Seven Wolves: Increase The Terminal Control &Nbsp; Increase The Added Value Of Products.

The seven wolves (002029) issued a private equity issuance plan in November 7th. It intends to issue no more than 53 million shares. The total amount of raised funds is not more than 1 billion 800 million yuan, which is used for marketing network optimization projects. The issue price is 34.27 yuan / share.

Enhance brand image

From 2003 to 2010, seven wolves realized the business revenue based on the increase of the number of stores by 36.29%.

With the experience of upgrading the past scale and market share, the seven wolves will increase the number of sales terminals in the weaker areas of existing terminals and emerging business circles, with 1200 flagship stores and 300 franchised stores, and 140 flagship stores and 700 franchised stores through the way of franchised business. The 60 new flagship stores will be added.

The total investment of the project is 2 billion 66 million 140 thousand yuan, including 1 billion 936 million 230 thousand yuan in construction investment and 129 million 910 thousand yuan in the bottom.

The construction period is 30 months.

With the growing maturity of consumers and escalating consumption levels, the role of sales terminal image for sales performance is still obvious.

The number of channel terminals is directly related to the market size and the market share of a specific area.

Therefore, the terminal shops which can carry the function of "brand pmission" and "channel sales" have become the top priority of clothing retailers.

First, second tier cities mature shops in the shops resources are limited, and for all walks of life enterprises to compete for the goal, at the same time, the cost is also higher.

With the continuous progress of urbanization, the construction of domestic business circles is constantly being adjusted and planned.

To seize the opportunity of booming commercial real estate and effectively occupy the high-quality shop resources of emerging business circles before the mature and stable business circle, the early layout of the target market is the focus of the clothing industry, especially the leading enterprises.

At the same time, a reasonable layout of channel terminals can also produce radiation effects on the region, and further enhance brand awareness and brand image.

Therefore, seven wolves to further strengthen the construction and upgrading of marketing channels is particularly urgent.

Further increase in gross margin

The seven wolves increased their gross profit margin from 35.22% to 41.60% in 2003-2010 years, and began to pay attention to endogenous growth in 2009.

In recent years, the company has established the strategic direction of "wholesale" to "retail". As of June 30, 2011, the company had 3576 sales terminals, including 28 living houses, 3189 exclusive stores and 359 flagship stores.

The company has 439 terminal terminals, accounting for 12.28%.

After the fixed increment project is implemented, the company's terminal will increase to 799, and the proportion will increase to 16.73%.

The expansion of the proportion of direct battalion not only strengthens the company's control over the terminal, but also gives the franchisee technical support, and more importantly, the gross profit margin of the direct store is higher than that of the franchisee. Therefore, the increase of the proportion of the direct store will further push the gross profit margin of the company as a whole.

Therefore, Orient Securities forecasts: the company's earnings per share in 2011 - 2013 were 1.40 yuan, 1.85 yuan and 2.36 yuan respectively. If the company's non-public offering is successful, the project will be implemented on schedule and give full play to the benefits, the company's rapid growth will continue to extend further, and its revenue and performance growth in 2013 and beyond is likely to exceed expectations.