Interpretation: The Key Words Behind The Notice Of Clothing Listed Enterprises

In August 31st, four ministries and commissions, including the SFC, the Ministry of finance, the SASAC and the China Banking Regulatory Commission jointly issued the notice on encouraging mergers and acquisitions, cash dividends and repurchase shares of listed companies, calling for further deepening reform, decentralization and decentralization through various ways, vigorously promoting mergers and acquisitions of listed companies, actively encouraging cash dividends of listed companies, supporting listed companies to repurchase shares, and improving the efficiency and vitality of capital markets. We should further improve the quality of listed companies, establish and improve the investor return mechanism, enhance the investment value of listed companies, promote structural adjustment and stable and healthy development of capital market, promote the reform of state-owned enterprises and enhance the vitality of state-owned economy. What kind of influence does this notice have on garment enterprises? How should clothing enterprises look at this notice with Xiaobian?

about Apparel listed companies There are several key words behind the notice, which are: "mergers and acquisitions", "cash dividends", "share repurchases", "investors' returns" and "investment value". This notice is a turning point of the government's rescue of the market, that is, the "bail-market" shift from violence to stock index to the "bailout" of improving the capital market's participation in the main body, which represents the new idea of capital market reform, and it will also be a new opportunity for clothing enterprises to improve their intrinsic value and make it stronger and bigger by using capital market.

　　 Mergers and Acquisitions: Merger and consolidation tide hits clothing Enterprises push the boat to make bigger and bigger

There are indications that mergers and acquisitions will accelerate. At the policy level, the notice of the four ministries and commissions is clear about promoting the merger and reorganization of enterprises. Recently, the responsible person of the securities and Futures Commission answered the reporters' questions, and said that the urgent tasks at present and in the coming period include "accelerating the market-oriented reform of the merger and reorganization of listed companies". It is expected that there will be more reform measures for mergers and acquisitions. On the other hand, the IPO suspension will make the capital integration and exit ways of enterprises more turned to mergers and acquisitions, backdoor buying and other ways. Mergers and acquisitions itself is a theme that can boost stock prices and raise capital market expectations.

If the bull market's most attractive move in the capital market in the first half of the year is diversified investment and new concept of the new economy, then the next important topic may be merger and reorganization, which will push enterprises to make more capital moves. According to media statistics, on September 1st -10, the merger and reorganization Commission has reviewed the application of mergers and acquisitions of 14 companies. In August 1st -9 10, a total of 33 audits were approved, of which 11 were conditional, and 22 were unconditional.

For the garment industry, mergers and acquisitions will also enter the fast lane. After several years of transformation and adjustment, from the annual report this year, the clothing industry has gradually recovered its weather, its performance has picked up, and the stock market has been drawing to a close. Enterprises in every subdivision have shown the potential of "high quality", and the trend of industrial differentiation is getting more and more obvious. Such as Semir clothing, only monetary capital reached 31 billion, indicating that it will continue to promote the strategy of multi brand strategy and extension strategy. It is expected that more M & A activities will take place; the seven wolves whose performance is still declining will have 24 billion yuan in cash, and two investment and acquisition funds have been set up, and the investment in mergers and acquisitions is expected to be further strengthened. Hong Kong shares, Anta and urban beauty will continue to promote their multi brand strategy, mergers and acquisitions initiatives or plans.

At present, clothing listed companies are generally small and medium capitalization. Through mergers and acquisitions, enterprises that focus on intrinsic value creation will grow stronger and larger, thus giving rise to a comprehensive high value clothing group. In this wave of mergers and acquisitions, the trend of industry differentiation will be more obvious.

　　 Cash Dividend Encourage value investment, clothing enterprises focus on creating long-term intrinsic value.

Four ministries and commissions mentioned in the notice that listed companies should establish and improve the cash dividend system, maintain the consistency, rationality and stability of the cash dividend policy, and clarify the priority of cash dividends in the way of profit distribution in the articles of association. Where cash dividends are available, cash dividends should be used for profit distribution. We should encourage listed companies to increase the proportion of cash dividends in profit distribution according to the industry characteristics, development stages and profitability levels of the company. We should improve the tax policy to encourage long-term holding of listed companies' stock, reduce the cost of cash dividends of listed companies, and increase returns on long-term investment returns.

