BGHL, The Big Shareholder Of Baozi, Increased 6.8%

In the announcement, the company's business is increasingly being hit by China's macro trend, coupled with the central anti-corruption demand for luxury goods, the company is under pressure from sales and profit margins, while operating costs are rising due to store rentals and staff costs.

In order to enhance brand awareness and international exposure, the company decided to insist on renovating and opening flagship stores.

This will lead to high short-term costs and great impact on sales. This consolidation period will continue throughout 2015 and thereafter, and the company will not pay dividends. Therefore, it is appealed to shareholders to accept the offer of baozi privatization.

about

3 Hong Kong dollar mandatory offer, many shareholders expressed anger and dissatisfaction on the social platform, calling the "big shareholder shameless, small shareholders helpless, the Hong Kong Stock Exchange incompetence", denounced the big shareholder Chen's brother's motive is not good.

The price of baozi was at about HK $30 between 2007 and early 2008.

After the plunge, it reached a high level of HK $25 in the early 2010 years, and its performance declined in the past three years. The stock price declined all the way. In the first half of June 30, 2014, the operating profit of baozi fell by 47.3% to 205 million yuan, and its net profit was 54 million 965 thousand yuan, a sharp decrease of 60.7% yuan from the 139 million 700 thousand yuan in the same period of the previous year, with a diluted earnings of 0.10 yuan per share.

Gross margins fell slightly by 40 basis points by 81.5%.

The median income declined by 10.3% to 965 million yuan (RMB, the same below), which was 1 billion 76 million yuan in the same period last year.

Among them, the retail revenue decreased by 10.1% to 976 million yuan due to the weak consumption in China's luxury market, and the other income fell 11.8% to 99 million 500 thousand yuan.

At the end of the first half of this year, the Group operates 327 retail outlets in mainland China, Hongkong, the United States and Canada, a decrease of 25 compared with the same period last year.

Excellent judge: Ports has become an old brand in the minds of consumers. What is the relationship between Huang Hua and us yesterday? Small and medium-sized investors are using this opportunity to cash in, even if the share price is far below psychological expectations, at least to avoid the next storm in the consumer goods industry.

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In January 8th, Baozi announced that BGHL was priced at HK $3 per share, plus a total of HK $112 million to increase its 6.8% stake.

After the paction, BGHL's shareholding increased from 33.3% to 40.1%, and has triggered a comprehensive takeover offer, involving about HK $996 million. If the total amount of shares acquired at HK $3 per share is 90%, it will be delisted from the HKEx.

Regarding the reasons for issuing the offer, Baozi pointed out that because the business is increasingly being hit by China's macro trend, coupled with the central anti-corruption, the demand for luxury goods has collapsed, and the operating costs of store rentals and staff costs have been rising. The company is under the pressure of sales and profit margins downward.

In order to enhance brand awareness and international exposure, the company decided to insist on renovating and opening flagship stores.

"This will lead to high short-term costs and great impact on sales. This consolidation period will continue throughout 2015 and thereafter, and the company will have no dividend payment. Therefore, it is appealed to shareholders to accept the offer of baozi privatization."

For this increase in behavior, Cheng Weixiong, general manager of clothing experts and Shanghai Liang Qi Brand Management Co., Ltd. believes that the whole garment industry is in a depressed market and the performance of baozi is not ideal.

Yu Ming (alias), who has had business contacts with Baozi and has long been concerned about baozi, has also told New Financial reporters that when the market is bad, the capital market will be empty, and the minority shareholders will sell stocks. "In this process, the market value of baozi will be reduced. Instead of such a big shareholder, the repurchase will at least control or stabilize the stock price and not fall too low".

Step by step, "at present, the whole market is underestimated. After the repurchase of major shareholders, if the capital market improves, the sale of shares can also be appreciated."

Using such a large sum of money to buy back shares indicates that "big shareholders are not bad at all."

Public information shows that BGHL is a wholly owned Affiliated Companies of PIEL, and PIEL is equally owned by Kenneth Chan and Chen Hanjie, executive director and CEO of baozi.

According to Yu Ming, the main business of Baoji, a listed company, is clothing, but major shareholders also have other businesses, such as commercial real estate.

A former executive of baozi also told the new financial reporter: "the profits of the group in recent years come from a small number of listed companies, and other businesses have done better."

In other words, in terms of BGHL's current capital strength, buypo's share price is "no problem".

"If the financial resources permit, then the repurchase will make the initiative of larger shareholders bigger. Finally, if privatization is really done, the majority shareholders will have more rights to decide the strategy of the company."

A person familiar with Hong Kong Stock Investment said to the new financial reporter.

According to the person, the listed companies in Hongkong are very pparent. Every aspect of the company's decisions and plans must be discussed regularly with the shareholders' representatives.

Yu also confirmed to reporters that in the past two years, Baozi has also made some adjustments, including changes in the internal management structure of family businesses, which all directly affect the future of baozi.

In his view, too much interference from outside is not necessarily a good thing for baozi.

Nowadays, Baozi is totally different from what he had just entered China.

"At that time, it needed listing and financing to drive its business development. Now, apart from everyone who is not optimistic about the capital market, it also has enough strength to develop in a relatively closed environment."

Yu Ming frankly.