by Profits fall a 3rd as currency and tariffs bite; balance sheet stays strong
CHANGZHOU, China — MotoMotion’s parent company reported a steep drop in profit for the first nine months of 2026.
Its third-quarter filing released Thursday at times reads like a copy of the one rival Kuka Home filed just a day prior, which points to shared challenges that big Chinese furniture manufacturers face, especially those that rely on the U.S. market.
Changzhou Jiangxin Duju Smart Home, a.k.a. MotoMotion China, stated its nine-month revenue was down 8.8% to about $340 million, according to the filing made to the Shenzhen Stock Exchange. Net profit attributable to shareholders dropped 32% to about $66 million, according to the unaudited numbers.
All amounts were reported in yuan and have been converted to U.S. dollars at the current rate of about 6.73 yuan per dollar. The filing was translated into English from Chinese by Claude.
The Q3 reports of MotoMotion and Kuka Home each point to the yuan’s appreciation and the bite of tariffs. Both companies reported dips in revenue and profit. Both companies show gross margins as holding steady. Both companies sell significant volume into the United States. Both have cash to work with, and both are spending now to position themselves for the sector’s recovery, albeit in different ways. Kuka Home has said it is prioritizing research and development; MotoMotion’s filing shows a priority on manufacturing capacity.
Summer doldrums
At MotoMotion, as at Kuka Home, the slowdown worsened over the summer. MotoMotion’s third-quarter revenue fell 12.6% to about $108 million. Attributable net profit fell 39% to about $20 million, and earnings per share fell 40% to 0.48 yuan, or about 7 cents. For comparison, if the third quarter is subtracted from the year-to-date totals, MotoMotion’s first-half revenue shows a dip of only about 7%.
Kuka Home followed basically the same pattern. Its sales were flat through June, then fell 7% from July to September.
For the first nine months, MotoMotion’s earnings per share fell one-third to 1.56 yuan, or about 23 cents. By sheer coincidence, that is very similar to Kuka Home’s nine-month figure, as well, though Kuka Home is a much bigger company with roughly six times MotoMotion’s revenue.
The underlying picture is a bit more sobering. Excluding one-time items, MotoMotion’s net profit fell 44% to about $52 million. After-tax gains on financial investments, which as stated are mainly “wealth management products,” added about $14.4 million to the bottom line. MotoMotion’s net margin fell to 19.4% from 26.2%.
But, like Kuka Home, MotoMotion kept its gross margin steady, even edging it up a tick. Gross margin was 38.7% for the nine months, up 0.4 percentage points from a year earlier. Kuka Home’s held at about 32%.
Storytelling
As is its custom, MotoMotion opens its filing with several pages of context and what Wall Street likes to call “color,” a narrative section attributed to General Manager Xu Meijun, husband of MotoMotion China’s chair and controlling shareholder, Li Xiaoqin, also known as Catherine Lee. Xu offers quite a bit of context. In fact, MotoMotion’s narrative is a bit like a post-game press conference, contrasted with Kuka Home’s filing, which is more like reading a box score.
Xu points out that the yuan rose about 4.2% against the dollar from January through September, which, when you bill in dollars but report out in yuan, is going to shrink reported revenue. That conversion effect alone cut revenue by about $14 million, or 4.2%, according to the filing. By contrast, at constant exchange rates, sales would have fallen only about 5% instead of nearly 9%.
The stronger yuan also cut the value of the company’s dollar holdings. MotoMotion booked exchange losses of about $31 million, the filing states, and its financial expenses swung from a net gain of about $5 million a year ago to a cost of about $25 million, a turnaround of roughly $30 million.
Calculated at 6.73 yuan to the dollar, MotoMotion’s swing is larger than Kuka Home’s $22.2 million, but MotoMotion is a fraction of Kuka Home’s size. Kuka Home doesn’t explain its own swing, so, we previously surmised the cause to be exchange losses. MotoMotion’s account of the same reporting period supports that surmising. The cash flow statements show the same gap. Currency movements reduced MotoMotion’s cash by about $35 million, compared with $8.6 million at Kuka Home.
MotoMotion also explains how tariffs reach a company that does not directly pay them. Most core customers buy on “free-on-board” (or FOB) terms. MotoMotion loads the goods onto the ship; the U.S. buyer pays shipping, import clearance and duties. To maintain long-term customer relationships, MotoMotion said, it cut prices to share part of the tariff burden. Those concessions, plus tariff costs it bore itself, cut total profit by about $5.2 million more than a year earlier.
The price cuts also distort sales figures. Five of MotoMotion’s Top 10 customers bought less in dollar terms than a year ago, but that doesn’t necessarily mean they bought fewer sofas or that store demand weakened.
Back to the future
Finally, both companies are spending for a rebound in the furniture sector, but on slightly different things. Kuka Home is betting on research, with its R&D spending rising 28% to $60 million, or 2.7% of revenue, up from 2.1%. By contrast, MotoMotion trimmed R&D by about 4.5% to about $18 million, according to the filing. But, because sales fell faster, MotoMotion’s R&D still rose to 5.3% of revenue from 5%.
MotoMotion’s larger bets are on factories and selling. Cash spent on long-term assets rose almost eight-fold, to about $40 million from $5 million. Construction in progress went from zero to about $15 million, mainly for a smart-furniture production capacity expansion, the filing states. And selling expenses rose 35% to about $16 million, driven by sales staff and travel expenses. These efforts could be paying off, as indicated by the U.S. retail statistics provided. MotoMotion counts 216 U.S. furniture retailers as customers, up from 167 a year earlier. It added 35 new customers this year, 33 of them U.S. retailers. All 10 of its largest customers are in the U.S., and eight of them are retailers.
Sales to U.S. furniture retailers made up 73% of total revenue, up from 67% a year ago.
Xu also uses his letter to describe the recent High Point Market, the first major show for which all of its brands could be presented together. Buyers moved between showrooms, the filing says, and some smaller retailers began talking about mixing brands to fill shipping containers they could not fill from one line alone.
The company also stated plans to explore a standard full-container purchase program for some SKUs from the Palliser lineup, plans that are not yet specific in terms of products and prices. Turning early feedback into steady orders “will take time,” the filing states.
MotoMotion’s narrative also includes a diarylike entry describing the visit to market by an investor, not identified, who spent two days and three nights with the MotoMotion team and the company’s customers.
“We welcome more investors to visit our operations and talk with the team, customers and industry participants, forming their own understanding and judgment of the Company through first-hand observation and independent conversations,” Xu writes.
