Caixin News | New Consumption Daily, December 17: (Researcher Liang Youyun) Musso Co., Ltd., which focuses on mattresses and Housewares, is further expanding its Overseas operations.

On the evening of December 17, Musso Co., Ltd. announced that it intends to acquire 100% equity of the Singapore company MIPL (Mattress International Pte. Ltd.) and all the assets of its Indonesian factory PTTC through its subsidiary. This round of transactions is priced at a total of 46 million Singapore dollars (approximately 0.248 billion yuan), which is 70.94% of MIPL's actual valuation. Musso Co., Ltd. plans to complete the basic payment and asset transfer by the end of September 2025 at the latest.

The acquisition has received full approval from the Board of Directors, and the funding for this acquisition will be entirely sourced from the company's own and self-raised funds. Musso Co., Ltd. stated that the acquisition will not significantly impact the company's financial status and Operational conditions, nor will it harm the legitimate interests of the company and its Shareholders, and it aligns with the company's long-term Operational development and Global Strategy.

According to reports, MIPL is a well-known sales company in Singapore for bedding, sofas, and other Housewares, owning its own brands such as Maxcoil, Viro, and MooZzz. PTTC has a production base located in Batam Island, Indonesia, mainly producing bedding, sofas, and other Housewares for MIPL.

Regarding this cross-border acquisition, Musso Co., Ltd. further explained that it aligns with the company's international development strategy, helps to improve the layout of the company's Overseas production bases, expands the company's Overseas sales channels, and accelerates the company's internationalization process. At the same time, leveraging MIPL's extensive and efficient sales channels and brand advantages accumulated over years of operation in Southeast Asia, including Singapore and Indonesia, will facilitate the company's accelerated layout in the Southeast Asian market, enhance the company's Overseas market share, and further improve the company's core competitiveness.

Musso Co., Ltd. has been selling Commodities Overseas for a considerable period. As early as the end of 2018, Musso Co., Ltd. disclosed that its Overseas revenue was 90.236 million yuan, accounting for 2.83% of the company's total revenue.

However, for many years, Musso Co., Ltd.'s Overseas revenue percentage has remained below 3%, with annual revenue hovering around 0.1 billion yuan. By the end of 2023, Musso Co., Ltd.'s Overseas revenue was 96.5217 million yuan, a year-on-year decrease of 8.96%, accounting for 1.73% of total revenue.

Before 2023, Mu Si Co., Ltd. primarily operated through a dealership + direct sales store model offline, with a marketing network covering 27 countries or regions, including North America, Australia, Europe, Singapore, and Hong Kong, Macau, and Taiwan. Starting in 2023, Mu Si Co., Ltd. formed a cross-border e-commerce team for the first time, began investing in the construction of overseas warehouses, and improved its business processes and management systems, trying to find a breakthrough through e-commerce channels.

Data from the first half of 2024's Earnings Reports shows that Mu Si Co., Ltd. achieved a year-on-year increase of 49.26% in overseas business income through an integrated online and offline export model, reaching revenues of 62.7079 million yuan. Among these, the cross-border e-commerce business achieved revenue of over 26.6 million yuan and has entered a fast development track.

According to recent disclosures from Mu Si Co., Ltd., due to the high costs of overseas warehouses, its cross-border e-commerce business is still in a state of loss, with such expenditures expected to continue until cost reductions through volume are achieved, resulting in profitability overseas. It is reported that Mu Si Co., Ltd.'s online channels primarily sell products through cross-border e-commerce platforms such as Amazon (USA, Europe, Japan, Southeast Asia), OTTO, and Walmart (North America).

In the first half of this year, the subsidiaries under Mu Si Co., Ltd. that focus on import and export of main products and overseas business expansion achieved revenues of 62.8211 million yuan, with a net loss of 2.9024 million yuan.

From the overall business perspective, Mu Si Co., Ltd. has faced difficulties in growth during the first three quarters of this year due to the slowdown in domestic Real Estate demand and lackluster demand for Housewares.

In the first three quarters, Mu Si Co., Ltd. achieved revenues of 3.878 billion yuan, a year-on-year increase of 1.9%; it posted a attributable Net income of 0.522 billion yuan, a year-on-year increase of 0.76%. In the third quarter, Mu Si Co., Ltd. reported revenues of 1.249 billion yuan, a year-on-year decline of 11.19%; resulting in an attributable Net income of 0.149 billion yuan, a year-on-year decrease of 8.29%.

It is reported that over 50% of the more than 1,200 nationwide Dealers of Mu Si Co., Ltd. have participated in the trade-in subsidy policy, and the company has continuously applied to participate in related subsidy activities on e-commerce platforms such as JD.com and Tmall.

Mu Si Co., Ltd.'s executives stated in response to investor questions that with the ongoing promotion of the home subsidy policies such as trade-ins nationwide, the recovery of the Real Estate industry, and gradually increasing domestic Consumer confidence, the demand for domestic home consumption is expected to gradually rebound. In the fourth quarter of 2024, the company will seize the favorable window period for policies like trade-ins, through a series of marketing activities centered on trade-ins, Singles' Day Sales, and empowering Dealers in multiple dimensions, striving to ensure growth, reduce costs, and increase efficiency to improve profits.