La Natsu Bell'S Return To A Shares Is Continuing In The Winter Of IPO Clothing Industry.

Changjiang Securities (000783, stock bar) research report shows that in the first three quarters of 2015,

The overall realization of the apparel industry sector was 81 billion 703 million yuan, an increase of 9.96% over the same period.

Eye-catching performance.

The gross profit margin of the industry in the first three quarters was 36.41%, down 0.02 percentage points from the same period last year.

In addition, the overall net profit growth in the three quarter of the apparel industry has been further declining due to the drag on operating costs and cost levels.

Under the background of insufficient terminal demand and cost increase, the overall profitability of the industry is still in a downward trend.

Against this background, high-end women's clothing enterprises Shanghai

Dress Limited by Share Ltd (hereinafter referred to as "La Natsu Bell") recently issued prospectus, intended to land at the Shanghai Stock Exchange, the sponsor is CITIC Securities (600030, stock bar).

It is worth noting that this is not the first time that La Natsu Bell appeared on the list of A share IPO companies. 3 years ago, it had crashed A shares and landed at the Hong Kong Stock Exchange at the end of last year. But after less than half a year, La Natsu Bell returned to A shares to sprint IPO.

In the bottleneck of high storage in clothing enterprises, La Natsu Bell also failed to escape.

In addition, although the market share is faster than the fast fashion brands such as UNIQLO, ZARA, H&M and other brands, and the rapid expansion in recent years has brought good results, but La Natsu Bell's direct mode has been widely criticized outside the world. In addition to the huge cost, the mode has caused pressure on inventory turnover, and there is also a huge challenge for future profits.

Hong Kong shares subscribed for cold

For the main high-end women's clothing La Natsu Bell, landing capital market has always been a big worry.

This choice of A share IPO is not La Natsu Bell Di's exposure to the capital market once.

A few years ago, La Natsu Bell submitted an application for IPO to the China Securities Regulatory Commission and opened the process of listing A shares.

In 2012, La Natsu Bell was in line to sprint IPO, during which he experienced eighth IPO "Gates". At the end of May 2013, La Natsu Bell appeared in the list of "termination review" companies announced by the SFC and dreams of A shares.

In November 2013, La Natsu Bell submitted his IPO application to HKEx.

However, the reporter found that, in addition to the impact of IPO suspension, La Natsu Bell failed to land A shares that year, and also repeatedly related to the apparel industry company's A share market.

In 2011, a total of 12 garment enterprises applied for A shares IPO, of which only 6 successfully passed, including 6 other enterprises, including the ladies' house, IPO was rejected and the veto rate was as high as 50%.

Women's clothing is the overwhelming majority of the enterprises that are not.

"Clothing home textile industry belongs to the traditional industry, with low entry threshold, fierce homogenization competition, serious overcapacity and low profit margins. These are the reasons leading to the IPO collapse of garment enterprises."

Guo Yan, a professor at Beijing Institute Of Fashion Technology, said.

However, La Natsu Bell did not give up the way of listing, and chose to visit Hong Kong stocks after the A share crashed.

Because of its simple process, short time and low cost in listing in Hongkong, H-share has become the choice for many mainland enterprises to postpone the A share financing process. La Natsu Bell has also become a member of the A H shares.

After undergoing stock reform and other procedures, La Natsu Bell finally listed on the Hong Kong Stock Exchange in October 9th last year.

However, the IPO of the HKEx did not allow La Natsu Bell to solve the urgent problem. La Natsu Bell's initial public offering was cold.

According to the results of La Natsu Bell's prospectus, the 11 million 555 thousand and 600 part of the public offering has been subscribed for 95% shares, which is equivalent to 95% of the total number of public offering. It has not been fully subscribed, and the offer price per share is 13.98 yuan, which is the lowest limit for the price range (13.98 yuan -18.2 yuan).

After deducting the listing fees, the net amount of capital raising is only 1 billion 606 million yuan.

According to the prospectus at that time, La Natsu Bell originally planned to raise HK $1 billion 700 million -22.1 billion, which was mainly used to expand the retail network. However, from the results of fund-raising, La Natsu Bell did not achieve the expected goal.

La Natsu Bell, who had been frozen by the Hong Kong stock exchange, was less than half a year after IPO in Hong Kong, so as to facilitate the return of A shares in April this year.

And the current prospectus clearly shows that this time, La Natsu Bell once again returned to the public offering of new shares not more than 54 million 770 thousand shares, the total fund-raising of 1 billion 640 million yuan.

Among them, 1 billion 550 million yuan is used to expand the construction project with the retail network, and 84 million yuan is used for the retail information system project.

It is not hard to see that the 90% of the money raised is still used to expand the retail network, which coincide with the fund-raising purpose of its listing in Hong Kong at the end of last year.

This also seems to mean that although IPO has raised funds, it has not solved the problem of the expansion of retail network.

It is worth noting that this time, there are quite a number of Hong Kong stock listed companies returning to A shares along with La Natsu Bell. Many companies choose to return to A shares due to low valuation of Hong Kong stocks and difficulties in financing.

For the return of A shares, La Natsu Bell said: "the company's business concentrated in the domestic market, but domestic financing channels are single, and H-share financing costs are higher and facing foreign exchange risk.

Therefore, in order to increase financing channels and reduce the risk of debt financing, the company decided to establish a domestic equity financing platform.

Gross margins lower than peers

As China's high-end women's clothing enterprises, La Natsu Bell mainly relies on its most famous La Chapelle brand to make profits.

