How Does "Sports Brand First Share" Continue To Carry Out Large-Scale Layout To Seek Pformation?

2016 for

This is a year of pformation.

At the end of last year, when Andy Chen, vice president of the company, announced that "the first sports company in China" began to be established.

From sports games to sports industry funds, and then to the suspension of the purchase of fitness and leisure industry assets, as of the first three quarters of this year, the birds have spilled nearly 900 million yuan of funds.

What is the next chess game?

Main business dilemma

Similar to most enterprises, the pformation of the great bird is largely due to the slump of the main business of the company.

Combing the achievements of the birds in recent years is not hard to find. Since 2009, the birds have generally experienced three stages: the rapid growth from 2009 to 2012, the sluggish decline in 2013 to 2014, and a slight rebound in 2015 since then.

Thanks to the successful holding of the 2008 Beijing Olympic Games, the "golden age" of the domestic sporting goods industry is officially coming, and the birds and birds standing on the draught are Lining.

And other domestic sports brands together have ushered in a good time for development.

China Institute of industrial research statistics show that in 2007, China's sports goods industry sales of 69 billion yuan, but only two years, this value in 2009 to break to 111 billion yuan.

It is also at this time that Lining first sold over $8 billion 387 million in annual sales to Adidas, becoming the second place in the sports apparel industry.

For a time, the domestic sports brands were playing the catchy words, inviting celebrities to speak, and the advertisements they put almost occupied the five stages of CCTV.

Because most of these enterprises are located in Jinjiang, Fujian, CCTV five are also nicknamed "Jinjiang manufacturing", and the degree of industry fever is obvious.

Online operation, the establishment of a large store to become the industry characteristics.

At that time, most of the domestic brands had been listed in Hong Kong, and sufficient funds also encouraged the sporting goods industry to enter the barbarism era.

Take Lining as an example, the total number of stores in 2011 has reached 8255, an increase of 340 compared with 2010.

The birds are more exaggerated. The retail terminal in 2011 increased by 1040 over the previous year, and the total number reached 5067.

It is not a long time since the rapid expansion has brought about the homogenization of the products, making the number of stocks in many companies increasing sharply, and the oversupply of sports industry is a foregone conclusion.

Entering the 2013, most domestic sporting goods manufacturers entered the painful inventory period, and the number of stores decreased significantly.

However, at this time, the "noble bird" went to the A stock market and did not join the army that closed shop. Instead, it continued to forge ahead and expand.

According to the data, by the end of 2013, the sales network of the noble bird has spread to 31 provinces, autonomous regions and municipalities directly under the central government. The total number of shops has reached 5560.

This way makes the best bird missed the best opportunity to adjust its main business, and the company's revenue and net profit have not improved.

The business income of the precious birds declined from 2 billion 855 million yuan to 2 billion 405 million yuan, and net profit dropped from 528 million yuan in 2012 to 423 million yuan.

In addition, according to the prospectus of the noble bird, the sales mode adopted by the company is mainly the wholesale mode, that is, selling the brand products to dealers by wholesale, which is sold by distributors directly or through retail operators. All retail terminals are all brand stores of "noble bird brand", and store space decoration and product display according to the unified standards of the company, and do not participate in the specific operation of retail links.

In the process of reimbursement, you can give the dealer a credit limit, usually within six months.

After the expansion of the store and revenue decline, the company encouraged the dealers to adopt the marketing policy of increasing the credit limit and extending the credit period, and the company's accounts receivable increased sharply.

Data show that the company accounts receivable increased by 58.8% in 2013, reaching 1 billion 369 million yuan, accounting for 49.69% of the company's total assets.

This has also led to the listing of 943 million yuan in 2014, and immediately issued a 800 million yuan corporate debt pfusion which is almost the same size as IPO.

In 2014, the "noble bird" experienced a brutal dealer inventory clearance, determined the pformation from "wholesale mode" to "retail oriented" mode. At the same time, it set up the goal of upgrading the sports industrialization group based on the manufacturing of sports apparel products and the coordinated development of various sports industry forms, and the company's performance gradually recovered in 2015.

Transformation and upgrading

"Good wind depends on borrowing power". The goal of targeting birds in sports industry is largely due to Article 46 of the State Council.

