Business summary
Murong Holdings is a leading manufacturer of sanders and sofa sets with a long history in China's sofa export business. It mainly focuses on producing sofas and sofa sets in China, and has an integrated operating model for design, production, sales and marketing. Based on the 2015 software sofa export value from China to the US, the group accounts for about 3.6% of the market share; the group's products are usually branded “Morris Holdings Limited” and “Morris Zou”, and are sold to major US brands. Market customer exports “Morris The “HoldingsLimited” brand sofas also sold “Morris Zou” brand sofas and wooden furniture products domestically through directly-operated stores in Zhejiang Province, China.
Competitive advantage
It has a leading position in the Chinese sand industry export market
It has an integrated business model integrating design, R&D, production, sales and marketing functions
Large-scale and cost-effective production and operation risk factors
The Group relies heavily on the US market. If any changes in US economic and regulatory conditions and global trade policies or changes in the business strategies of US customers are likely to have an adverse impact on the Group's business
The group is affected by future exchange rate fluctuations of the US dollar against certain other currencies
The Group's current level of debt and possible future additional liabilities may have a significant adverse effect on the financial situation and operating results.
Use of proceeds
About 31.3% is used to expand overseas markets and sales and marketing networks in China
Approximately 26.4% was used to repay part of bank loans
About 26% was used to increase the approval of group brands
Approximately 9.8% is used for working capital and general purposes
Approximately 6.5% will be used to increase production capacity in Cambodia