The garment company, which was once a Chinese version of Zara, has already been ahead of other clothing brands in its market share.

According to public information, La Natsu Bell's market share in China's popular women's clothing has surpassed HKEE International Group's 4.8%, ZARA's 3.2%, UNIQLO's 2.9% and H&M's 2.2%, and its brand advantage is obvious.

The high market share also contributed a lot to La Natsu Bell's growth.

Annual report data show that La Natsu Bell achieved operating income of 7 billion 814 million yuan in 2014, net profit of 500 million yuan, an increase of 25.5% and 23.6% compared to the same period, while the gross margin of the company continued to be over 68% for three consecutive years.

In addition, La Natsu Bell's net profit growth rate should not be underestimated. In 2011, La Natsu Bell's net profit was only 123 million yuan, increased to 260 million yuan in 2012, jumped to 413 million yuan in 2013, and the annual compound growth rate was 83.3%.

However, reporters found that even if the growth rate of revenue and net profit is obvious, La Natsu Bell's gross profit margin is always at a lower level than its competitors, and is lower than the average value of the industry.

According to the prospectus, in the 2012-2014 years, La Natsu Bell's gross profit margin was 64.53%, 64.18% and 64.18% respectively, while the average gross profit margin of women's clothing industry in the same period was 66.04%, 67.55% and 66.41%, respectively. Among them, the gross margin of the industry's highest gross profit margin (603518 shares) was 68.8%, 71.05%, 71.6%, and La Natsu Bell was in the position of countdown.

Moreover, compared with peers, La Natsu Bell's net profit margin is almost at the end of the industry.

In the 2012-2014 years, the net profit margin of La Natsu Bell was 8.91%, 8.2% and 8.2% respectively. The average value of the industry was 20.9%, 18.52% and 14.9% over the same period. La Natsu Bell was far apart.

Low gross profit margins and net profit margins in the industry average have already shown that La Natsu Bell's growth capacity is weak.

But in fact, relying on a single brand has also become a constraint on La Natsu Bell's profitability.

Therefore, the La Chapelle based brand has brought a lot of income to La Natsu Bell, but it is also facing enormous pressure to rely heavily on the brand.

High inventory

Changjiang Securities Research Report shows that in the first three quarters of this year, the overall inventory of the garment industry was 375.46 yuan billion yuan, up 10.12% over the same period last year. The main reason is that the quantity of flour and accessories, home textiles and men's clothing increased during the peak season of sales.

In addition, operating cash flow deteriorated during the reporting period, down 5.30% in the first three quarters.

Like all garment enterprises, high inventory is another big problem that La Natsu Bell can not ignore.

The larger inventory increases the cash flow pressure of the company, while the extension of the library age structure makes it easier for the company to increase the price.

In late 2012, late 2013, late 2014 and June 30, 2015, La Natsu Bell's inventory depreciation was 4635 yuan, 116 million yuan, 243 million yuan and 259 million yuan respectively.

La Natsu Bell said that the increase in inventory depreciation was mainly due to the rapid growth of the company's retail outlets and the extension of the inventory structure.

In fact, the rapid expansion of retail outlets has added a lot of revenue to La Natsu Bell, but this expansion has also caused the company's inventory and rising costs.

In recent years, La Natsu Bell has been crazy expansion, mainly to increase the store and open shop.

At the end of 2011, the number of retail outlets was 1841, and it jumped to 7147 in June 30th this year.

Moreover, its outlets are mainly distributed in famous department stores and shopping centers in major cities, relying on the marketing mode of shopping malls.

It is worth noting that, unlike the wholesale clothing distributors in the mainland, La Natsu Bell adopts the direct camp mode, that is, 100% of its retail outlets are directly controlled and operated by the company. Its advantage lies in enabling the company to manage effectively in terms of brand and price, but at the same time, it is also challenged by rising inventory and cost.

With the rapid rise of all kinds of costs, the company's operating costs continue to rise.

In 2013 and 2014, the sales cost of the company reached 2 billion 305 million yuan and 2 billion 806 million yuan, accounting for 46% and 45% of the total revenue respectively.

From this, La Natsu Bell's performance is largely driven by continuous expansion.

But La Natsu Bell does not seem to want to stop expanding. The prospectus shows that one of the company's fund-raising plans is a retail network expansion project, and plans to build 3000 new retail outlets in the next three years.

Excessive attention to the high cost expansion under the line led to the widespread adoption of online warfare in the clothing industry. La Natsu Bell's online sales ability was weak.

Although La Natsu Bell has set up retail outlets on the third party business platform, the effect is not good enough.

In 2014, the company's online business revenue was 37 million 610 thousand yuan, accounting for only 0.61% of the company's main business revenue in the same period. In 2015, 1-6 months, the company's online business revenue reached 130 million yuan, accounting for the proportion of the company's main business income increased to 3.85%.

In the same period, online sales revenue of excellent clothing companies accounted for 45% of total revenue, and La Natsu Bell was far apart.

"The trend of downward trend in the overall trend of garment industry will continue in the near future. This is the need for industrial upgrading and structural adjustment, and also the process of survival of the fittest in the industry.

Now the whole industry is developing towards a more intelligent direction, and it is imperative to reduce labor costs. Most of the enterprises are developing electricity providers, and excellent companies earn half of their total revenue. The direct mode of relying on manpower has lagged behind.

For the development of the clothing industry, Guo Yan said.