AOKANG Shoe Industry Seeks New Road With Technology To Buy Lanting Pavilion

On Wednesday, before the US disk, LightInTheBoxHoldingCo., Ltd. (NYSE:LITB) of Lanting Pavilion, China's foreign trade supplier, announced its strategic investment in AOKANG footwear industry in Zhejiang, China. AOKANG shoes bought 25.66% stake in Lanting Pavilion's stock at a price of about $77 million 340 thousand per share and became the majority shareholder of AOKANG.

News prompted Lanting Pavilion rally Wednesday to soared 15%.

The purchase price of $6.30 per share is 12.25% higher than that of Lanting Pavilion's closing price of 5.13 dollars on Tuesday. Lanting Pavilion said that in March this year, Li Keqiang's "Internet +" strategy hoped that traditional enterprises could turn to technological innovation.

At present, the traditional retail enterprises in the Chinese mainland market really have little to do in the Internet. Most of them just use this concept to try to "make a difference" in the stock market or to create a IPO price for the future.

ZhejiangAokangShoesCo., Ltd. Zhejiang AOKANG shoes is a A share listed company. The group has Aokang AOKANG, Kanglong Kanglong, Redess red bird, MeiRie's beauty beauty and other brands, and has a total of about 5000 outlets.

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Wenzhou international company's virgin shoes production base in Wenzhou, the industry supporting advantages are outstanding, the current own capacity can guarantee the product quality of the company, while the product advantage is prominent, the company uses funds raised to counter the trend to build a large professional shop.

We believe that the company's investment in large specialized shops is in line with the future development trend. As a platform mode, the International Pavilion will provide a strong guarantee for the company's steady growth in the future.

We are optimistic about the accumulation of multi brand operation and store efficiency. With the continuous promotion of the International Pavilion and the continuous filling of new brands and new categories, the main business is expected to reverse significantly.

At the same time, business exploration related to customization is expected to significantly enhance the company's valuation level.

It is estimated that the net profit attributable to the parent company in the 2015-17 years is 3.50, 4.29 and 507 million yuan respectively, increasing 35.36%, 22.74% and 18.25% respectively, corresponding to EPS of 0.87 yuan, 1.07 yuan and 1.27 yuan respectively, taking into account the PE interval of the comparable company in the 30x-58 x interval, giving the company 2015 40xPE, corresponding to the target price of 15 yuan, buying rating.

The main uncertainties are: terminal demand continues to deteriorate, new brand construction fails to reach expectations, and big store construction fails to achieve expectations.