The Listing Of Garment Enterprises Takes The Long March?

This is the best and the worst.

Since 2010, more than 10 garment companies such as Kaiser, Hinur, news bird and so on have been listed. The Chinese textile and garment industry once again welcomed the climax of embracing the capital market.

According to media reports, in May 5, 2011, the securities and Futures Commission of the SFC abruptly cancelled the IPO application of the Zhuhai Wiseman dress Limited by Share Ltd (hereinafter referred to as "Wiseman") which was originally scheduled for May 6th. The information disclosed in the prospectus shows that the company raised 284 million 788 thousand and 500 yuan in this listing, of which 200 million 500 thousand yuan will be used to add 171 stores in 17 provinces and cities nationwide. Media reports said that the reason for the incident was that the report materials received by the Commission and other departments showed that in 2002, before the listing, there were as many as more than 1200 franchisees, and the sweaters in the actual controllers were as many as more than 100. But then, these franchisees were almost forced to close because of operating losses, and these brands disappeared. However, this part of the content is contrary to the continuous growth of the company's performance in the prospectus in the past three years.

Coincidentally, the Shandong Securities Regulatory Commission in April 20th show long Limited by Share Ltd, a clothing and apparel company, has been exposed for many years to deal with social insurance and provident fund for most employees. Earlier, Semir clothing (002563, stock bar) was reported to be suspected of evasion of 3 billion yuan, Mona hosiery IPO twice failed and other news, a series of events show that China's textile and garment enterprises listed on the road is not smooth.

In addition to the examination and approval of listed companies, many enterprises found that after their hard and successful IPO, their harvest was not as big as they expected. Securities analysts pointed out that, taking Hongkong's capital market as an example, after many times of market education, investors in the capital market have gradually learned to take a cool view of the concept of "domestic demand stocks" thrown by Chinese mainland enterprises, and it is difficult to attract them to join in a single prospectus with a good prospect. With the return of investment philosophy to investors, coupled with the increasing saturation of the mainland market and the intensification of competition, many of the "domestic demand shares" have gradually returned to their rational price earnings ratio, market rate and return on equity.

In fact, the listing is not the end of the development of enterprises, but just a "weapon" on the way to enterprises. Whether or not we can see beautiful scenery after reaching the summit, enterprises continue to work hard to climb the high mountain of "listing". The listing of apparel enterprises is only one example.

　　 Apparel enterprises The four blowout on the market

In November 2009, the Ministry of industry and information technology, the national development and Reform Commission, the Ministry of Finance and other 7 departments jointly issued the "guiding opinions on speeding up the construction of independent brand of clothing home textiles" (hereinafter referred to as "guidance"), and pointed out that it would encourage qualified clothing brands, home textile enterprises to go public, issue bonds, make direct use of capital market financing, and encourage enterprises to carry out mergers and acquisitions with independent brands as the link. The overall goal of the guiding opinion is that by 2015, a healthy and standardized market and social environment for the development of healthy and standard brands of clothing and home textiles has been basically formed. A number of garment and home textile enterprises with strong competitive advantages and independent innovation as the core and famous brand as the core have been nurturing and developed. The share of clothing and home textile independent brands has significantly improved in the domestic and international market, and a number of independent brands of clothing and home textiles with international influence have been formed. The "guidance" put forward to support independent brand clothing and home textile enterprises to enhance their core competitiveness. To provide financial services for clothing and home textile brand building. Establishing a new relationship between banks and enterprises, guiding financial institutions to innovate business operation mode, encouraging clothing and home textile enterprises to use their own brands as collateral, financing the financial institutions according to law, and exploring the establishment of enterprise independent brand credit guarantee system.

According to the dean of Guangdong fashion industry economics research institute, Bluish blue Li Kai Luo, President of International Investment Consulting Co., Ltd., said that capital tentacles have long been extended to the apparel industry. After ten years of development, the trend of wave band development has emerged in the continuous integration of garment enterprises and capital, and in each band, there are representative garment enterprises. For example, the first band before 2007, such as Shanshan, YOUNGOR and other listed companies, 2007-2008 years of clothing industry ushered in second bands, representing enterprises such as BELLE, Anta, good bird, Bo Shi Deng, Mei bang and so on. After the financial crisis, the clothing industry has been temporarily silent for a period of time. From 2009, the clothing industry mainly dominated by the Fujian plate has been listed on the market, and has been subdivided into home textiles, children's clothing and other sub sectors. Small and beautiful enterprises have produced overvalued values. By 2010, they enter fourth bands, Kaiser shares are listed, and A has landed in the A-share market.

