Oppein Home Chairman Yao Liangsong: Misjudged Market at Year Start, H1 Profit Plunges 56%

By Lingdu | Source: Node Finance

"If you think Oppein will never die, then Oppein will 100% die."

At a recent investor conference, Yao Liangsong, Chairman and President of Oppein Home, used unusually stark language—"turbulent waves" and "violent storms"—to describe the company's current situation. He even admitted that the company's initial market outlook for the year had been a "mistake."

For a home furnishing giant that has dominated its peers for over three decades, this warning is no joke. It reflects a genuine chill of hitting rock bottom.

From launching China's first integrated kitchen cabinet system in 1994 to leading the domestic custom home furnishing market for decades, Oppein has been a defining player in China's home furnishing industry. Yet, even this asset-rich, deeply entrenched industry titan found itself at the forefront of a storm when its 2026 semi-annual financial report was released.

Plummeting Performance and the Chairman's Admission of "Misjudgment"

The newly released 2026 semi-annual report delivered Oppein's heaviest results since going public:

• Revenue: RMB 5.95 billion, down 27.79% year-on-year
• Net profit attributable to shareholders: RMB 442 million, down 56.62%
• Net cash flow from operating activities: RMB 92.4974 million, a sharp decline of 94.45% from the same period last year

Revenue fell by nearly a third, while profits were cut in half. This leverage effect—where profit contraction is nearly twice the rate of revenue decline—exposes the brutal squeeze of fixed costs and marginal profits on margins during a sharp demand contraction.

Business Segment Breakdown

| Segment | Revenue (RMB) | YoY Change | |---|---|---| | Wardrobes & related products | 2.776 billion | -34.51% | | Kitchen cabinets | 1.748 billion | -27.37% | | Bathroom products | — | -32.86% | | Wood doors | — | -15.72% |

The wardrobe segment, once the company's mainstay, suffered the steepest decline, dragging down overall performance.

Channel Weakness

• Distribution network (accounting for 80% of revenue): RMB 4.48 billion, down 26.93%
• Bulk business (previously a growth driver): RMB 655 million, down 50.74% — hit hardest by the contraction in real estate completions

Cash Flow Concerns

According to Node Finance, the potential strain on the cash chain is even more worrying than the profit decline. In Q1 2026, Oppein's single-quarter operating cash flow hit a low of -RMB 364 million. The company attributed this to three temporary factors: lower sales collections, a high base from previous trade-in subsidies, and concentrated maturing notes payable.

Despite the cash crunch, Oppein distributed approximately RMB 1.5 billion in dividends in the first half of the year—3.39 times its net profit for the period.

A Long-Brewing Storm

The warning signs were already visible:

• 2024: Revenue down 16.93%, net profit down 14.38%
• 2025: Revenue down 8.94%, net profit down 23.18%
• Compared to its 2023 peak, Oppein's profit scale has shrunk by nearly one-third.
• In 2025 alone, the company closed 468 net stores, marking three consecutive years of store reductions.

Facing this accelerating decline, Yao Liangsong did not shy away from admitting decision-making errors at the performance briefing. He acknowledged that the company's initial assessment of the market environment was "prepared to move forward in the rain," but the reality was far worse—a clear misjudgment.

Yao's remark—"We are very afraid of dying. It's because we fear death that we will change to the death"—sounds tragic but reveals the survival instinct of a traditional manufacturing giant facing a cyclical upheaval. At least in the storm, the ship, supported by its past accumulation, has held its structure together, and the team remains combat-ready.

From Humble Beginnings to a Billion-Dollar Empire

Yao Liangsong, now gripped by crisis and shouting "fear of death," was once a legendary entrepreneur who fought his way up from the grassroots.

Over 30 years ago, a graduate of Beihang University, Yao experienced the painful transition from a state-sector job to market entrepreneurship. In the restless, opportunity-filled early 1990s, he suffered a failed venture and fell into heavy debt. But a chance encounter in 1994 changed his fate.

