Two Leather Shoe Stocks PK: Red Dragonflies Catch Up With AOKANG.

Red dragonflies and AOKANG are also born in Wenzhou. They are also the leaders of the domestic leather shoes industry. They even submitted IPO pre disclosure materials in the same year, but only one has been in the capital market for two years, and one is still queuing up. Over the past two years, red dragonflies and AOKANG have undergone some changes in the rapidly changing economic form. The two companies of the same size have gradually begun to distance themselves from each other.

　 list

Red Dragonfly rushing to IPO AOKANG has been listed for two years.

From BELLE to Anta, from Saturday to AOKANG, more and more domestic shoes and clothing brands are landing in the capital market. After two years of AOKANG's landing on the stock exchange, the red dragonfly of Wenzhou shoe enterprises also accelerated its own IPO process.

In fact, as early as 2011, the Red Dragonfly submitted IPO materials, but later due to the slowdown in the IPO, the listing process of red dragonfly has also been suspended for some time. In 2014, Red Dragonfly The prospectus appears again in the IPO pre disclosure list. Moreover, after three years, the Red Dragonfly's stock investment project has not changed significantly. It is still the total number of first issue stocks not exceeding 80 million shares. The investment and investment projects are still the construction projects of marketing channel construction and information system. Reporters noted that if the IPO recruitment project to get three years ago to compare, almost can be called "yes". AOKANG International Copy. As the leader of Wenzhou leather shoes manufacturers, AOKANG and red dragonfly almost opened the listing process in 2011, but luckily, AOKANG first landed on the Shanghai Stock Exchange in April 26, 2012.

It is understood that the red dragonfly is a collection. leather shoes The company is mainly engaged in the design, development, production and sale of leather goods and children's products. The products are mainly targeted at consumers in two or three line cities, strong economic towns and two or three tier businesses in the first tier cities. The retail price of leather shoes is between 300-500 yuan. The retail price of AOKANG leather shoes is also between 300-500 yuan. It can be seen that the two companies are quite comparable in many aspects.

Management

Red Dragonfly performance slowdown AOKANG stock larger

"The construction of shopping centers and the development of e-commerce have diverted many traditional street store outlets. The lack of consumer confidence caused by the economic downturn will also bring some pressure on the demand for consumer goods, and the overall sales revenue and profits of the footwear industry fluctuated considerably." In an analyst's view, under the background of the industry downturn, two shoe companies have not escaped the industry's performance haze. Data show that in 2012-2014 June, the Red Dragonfly achieved net profit of 293 million yuan, 257 million yuan and 129 million yuan respectively, while the data of AOKANG International were 510 million yuan, 270 million yuan and 150 million yuan, respectively, and the trend of performance growth slowed down obviously.

It also plagued the entire leather shoe industry with high inventories. In the prospectus, red dragonfly said that with the expansion of the company's marketing network terminals and the increase of sales scale, the stock held directly for the franchisee to pick up the goods also increased. By the end of June 30, 2014 and the end of 2013, the stock balance of red dragonflies was 500 million yuan, 610 million yuan and 550 million yuan respectively, accounting for 89.86%, 92.44% and 90.21% of the total inventory ratio respectively. Similarly, AOKANG International's inventories are increasing year by year. At the end of 2012, the company's stock was only 540 million yuan, and by September 30, 2014, this figure had changed to 930 million yuan.

"High inventory is a stubborn disease in the shoe and clothing industry. When the inventory is high and terminal sales are sluggish, enterprises will sell goods at a discount if they are exposed to inventory pressure, and the fall in retail prices will impact on gross margins." An industry analyst said. It is not yet known whether the Red Dragonfly sells goods by discount means, but the gross profit margin of the company is much lower than that of the same industry. The average gross profit margin of the industry listed companies in the past 2011-2013 years was 53.73%, 52.59% and 53.01% respectively, while the Red Dragonfly's gross profit rate was only 34.05%, 35.49% and 36.11% at the same time, which was lower than that of AOKANG, which was also the same as franchising.

