Bathroom Business School
Recently, following TOTO, Lixil and other giants, a number of Japanese sanitary ware-related companies also released their annual or quarterly reports, including KVK, Takara Standard, Cleanup, Asahi Weitao 4 companies. In the earnings report, the Chinese market was mentioned several times, and some companies revealed that they would enter the Chinese market with the Hong Kong branch as a cut-off point. The China strategy of foreign companies is once again under the spotlight.
KVK (main products: faucets, pipes and various faucet accessories)
-Full fiscal year sales of approximately RMB 1.5 billion
-Will participate in Shanghai Kitchen & Bath Show 2021
-Substitute for Panasonic and other famous companies
On May 14, KVK released its annual report for fiscal year 2020 (April 2020 to March 2021). in fiscal year 2020, KVK achieved sales of 25.441 billion yen (approximately RMB 1.502 billion), an increase of 3.7% year-on-year. Net income attributable to shareholders of the parent company also increased by 29.1% to 2.196 billion yen (approximately RMB 130 million). KVK is known in the industry for its faucet hardware products. The company said that non-contact products are receiving attention under the epidemic. As a result, the company launched a number of sensor bathroom faucets and sensor kitchen faucets, which saw significant sales growth. This served as one of the drivers for the growth in results.
KVK has 3 production bases in Japan, China and the Philippines. The supply chain pressure caused by the epidemic has been effectively controlled and a stable production system has been maintained. According to the financial report, in KVK’s full fiscal year sales of 25.441 billion yen, the China production base only contributed 382 million yen. It reflects that KVK’s sales business in China market is still in preliminary stage. However, KVK revealed that it mainly carried out China business in the form of network before. Now it is a combination of field visit plus network form to ensure the business is carried out normally. It is reported that KVK participated in the Shanghai Kitchen & Bath Show held from May 26 to 29 this year.
It is worth mentioning that KVK also listed its major customers in the financial report, including Takara Standard and Panasonic Housing Equipment Co. Apparently some of the leading products of these two companies are OEMed by KVK.
Takara Standard (main products: whole kitchen, whole bathroom, vanity, toilet, wall material, water heater, etc.)
-Full-year sales of approximately RMB 11.3 billion
-Bathroom sales declined the most
-Significant sales growth expected in the next fiscal year
On May 14, Takara Standard announced its annual report for fiscal year 2020 ending March 2021, reporting sales of 192.1 billion yen (approximately 11.345 billion yuan) from April 2020 to March 2021, a decrease of 4.6% year on year. Net income attributable to shareholders of the parent company was 7.5 billion yen (approximately 443 million yuan), a decrease of 12.2% year-on-year.
Takara Standard said that sales declined significantly in the first half of the fiscal year due to the closure of its showrooms as a result of the emergency declaration in Japan, which had a significant impact on business activities. Sales improved in the second half of the fiscal year as demand for remodeling expanded. Sales based on remodeling were higher than in the previous fiscal year, but still declined year on year for the full fiscal year.
Takara Standard’s product lineup is dominated by kitchens, bathrooms, and vanities. The three categories accounted for 60.1%, 21.5%, and 11.7% of total sales, respectively, with declines of varying degrees compared to the previous year. Among them, the bathroom category experienced the largest decline, at 8.1%.
Takara Standard forecasts sales of ¥194.3 billion for fiscal 2021, up 1.6% year-on-year. Net income attributable to shareholders of the parent company is 7.8 billion yen, up 2.8% year-on-year. Judging from the smaller increase, the company remains cautious about sales in the new year.
Cleanup (Major products: total kitchens, total bathrooms, vanities, bathtubs, etc.)
-Full-year sales of approximately RMB 6.2 billion
-Kitchen and bathroom divisions declined by 2.3% and 7.2% respectively
-Sales are expected to increase by 5.6% in the next fiscal year
Japanese kitchen and bathroom company Cleanup released its annual report for fiscal 2020 on May 11. from April 2020 to March 2021, Cleanup achieved sales of 104.185 billion yen (6.153 billion yuan), down 3.1% year-on-year. Of this total, sales in the kitchen division were 82.356 billion yen, a decrease of 2.3%. Sales in the bathroom segment were 14.816 billion yen, a decrease of 7.2%. Despite the decline in sales in each division, net income attributable to shareholders of the parent company increased by 19.2% to 1.746 billion yen (about 103 million yuan).
Cleanup said that the company took several measures under the epidemic to allow customers to access the company’s products through various means. At the same time, the company’s operating expenses were reasonably controlled. On the merchandise side, Cleanup launched new products of COLTY series and STEDIA series in June and September 2020, respectively. In terms of terminals, Cleanup currently has 102 showrooms throughout Japan, and has renovated two showrooms in the Fukushima and Komaki areas of Japan in the current fiscal year. In addition to developing brick-and-mortar stores, we have also launched an online showroom business.
Based on these favorable measures, Cleanup expects sales of 110 billion yen in fiscal 2021, up 5.6%, and net income of 1.8 billion yen, up 3.1%.
Asahi Weitao (Major products: toilets, vanity tops, faucets, bathroom cabinets, kitchens, etc.)
-Full fiscal year sales of approximately RMB 100 million
-Entered China market through Hong Kong branch
On April 14, Asahi Weitao reported its fiscal first quarter ended February 28, 2021. The company achieved sales of 433 million yen (about RMB26 million) in the previous three months, down 21.8% year-on-year. It achieved a net profit of ¥04 million (about RMB 236.2 million), down 35.3% year-on-year. Also according to Asahi Weitao’s 11-month report (December 1, 2019 to November 30, 2020) released in January this year, the company achieved sales of ¥2.002 billion (about Rmb118 million) in the 11 months ended November 2020, a 17.5% decrease year-on-year. It achieved a net profit attributable to shareholders of the parent company of 0.17 billion yen (about RMB 1.039 million), a significant increase compared to the loss of 371 million yen in the previous fiscal year.
Although Asahi Weitao did not mention the Chinese market in its earnings report. However, a previously released statement mentioned an overseas affiliate, Weitao Enterprises (Hong Kong) Ltd. According to the statement, in January this year, Asahi Pottery entered into a license agreement with Pottery Enterprises (Hong Kong) Ltd. Asahi also said that Asahi has a strong network of contacts in the Chinese real estate industry. In the future, it will strengthen its sales business in the Chinese market.