With the gradual emergence of capital as the value of competitiveness, Li Kailuo believes that the capital operation of Chinese garment enterprises will soon enter the fifth band. The rapid entry of capital into traditional industries will change the way of thinking and operation of traditional enterprises with unprecedented efforts, and explode business potential energy, thus changing and affecting the development path of China's garment industry.

Example force to stimulate the tide of listing

Li Kai Luo pointed out that in these four waves, there were four stimulus points to speed up the listing process of Chinese garment enterprises. In the capital market, BELLE listed nearly HK $9 billion, which launched a series of big takeover actions in the same year, bringing many former competitors back to fame. At the same time, BELLE group's business scale increased rapidly after listing, and quickly widened its gap with its competitors. In August 2008, the U. S. state clothing landed in the Shenzhen Stock Exchange, the shares held at a moment of about 16000000000 yuan to the market value. The publicity effect is equivalent to 50 million yuan of advertising investment. Zhou Chengjian, chairman of the US bond company, ranks 307 in the latest Forbes global list of rich people, and has greatly encouraged a large number of enterprises to go forward. Eighth listed companies in Dongguan were listed on the SME board in Shenzhen Stock Exchange in November. The first day, the stock price rose 14%, and its market value was close to 7 billion yuan. The prospectus shows that the search was established in 2005, and its sales revenue before the listing was only three or four billion, and its net assets were only 157 million yuan. However, the listing has brought nearly 1 billion 500 million yuan to raise funds, and the company's net asset size has increased by ten times. The company's competitive strength and position in the industry have been rapidly improved. In March 11th this year, Semir apparel successfully landed on the A share market, becoming the first Chinese breakage of the first day of the apparel sector. The listing of special clothing and Semir clothing has had a disruptive impact on the entire apparel industry, especially in the search for special listing. No one expected this five or six year old rising star to be so popular in the capital market.

Li Kailuo said that the newly listed clothing companies are quite different from the old clothing companies such as Shanshan, YOUNGOR, Dayang creation, and open industries. The old fashioned clothing enterprises such as Shanshan, YOUNGOR and Kai Kai are all products of the industrial age, and their advantages are mainly in the field of processing and production. Such clothing enterprises are very strong in terms of hardware conditions. They have modern factory buildings, comparable to the most advanced production lines in Europe and the United States such as Italy, improved production and processing capacity, strong innovation ability in fabric research and development, and so on. YOUNGOR even extends the industrial chain of clothing industry to the cotton field in the upper reaches, and has a high quality cotton planting base in Xinjiang, which has opened up all links from raw material planting, textile, printing and dyeing, clothing production, sales and so on. But such companies can only be attributed to manufacturing companies, and it is difficult to show rapid growth. The reason is that the profitability of this heavy asset company is mainly reflected in the process of production and production. The number of machinery and equipment determines the company's profitability. The growth of performance is mainly driven by a larger investment in machinery and equipment. At the same time, the OEM mode determines that they can only get the lowest profit of the industrial chain, and their growth is not strong, and their performance is easily subject to the fluctuation of orders. Once orders decline, the company's performance will also decline. Therefore, the capital market is unlikely to give high valuation.

In contrast, there are no production links in light industries such as American Apparel, search special, Semir clothing and so on. The assets and management capabilities of the company are mainly concentrated in the field of product design and marketing. So these companies look more like a ditch companies or a commercial company. Their performance can grow as the number of stores increases, the channels and scale continue to expand. Therefore, once there is real performance support, such a development mode will be very attractive and imaginative to the capital market, and the capital market will naturally give high valuation.

From the point of listing, there are mainly three choices of domestic clothing enterprises, namely, China's mainland A shares, China's Hongkong stock market and NASDAQ (Mcglaughlin landed on the stock market in October 2009).

Advantages and disadvantages of apparel enterprises going public

Li Kailuo said that capital is the booster of the development of enterprises, and there is a qualitative leap after the listing of enterprises. Many enterprises were evenly divided in the domestic competition. After the listing of enterprises, the capacity and scale increase; the funds needed to solve the development of enterprises will provide a stable and long-term financing channel for the sustainable development of the company, and this can form a benign fund cycle; it will help attract talents and open up market space; it is conducive to the transformation of private enterprises; it is beneficial for the market to resist risks and diversify production, and enhance the public image of entrepreneurs.

