In the first half of 2020 when the global economy was hard hit by the COVID-19 pandemic, 3TREES managed to deliver a strong performance against headwinds with substantial gains in both industry position and market capitalization. This impressive result was achieved by having the big picture in mind, consolidating cultural confidence, maintaining the strategic focus on the three themes of 「value, coordination and growth」, capturing opportunities amid challenges, and persisting in building internal strengths and exploring new sources of growth.
In the first quarter of 2020, 3TREES had RMB434,661,700 in operating revenue, down 31.10% YoY, with -RMB126,384,000 in net profit attributable to shareholders of the listed company. As the COVID-19 epidemic was gradually controlled in China, the declines in growth of infrastructure investment and real estate investment gradually narrowed, which boosted a quick recovery of market demand. In the second quarter of 2020, 3TREES posted RMB2,159,846,000 in operating revenue, up 37.45% YoY, with RMB235,139,500 in net profit attributable to shareholders of the listed company, up 96.22% YoY, representing record highs in both single-quarter revenue and net profit! This extraordinary success achieved against a challenging situation for the entire coating industry has again proven the huge growth potential of 3TREES as a leader in the domestic civil engineering paint industry and the strong momentum of its march towards a world-class paint enterprise.
In the first half of 2020, 3TREES continued to improve and optimize the profit models of franchised stores, enhance dealers' retail sales, improve supply chain efficiency, strengthen brand innovation and development, deepen the self-driven mechanism based on shared efforts and benefits, rigorously increase the performance per employee, and continuously roll out innovative products and services. The aim was to advance its commitment to providing comprehensive life-enhancing solutions that integrate healthy products, diversified colors, refined tastes, and considerate services through a one-stop 「6-in-1」 (interior and exterior wall coatings, waterproofing products, insulation materials, floor coatings, base and auxiliary materials, and construction) green building materials integration system that is dominated by high-quality paint products and supplemented by new home furnishing materials
A premium brand with nationwide reputation
3TREES has always emphasized brand building and communications and invested in long-term advertising highlighting its healthy and environmentally friendly products on CCTV, China National Radio, major web portals, railways stations, and building materials marketplaces, with 「3TREES, Immediate Move-in」, which has become a household brand tagline.
In early 2020, 3TREES was ranked among the Hurun China 500 Most Valuable Private Companies; on August 5, 3TREES was named to the World Brand Lab 「China 500 Most Valuable Brands」 for the 14th consecutive time with RMB29.236 billion in brand equity, up 14 places from the previous year, and ranking first in the paint and coatings category; on August 6, 3TREES became the official paint exclusive supplier of the Olympic and Paralympic Winter Games Beijing 2022, which would provide a stage on which 3TREES proudly presents itself as a national brand of China. In addition, 3TREES has ranked among the global top ten listed paint and coatings companies in terms of market capitalization, with a substantial improvement on the global rankings.
Rigorous R&D and innovation in healthy products
Upholding the product R&D philosophy of 「ultimate performance and application for ultimate health」, 3TREES in the first half of this year stepped up product R&D and iteration and developed 100 new products, upgraded 77 products, and reduced costs of 103 products.
Through new product launches and upgraded existing products in such segments as waterproof coating, waterproof membrane, interior wall coating, exterior wall coating, wood paint, adhesive, and new home furnishing materials, 3TREES has further enhanced the market competitiveness of its products. In addition, 3TREES rolled out a succession of innovative products, including Waterborne Polyurethane Waterproof Paint, Thermoplastic Polyolefin Waterproof Membrane, High-End Decorative Interior Wall Art Paint, 360 Multi-Effect Anti-Bacterial & Anti-Virus All-Round Wall Paint, Fresh Breath Anti-Virus All-Round Water-Based Wood Paint, and SEN Sci-Tech Innovation Board which integrates many innovative technologies, to continuously meet the demand for comprehensive green building materials offered at one stop and lead the development of the paint and coatings industry.
To build compelling competitiveness in both products and technology and also with a view to aggregating and developing leading talent in the industry, 3TREES has established a research center in Shanghai dedicated to the R&D of synthesis and application of key raw materials, which has made a series of major breakthroughs in the synthesis of new materials and development of new products.
For partner success and the sales enablement
In the interior paint business, 3TREES has made continuous efforts to enable partners through thorough digital transformation and sales leads collection geared to increasing retail sales per store, per employee and per product, and has preliminarily put in place a new retail store operation model.
3TREES convenes online partner meetings on a regular basis to enable them for coordinated development and faster growth. And it has set up an official WeChat-based online store, established a marketing event platform, held customer-facing promotional activities, and explored live-stream sales. Through online-offline linkage and integration, 3TREES has effectively boosted the sales of retail stores.
