Hugging The Capital Driven Era Of High-End Clothing Brand Enterprises To Accelerate The Listing

On December 9, 2015, the Executive Council of the State Council deliberated and adopted the decision to authorize the State Council to adjust the relevant provisions of the "People's Republic of China Securities Law" in the implementation of the stock issuance registration system reform.

According to industry experts, the registration system will be launched in Shanghai and Shenzhen stock markets in April 2016 as soon as the relevant processes are successful.

In the previous 1 months, the securities and Futures Commission announced that it had suspended the 4 month's IPO restart and postponed the issuance of 28 companies under the current system.

The SFC will further reform and improve policies and measures for the IPO system.

The "13th Five-Year plan" proposed that we should actively foster a pparent and healthy capital market, push forward the reform of stock and bond issuance and trading system, raise the proportion of direct financing and reduce the leverage ratio, which is the general direction of capital market reform.

Whether it is IPO restart or registration system implementation, is a logical matter.

Accelerated listing of garment enterprises

After 4 months' suspension in November 6, 2015, IPO (initial public offering) pre disclosure, IPO and IPO trial will be fully started.

This IPO restart, clothing enterprises have appeared in the capital market.

Sanfo outdoor, an outdoor apparel company, has successfully landed in the Shenzhen Stock Exchange as one of the 28 enterprises to postpone the release of IPO.

Since its purchase in December 1, 2015, Sanfo's outdoor share price has risen from 9.42 yuan / share issue to 35.19 yuan / share as of December 23rd.

At the same time, after the IPO restart, the first batch of 85 enterprises appeared in the pre disclosure list of the SFC IPO. These new faces include 3 clothing enterprises, the daily fashion (Broadcast: broadcast), the DAZZLE (DAZZLE) and La Natsu Bell (Chapelle), all of which plan to land on the Shanghai Stock Exchange.

Statistics show that the daily fashion and the A fashion submitted a declaration to the SFC in September 2015. La Natsu Bell decided to return from the Hong Kong stock to the A shares as early as the first half of the stock market hurricane, and submitted a declaration to the SFC in October 2015.

In fact, the garment companies that are queuing up for IPO are far more than three. IPO paused before the list of Shenzhen Mass Phil fashion, Xiamen Hsing ho shares, Guangzhou's Finnish dress, Shanghai's Zheng fashion group, Ningbo Taiping bird fashion dress, Sichuan redo Bohr dress and other garment enterprises also resumed normal audit status.

New faces and old acquaintances, as of December 2015, a total of 12 garment companies queued to go public.

Among the 12 enterprises, Nikon, Di, Mass Phil, La Natsu Bell, Xin He, an Zheng, and Taiping bird are all women's clothing enterprises or main brands, including women's clothing enterprises. In 2015, the listed enterprises such as song Li Si, red dragonfly, Hui Jie share, blonde rabbi and other enterprises also came from women's clothing, women's shoes, underwear, maternal and infant supplies and other women's clothing related industries.

Related experts analysis, after men's wear, casual wear, sportswear and other enterprises listed band, the band of women's clothing enterprises listed has arrived.

The women's clothing industry, due to the strong individuality of products and design and the decentralization of market concentration, is bound to undergo a stage of capital promoting brand development and integration, giving birth to a more monopolistic and comprehensive women's clothing brand group.

At the same time, looking at the clothing companies that have been listed and listed all the year round, besides women's wear, they also involve men's wear, sportswear, maternity and infant supplies, children's wear, underwear, shoes and clothing, leather goods, casual wear design, home textiles, outdoor products and other industries.

This trend is consistent with the acceleration of capital market reform, the evolution of the clothing industry to the "greater" connotation, and the increasing demand for consumption.

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With the rapid development of new economic mode, the pace of landing on the capital market of online clothing brands will also accelerate. For example, Guangzhou Hui Mei dress, which has been searched for 342 million yuan strategic investment, may become the first online clothing brand to be listed.

And the clothing companies that choose to list will adopt more brand operation mode.

Some of the business owners are more prominent, but in the prospectus they also reveal that after the listing, the plan will strengthen multi brand operation, develop multiple brands or acquire more brands.

