Recently, Luolai Group released its Q1 2025 quarterly report. As a leading Chinese home textile enterprise listed on the Shenzhen Stock Exchange in 2009, the company covers the research, design, production, and sales of home textile products, and has multiple brands covering different consumer markets. It has expanded its online and offline comprehensive multi-channel sales system and is committed to creating a win-win home industry ecosystem.

 

Luolai Group is guided by the concept of "big home textiles and small home furnishings” and it has gradually grown from a single bedroom product manufacturer to a comprehensive home solution provider with multiple brands. The company's business is currently mainly focused on bedding products, and has developed a series of product lines covering the mass market (Lovo), high-end market (Luolai, Luolai children), and ultra high-end market (Laviehome, Lexington, Uchino), covering different consumer groups in all aspects.

Lovo, as an online home textile brand launched by Luolai Group, is mainly positioned for mass consumption, meeting the fashionable and cost-effective consumption needs of young Chinese consumers. In 2024, Lovo will provide three major sleep experiences for consumers aged 22-39: "rejuvenated sleep", "scientific sleep", and "exquisite sleep". It exclusively launches the "washable silk sleeping quilt", which is the first washable 2-in-1 silk quilt certified by OEKO-TEX. At the same time, Lovo work with the Super Soft Research Institute to develop the "Redheatti" for woolen blanket. The Lovo series products are updated rapidly and complement each other with other brands of Luolai, becoming the main force for Luolai' s online sales due to their active performance.

Luolai，as a leading brand in the company and even the home textile industry, has won the first place in the comprehensive market share of similar products for 20 consecutive years. It has become the flagship brand in the middle and high-end market with Texsoft Super Soft Technology. In terms of marketing, Luolai combines tradition and modernity, demand and innovation, through synchronous integration of online and offline, and provides consumers with high-quality home life through exquisite craftsmanship and rigorous material selection.

Luolai Children, is precisely positioned for children and adolescents over the age of 3. Based on the comprehensive implementation of the concept of "child safety bedding", Luolai Children built a safe closed loop of "medical assistance, scientific innovation, and ecological planting" to comprehensively protect the sleep health of young children. At the same time, Luolai Children has innovatively created high-end customization of "I sleep, I design my own bedding", introducing aesthetic education into bedding. This not only improves the gross profit margin of the product but also further deepens the market penetration.

Laviehome, Lexington, Uchino and other brands focus on the ultra-high-end market. Among them, Laviehome furnishings business Line integrates global home lifestyle from home textiles to tableware, bathroom, and daily necessities, providing high-end international design and craftsmanship luxury experiences for high-net-worth individuals. Lexington is a furniture brand of Luolai group, mainly sold in North America, filling the company's gap in overseas markets.

 

 

Key financial data (hundred million yuan)

 

In the first quarter of 2025, Luolai group achieved a revenue of 1.094 billion yuan, a year-on-year increase of 0.57%. In fact, in 2024, due to insufficient domestic demand, the textile industry as a whole was under pressure. In March of the same year, the General Office of the State Council issued a notice about " Promoting Large scale Equipment Renewal and Consumer Goods Trade in", which included the home textile industry in the subsidy scope. It can be predicted that by 2025, the consumer environment will improve as more provinces across the country participate in this activity. And it will help the company further increase the revenue obviously.

 

Although the growth rate of operating revenue is relatively small, the company's profitability has significantly increased. The net profit attributable to the shareholders of the parent company in Q1 2025 was 113 million yuan, a year-on-year increase of 26.31%; The net profit after deducting non-recurring gains and losses was 106 million yuan, a year-on-year increase of 22.13%, representing the healthy and stable development of the company's main business, and the significant rebound and excellent performance of the company.

In terms of other profits, the gross profit margin of Luolai group in Q1 2025 was 45.97%, a year-on-year increase of 2.42%, mainly due to the increasing proportion of high value-added products and supply chain optimization. With the completion and operation of the Luolai Smart Industrial Park, intelligent manufacturing driven by digitization, refinement, and automation will enhance the overall production efficiency of the company, further effectively expand the company's own production capacity, and increase gross profit margin as well.

In the aspect of costs, during Q1 2025, the operating costs of Luolai group decreased by 3.74% year-on-year to 591 million yuan. This phenomenon is closely related to the stabilization of raw material prices such as cotton and synthetic fibers, and the improvement of production efficiency; The period expense ratio was 32.73%, stable with a slight decrease, a year-on-year decrease of 0.19%. Non-operating expenses decreased by 95.33%, mainly due to the compression of non-recurring expenses such as donations.

