Or is it a new turning point? Net profit is nearly 800 million, and the revenue growth in the first half of the year is over 50%!

▶ Video account attention cross-border navigation

Recently, actor Liu Genghong became an instant hit by live streaming his fitness on Douyin, sparking a nationwide fitness trend, with a large number of "Liu Genghong girls" emerging.

Behind Liu Genghong's phenomenal popularity, it also reflects that the repeated outbreaks of the COVID-19 pandemic in the past two years have boosted the popularity of home fitness. Not long ago, fitness giant Chuangyuan Holdings also answered questions from investors and said that it might consider applying to Liu Genghong for image endorsement after the domestic market is developed.

It can be seen that home fitness is becoming a new trend that has attracted much attention. Cross-border fitness sellers, led by Chuangyuan Co., Ltd., have shined in this field. Recently, another sports and fitness seller is planning to raise funds for listing.

It is learned that recently, Xuan Sports, a major exporter of fitness equipment, disclosed its IPO prospectus for the first time, intending to raise 2 billion yuan.

▲ The picture comes from Lixuan Sports announcement

Lixuan sports products cover two major categories: aerobic exercise and strength training, including treadmills, exercise bikes, elliptical machines, rowing machines, dumbbells and other products, which are mainly exported to countries and regions such as Europe and North America.

▲ The picture comes from Lixuan Sports announcement

The prospectus shows that Lixuan Sports had revenue of 3.52 billion yuan in 2021 and achieved a net profit of approximately 437 million yuan, of which overseas sales reached 3.251 billion yuan. According to data from the General Administration of Customs, the total export volume of treadmills and other fitness and rehabilitation equipment in China in 2021 was US$8.945 billion, of which Lixuan accounted for 5.69%.

▲ The picture comes from Lixuan Sports announcement

Looking at the sales situation of each category, the sales amount of exercise bikes was 1.333 billion yuan, accounting for the highest sales share of 38.27%. In addition, the annual sales of elliptical machines and treadmills also exceeded 500 million yuan.

  ▲ The picture comes from Lixuan Sports announcement

From the perspective of the average order value of the products, affected by factors such as rising raw material prices, the price of exercise bikes, the main category of Lixuan Sports, increased by 288.47 yuan from 2019 to 2021 , but sales increased by nearly 680,000.

  ▲ The picture comes from Lixuan Sports announcement

However, although Lixuan Sports' revenue scale is ahead of other companies in the same industry, its comprehensive gross profit margins in 2019~2021 were 27.42%, 23.61% and 21.45%, all lower than the average gross profit margin of its peers.

At the same time, over-reliance on core customers has become a major hidden danger in the current development of Lixuan Sports.

Lixuan Sports has established a stable and in-depth cooperative relationship with well-known foreign sports and fitness brands such as Decathlon and Nautilus. In 2021, the revenue from Decathlon and Nautilus reached 1.554 billion yuan and 1.151 billion yuan respectively, accounting for a total of 76.82% , which can be said to support more than half of Lixuan Sports' total revenue.

In the case of high customer concentration, once major customers encounter operational difficulties, resulting in reduced purchasing demand, failure to fulfill payment obligations in a timely manner, or transferring orders to other suppliers, it will have an impact on Lixuan Sports' revenue.

The continued epidemic in the past two years has led to a significant increase in consumer demand for home fitness equipment. In North America, the world's largest fitness equipment consumer market, the trade volume of fitness equipment imported from China has increased from US$1.5 billion in 2012 to US$3.3 billion in 2020.

The huge market potential has also brought many opportunities to Lixuan Sports. However, Lixuan Sports, which mainly adopts the OEM/ODM model, has a relatively low gross profit margin. Whether it can strengthen brand building and improve competitiveness through fundraising remains to be seen.

In addition to Lixuan Sports, the developments of another Zhejiang big seller, Superstar Technology, have also attracted attention recently.

It is learned that Giant Star Technology recently released its 2021 semi-annual performance forecast. The net profit attributable to shareholders of the listed company is expected to be 655 million to 801 million, a year-on-year increase of -10.00% - 10.00%; the net profit after deducting non-recurring gains and losses is 581 million to 784 million, an estimated year-on-year increase of 0.00% - 35.00%.

  ▲ The picture comes from the announcement of Giant Star Technology

Although the overall growth rate of North American e-commerce business declined during the reporting period, Giant Star Technology still achieved a growth of more than 50% in cross-border e-commerce business . Giant Star Technology analyzed that the performance changes during the reporting period were mainly affected by the following factors:

International logistics costs remain at a high level, and due to the increase in long-term contract prices and the increase in US wages, the company's logistics costs and port costs have objectively increased significantly compared with the same period last year. For this reason, in the second quarter, Giant Star Technology optimized its costs and made balanced adjustments to product prices with its customers, which led to a recovery in gross profit margins.

During the reporting period, global demand for tools continued to rise steadily, and most products in the North American market maintained a high level of prosperity. Although demand in the European market was still in a slow recovery phase, the production capacity of some competitors dropped significantly due to the Russia-Ukraine conflict, and the demand for tool imports increased significantly.

Giant Star Technology has also seized this opportunity and continued to increase its efforts in product research and development and launch. With the advent of a new round of housing delivery transaction peak in North America, it is expected that the main business income will continue to maintain a high growth rate.

In the first half of the year, Giant Star Technology's production capacity in Vietnam, Thailand and Cambodia in Southeast Asia operated normally, but the international shipping capacity in northern Vietnam and Cambodia's West Port was obviously insufficient; at the same time, the operation of some domestic ports was restricted in April and May, and international logistics is still a major risk for its product delivery.

In the first quarter report released earlier, Giant Star Technology's revenue increased by 45.20%, but its net profit fell by 28.77% year-on-year. Risks such as shipping cycles and rising raw material prices have had a negative impact on its profitability. However, with the recovery of demand in the foreign tool market, Giant Star Technology's overall revenue increased by more than 50% in the first half of the year, and its performance in the second half of the year may usher in a new turning point.

What do you want to say about this? Feel free to leave a message in the comment area~