This is the nature of capital, and also the embodiment of the operation rules of the capital market. It is also the requirement of the channel integration, consumption demand and the upgrading of the management mode of the garment industry.

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At the same time, most of the brands listed on the market are located in the high-end market.

Positioning high-end high-end sales have gross margins, Shanghai La Natsu Bell clothing, although located in the public casual wear, but in the first half of 2015, its gross profit margin was 63.56%, higher than that of Langer, in fact, it is also in the middle and high-end section.

Ningbo Taiping bird fashion apparel is positioned as a mid-range casual wear market. Its gross profit margin in the first half of 2014 was 55.59%, higher than that of Smith Barney and haolang's home.

In July 2015, the China Apparel Association released the list of top 100 enterprises in the clothing industry sales profit in 2014. Mass Phil, di Su, Xin he and an Zheng occupied 1 - 4 place respectively.

This also shows that the excellent enterprises in the clothing industry have invested in the embrace of the capital market.

Embrace capital driven Era

Judging from the rapid development of the registration system and the establishment of multi-level capital market, the 12 garment enterprises will visit the capital market successively, and thus become a public company formally. Through market value management and capital operation, the enterprises will further develop and grow, accept the baptism of the capital market and eliminate the choice of the public investors, which is equivalent to the "adult ceremony" in the growth process of the garment enterprises.

In the future, the "adult ceremony" will be far more than more than ten garment enterprises.

For the garment industry with opportunities and challenges, driven by the main factors such as manufacturing, sales and brand, nowadays capital has become a key factor in driving the development of the industry and the development of the garment enterprises.

These 12 garment enterprises show some common characteristics, such as women's clothing enterprises have been listed, positioned in the high-end market, the listed industry sectors are fragmented, reflecting that clothing enterprises need to further promote enterprise development through the capital market, and take the initiative in the future market pformation and integration.

The trend of mutual demand and integration between the garment enterprises and the capital market will be irreversible and increasingly close.

Despite the ups and downs of the capital market in the past few years, the apparel listed companies are in the middle of the whole industry sector. Clothing enterprises and private equity funds have established several industrial funds, and capital movements and M & A activities are active. In addition to A shares, the newly listed clothing enterprises in overseas, new three boards and other multi-level markets are constantly in shape.

In October 8, 2015, Vitoria's Secret largest supplier, Jeanne, a maker of seamless underwear, was officially listed in Hong Kong, and the Cosplay role played.

The Zhejiang Yiwu enterprise Chinese party culture has also landed in Hongkong's main board market.

It is reported that Jiangnan Buyi is also planning to IPO in Hongkong next year.

In addition, Mr Wiseman, who had appeared in the IPO queue of A shares, chose the new three boards and was listed on the new third board in October 8, 2015.

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Rough statistics, in the 4 months suspended by IPO, more than ten textile and garment enterprises have landed on the new third board market.

The reform of capital market also coincides with the capital demand of enterprises.

With the acceleration of registration system, the construction of multi-level capital market and the increase of financial market reform, the degree of integration between garment enterprises and capital markets will be further deepened.

From the perspective of the new IPO system, the public offering of 20 million shares of small cap stocks will cancel the inquiry link, reduce the issue cost of SMEs, and alleviate the financing difficulties of SMEs.

In addition, entering the capital market also promotes the clothing enterprises which are mainly private and "rash" to improve their corporate governance structure. Through equity incentive, they can better retain and attract talents, enhance brand effect and enterprise credit level, so as to better compete against the surging domestic consumer market and remodeling of the global apparel industry chain.

All these indicate that there will be a new wave of clothing enterprises going public in the future.

But before going public, clothing companies should consider how to make better use of capital market rules and how to formulate appropriate capital strategies, deciding whether to merge, create or cooperate, and how to manage capital operation and market value better so as to avoid being prey to others in the capital market.

In the context of the upcoming registration system, both listed and listed companies should familiarise themselves with this system as soon as possible, take the initiative to adapt to the new institutional environment under the registration system and face the opportunities and challenges brought about by this new regulation.

Capital change under registration system

"Any enterprise can be listed, but time will prove everything", a famous Wall Street saying, at this time to describe the upcoming registration system, it is more appropriate.

Registration system, as the name implies, means that an enterprise can issue shares by registering its identity on the stock exchange.

