Cash Flow Is The Core Factor In The Normal Operation Of Sports Industry.

< p > Nike, from the agency of Japan Tiger campaign < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a >, and to cooperate with OEM manufacturers to launch the "NIKE" brand, until it has become the world's sports giant, its light assets operation mode has become the benchmark for the development of the mobile brand.

Whether Adidas, Puma and other foreign brands, or Lining, Anta and other domestic companies, in the development process turned to light asset operation.

As a sports brand in the middle of the supply chain, capital flow, information flow and logistics are organically combined with the front end production procurement and the back-end retail distribution.

We believe that cash flow is the core factor in the normal operation of the sports industry.

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< p > 2012, the development of sports goods industry in China encountered "Waterloo", and many external diseases were exhausted.

We start with cash flow in order to further analyze sports products industry.

The cash flow analysis is carried out in three parts: net cash flow from operation activities, net cash flow generated by investment activities, and net cash flow generated by financing activities.

The sum of the three is the change of cash and equivalents in the year.

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< p > cash flow performance of operating activities varies, Lining loss, 361 degree and XTEP volatility /p

< p > Lining's cash outflow in 2012 was 931 million yuan, the only one of the 6 sports brands that recorded "loss".

Since the accrual basis is used in the compilation of the profit statement, and the cash flow statement is implemented by a cash basis, there is a link between the net cash outflow and the loss on the profit statement, but it does not draw an equal sign.

Most of the 1 billion 970 million yuan loss on the Lining income statement comes from the impairment of assets. Therefore, the net outflow of 931 million yuan in business activities may reflect its deficit situation more.

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< p > 361 degrees in 2011, revenue grew, but operating cash outlay amounted to 1 billion 344 million yuan, mainly due to a substantial increase in accounts receivable and bills receivable, that is, the increase in revenue from credit sales.

By 2012, due to the increase in receivables, deposits, advance payments and payables (the increase in recoveries and the decrease in payroll), operating cash inflows increased substantially, making cash reserves abundant.

Increasing the recovery of accounts receivable and extending the accounts payable period (the increase in accounts payable turnover days), the performance of 361 degrees in operating cash flow seems to tell us that in the face of complicated market environment, increasing capital reserves at hand is the best policy.

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< p > however, the recovery of accounts receivable will inevitably bring pressure to downstream operators. The extension of accounts payable will also make upstream manufacturers more and more suffering.

We doubt that the brand strength of 361 degrees can support such a squeeze on the upper and lower parts of the supply chain.

Of course, it is not excluded that suppliers and channel managers should be a bit stressed to make the report look good.

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The performance of < p > XTEP is similar to that of 361 degree, while Anta maintains its strong cash flow through its steady sales ability.

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< p > cash expenditures for investment activities generally decreased less than /p >

< p > no matter brand name or channel business, investment activities in 2012 are all convergent.

This is not difficult to understand. In the words of Anta chairman Ding Shizhong, the era of "making money with closed eyes" has passed.

In the face of weak demand and increasingly fierce competition in the same industry, brand operators' investment moves are more cautious.

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< p > trend is regarded as a heterogeneous brand in sports brand. In 2007, when IPO successfully raised 6 billion of its funds, the way of operation was not like a retailer, but more like an investor. Especially after the sharp decline of KAPPA business in the second half of 2010, 670 million yuan invested in Yunfeng based gold, 230 million yuan invested in Mcglaughlin, and 150 million yuan settled in the CITIC fund.

In 2012, the volume of investment products issued by commercial banks was as high as 2 billion 261 million yuan.

Actively using the funds at hand to join the financial market may be worth learning from sports companies in difficulty.

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< p > active financing to protect survival < /p >

< p > from the perspective of net cash flow generated by financing activities, Lining and 361 degree had greater moves in 2012, and each of them issued a convertible bond of about 750 million yuan to replenish funds.

Lining's situation is more serious. Facing the two challenges of "business mode pformation" and "channel reorganization", raising enough cash is the top priority of the current work.

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< p > in the second half of 2012, Lining has made great efforts in the pformation: 1. large-scale channel inventory repurchase; 2. integration of inefficient stores; 3. increasing market research input, developing the best selling SKU portfolio (A+ product portfolio); 4., optimizing the ordering mechanism, and trying to quickly respond to the supply chain.

Every change of Lining needs financial support, while Lining's capital stock is the least among several sports brands.

It is hard for us to be optimistic about Lining's future.

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< p > bank lending is an important channel for sports brand dealers and channel financing. In 2012, except for KAPPA and 361 degrees, the major sports brands and Baosheng bank loans increased greatly.

The top three loans were Baosheng (1 billion 972 million yuan), Lining (1 billion 450 million yuan) and Anta (1 billion yuan).

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< p > we think that compared with brand dealers, the pressure of channel business funds is even greater.

Baosheng expands its business through self run and joint operation (first injection of better regional sports agents, if performance is up to standard).

However, because most of the business of joint business is concentrated in domestic brands, and the inventory backlog and sales shrunk in recent two years, many agents are heavily indebted. This has increased the financial pressure of Baosheng and has had to increase its financing to help its channel operators improve their operation.

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Compared with Baosheng, BELLE's sports products business has a good momentum of development. < p >

As BELLE sells 90% of its products from Nike, ADI and other first-line sports brands, with its strong brand influence and channel sinking strategy, BELLE sports products business revenue and gross profit performance are relatively stable.

Moreover, the first-line brand is more effective in helping channel businesses, so BELLE's agency business is still expanding even though it is facing the problem of discounted sales promotion and single shop growth.

In addition, with the support of a strong women's shoe business, BELLE has plenty of capital and is very competitive as a sports product distributor.

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< p > look at the future competition pattern from the stock of capital < /p >

< p > the stock of capital (cash and equivalents + bank deposits) at the end of 2012 provided us with the ranking of several domestic sports brands.

Anta (4 billion 990 million yuan) and KAPPA trend (4 billion 980 million yuan) are among the two richest in the sports industry.

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< p > farewell to crazy growth and market entry adjustment period.

In the next two or three years, the M & A events in the sports goods market will probably increase, and the competitive big brands will stand out.

But will there be a takeover between several sports products? < /p >

< p > combined with the market value of each brand, we can not help but imagine the future competition pattern.

At present, the sports brands whose market capitalization is smaller than Anta and the trend of capital reserves are Lining, PEAK and 361 degrees.

In particular, PEAK, whose market value is only 2 billion 700 million yuan, jokes that the Jinjiang enterprise, which focuses on basketball and the first to create a brand, will be acquired in the future competition. Of course, Anta's own basketball product is already the core business. On the face of it, there is not much benefit to integrate PEAK.

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From the perspective of cash flow, we expect that Anta will become the core of the sports market in the next two to three years, and there will be some acquisition actions. XTEP will continue to develop in the direction of leisure sports and form a differentiated competition with Lining and Anta. Lining will continue to reform, but in view of the weakness of its capital chain, the adjustment period will be quite long.

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< p > heavy crossroads < /p >

< p > in view of the problems of market saturation, serious homogenization of products and unclear positioning of consumers, domestic sports brand manufacturers, manufacturers and channel traders are facing increasing pressure.

For brands, after the wholesale mode meets the ceiling, the new business model must not be formed in the short term. Therefore, adequate capital and stable cash flow are the basis for long-term change.

When the seller's market is pformed into a buyer's market, is it a professional retailer (vigorously developing proprietary business) or an innovative wholesaler (a more scientific distribution mode)? The Chinese sports brand is walking at the crossroads.

It is undeniable that cash flow will be the lifeline of changing sports brands.

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