That year, Yao saw an imported integrated kitchen cabinet in Guangzhou. At a time when most Chinese families still used cement stoves and wooden shelves, the sleek, functional design struck him: with urbanization and rising living standards, a revolution in kitchen and home living was imminent.

He scraped together funds, rented a factory, and introduced the concept of "integrated kitchen" to China, founding the precursor to Oppein. In an era of weak industrial infrastructure and scarce supply chains, Yao's sharp business instincts and decisive execution turned a small assembly workshop into a home furnishing behemoth.

This is a classic Chinese business legend: starting from a modest cabinet workshop in Guangzhou, Yao led Oppein to pioneer standardized kitchen cabinet manufacturing and extend the "customization" concept from kitchens to wardrobes, bathrooms, doors, and even whole-home renovation.

In 2017, Oppein Home went public on the A-share market. Its market value soon surpassed RMB 100 billion, and Yao Liangsong, with his stake, became a perennial fixture on China's billionaire lists.

At its peak, Oppein's expansion and control were staggering. It built an extensive, dense distribution network with over 7,000 physical stores, reaching deep into third- and fourth-tier cities and county-level markets.

For over a decade, Oppein maintained a "gap" lead over its second- and third-place competitors in both revenue and net profit. Under the "whole-home customization" and "big home" strategies, Oppein became synonymous with China's home furnishing industry—an irreplicable wealth creation story in manufacturing.

Industry-Wide Crisis as Real Estate Dividends Fade

Oppein's current predicament is not isolated. It is part of a systemic industry-wide reshuffle and crisis as the real estate boom completely recedes.

According to the National Bureau of Statistics:

• Jan–Jun 2026: Revenue of China's above-scale furniture manufacturers: RMB 257.61 billion, down 8.6% year-on-year
• Total profit: RMB 4.57 billion, down 52.7%
• Industry average profit margin: Compressed to approximately 1.8%
• Profit decline in furniture manufacturing ranked highest among all manufacturing sectors

Root Cause: Real Estate Collapse

• National residential building completions: down ~26.6%
• New housing starts: down >24%
• New commercial housing sales area: down 11.6%

According to Node Finance, the past two decades of high prosperity in the custom home furnishing industry were deeply tied to the real estate beta. High-density delivery of finished apartments and mass new-home occupancy provided factories with high-value, standardized "whole-home" orders. With the downturn in new housing, this high-profit model has collapsed.

Replacing it are fragmented demands: old-home renovations, partial upgrades, and existing home refreshes. These projects involve complex on-site conditions, lengthy delivery chains, and more budget-conscious consumers. Order values and volumes cannot compare to the new-home bulk orders of the past.

Peer Performance

Among the nine listed custom home furnishing companies:

• Average revenue decline in H1: 25.5%
• Eight companies saw declines exceeding 20%
• Only three companies remained profitable after deducting non-recurring gains and losses

For example, Suofeiya (Sogal), a leading player, saw its net profit attributable to shareholders plunge 80.61% year-on-year. Several second- and third-tier companies reported their first half-year losses since listing.

The once-thriving custom home furnishing sector is now experiencing unprecedented collective pain.

Conclusion: Surviving the Storm

From seizing the opportunity of an era to building a billion-dollar empire, to now navigating survival in the ice age of a fading real estate boom, Yao Liangsong and Oppein are undergoing an unprecedented transformation.

As Yao said, only companies that truly "fear death" will have the determination to "change to the death." This violent storm is both a brutal market squeeze and an inevitable process of eliminating outdated capacity and reshaping the competitive landscape.

Admitting misjudgment is the starting point for change. At this historic turning point—from "real estate growth" to "stock market deep cultivation"—how to extract efficiency from this rocky terrain will determine whether this business titan can lead his ship through the cycle and toward the next dawn.

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