For AOKANG, its accounts receivable may be faced with a larger risk of repayment. Although AOKANG raised 2 billion yuan in 2012, the company's accounts receivable and the proportion of accounts receivable were higher than the red dragonfly and the industry average. At the end of -2013 in the end of 2011, the proportion of accounts receivable of Listed Companies in the same industry was 21.08%, 19.55% and 19.1% respectively, while the data of AOKANG were as high as 41.98%, 28.99% and 26.33%. In addition to the accounts receivable ratio of 2013 was slightly lower than that of red dragonfly, it was higher than that of red dragonfly in the other two years.

dilemma

Red dragonfly and AOKANG shut down some stores.

"No more than 80 million shares are issued for the first time, and 970 million yuan will be raised." Three years ago, the Red Dragonfly prospectus showed that three years later, the red dragonfly, which had been pre announced, did not change the number of initial shares, nor did it change the investment projects.

According to the prospectus of red dragonfly, the company intends to further tap the potential of the two or three line market on the basis of the existing marketing channel network through the establishment of a direct independent store, that is, the company intends to increase 30 flagship stores and 100 standard stores through direct acquisition and leasing.

However, it is worth noting that for the red dragonfly, the newly opened storefront may not be the best way. Since 2014, red dragonfly has also opened 183 stores, but it closed 194 stores for various reasons. Finally, the number of shops opened was -11. Moreover, the number of stores in the company began to decrease as early as 2013. Data show that as of the end of 2012, the total number of direct and franchise red dragonflies was 4458, but by the end of 2013, this figure had been reduced to 4428, and then to the nearest June 2014, the total number of stores was 4351.

Two leather shoe stocks PK: red dragonflies catch up with AOKANG.

"In recent years, due to the difficulties in online business transformation and the rising cost of rents and manpower, most of the domestic shoe and clothing enterprises have fallen into a sluggish growth and closed up. In the backdrop of this industry's development, the Red Dragonfly's expansion is not likely to be valued by the market." A garment industry analyst told the Beijing Commercial Daily reporter.

In fact, AOKANG has also gone through the way of expanding outlets through increasing stores. In AOKANG's 2011 prospectus, the company intends to raise 876 million yuan to build a marketing channel project: it intends to open 348 stores in a few years, including 168 Direct stores and 180 stores. However, less than a year after the listing, AOKANG international has extended the construction cycle of the investment projects, while the pace of expansion of the stores has slowed down, while AOKANG international has frequently used fund-raising funds to buy financial products.

Compared with the expansion of the 130 stores in the red dragonfly, AOKANG's new 348 stores have a bigger appetite. Despite its appetite, AOKANG failed to escape the fate of more than 400 stores in 2013. With the expansion of stores, the sales expenses of the company increased. The sales cost of AOKANG increased from less than 300 million yuan in 2010 to 520 million yuan in 2013 due to the increased rental and decoration costs.

"In this case, even if the company's sales revenue has a certain degree of growth, but because of the increase in costs, the company's net profit will not increase substantially, and there will be no increase in profits." An investor at AOKANG said.

After two years in the capital market, AOKANG is well aware of the reasons for the slow development of the industry. Now, the company has slowed down the pace of opening up shop. Under the pressure of the transformation of the retail industry, the company is pushing forward the construction of the store and AOKANG International Pavilion, the famous shop and the image store on the basis of the direct layout, and realizes the transformation and upgrading of the terminal by testing the concept shop without shoes and O2O intelligent store.

When the growth rate of online shopping exceeds the sales growth of professional stores, supermarkets and department stores, the development of new sales channels has become inevitable. In the deep industry reshuffle period, it is far from enough to increase enterprises' control over the channels only by increasing the stores. When the shoe companies in the same industry have begun to seek change, red dragonfly should also seize the opportunity to expand new sales channels instead of blindly expanding stores. Otherwise, the distance between the company and AOKANG international is no longer just two years after entering the market.