Prior to that, the SFC approved the way to determine which company has the qualification of initial public offering (IPO).

Although the fate of listed companies is determined by their own performance and potential, the IPO process is very long.

After the completion of the share reform, the company needs to achieve three consecutive years of profit, totaling more than 30 million, and then undergo at least half a year's guidance period. It also has many links such as acceptance, meeting, inquiry, feedback, pre disclosure, preliminary examination, trial meeting, approval and so on. This long interrupted process will set obstacles to the normal financing of enterprises.

Under the registration system, the enterprises can not veto the listing request if they submit relevant materials and ensure the authenticity of the materials according to the regulations.

However, this does not mean that there is no threshold and non substantive audit of listed companies. Instead, the listed companies are handed over to the market, and the market determines the success or failure of the issuance of listed companies.

As of December 14, 2015, the number of IPO queuing companies has reached 688.

Under the current stock audit system, it will take several years to digest. Once the registration system is implemented, these listed companies only need to accept the test of the market, be able to go up and down, do not go up and retreat, and the middle process will not consume much time.

Xu Xin, a senior macroeconomic commentator, said that the adoption of the registration system reform bill by the State Council is the first legally binding timetable for the registration system reform of Chinese enterprises.

In view of this, we should not be confined to capital market to observe the IPO registration system reform, but we should interpret it in the context of "supply side reform".

"IPO registration system is the" supply side reform "of China's capital market, because this is the reform of supply and demand balance of capital market and market price determination.

Xu Xin also said that under the "supply side reform", the supply of IPO increased, and the "excess earnings" of listed companies would be greatly reduced.

And some inferior companies will be delisted without market conditions, instead of "immortal birds". This will effectively enhance the enthusiasm of listed companies to create value and play the role of survival of the fittest.

"Delisting has always been a heart knot in China's capital market.

The listing of enterprises is equivalent to getting a piece of "no death gold medal". In any case, serious violations of law and regulations, listed companies can avoid delisting, and most of them can sell their listed companies' qualifications to other enterprises through restructuring.

The benefits of this "shell resource" will also disappear in the registration system.

Xu Xin said that entrepreneurs also had to change the speculative mentality of "making money and go away". Outstanding entrepreneurs who were innovative, practical and focused on internal cultivation were more likely to stand out.

Johnny Liu, an expert in the financial field, also believes that, in essence, there are two main objectives in the registration system reform: the first is to solve the problem of high IPO price, high price earnings ratio and high raise by solving the imbalance between supply and demand. It is precisely because of the size and scale control of the listing that the imbalance in stock supply has created the three highs. The registration system is to create an environment of balance of supply and demand; the second is to reduce the examination and approval links by administration, improve the efficiency of issuing, and reduce the rent seeking power.

"Judging whether the issuer's continuous profitability is the biggest difference between registration system and approval system".

Luo Yunxiang, an analyst at securities company, believes that the abolition of continuous profit judgment will enable more SMEs to raise funds publicly to the public through listing, which is in line with the direction of reform to support SMEs financing.

The registration system has greatly reduced the listing threshold of small and medium-sized private enterprises, and whether it will lead to a blowout of listed companies. Luo Yunxiang said that the number of listed companies will increase significantly, but because centralized distribution may lead to undersubscriptions or lower valuations than certain expectations, some enterprises will not be allowed to start issuing immediately if they are permitted to register.

Moreover, the characteristics of registration system are wide entry, strict management, authority and responsibility, and pparent information.

Objectively speaking,

Most of them start from grass roots and take family based management as the main business. Many enterprises have problems such as unclear property rights, non-standard management and imperfect financial system. This will undoubtedly become an obstacle to the listing of these small and medium-sized garment enterprises. Even after the "packaging" of intermediaries has been implemented, the enterprises will face severe supervision and even heavy penalties.

At the same time, the securities and Futures Commission said that the listing of enterprises under the registration system is not a swarm, but it still needs "first come first served" and the implementation of queuing system.

Therefore, the clothing companies that are going to be listed should also take the time to take the initiative to link up the relevant organizations and make preparations for the preparatory work as soon as possible.

In this way, once the new system is implemented, it will take the lead.