As for the cash flow, Luolai group has shown strong performance. At the end of Q1 2025, the net cash flow generated from operating activities was 176 million yuan, a year-on-year increase of 83%. On the one hand, due to the strengthening of cash management in this period, the cash outflow from operating activities has decreased; On the other hand, it demonstrates the strong position in this industry chain, with a solid ability to withdraw cash. Among them, the operating cash flow received from selling goods and providing services was about 1.192 billion yuan, far exceeding the total operating costs by about 959 million yuan, which strongly supported daily operations. On May 20, 2025, Luolai group pounced that it would distribute a cash dividend of 4.0 yuan (including tax) per 10 shares to all shareholders. The sustained and stable dividend policy indicates the company's stable capital chain and demonstrates excellent risk resistance in the turbulent market.

 

2024, "duvet insert " and "bedding set " are the main products of Luolai group, accounting for 34.88% and 32.04% of the total operating revenue respectively, with a slight year-on-year decline, which is related to fluctuations in raw materials. However, the gross profit margins of both have increased, reaching 53.03% and 51.73% respectively; Next is "furniture" products, accounting for 18.03% with a gross profit margin of 28.07%. Due to weak consumption in the US market and the impact of international policies, revenue decreased by 21.54% year-on-year. Although the US real estate market is expected to rebound in 2025, there is still uncertainty; Due to the introduction of “zero pressure deep sleep pillows”, the "pillow insert" products increased 8.77% year on year. This product relies on the advanced zero pressure technology to help consumers quickly enter deep sleep and further enriches multi-level product line of Luolai group. Through the vigorous promotion of Little Red Book and Tiktok platform, this “zero pressure deep sleep pillows” has become a hot-selling product.

 

As for the marketing, the headquarters in East China has a strong radiation effect, contributing to the main income of Luolai group with a gross profit margin of up to 52.38%; Next is the furniture business in the United States, accounting for 18.03%; The sales revenue in North and South China regions is steadily increasing, and there is still great potential for expanding market share in the future.

In addition, from the perspective of market channels, offline channels, as the foundation of the company, contributed 69.68% of the revenue, reaching a high of 3.176 billion yuan in 2024. The company adopts a marketing model of "franchise chain (main mode) + direct-sale chain +group purchase". Among them, the direct-sale channel mainly displays high-end brands in flagship stores, and its operating income accounts for only 8.8% of the total revenue but has a gross profit margin of up to 67.55%. Franchise channels use franchisees and distributors to penetrate the market and achieve flexible layout in market. In 2024, they achieved a revenue share of 31.76%, but due to factors such as insufficient endogenous power in consumption, some franchisees have accumulated inventory and closed stores for adjustment. As an emerging force in recent years, online channels, relying on major platforms such as Xiaohongshu, Tiktok, Taobao and Jingdong, generate revenue of 1.382 billion yuan in 2024, almost the same proportion as in 2023. Due to the particularity of online sales (such as online exclusive supply) and flexibility (rapid market response), its gross profit margin is relatively high at 53.32%, which is superior to the offline gross profit margin of 45.70%. However, due to the impact of frequent change of platform rules and trending on online sales, there is still some uncertainty in the future, which will pose higher requirements for enterprises to further develop precision and differentiated marketing to capture consumer demand.

 

In 2024, Luolai group collaborated with Huawei to jointly build a comprehensive digital platform for smart industrial parks, integrating technology with every corner of research, production, logistics, and office. In April 2025, Luolai group and Lark reached a strategic cooperation, leveraging Lark's one-stop digital solution to build the company's AI and digital knowledge management system overall. In the same month, the completion ceremony of the Luolai smart industrial park was held in Nantong, marking the landing of "full digitization chain ". With the successive operation of smart factories, Luolai group has completed a series of optimization and upgrading, further improving the efficiency of the supply chain. By fully implementing intelligent manufacturing through AI technology, digital intelligence empowerment will become an effective endogenous driving force for Luolai group in future market competition.

The uncertainty of the current international situation has brought strong pressure and resistance to the development of China's home textile industry. However, in the long run, the home textile industry will still be one of the indispensable links for people's livelihood consumption. With the implementation of a series of policies to improve people's livelihood, the home textile market will face both challenges and opportunities. How to explore their own advantages, enhance added value of product, and further reduce costs and increase efficiency will be a necessary lesson for every enterprise in a volatile market.

(Source of data: Wind/Luolai Group 2024 Annual Report/Luolai Group 2025Q1 Report)