Why Did Anta Issue 3 Billion 600 Million Panda Debt?

The application for the issuance of about 3 billion 600 million yuan of corporate bonds has been submitted to the Shanghai Stock Exchange. If the examination and approval is successful, it will become the first non-financial private enterprise to publicly issue panda debt in China.

After the issuance of bonds, Anta's cash reserves are expected to be close to 10 billion yuan level, which may be added next.

The matrix carries out a series of investments and mergers and acquisitions.

Under the expectation of the industry and the outside world, the local sports brand "boss" has to act at last.

In 2014, Ding Shizhong, chairman and CEO of Anta's board of directors, said in an interview with reporters that we should go beyond ADI or Nike in the Chinese market.

After 2015's annual performance exceeded 10 billion mark, he put forward the next 10 years to achieve the next stage of 100 billion goals.

Whether it is support or opposition, everyone knows what Anta wants to do, but he doesn't know what to do and when.

This issue of the 3 billion 600 million panda debt undoubtedly conveys a very clear signal.

Anta

The company announced that it had applied to the Shanghai stock exchange for issuing public panda debt, and the total amount expected to be issued would not exceed RMB 3 billion 600 million yuan.

According to the reporter, Anta has obtained the highest AAA rating of credit rating agencies. The initial issuance scale of the bond is not more than 1 billion, and the issuance period is not more than 5 years. The Underwriters include three bank of China, Oriental Citigroup and Goldman Sachs high China Securities.

It is worth mentioning that Anta is the first non-financial private enterprise to publicly issue panda debt in China. The mode of public offering is fairly good in terms of subscriptions and liquidity. The previous AAA credit rating is mostly state-owned enterprises, financial or real estate enterprises.

The success of FILA has made Anta more confident in promoting multi brand strategy.

Panda Bonds refer to the Renminbi denominated bonds issued by foreign institutions in China. They belong to foreign bonds with Japan's "samurai bonds" and the US "Yankee bonds".

In September 28, 2005, the first time the international multilateral financial institutions were allowed to issue RMB bonds in China, the first batch of institutions issuing the panda debt was international financial corporation and Asian Development Bank. The issuing amount was 1 billion 130 million yuan and 1 billion yuan respectively.

According to international practice, when foreign financial institutions issue bonds in a country, they usually designate the most characteristic mascot of the country, so the then Treasury Secretary Jin Renqing named the first bond as "Panda Bonds".

To understand the list of institutions issuing panda debt in China over the past 10 years, it is easy to find that the issuers are mainly financial institutions, sovereign states, foreign local governments and state-controlled enterprises listed overseas. On the other hand, based on the opening up of China's bond market and the gradual development of the internationalization of China's currency, the panda debt has been in a relatively "pilot" stage in the past 10 years.

In November 2015, IMF formally announced the inclusion of RMB in SDR. At present, the renminbi has surpassed the Japanese yen and the pound to become the third largest basket in the basket.

At the same time, panda debt has also become an increasingly popular means of financing in China since 2015.

With the increasing popularity of RMB corporate bonds, the current domestic credit rating standards for issuers of corporate bonds have improved quite a lot.

Like the general guidelines of major international rating agencies, it is the first to look at the company's net assets, followed by profitability and solvency, in order to assess the amount of bond and bond interest rate.

The regulations on issuance and trading of corporate bonds promulgated by the China Securities Regulatory Commission stipulates that the issuance, trading or pfer of overseas registered companies in the bond trading venues supervised by the China Securities Regulatory Commission shall be governed by these measures.

Among them, the issue of public offerings must satisfy the requirements of the securities law that the balance of accumulated bonds should not exceed 40% of net assets, and the distribution profit of the last three years shall not be less than the interest rate of the bonds for one year.

Anta's 2015 earnings report showed that the total assets of the company amounted to about 12 billion 500 million yuan.

In addition, Anta accounts for more than 5 billion yuan in cash.

After the issue is completed, 5 billion cash plus 3 billion 600 million panda debt, Anta's next cash reserves will be close to 10 billion levels.

Anta has already made good use of this particular amount of money.

During the two years of rapid development of China's sports industry, many local sports shoes and clothing enterprises are making use of their own capital and scale advantages, hoping that they can have a new field and try to pform or upgrade.

For the Minnan sports brand enterprises, they also tend to bid against Anta in terms of strategy and capital.

A person familiar with the matter told reporters that Ding Shizhong had expressed "very interested in the current changes in China's sports industry", but Anta, as the "industry leader", has not yet considered investing in the depth chain of the sports industry.

On the contrary, Anta has been emphasizing the "craftsman spirit" and "do well every dress and every pair of shoes".

Therefore, the 10 billion most likely direction is to continue the brand acquisition.

Not long ago, reporters have reported, industry sources said, after Desanto and Spandi (Sprandi), Anta will be in the short term to further brand acquisitions, including one to two brand pactions are close to completion.

This will further complement Anta's "multi brand matrix".

The news from reporters is that the direction of the two brands may be outdoor and ice sports equipment, at least one of them has business in the Chinese market, and the brand positioning is different from the previous Desanto positioning.

In the recruitment of panda debt issued by Anta, when it introduced the Group subsidiary, it also mentioned Spandi for the first time.

Earlier, reporters had reported on Anta's acquisition of Spandi (Sprandi), but Anta official did not issue a notice about it.

At present, Spandi's operation has just started, and the flagship store has been set up in Tmall.

This shows that the "multi brand strategy" is on the track, and Anta is confident that it will serve as a strong endorsement for future development potential.

However, for Anta's "100 billion market" target, the current brand matrix and scale is obviously not enough, so after this one to two brands, Anta is likely to continue to buy, perhaps consider the acquisition target magnitude will be greater.

{page_break}

In 2015, Anta once tried to buy Puma, but it did not follow.

Some people believe that the current price of Puma has been lifted up, and is not a good time to buy.

But it is conceivable that Ding Shizhong's heart has not given up on the acquisition of a larger brand.

"Before, they (Nike and ADI) kept us awake, and now we have to keep them awake."

He said this earlier in an interview with reporters.

However, Ding Shizhong also admitted in an interview that it is not realistic to want to exceed Adidas and Nike in the global market. His goal is to do better in the Chinese market than Nike and Adidas.

In the South Fujian enterprises, there are many cash in hand, but it is still difficult to take a small step in pformation and upgrading.

The reasons for this can be summarized as follows: failing to develop a secondary card or acquiring a brand, full of fear for new investment and drastic reform, so trapped in the crevice of the "heart stirring"; on the other hand, the middle-aged bosses, more or less, have a "mental health" mentality, and the "two generation" does not yet have the ability to take full responsibility.

In this case, Anta is an exception.

"They are talking about why FILA is successful, such as bold adjustment and positioning, hiring foreign executives, and no strict assessment index in the first two years. In the final analysis, the boss is good. How many bosses can do it?" a professional manager who understands South Fujian enterprises told reporters, "in 2015," double 11 "Ding Shizhong still stayed up late to supervise the battle.