Gao Da Shang children's clothing dealers intend to rush off IPO Jia Man clothing over half of the assets is actually in stock

The company is authorized to operate children's clothing such as Hurricane, Haggis, etc., but its relationship with upstream import brands and agents is not secure.

Text | "Investment Times" intern reporter Mosaisai

When the demographic dividend began to recede, Chinese clothing companies finally bid farewell to the days of lying and making money.

It is indeed an era of nostalgia. Relying on "Celebrity Endorsement + Mass Advertising", the fingertips of the women in the car clothes are not sewing fabrics, but a piece of RMB. The benefits are obvious: rapid expansion of expansion, rapid return of funds.

The short board is of course also obvious: lack of design capabilities, inadequate supply chain processing, and poor inventory management... However, in a market that is in short supply, what is all that is worth it. Until the wind has changed.

Inventory, the most difficult to control "high" situation appears in most apparel companies. As the parent company of “Water Baby”, Beijing Jiaman Garment Co., Ltd. (hereinafter referred to as “Gayman Apparel”), which operates the high-end children's wear business, is also not immune.

Jiaman Apparel is mainly engaged in the core business of R&D and design, supply chain management, operation and promotion, direct sales and franchise sales of children's wear. Recently, it disclosed the prospectus on the website of the China Securities Regulatory Commission. The company intends to publicly issue no more than 27 million shares in the SME board of the Shenzhen Stock Exchange, no less than 25% of the total share capital after the issuance. The sponsor institution is Huaying Securities.

From 2014 to 2016 and the first three quarters of 2017 (hereinafter collectively referred to as the “reporting period”), the book value of Jiaman apparel inventory was 181 million yuan, 191 million yuan, 216 million yuan and 280 million yuan, respectively, accounting for the total assets of the current period. The proportions are 49.90%, 52.30%, 52.79% and 58.06%, respectively. The average level of inventory in the same industry as a percentage of total assets was 21.50%, 20.90%, 20.40% and 20.89%, respectively.

It can be seen that the inventory level of Jiaman clothing is much higher than that of its peers, and it is still rising year by year. The high inventory has greatly increased the company's management and profit costs, affecting its cash flow.

In this regard, Jiaman Clothing explained in its prospectus that its own funds are mainly used for stocking and thus highlight the proportion of inventory in current assets. In addition, the higher unit price of the international high-end children's wear brand, which is mainly operated by the company, results in a larger inventory.

In addition to the high inventory, Jiaman clothing seems to be difficult to step through the window of the recent red line. In addition, family holding issues may also be an obstacle to entering the capital market. In response to the above problems, the "Investment Times" reporter sent an interview outline to the company's secretarial office, and did not receive a reply as of the date of publication.

During the reporting period, Jiaman apparel business income showed growth of 323 million yuan, 385 million yuan, 402 million yuan and 356 million yuan. However, there are ups and downs in net profit. In 2014, there were 46.155 million yuan in fashion. By 2015, it was only 30.988 million yuan. By 2016, the index rose to 37.115 million yuan, but it is still difficult to reach the 2014 level. The latest data released in the first three quarters of 2017 showed that the current net profit of Jiaman Apparel was only 28.4545 million yuan.

Performance fluctuations are only one of them. In March 2018, there was a new standard in IPO audits between the markets: IPO new reporting companies, the main board required net profit of more than 80 million yuan in the most recent year, and the GEM was no less than 50 million yuan. According to this standard, it is difficult for Jiaman clothing to “reach the standard”.

The "Investment Times" reporter learned through simple calculations that the average quarterly profit of Jiaman apparel in the first three quarters of 2017 was 948.20 million yuan. If you want to reach the standard of 50 million yuan, it means that the profit in the fourth quarter needs to reach 215.541 million yuan. That is, the quarterly profit growth rate needs to be as high as 127.32%, which is indeed difficult. In particular, the company's net profit fluctuating state, it seems that it is difficult to fit the regulatory level to the high priority of IPO companies' continued profitability.

