In-depth Analysis of Oppein Home's Brand Licensing and Dealer Model

Based on the latest market data and industry information, I will provide an in-depth analysis of the dealer model challenges faced by Oppein Home.

Based on the latest financial data, Oppein Home (603833.SS), as a leading enterprise in the domestic custom home furniture industry, is currently facing significant operational pressure [0]:

• 24.31% drop in 2024, 24.44% decline over the past year
• 56.46% cumulative drop over three years, 61.27% decline over five years
• Current stock price is about RMB 52, with a P/E ratio of 13.14x, at a historically low level

• 2025 Q3 financial report shows revenue of $4.97 billion, lower than the market expectation of $5.24 billion (-5.13%)
• EPS of $1.34, lower than expected $1.43 (-6.29%)
• Net profit margin of 13.15% and operating profit margin of 14.72%, both down from previous periods

The dealer licensing model in the custom home furniture industry has exposed multiple issues in the current market environment:

• Oppein Home has over 7,000 stores covering all levels of markets across the country [0]
• The large number of dealers makes it difficult to unify quality control standards
• Some regional markets have inconsistent service quality and delivery capabilities

• Downward real estate cycle leads to contraction in end demand
• Intensified competition in the custom home furniture industry and price wars compress channel profit margins
• Some dealers face capital turnover pressure, leading to increased operational risks

• While the brand licensing model helps expand market coverage quickly
• The licensee’s quality control capabilities are limited, making it difficult to ensure end-service quality
• If a dealer runs away, it directly damages the brand image and consumer trust

From an industry perspective, custom home furniture enterprises generally face channel transformation pressure:

(can be used as an industry reference) [1]:

• Dealer model accounts for 62.8%, direct sales 32.3%, brand licensing only 4.9%
• Despite the obvious downturn in downstream real estate, it still achieved 12.8% revenue growth in the first three quarters of 2024
• The brand licensing model only allows licensees to sell to designated dealers to control channel quality

:

• Over 4,000 stores covering more than 300 cities
• Established long-term strategic partnerships with leading real estate enterprises like Vanke, Poly, and Country Garden
• Compensate for the shortcomings of the retail channel through the engineering channel

• Establish a stricter dealer qualification review system
• Improve performance assessment and elimination mechanisms
• Establish a dealer credit rating system

• Introduce real-time store operation monitoring systems
• Establish customer satisfaction tracking mechanisms
• Use big data analysis to warn of potential risky dealers

• Moderately increase the proportion of direct stores to enhance end-control
• Develop engineering channels and home improvement company channels to reduce dependence on a single channel
• Explore new retail models to improve online-offline collaboration efficiency

• Clarify the quality control responsibilities of licensees
• Establish licensee assessment and exit mechanisms
• Implement stricter sampling inspection systems for licensed products

• Continued real estate downturn suppresses home consumption
• Short-term pains from dealer channel integration
• Price pressure from intensified industry competition

• Demand release in the existing home renovation market
• Continuous increase in custom home furniture penetration rate
• Market share concentration to leading enterprises after industry reshuffling

Current P/E ratio is 13.14x, which is at a historical low. The stock price has dropped about 24% since the beginning of 2024 [0]. If the company can effectively solve channel management issues, its fundamentals are expected to stabilize and recover.

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The dealer challenges faced by Oppein Home are not unique; they are a microcosm of the channel model transformation in the custom home furniture industry. The brand licensing model played an important role in the rapid expansion period, but its quality control shortcomings have become increasingly prominent during the industry adjustment period. Investors are advised to closely monitor the company’s channel reform progress and marginal changes in terminal sales data. For the company, finding a balance between expansion speed and channel quality will be the key factor determining whether it can survive the cycle.

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[0] Jinling API - Market Data and Financial Analysis of Oppein Home (603833.SS) (https://financialapi.oppein.com)

[1] Ping An Securities - Initial Coverage Report on Rabbit Baby: Leading Plate Industry Enterprise, Reforming Channels to Continue Growth (https://pdf.dfcfw.com/pdf/H3_AP202503121644310154_1.pdf)