Is Baozi Really Going To Quit The Clothing Industry After Encountering Difficulties?

"In the history of Booty, fashion is a core link. Booty International Group is involved in many fields such as real estate, high-tech, finance and insurance, but its core business is fashion. We will not quit this industry."

Zhang Ling (a pseudonym), an analyst in the clothing industry of a securities firm, said to the reporter: "The equity receiver named in the announcement, Dongfang Fuhai, is a well-known PE in the industry. Now there are a lot of shell resources in the A-share market. It is not impossible to help Baozi go public in the A-share backdoor through PE operations."

In fact, in January 2015, Baozi's main shareholders Chen Qitai and Chen Hanjie purchased 6.8% of Baozi's issued share capital from Fidelity Fund Hong Kong at HK $3 per share, with a total amount of HK $112 million, triggering a mandatory comprehensive offer. If successful, Baozi will be privatized and delisted. However, due to various reasons, the tender offer was not completed and the privatization of Booty was blocked.

This equity sale may be another attempt at the operation of Booty Capital. Clothing watchers believe that under the condition of low performance and stock price, some traditional clothing enterprises have increased their stock price through various means, including the acquisition of mature e-commerce teams on Taobao Tmall and the layout of O2O; Diversified development; Sell the main clothing business and turn to commercial real estate and other businesses. However, "capital means are just 'speculation', and to improve performance, we still need to focus on the development of main business".

It is believed that Booty is seriously underestimated in the H-share market, or it is an important reason why Chen Qitai hopes to move to A-share market. He said that Booty "got a market value of about HK $3.1 billion in the H-share market, which is less than RMB 2.6 billion." And "the P/E ratio of A-share fashion companies can reach 50~80 times. If everyone conservatively estimates at 50 times, the market value of (Booty) is about 13.7 billion yuan.

In recent years, the performance of Borz's share price in the H-share market has been sluggish. At the time of listing, 3 Hong Kong dollars soared to 31.5 Hong Kong dollars in 2008. Since 2010, the share price of Boots has begun to decline all the way, falling to 2.34 Hong Kong dollars at the end of 2014. As of June 8, 2015, Baozi The closing price was only HK $5.63.

As for Chen Qitai's expectation of returning to A-share market, Zhang Ling analyzed that the price earnings ratio of the fashion industry is 50~80 times, first of all, in the current bull market, but now at 5000 points in Shanghai, equity market How long dividends will last is hard to predict; Secondly, for example, the fact that Lucie can achieve a high P/E ratio tells a big story about the capital market, such as its layout of the Internet and mobile Internet pan fashion culture industry. Whether or not Posie can tell its own story is hard to say.

More importantly, the last few years Women's wear market The situation of prosperity is no longer the case. The excessive competition in the high-end women's wear market has made Borz lose its previous advantages. As an international medium and high-end women's wear brand image, Borz has a first mover advantage in the domestic market over the past decade, but now the first and second tier luxury clothing brands in the international market are entering the Chinese market through agency or direct marketing. At the same time, domestic medium and high-end women's wear brands such as Golith, Masefield and other new competitors participate in the competition, squeezing their market share.

And Borz's products and brands are also facing the dilemma of aging. Zhang Ling believes that women's clothing needs to be updated quickly, but Borz's old customers are gradually losing as they get older, and they can't catch the needs of young consumers. "If we cannot focus on innovation, even if we return to A-share market, we will not be favored by investors," Zhang Ling said.