As a private label and authorized brand of children's wear operators, the upstream industry of Jiaman Apparel mainly includes fabric accessories production industry and garment processing industry. Jiaman clothing itself is not produced. The company's own brand “Water Baby”, authorized brand “Hampus”, “Haggis”, etc. mainly adopt the method of directly purchasing garments from the foundry. Therefore, the production of the foundry Process, management level and quality control directly affect the quality of the company's products.

The relationship between Jiaman clothing and upstream import brands and agents does not seem to be solid.

Hush Puppies and Haggis are two of the more well-known brands in the Jiaman apparel brand. Among them, Hajis children's wear brand authorization period until December 31, 2020, the Hurricane children's wear brand authorization period until December 31, 2022, and Jiaman clothing does not have the exclusive right to use the above brands registered in China. The problem is that the authorized brand has become a new growth point for the company's performance. In the January-September and 2016 of 2017, the revenue from the second-class authorized business brands accounted for 39.66% and 24.31% of the main business income. If the brand of Jiaman Apparel is not renewed after the expiration of the authorization period, it will have a great impact on its business performance.

During the reporting period, the proportion of international retail agency business accounted for the main business income of Jiaman apparel was very heavy, accounting for 40.89%, 39.48%, 37.02% and 31.71% respectively. The retail agent sales of more than ten international brands including “ARMANI JUNIOR”, “KENZO KIDS”, “Catimini” and “YOUNG VERSACE” contributed a lot of revenue to the company.

According to the reporter's understanding, Jiaman Apparel has not signed a long-term cooperation agreement with the above-mentioned brand parties, nor has it reached a relevant agreement with the brand side to lock in the annual transaction volume, price and category. If there is a material adverse change in the company's cooperation with the above-mentioned brands in the future business year, including reducing transaction volume and terminating cooperation, it may adversely affect its operating results.

What about the upstream and downstream? The downstream of the Jiaman apparel supply chain is mainly department stores, franchisees, e-commerce platforms and end consumers who participate in apparel sales and manage retail channels.

From 2015 to 2016 and January-September 2017, the company's main business income in the franchise model accounted for 27.78%, 32.87%, 22.55% and 21.27%. Jiaman Clothing said in the prospectus that although the franchisee model can help the expansion of the company's marketing network, it can share the investment risk. However, if the franchisee causes fluctuations in performance due to factors such as its own management and management, it will operate the company. Performance and the company's brand reputation have adversely affected.

At the same time, because the initiative of the ordering system is in the hands of a large number of franchisees, it actually forms a bottom-up group system, which is not conducive to the efficient operation of the supply chain.

From the aspect of ownership structure, Jiaman Apparel is a typical family business. The actual controllers of the company are Cao Shengkui, Liu Wei, Liu Lingui and Ma Lijuan. Among them, Cao Shengkui and Liu Lingui are husband and wife relationship, Cao Shengkui and Liu Wei are father and son relationship, Liu Lingui Liu Yu and Ma Lijuan are in a relationship with the mother and son of Liu Wei.

Cao Shengkui, Liu Wei, Liu Lingui and Ma Lijuan directly held 66,536,697 shares of the company directly, accounting for 82.14% of the total shares of the company before the issuance; Liu Wei is the executive partner and general partner of the company's shareholder Li Yuan Zhengtong, the actual control The voting rights of 3.36% of the shares held by Yuanzhengtong. Therefore, Cao Shengkui and other four people collectively control the voting rights of 85.50% of the shares of Jiaman Clothing.

Liu Wei, Cao Shengkui, Liu Lingui and Ma Lijuan signed the Concerted Action Agreement on June 1, 2015. After the issuance, the proportion of direct and indirect control of shares by Cao Shengkui, Liu Wei, Liu Lingui and Ma Lijuan will drop to 64.13%, but it is still a big one.