Why Does Wumi And BBK Still Hold A Large Share Of The 100% Stake?

A plan for issuing a non-public offering stock is announced, and it is intended to issue non-public offering to three enterprises.

Among them, private enterprises, Wuming investment and BBK business participated in the issuance and became the second and third largest shareholders of Chongqing department store respectively.

As we all know, the department store industry is generally depressed now.

And wumi's department store performance is not very good. In this case, why did wumi and BBK still hold a large share of the 100% stake?

Traditional retail three swordsman Alliance

According to the announcement, Chongqing department store intends to issue 205 million shares to three enterprises, 23.81 yuan / share, and the total amount of fund-raising will not exceed 4 billion 881 million yuan.

Among them, the number of subscription stocks of Wumart, BBK and Chongqing Huamao is 130 million 400 thousand shares, 66 million 700 thousand shares and 7 million 900 thousand shares respectively, which cost 3 billion 105 million yuan, 1 billion 588 million yuan and 188 million yuan respectively.

In accordance with the requirements, all the shares of the non-public offering will be subscribed in cash, with a period of 36 months.

The announcement of the release is still subject to approval by relevant departments.

After this issue, the total share capital of Chongqing department store will increase from 406 million 520 thousand shares to 611 million 520 thousand shares. Chongqing state owned business group holding 29.95% will remain the largest shareholder; Wumart investment holds 21.32%, ranking second; BBK business holding 10.91%, ranking third; Chongqing state owned Chongqing Hua Trade holding 2.27%, fourth, and the rest as public shareholders.

The announcement shows that Chongqing department store issued 205 million shares and raised 4 billion 881 million yuan, which is an important measure to carry out the reform of mixed ownership.

Chongqing department store official said that after this issue, Chongqing department store will become a diversified mixed ownership enterprise in Chongqing SASAC system.

Business group, Wumart investment and BBK business participate in corporate governance according to their respective shares of Chongqing department stores.

From the shareholding ratio and control relationship, no shareholder in Chongqing department store can form a control relationship with Chongqing department store alone.

With the deepening of the reform of the mixed ownership system, Chongqing department store will intensify the mechanism innovation. On the one hand, we should implement the professional manager system in the management level, carry out market-oriented recruitment, management and examination; on the other hand, we should further explore the establishment of incentive and restraint mechanisms, fully stimulate the endogenous motivation of enterprises, and ensure the smooth implementation of the reform goals.

Statistics show that Chongqing department store is a listed company of Chongqing SASAC. Its main business covers three major formats: department stores, supermarkets and electrical appliances. Its business outlets cover Chongqing, Sichuan, Guizhou, Hubei and other places, and its controlling shareholder, Chongqing business group, achieved overall listing in March this year.

Wumart investment is a subsidiary of Wumart holdings. It is a well-known chain supermarket group in China. It owns famous names such as "wumi", "Mei Mei Mei" and "B&Q".

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The market share is the first in Beijing and Ningxia autonomous region, and the market share in Zhejiang and Tianjin is the highest.

Wumart holding owns Xinhua Department store, a A share listed company. The original H-share listed company, Hongkong Wuming commerce, was delisted from Hongkong in January this year.

BBK's current business covers complex retail, shopping centers, e-commerce, mobile payment and other retail formats.

As of the first half of 2016, BBK has 245 stores, including 203 supermarkets and 42 department stores.

"Because of many formats, I may be the most hardworking person in China's retail industry, but it is also because of the multiple formats and step by step that it has achieved diversified and coordinated development, and there are more differentiated turn overtaking opportunities in cross regional development."

BBK chairman Wang Tian said that the future retail industry will be controlled by several large retail groups. When BBK builds its own retail environment, besides endogenous growth, the company will also achieve resource sharing and Industrial Synergy through strategic cooperation and capital integration, so as to have a place in the future retail layout.

How far can we go together?

As a traditional retailer, there are many similarities in the format and mode of operation between Chongqing, BBK and Wumart.

Affected by the slowdown in the macro-economy and the upgrading of consumption, the operation of the three enterprises has also declined to varying degrees.

According to the performance report of the first half of 2016, this year, from 1 to June, the business income of 100 billion yuan was 18 billion 133 million yuan, 6.78% lower than that of the same period last year, and the total profit was 465 million yuan, down 8.5% from the same period last year.