In this document, the State Council clearly put forward a development goal: by 2025, the total scale of sports industry will exceed 5 trillion yuan, which is regarded as a clear policy signal.

For a time, a number of listed companies announced the layout of sports industry, many of which were "cross-border" 300027.SZ, 03699.HK and so on.

Feng Yibo, co-founder of sports business, once said that Anta,

Belonging to the first gradient, PEAK sports and precious birds are fourth, fifth of the industry. Under the circumstances of traditional business channels being suppressed by Anta and Lining, it is a good choice for the two companies to expand their business scope to the sports industry, because the sports industry has great prospects for development and can provide a broader space for the future development of the company.

At the beginning of 2015, the ROC announced that the 240 million yuan stake in tiger sports was the prelude to the horizontal development of the sports industry.

In July 2015, the great man bird and tiger hop sports joint Jing Lin invest in the establishment of mobile capital. Up to now, mobile capital has invested in more than 20 Internet plus projects, including star sports such as understanding the emperor, interest sports, and hot fitness, including running, fitness, education and training.

The company's annual report 2015 pointed out that if the financing valuation of investment projects has been calculated, the above investment has realized the total income of 114 million yuan.

It is worth mentioning that, at present, tiger sports has begun to sprint IPO, if the successful landing of noble birds stake or double.

This year, the purchase of birds is constantly moving.

In June, the company invested 383 million yuan to acquire part of the stake in Jay's Bank and increased its capital to become the controlling shareholder of the company. In July 25th, it announced that it would invest 100 million yuan to increase capital and become the largest shareholder of Shenzhen Xingyou technology. In September 3rd, the precious bird invested 382 million 500 thousand yuan to buy 51% stake in Xiamen shoe store.

From the main business of the three acquisitions, apart from Xing you technology is an Internet sports game supplier, the remaining two are still traditional sports clothing business operators.

A broker said that the two acquisitions also mean that although the giant bird has a large layout in the sports industry, the company's business income basically comes from sports shoes and clothing.

If you want to maintain short-term performance, the main energy should be placed in traditional industries, and the company's performance has improved in 2015. Under such circumstances, it is reasonable for the company to acquire the equity of retailers.

From the traditional clothing into the sports industry, noble birds are also facing challenges.

The first to bear the brunt is the company's financial problems. After the 3 companies purchased this year, the performance of the good birds will undoubtedly be boosted again.

As mentioned above, accounts receivable increased sharply after the expansion of the birds and birds, and the liquidity of the company was obviously insufficient. Continuous acquisitions made the company's cash flow even weaker.

In the first quarter of 2016, the net cash flow generated by the operation of noble birds was -2.78 billion yuan, and the net increase of cash and cash equivalents was -1.95 billion yuan.

In the first half of this year, this figure continued to expand, and net cash flows from operating activities amounted to -3.61 billion yuan, 209.39% less than that of last year.

Basic earnings per share of 0.2558 yuan / share, a decrease of 9.93% over last year.

In addition, according to the announcement issued by the popular bird recently, as of the end of November this year, the loan balance of the company has reached 3 billion 309 million yuan, an increase of 1 billion 506 million yuan compared with the end of 2015.

The company added that the company's new loans mainly consist of 500 million yuan non-public directional debt financing instruments newly issued in 2016, 600 million yuan ultra short term financing bonds and new long-term loans, which belong to the normal business activities of the company.

Cash flow is scarce, and the future layout of the birds is facing some pressure.

At the same time, through cooperation with tiger tiger, the noble bird set up an industrial fund, and the market also had different opinions.

Zhu Qinghua, a sports industry researcher at CIC, said there is some difficulty in this top-down layout. He believes that the market maturity of the downstream sectors of the sports industry has been relatively high, the business model is relatively perfect, and it is easier to develop, while the upstream link is still in the initial stage of development, with relatively low level of internal capacity and technology and relatively scattered resources.

The main difficulty for such sports companies as mergers and acquisitions is to choose high-quality resources and successfully integrate them, and whether the following development models and strategies can adapt to the market environment.

At present, the bird of honor has been suspended. If the reorganization is successful, it may involve raising matching funds. However, in the case of tighter regulation of fund-raising projects, it remains to be seen whether the pformation plan can be successful.

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