In mature capital markets, investors often get the main return through dividends and dividends rather than speculation through short-term stock price fluctuations. Enterprises with good growth, steady growth and increasing intrinsic value will often provide continuous dividends. For example, the US DuPont Co has been distributing quarterly cash dividends for more than 100 years since its announcement of its first cash dividend in the fourth quarter of 1904. Most favored by the market is to continue to provide high dividend growth stocks, and the dividend amount increases with the growth of performance. Cash dividends are meaningless for short term traders, and can bring sustained and stable dividends to long-term investors.

This has important guiding significance for clothing enterprises in the capital market. Clothing listed companies use the capital market to earn money, rely on storytelling and create a concept to elevate market value to create a temporary scenery, or to steadily improve their performance and create a long-term continuous dividend basis, and become a continuous return of blue chip stocks to shareholders and investors. During the bull market and the stock market crash in the first half of this year, the A share market has a variety of concepts, such as soaring share prices, changing the name share price soaring, and high cash in business. This irrational phenomenon is not the normal form of mature capital market. Of course, how much dividends and policies should be decided according to the different stages of development of enterprises, but the intrinsic value created by dividends and the return to investors should be a long-term direction for apparel listed companies. For garment enterprises, it is necessary to continuously optimize the competitiveness of the main industry, do fine and strong in the main garment industry. In diversified investment, we still need to focus on the integration of the upstream and downstream industries chain. We should not burn money in any way, be vigilant against the bubble of new concepts in the market, lay stress on capital stories, establish effective capital strategy, and create long-term value that can provide sustained competitive advantage.

　　 Buy back shares: enhance investment value of enterprises, clothing enterprises carry out effective market value management.

Regarding the share repurchase, the notice pointed out that the share price of listed companies is lower than the net assets per share, or the P / E ratio or the market rate is lower than the average level of the listed companies in the same industry, which can reach the preset range, and may take the initiative to buy back the shares of the company. To support listed companies to raise funds for the purchase of shares of the company by issuing preferred shares and bonds.

Share repurchase is more common in overseas capital markets, while A shares are relatively rare. In recent days, stocks fell, and Alibaba, NetEase and Jingdong announced the repurchase shares. After the announcement of the buyout, the stock price rose by 5%. It is clear that share repurchase plays an important role in stabilizing the share price and giving confidence to the capital market. Unlike common holdings, stock repurchase can write off stocks. Through repurchase, companies can change their capital structure, optimize their debt ratio and leverage ratio, and improve their efficiency. In the case of low share prices, companies often face the threat of takeovers. By repurchasing shares, the company can maintain control and prevent companies from being easily acquired.

All these, summed up, is "I am the master of my business" and actively promote the value of enterprise investment. In the case of stock price fluctuations, enterprises can not rely too much on the bail-out of the outside world, but take the initiative to share responsibility with investors by means of share repurchase and so on, transmitting confidence, increasing returns to investors, reducing speculative atmosphere, and managing effective market value. At present, most of the enterprises that buy back on the A share market are state-owned enterprises. According to statistics, since July this year, the repurchase amount of state controlled listed companies has accounted for 72.8% of the repurchase announcement of the Shanghai and Shenzhen two cities, and for small and medium-sized market clothing enterprises, they should have the initiative market value management behind the share repurchase, and the attitude towards investors' return and responsibility. This is also a characteristic of mature enterprises in the mature capital market. As for the specific strategy and timing of repurchase, it is decided by the specific circumstances of the enterprise just like dividends.

　　 Observation: the road to value

This year's capital market ups and downs, clothing enterprises also experienced a storm in the capital market baptism. An overall direction is that the pace of reform of the capital market will not stop, and the adjustment and transformation of the garment industry will continue to deepen. At the same time, the degree of integration between the capital market and the garment enterprises will continue to deepen. Behind the capital market keywords such as "merger and reorganization", "cash dividends" and "share repurchase", the way to build a mature capital market to increase investor returns and enhance the investment value of enterprises will be irreversible. This is also the only way for garment enterprises to become bigger and bigger through capital market.