Sanfo Outdoor: Future Profitability

According to the statistics of China Textile Association outdoor products branch (COCA), in 2000-2013 years, the total retail sales of outdoor products in China increased at an average annual rate of 45.62%. In 2013, the outdoor products in the Chinese market were realized.

The total amount reached 18 billion 50 million yuan.

However, the prospectus shows that in 2012 and 2013, the proportion of Sanfo's outdoor revenue growth was 11.9% and 19.03% respectively, much lower than the average growth rate of the industry.

In 2014, Sanfo outdoor revenue only achieved a single digit growth. The company achieved operating income of 304 million yuan, an increase of only 5.16% over the same period. At the same time, the company realized net profit of 27 million 851 thousand yuan, down 14.53% compared to the same period last year.

Not only that, Sanfo's outdoors net assets

Is also declining year by year.

Prospectus shows that from 2011 to 2013, Sanfo's outdoor weighted average return on net assets was 31.98%, 20.44% and 19.61% respectively.

Although the company explained that the decline in net asset yield was due to the increase in fixed assets purchased by International Building in 2013 in Changchun International Building.

But the fact is that in 2014, Sanfo's outdoor weighted average return on net assets continued to decline, only 14.44%.

Compared with the increase in fixed assets, Sanfo's outdoor store expansion seems to attract more attention.

In the 2010-2014 years, the number of Sanfo outdoor stores increased year by year, but the profit growth of enterprises was relatively slow.

In 2009, the number of Sanfo outdoor stores was only 18. In 2010, Sanfo outdoor opened 8 stores in Chengdu, Shenzhen, Shenyang, Changchun and other cities.

As of December 31, 2014, Sanfo outdoor has opened 34 stores in 12 cities across the country.

However, rapid expansion of stores did not bring about a rapid increase in profits.

The prospectus shows that there are 10 stores in 34 stores outside Sanfo.

And in the remaining 24 stores, there are 9 stores with a net profit of less than 200 thousand yuan.

In addition, Sanfo's dependence on state-owned enterprises seems to be growing.

The latest version of the prospectus shows that in 2014, the top five customers of Sanfo outdoors were PetroChina Co Ltd North China Petrochemical Company, China Mobile Communications Group Hebei branch Tangshan branch, State Grid Zhejiang Pujiang county power supply company, Beijing Stomatological Hospital affiliated to Beijing Stomatological Hospital, and Chengdu Hydropower Survey and Design Institute Limited of China hydroelectric consultancy group. The purchase amount was 3 million 417 thousand and 100 yuan, 2 million 720 thousand yuan, 1 million 407 thousand and 800 yuan, 1 million 143 thousand and 600 yuan and 1 million 36 thousand and 500 yuan, respectively, totaling 9 million 725 thousand yuan, accounting for 62.09% of the new income of that year.

At the same time, the reporter noted that in December 2014, Sanfo outdoor signed sales contracts with China Mobile Communications Group Sichuan Co., Ltd., Hainan Co., Ltd. and Guangdong branch Zhongshan branch.

According to the contract, Sanfo outdoor will provide Sichuan mobile with women's in-house labor insurance clothing with a sum of 5 million 959 thousand and 500 yuan, provide a labor insurance coat with a sum of 3 million 477 thousand and 400 yuan to Hainan mobile and provide 2 million 693 thousand yuan for the Guangdong mobile. The total amount is 12 million 129 thousand and 800 yuan.