China'S Leather Shoes Market Is Competitive, And AOKANG'S IPO Advantages Are Highlighted.

Since the macroeconomic downturn continues, it has since been launched.

The international market has been rising, and its share price has continued to be strong, which is in sharp contrast to China's sports stocks.

Statistics show that in the past 60 days, 29 research reports have released AOKANG international rating, and the overall rating is overweight (see table 1-3, the 1-3 stock organizations' forecasts of AOKANG international EPS, PE and 2012-2014 years' revenue.

The first venture stock is a highly recommended rating.

The agency said that in conjunction with the valuation of A shares listed companies, and taking into account the acceleration of AOKANG channel expansion and brand operation to enhance the valuation premium, giving it 22 times PE in 2012, implied 22.7% of the uplink space.

After the listing, AOKANG International's performance basically accorded with the prediction of major securities institutions. From April 27th to July 6th, the share price and market value rose all the way, with a maximum of 28.60 yuan per share.

Recently, the stock price has been affected by A shares' five week negative effects.

Explanation of reasons

AOKANG international is a company specializing in R & D, production and retail of men's / women's leather shoes and leather products. The high-end products are mainly located in the domestic market, accounting for 88%.

Its own "AOKANG" and "Kanglong", "red bird", "beautiful beauty", "Wanli Wei" 5 independent brands, while the company also for international famous brand GEOX and other foundry production.

The mode of operation is the combination of independent design, self production and OEM, joining sales channels. In 2011, revenues and net profits were 29.7 yuan, 460 million yuan, 4512 shops (316 stores in Direct stores, 161 outlets in independent stores, 4035 in distribution terminals), and the proportion of men's leather shoes and women's leather shoes was 50% and 43% respectively.

As a leading enterprise in leather shoes industry, leather shoes sales and market share are among the best.

The market share of "AOKANG" brand ranked second in China's male leather shoes market, reaching 5.79%, while the East China region ranked 6.64% in the male leather shoes market.

The leather shoes market is growing steadily, and the multi-level competition pattern is formed.

According to the National Bureau of statistics, China's annual consumption per capita footwear is 1.9 pairs, compared with Europe, Japan, Japan and South Korea, China's per capita consumption of footwear has considerable room for development.

China's men's shoes retail market has been in the 9.2% compound year since 2006.

Growth, according to Euromonitor, predicts that men's shoes will grow at a compound annual growth rate of 11.2% over the next 2011-2015 years, and that women's shoes will grow at a compound annual growth rate of 11.7%.

There are many domestic leather shoes market, forming three big, middle and low end markets.

Women's shoes, led by BELLE, have a market share of 46%, showing an oligopoly pattern. The dominant position in men's shoes market is coming out. AOKANG occupies the dominant position. The market share of AOKANG's brand is second of domestic men's shoes, and Kanglong's brand is the number one among casual shoes.

Multi brand operation, outstanding marketing ability, and perfect sales network.

The company adopts multi brand mode operation, and the 5 brands occupy different market segments, increasing the bargaining power with the powerful shopping malls and department store terminals.

Its Kanglong brand grew by 187% at the end of 2011 compared with 2008, and the number of red Firebird outlets increased by 306%.

From the pricing point of view, the price of the 5 major brands is in the 300-500 interval, effectively avoiding the competition of "pseudo ocean brand". From the brand point of view, adhering to the strategy of the first brand of the local shoe industry, taking the Beijing Olympic Games leather supplier as an opportunity to enhance brand promotion and brand image; from the perspective of channel layout, with the upgrading of brand image, gradually shift from the focus of the three or four line layout to the two or three line, and take the East China as the foundation to develop to other parts of the country.

From its inception, AOKANG brand has continuously innovated marketing planning, and has carried out various forms of marketing, including event marketing, Olympic marketing, network marketing, entertainment marketing, interactive marketing, implantable marketing, experiential marketing, and happy marketing, so that the company's brand awareness and reputation have been greatly improved.