In engineering exterior wall paint and coatings products, 3TREES has consolidated its competitive advantages. Revolving around the core value of 「customer orientation」, 3TREES has accelerated efforts to promote its systematic urban renewal and 6-in-1 solutions and integrated life beautification system and persisted in focusing on products ranking in the top ten and refining those ranking in the top 100. It has strengthened cooperation with major real estate companies to promote the inclusion of 3TREES in new channels and increase the company’s share of paint and coatings products used by real estate companies.
In 2020, 3TREES held the 「Urban Renewal & Building Facelift」 online summit to enhance existing buildings. And 3TREES launched for the first time a series of live-stream partner enablement forums which were attended by hundreds of thousands of people and cemented its close relationships with partners. 3TREES has been a preferred brand for many leading real estate companies by virtue of its green, healthy and eco-friendly products and efficient professional services. As of the end of the reporting period, 3TREES had maintained strategic cooperation with nine of China’s top ten real estate developers and project cooperation with the rest one, in addition to an increasing share of 3TREES products being used by Top 100 real estate developers.
Online marketing for accurate customer acquisition
In response to the COVID-19 impact, 3TREES continued to step up online marketing and explore an online transformation based on targeted online user operations. It made major deployments to comprehensively integrate online and offline channels, combining a series of measures including online promotion, online customer acquisition and online services to cater to young consumers』 preferences in terms of shopping experiences as well as products.
3TREES successfully implemented the first live-stream sales campaign in the paint and coatings industry, garnering the largest share of voice with as many as 3.5 million users viewing it simultaneously; and 3TREES also increased advertising on mainstream online platforms such as Baidu, Toutiao, Tiktok, WeChat Moments and Dianping to effectively reach home furnishing customers.
Green, smart and lean production
3TREES has been committed to green production, with its factories in Putian and Sichuan being designated as national green factories. Its factory in Anhui has been further upgraded and has not only passed the ISO certification but also become a benchmark park of intelligent manufacturing and green production, boasting an imported world-leading automated production line and clean production system. Construction of an intelligent factory in Boye in Hebei province has been on full swing, with the construction of workshops having been completed. And work has been launched to plan an intelligent factory in Xiuyu in Fujian province. These developments have brought 3TREES closer to the goal of establishing a nationwide green supply chain characterized by multiplicity, fastness, goodness, and economy, to achieve rapid delivery from across the country.
Responsible corporate citizenship rooted in respect for nature and care for compatriots
As a China-based leading premium paint and coatings brand, 3TREES has been steadfastly committed to respecting nature and caring for compatriots in the process of rapid business growth. During the COVID-19 epidemic, 3TREES showed remarkable care for society, partners and employees. Through the 3TREES Charitable Foundation, it donated more than RMB10 million in supplies and cash at the first opportunity in support of the national epidemic fight and cumulatively donated more than RMB18 million in supplies and cash.
3TREES joined hands with the China Education Support Project to launch the first 3TREES "Beautiful China & Youth in Action" University Student Environmental Design Contest, encouraging and supporting university students nationwide to come up with creative designs of environmentally friendly products and increasing awareness of ecological progress and environmental protection; it sponsored the CCTV charity program My First Time in Life through the Green Class campus donation plan; it participated in the first Ant Forest Online Forestation Festival to promote the 「March 17 3TREES Day of Charity」; it donated healthy coatings in support of the "100 Village Homes" project initiated by the China Foundation for Poverty Alleviation; as the official green and low-carbon corporate partner of the E.G.G. Walkathon project, 3TREES offered support to and actively participated in the online challenge and other activities of the project; and 3TREES Chairman Mr. Hong Jie donated RMB20 million to his alma mater Xiamen University at its centenary celebration to support the university’s development. And the list can go on and on. In a word, 3TREES has not only proactively performed its corporate citizenship but also called on university students and the general public as well as its employees and partners to participate in charitable activities and has established an open shared charitable platform of win-win outcomes.
In 2020, 3TREES will closely revolve around the three themes of value, coordination and growth by aligning with the national strategies, capturing opportunities, continuously diversifying sales channels, and establishing a new sustainable retail marketing model; improve the "6-in-1" supply capacity and upgrade the supply chain; continue to promote the three new concepts of product development, drive product R&D and innovation and accelerate the development of the 3TREES Shanghai Research Center with the focus on forward-looking, innovative and basic research on high-tech new materials; steadily advance a series of CSR projects in such areas as poverty alleviation, environmental protection and education, continue to strengthen research on brand management and brand innovation and development, and deepen branded green development and CSR programs; improve the company's supply management system and improve its smart manufacturing and digital capabilities; strengthen the company's organizational transformation with a view to establishing agile service capabilities and continuously empowering employees and partners and their teams; and deepen the self-driven mechanism based on shared efforts and benefits to deliver greater value to employees, users, the company, and society.