and other international brands will no longer be so obvious advantages .Dr. Ding also pointed out that the transition to the high-end, but the product Structure and image changes still take time, profitability is limited.
In the eyes of Major-General Ding, Flytech should continue to strengthen R & D capabilities, not only to improve product premiums and maintain a good brand image, but also to avoid the recurrence of intellectual property case and quality problems; continue to enrich the product line, you can first care The category creates a product ecosystem and builds a closed loop with a product + service model; the brand needs a more global perspective, especially in overseas markets, to qualify for genuine competition with brands like Philips.
