The controversial shares of Deuce are about to go public.
On June 2, the website of the China Securities Regulatory Commission issued an approval for the initial public offering of shares of Deuce Healthy Sleep Co., Ltd. (hereinafter referred to as “Deuce Shares”).
The China Securities Regulatory Commission has approved the public issuance of no more than 40.01 million new shares of Rousseau.
This approval is valid for 12 months from the date of approval for issuance.
According to the disclosure of the China Securities Regulatory Commission, as of June 1, the review status of Deuce shares has been changed to "passed the issuance review committee".
According to the prospectus, Deuce shares is planned to be listed on the main board of the Shenzhen Stock Exchange this time, and it plans to issue no more than 40.01 million new shares, accounting for no less than 10% of the total share capital after the issuance.
The net amount of the actual raised funds after deducting issuance and underwriting expenses and other issuance expenses will be used for the company's East China healthy bedding production line construction project, digital marketing project and healthy sleep technology research center construction project.
Previously, Deuce had become the focus of market attention due to a letter of inquiry from the China Securities Regulatory Commission.
Among them, the foreign old man on the huge advertisement of Mousse is actually a portrait photo.
In the early brand promotion of Mousse, the phrases such as "French Royal Designer" and "Founded in 1868" were often seen.
The China Securities Regulatory Commission has thus questioned whether Deuce has false propaganda.
Early advertisements of mousse
Mousse's early advertisements
are deeply involved in the controversy of fake "foreign brands"
"It can reflect the spirit of craftsmanship and is worth using." The manager of a mousse store said that mousse is a Chinese brand, and the use of the image of a foreign old man in the advertisement is in line with the original intention of the brand.
Several Mousse employees denied claims that the foreign seniors in the advertisements were the company's designers or founders.
Mousse disclosed in the prospectus that on August 15, 2009, Timothy James Kingman authorized Mousse to use his portrait in a limited manner.
Is a brand ambassador just a portrait?
In this regard, the China Securities Regulatory Commission questioned: Is Deuce’s external promotion of its products appropriate, and whether there is false publicity?
The surging journalists have contacted Deuce several times on related issues, and were told by the other party that they need to communicate through official emails.
As of press time, the company has not yet responded.
"Such commercial information will make consumers mistakenly believe that this is an international brand with overseas origins, resulting in a 'information black box' in consumers' purchasing decisions." Zhang Dianyuan, a professor at the School of Journalism at Fudan University, said that the official English name is De Rucci, which gives People have the illusion of "foreign brands", and the poses of models make it easy for consumers to associate them with "healthy sleep research experts", which is obviously suspected of misleading consumers.
Is Mousse a "foreign brand"?
The staff said that it is difficult to tell clearly, "Although Mousse is registered in China, it has more than 3,500 stores around the world, and all accessories of the high-end series are imported."
According to Tianyancha, the mousse brand was founded in Dongguan in 2004.
According to the official website, the English name of DeRucci is DeRucci. In the early days, it was promoted that the brand was founded by DeRucci. When promoting the brand, it emphasized "French DeRucci" and "founded in 1868".
According to the prospectus of Rousse, the subsidiary of Rousse in New York was established in 2017, the subsidiary of Rousse in Italy was established in 2015, and the establishment of Rousse in Germany in 2014, and the flagship store of Rousse in France opened in 2019, and no French subsidiary has been established so far.
In 2009, Wang Bingkun, chairman of Mousse, admitted in an interview with the media that the company's early marketing "does have some inappropriate aspects", but he believes that packaging the company as a "foreign brand" is "necessary marketing", otherwise it will be "difficult." Get a foothold in the industry".
From the performance point of view, Deuce has indeed gained a firm foothold in the home furnishing industry.
In 2018, 2019, 2020 and the first half of 2021, they were 3.188 billion yuan, 3.862 billion yuan, 4.452 billion yuan and 2.809 billion yuan respectively; the net profit for the same period was 216 million yuan, 333 million yuan, 536 million yuan and 326 million yuan respectively. Yuan.
In terms of horizontal comparison, in 2020, the main business income of domestic home furnishing company Gujia Home Furnishing (603816.SH) is 12.3 billion yuan, Menglily (603313.SH) revenue is about 6.3 billion yuan, and Xilinmen (603008.SH) revenue is 5.5 billion yuan. Yuan.
Source: Deuce Shares Prospectus
In an interview with The Paper, Zhang Dianyuan said that in health, education and other industries, the psychology of "the moon in foreign countries is more round than China" still exists, and the packaging of "sleep experts from France" and "French Royal Designers" still has certain characteristics. appeal.
Russell packaged it as a "foreign high-end brand" through advertising, resulting in a brand premium.
At present, Rousse no longer promotes "foreign origin", but catches up with the concept of "big health".