The company takes the "regional first" as the core policy of market development, and gradually forms a nationwide marketing network. In 2011, there were 4512 stores.

Coupled with strong R & D design capability and fast supply chain reaction mechanism, the company's performance growth rate is higher than the industry average level.

The company plans to raise funds of 1 billion 22 million yuan, mainly to marketing network construction, information system construction project, R & D center technical pformation project.

300-500 yuan price single brand most suitable for 4000-5000 stores, the company's multi brand store space is still large, at the end of this year is expected to open to 5700 stores, the current house prices have a downward trend, store robbing opponents are also withdrawing from the market, is a good time to raise funds to open shop; raise investment projects will expand the company's coverage of the terminal market, enhance the company's independent design ability, is conducive to the future profitability and market share.

The sales area of AOKANG international is mainly concentrated in the East China region. The proportion of revenue achieved is over 50%, and sales in the West and central China account for about 12.5%.

Under the background of domestic consumption upgrading, the company will have huge space to open up the market in Southern China, North China and Northeast China in the future.

Protruding the predominance of the listing

The competition in the footwear market is relatively relaxed and the brand position is relatively stable, making the leading role of the company obvious. The company will make full use of the dividend on the market so as to fully build the first mover advantage in comparison with its competitors in the next year.

Brand retail enterprises will greatly enhance brand awareness after listing. The company's current financial strength can play a "first mover advantage" in improving operation management and terminal channel layout, strengthening the company's competitive advantage in channel and management, and improving the product category, brand building, channel structure optimization and operational efficiency improvement.

Dongxing Securities said that as the leading domestic product of men's shoes, AOKANG's international operation mode is mature and its brand influence is extensive. Listing dividends are expected to strengthen the leading position. As the sole brand of listed men's shoes, the premium of men's shoes should be higher than men's wear (the current dynamic PE of men's clothing in 2012 is around 20 times).

Risk warning

At present, the slowdown in domestic textile and clothing consumption may affect footwear consumption, resulting in lower than expected performance.

According to the statistics of the China National Business Information Center, the overall sales growth rate of the clothing market in the first half was not as good as that of the same period last year. The retail sales of clothing commodities increased by 9.82% in 1-6 months, and the difference was 12 percentage points from the same period of last year. It has narrowed significantly compared with that in 1-2 months, as shown in Figure 2.

In the 1-6 month, the volume of clothing retail sales increased by 0.99%, and the difference from the same period last year narrowed to 7.21 percentage points. The gap was also significantly lower than the beginning of the year, as shown in Figure 3.

Galaxy Securities, Mali researcher said that by the order performance lock, enterprise development stage and other factors, it is expected that most of the brand clothing 2012H1 and even 2012 remain high performance growth.

However, from the perspective of terminal retail, it has been relatively general since September 2011, and there is no hope of returning to high growth in the short term.

Based on the determinacy of performance growth and the general two factors of terminal retail, we should maintain the prudent recommendation rating of brand clothing.

This year, the A share market continued to slump, last week (July 16th -22) has not changed the low profile finishing situation, Shanghai and Shenzhen market has reached a recent low and fell 0.79%, 4.69% respectively, estimated that this week will continue to maintain the trend of consolidation, 2200 points and 9600 points are not too great hope.

Although the company has been growing against the market in recent years, it has become very weak.

With the continuous sinking of international brands such as Nike and Adidas, the competition in the two or three tier market has intensified. Local sports such as Anta, XTEP and 361 degree have slowed down the pace of opening stores. Although the market positioning is different, the expansion of the company's channels is also facing indirect competition from international brands, which may not be as fast as expected.

As a new stock, AOKANG will take time to gain investor recognition although its future profit can be expected.

Sina investment survey shows that the "strong buy" accounted for 63.8% of the total, advocating "strong sell" accounted for 32.6%.

In addition, there are risks in store expansion, relatively lagging behind in management, and too long brand building cycle.