For the reasons leading to the decline in revenue in the first half of the year, Chongqing department store explained that the decline in operating revenue over the same period last year was mainly due to the impact of electricity suppliers and shopping centers, and the passenger flow continued to decline.

Chongqing, Sichuan and other places, which are heavily concentrated in 100 main business areas, are affected by factors such as macro environment, intensified competition, and closing some inefficient shops. Sales revenue has declined, and even the phenomenon of closing stores has appeared.

In the various formats of heavy business, department store performance is the most serious.

However, compared with last year, the performance in the first half of this year has been improved. In 2015, the 100% operating income and net profit fell by 25.28% and 36.13%. respectively.

The operation of Wumart is also not optimistic.

Take Xinhua Department store, a listed company of Wuming, for example. In the first half of this year, the revenue of Xinhua Department Store decreased by 0.72%, and net profit dropped by 69.26%.

Compared with 2015, the decline in performance of Xinhua Department store expanded further.

Although BBK is a leading retailer in the southwest region, it is still difficult to avoid the common situation faced by its peers.

In the 2015 quarter, the 1 quarter of 2016 and the half year 2016, the operating income increased by 25.66%, 0.71% and -1.81% respectively compared with the same period last year.

In the 2015 quarter, the 1 quarter of 2016 and the half year of 2016, the net profit of BBK decreased by 38.08%, 29.82% and 28.70%, respectively.

Because of this, BBK's 2 billion 500 million yuan issuance plan has been questioned by the SFC.

In the 1 quarter of 2016 and the half year net profit in 2016, there were four main reasons for the year-on-year slowdown. First, the growth of China's economy slowed down in recent years. The traditional retail industry is facing fierce competition in the channel, and the growth of the company's revenue has declined. The gross profit margin has also declined. Two, since 2015, the cloud monkey big platform ecosystem built by the company including the electronic business platform, payment platform, logistics platform, convenient platform and membership platform is currently in the stage of pre construction and market cultivation, and the cost of cultivation is relatively high. Three is BBK's new entry in Sichuan and Chongqing. The number of stores in these areas is not large, the opening time is not long, and it can not form synergy with the stores in Hunan and Jiangxi area, and the profitability of the former is relatively low. Four, the loan amount has increased, and the interest expense has increased considerably. In response, BBK explained to the SFC's reply that 2015

According to the revised issuance plan of BBK, the $2 billion 500 million raised after deducting the issuance cost is 570 million yuan for the chain store development project, 1 billion 130 million yuan for cloud monkey big business platform project, and 800 million yuan for bank loan repayment.

Thus, for BBK, e-commerce platform and debt has also become a huge business pressure.

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Now, the $2 billion 500 million issuance plan has not yet been completed, and the big acquisition is also facing hundreds of shares in the face of difficult business. What kind of chess is BBK going to play in the next game? What kind of consideration do we have in the face of the slow growth of Wumart?

For the interview, BBK responded by saying that the move was to expand the retail territory through capital means and build it into a future big retailer.

Material beauty does not give a clear response.

Wang Hongbo, a consulting partner with Mr. Jun, thinks that the business income and return on equity of Chongqing department store are in the forefront of the industry. It is necessary to optimize and enhance corporate governance and management team through the reform of mixed ownership.

Wuming and BBK have lost a lot of business income and net asset yield in recent years, especially BBK's unfavorable business development in Chongqing and Sichuan, resulting in a big loss in the business and business.

After entering Chongqing department store, BBK and Wuming can form benign business layout and financial integration.

He told reporters that after the three unions, they will form strong regional markets in Sichuan, Shaanxi, Gansu, Ningxia and Hunan. In the future, they can further arrange and integrate Xinjiang, Qinghai and Tibet into the west, and layout the provinces of Jinyu and e to the East, thus becoming the kings of department stores in the central and western regions.

After entering the Chongqing department store, Wumart and BBK can close down and pfer the original stores in Sichuan and Chongqing, reduce invalid stores and dissolve competition in the same industry.

And through the joint efforts of three companies to further enhance the bargaining power of suppliers to increase profits, if effective signals can be released to the capital market, it will effectively drive the stock prices of the three listed companies.

Lai Yang, director of Beijing Jing Shang Circulation Strategy Research Institute, held a different view. He told reporters that under the general trend of traditional department stores and businesses going downhill, the three enterprises were actually faced with the need to pform themselves.