According to the official website, Deuce is committed to the research on human healthy sleep, specializing in the research and development, production and sales of a complete set of healthy sleep systems.
100,000 yuan mattress "black technology" raw material unit price of 72 yuan / meter
In terms of product pricing, mousse mattresses are much higher than other home furnishing brands.
Most of the products in the mousse store are priced at more than 10,000 yuan, and a mattress can sell for up to 100,000 yuan.
In contrast, the selling prices of some two domestic home furnishing brands are basically in the range of 3,000 yuan to 5,000 yuan, and the price of mainstream products of an American brand fluctuates around 10,000 yuan.
The sales staff of Deuce said that the development of black technology products of Deuce mattresses uses imported materials, which are "worthy of the price".
A "high-priced" mattress with a price of 108,886 yuan, the official introduction said that it uses the 3D material "black technology" imported by the German Miller company, which has the effect of waterproof and mildew resistance.
Mattresses priced at 100,000 yuan in Mousse’s offline stores.
Photo by The Paper reporter Wang Qiwen
According to Mousse’s prospectus, the unit price of its new material “3D cotton” is only 72 yuan/meter, and the main suppliers are domestic factories, including Muller Textiles (Tianjin) Co., Ltd., Fujian Fulian Fine Weaving Co., Ltd. and Dongguan Huixin Textile Co., Ltd.
The surging news reporter consulted people in the home furnishing industry. They said that 3D cotton is a general term for the industry. It has a special upright fiber mesh structure and is very breathable.
This material is very mature in the clothing industry, and more than 90% of women's bra cups on the market are made of this material.
The industry insider mentioned that 3D cotton has been regarded as a new material in the home furnishing industry in the past two years, but because the cost is much higher than that of ordinary sponge, it is generally used by mature mattress brands and has not been widely promoted.
"There is not much technical difference in the use of this material by different brands, and the material channels of mature mattress brands are the same."
Exclusive new material? R&D expenses account for about 2%
Another well-selling product of Deuce, "Baby Deuce" is the "Chinese Women's Volleyball Special Contribution", priced at 55,555 yuan, and the "3·21" World Sleep Day event price is 29,999 yuan.
The salesperson said that the mattress is made of the new material "Space Resin Ball" imported from Japan, which "can achieve 2 hours of sleep for 40 minutes". He also said that only Mousse has this material on the market, and it is the exclusive authorized agent of Toyota. .
According to the official website of Deuce, in 2017, Deuce reached a strategic cooperation with Aisin Seiki Group, a subsidiary of Japan's Toyota Group, and introduced the "Fine Revo" material, namely "Space Resin Ball", from ASLEEP, a bedding brand under Aisin Seiki.
The surging news reporter found from the prospectus of Rouse that all the materials of Rouse's "space resin ball" were purchased from Dongguan Zhongri Home Furnishing Co., Ltd. (hereinafter referred to as "Zhongri Home Furnishing").
However, the application status of several “space resin balls” related trademarks of the supplier Sino-Japanese Home Furnishings is invalid and awaiting substantive examination.
Sino-Japanese Home Furnishing may have undertaken ASLEEP business.
ASLEEP's official website shows that the bedding business operated by Aisin Seiki has been discontinued on March 31, 2020, and the "Fine Revo" mattress currently sold has been transferred to Dachi Company (which can be translated as "Dadi Company").
The legal person of Dadi Company and the actual controller of Sino-Japanese Home Furnishing are Lin. The company produces household products and other products in China and exports them to Japan.
Zhang Dianyuan pointed out that in the mattress industry, which affects people's sleep and quality of life, product quality is undoubtedly regarded by consumers as the most important decision-making basis. Because of sleep problems in the medical field, imported products undoubtedly mean high technology content and large R&D investment.
In fact, Mousse's space resin ball products may have been unsalable.
In 2018, the market promotion of Mousse's space resin ball mattress was insufficient, and the actual sales were different from the planned sales, resulting in a high stock of raw materials.
In 2019, Mousse officially became the official sponsor of the Chinese women's volleyball team, and exclusively customized the "Mouse Space Resin Ball Chinese Women's Volleyball Mattress" for the Chinese women's volleyball team.
The blessing of the women's volleyball team may have eased the inventory crisis of Mousse, and Mousse will purchase space resin ball materials in large quantities again in 2020 and the first half of 2021.
The prospectus disclosed that due to the significant increase in the procurement of space resin ball materials, the prepaid materials procurement at the end of 2020 increased significantly compared with the previous year.
In 2020 and the first half of 2021, the end-of-period prepayments of Russell for purchasing space resin balls from Sino-Japanese Home Furnishings were about 18.21 million yuan and 15.57 million yuan.