Although listing has many advantages, just like a coin has two sides, the disadvantages of listing are constantly being mentioned. The obligation of the public (including competitors) to disclose information fully, including information on main business, market strategy and so on, sometimes has a negative impact on a listed company. After the listing, in order to protect the interests of small and medium shareholders, a major business decision of a company needs to fulfill certain procedures, which may lose part of its business flexibility as a private enterprise. After the listing is diluted, management will inevitably lose part of its control over the enterprise. After listing and listing, enterprises need to pay higher fees; such as public relations costs, investment banking costs, audit fees of financial statements, etc., and listed companies need more obligations and more responsibilities than the private enterprises, and management will also be more stressed. After listing, enterprises are no longer Private Companies, but have regular direction. At the same time, more than 90% of the domestic garment enterprises are private enterprises, most of which are based on family management, which is not compatible with the rules of the stock market game used in the capital market. If we want to go public, we must carry out the shareholding system reform.

As for the different problems exposed in the process of applying for listing, the analysis of the investment department of a securities company may be due to the incomplete reform of the enterprises themselves, resulting in a hidden danger that is difficult to change in the short term. Some textile and garment enterprises have short preparatory time for listing and lack the guidance of professional organizations, resulting in their lack of timely recognition of the lack of management mechanism. {page_break}

The official said that there were three kinds of consequences for the unsuccessful Enterprises: the first outcome was to start the "big shuffle", to replace all the key personnel and institutions responsible for the listing work, and to re declare them; the second outcome was to sort out the problems of the enterprises themselves, carry out rectification, and report them again after the completion of the rectification; the third outcome is that the enterprises completely abandon the idea of listing, and no longer apply for listing, or turn to the overseas listing path.

Revaluation of listed companies' motives

Li Kailuo said that compared with the rationality of capital inspection of enterprises, enterprises are very puzzled about finding capital, and even do not know why they are listed. He said that there is no particular outstanding performance and profit model of textile enterprises, it is difficult to get the attention of the capital market, whether it has unique characteristics is the weight of the handshake of the clothing enterprises and capital.

It is reported that the main obstacle for clothing companies to apply for listing is from the marketing network management, and the SFC's audit of chain enterprises' channel management is more and more stringent. The textile and garment enterprises listed on the list are mostly investing in expanding production capacity and marketing network. After many textile and garment enterprises have gone public, the terminal channel has expanded too fast and the marketing network has expanded. However, because of the low efficiency of single stores and the decline in average income, it has raised questions about whether the investment fund has fully played its role.

Hinur wants to use the listing financing to speed up the construction of Direct stores. In the prospectus of the company, the company will invest 540 million yuan in marketing network construction projects, and build flagship stores and 46 Direct stores. It is estimated that the remaining 37 outlets will be completed in 2011. Kaiser's initial fund-raising plan adds 23 self marketing network points, and its expansion will also be dominated by self purchase stores.

Metersbonwe will set up 85% of the listed funds to be used for shops (channel terminals), and 15% to invest in IT platform to build B2C network channels. There are 2211 stores in the United States. The fund is used to build 68 stores, 31 of which are direct flagship stores and image stores, and 37 are flagship stores and strategic franchisees.

Similarly, after the listing of BELLE, 27%-31% will be used to raise funds for various expansion plans, including acquiring company or alliance with strategic partners. 24%-25% will also be used to open new stores and plan to open 1000 new stores a year, and refurbish the stores every 3 years. In addition, it needs to build more retail sports mall.

However, after the listing, it did not invest its hosiery assets into the underwear business. For this reason, chairman Weng Rongjin of Lingsha socks Co., Ltd. explained that the "plate" of socks business is too large to enter the operation of the listed companies in a short time. They hope to use the capital market platform to rapidly expand the underwear industry and make it another pillar industry after the hosiery industry.

However, some experts pointed out that blindly cross industry investment risk is relatively large, for example, clothing enterprises to invest in real estate and other industries, from an enterprise perspective, but for those who want to make big brands, they should put more capital in R & D and other links to promote brand value.

"When clothing companies are diversifying in different areas, they should decide on their investment direction and specific projects according to their own resources and advantages." Lu Yang, an industry analyst at Huaxia Securities Research Institute, said.