In 2018, 2019, 2020 and the first half of 2021, the period expenses of Rousse were 1.254 billion yuan, 1.6 billion yuan, 1.49 billion yuan and 868 million yuan respectively, accounting for 39.32%, 41.45% and 33.47% of revenue respectively. % and 30.89%.
Among them, sales expenses accounted for nearly 30% of the period expenses.
According to the prospectus, this is in line with the company's continued focus on brand promotion and active marketing strategies.
It is worth noting that, during the reporting period, the expenses invested by Deuce in advertising were 345 million yuan, 445 million yuan, 396 million yuan and 193 million yuan respectively, and the advertising expense ratios were 10.81%, 11.53%, 8.9% and 6.87% respectively. %, while the average advertising expense ratio of comparable listed companies in the industry is around 4%.
Source: Deuce Shares Prospectus
Judging from the prospectus, Mousse’s R&D expenses are far less than its investment in advertising.
During the reporting period, the research and development expenses were 90.3549 million yuan, 74.0994 million yuan, 77.1550 million yuan and 62.06 million yuan respectively, accounting for 2.42%, 1.92%, 2.03% and 2.21% of the operating income for the same period, close to the average value of listed companies in the same industry.
In 2020, Mousse's advertising expenses will be about 5 times the research and development expenses.
Source: Deuce Shares Prospectus
According to the prospectus, Muteng Investment directly controls 150 million shares of the company, accounting for 41.67% of the company's shares before this issuance, and is the company's controlling shareholder.
Mu Teng Investment is jointly controlled by Wang Bingkun and Lin Jiyong and holds 50.00% and 50.00% of the shares respectively.
The actual controllers of the company are Wang Bingkun and Lin Jiyong.
Wang Bingkun and Lin Jiyong directly hold 73.05 million shares and 73.05 million shares of the company respectively, jointly hold 150 million shares of the company indirectly through Muteng Investment, and jointly hold 20 million shares of the company indirectly through Mutai Investment.
Therefore, Wang Bingkun and Lin Jiyong hold a total of 316 million shares of the company directly and indirectly, accounting for 87.81% of the company's shares before this issuance, and are the actual controllers of the company.
The price of different channels varies greatly, and the price of mattresses for corporate customers is as low as 1,000 yuan
Although Mousse sold "sky-high" mattresses, according to its disclosed prospectus, the average unit price of the company's mattresses was as low as more than 2,000 yuan, while the unit cost of mattresses in the first half of 2021 was only 916 yuan.
In the first half of 2021, Mousse's comprehensive gross profit margin was 45.61%, and the gross profit margin of its core product mattress was as high as 57%.
In the prospectus, Mousse stated that mattresses are mainly targeted at mid-to-high-end customer groups, and at the same time, the "Mouse" brand is well-known, so the gross profit margin is stable at a high level.
Source: Deuce Shares Prospectus
There are obvious differences in the unit price of mattresses sold through different sales channels.
In the first half of 2021, the unit price of mattresses sold directly by Mousse is about 6,049 yuan, the unit price of mattresses supplied to dealers is about 2,145 yuan, the price of e-commerce channels is about 2,757 yuan, and the price of direct supply channels is as low as 1,257 yuan .
From the perspective of channels, in the first half of 2021, the gross profit margin of Deuce's direct sales channel is as high as 75%, followed by the e-commerce channel, with a gross profit rate of about 59%, the gross profit rate of the distribution channel is 43%, and the direct supply channel gross profit rate is the lowest, only 25%.
In fact, in the many Mousse stores visited by The Paper reporters, the staff have different calibers for the price of the same model.
A space resin ball "women's volleyball model" mattress priced at 55,555 yuan in one store is priced at more than 20,000 yuan in another store.
In the flagship stores of Mousse Tmall and JD.com, the price of the top-selling mattress products is not more than 10,000 yuan, and the best-selling coconut palm mattress in the flagship store of Tmall Mousse is only 1499 yuan.
The disparity in price also led to doubts from the China Securities Regulatory Commission. The China Securities Regulatory Commission asked Mousse to explain the reasons and rationality for the differences in the unit prices of similar products under different sales channels.
Mousse pointed out that the different price of each channel is related to the position of the channel in the industry chain and the different customer groups.
Distribution channels and direct sales channels adopt the national unified terminal suggested retail price.
The direct supply channel is mainly for large customers, star-rated hotels and other enterprise-level customers, and adopts "one customer, one negotiation" negotiated pricing, mainly referring to customers such as OPPEIN and Jin Jiang Hotels. The unit price of mattresses in this channel is close to the cost price.
In the e-commerce channel, due to the relatively transparent prices of competing products, in order to seize the market and protect the offline retail price system, the price of the e-commerce channel is higher than that of the distribution channel, but lower than the retail price of offline stores.