Can Urban Beauty Join Hands With Jingdong To Save Themselves?

According to the world clothing and shoe net, with the change of lifestyle, people's demand for their materials is getting higher and higher. People used to want only a good car, but later they wanted a famous brand. Bag And then pursue a more refined life, then want to have a good underwear. Before the development of China was not so fast, the Chinese concept of "good Bra" might be limited to LaPerla, fal, sdale or taylor swift But now that the economy is strong, more people are willing to support domestic products. Today, I want to talk about local Bra shares. Urban beauty (02298-HK).

Join hands with Jingdong to set up 1 billion scale cooperation fund

(source: HKEx)

Yesterday, the Bra stock city beauty released an insider message: its affiliate Guangdong city beauty intends to set up a partnership fund with Jingdong century and fund management team, which is mainly used for industry mergers and acquisitions and resource integration suitable for the group's business, and then further expands the group's popularity and footprint in the global body clothing industry.

According to the main provisions, the target size of the cooperative fund is expected to be 1 billion yuan (RMB), and the scale of the fund will be expanded according to actual needs. The first investment is expected to be no less than 350 million, of which the Guangdong metropolitan beauty is expected to contribute 250 million, while the Jingdong century is expected to contribute 100 million. The investment target of the cooperative fund is mainly related to China's domestic and foreign companies involved in clothing brand, upstream and downstream and related peripheral industries. The duration of the cooperation fund is expected to be 8 years and may be renewed for another two years, each time for one year.

There must be a cause for it: the 2016 performance is slippery 55.18%

For the cooperation fund with the electricity supplier Jingdong, the urban beauty can be generous, and for the first time, it will inject 250 million capital. To figure out the way to open up the electricity supplier is to just want to "pig cage into the water, the source of wealth is rolling" or is it aware of its own business problems, and work with Jingdong to tide over the difficulties? Let's first look at its achievements in the past three years.

(source: HKEx)

(source: HKEx)

As can be seen from the chart, the performance of urban beauty appeared in 2016. The profit attributable to shareholders decreased by 55.18% to 242 million in 2016, or even to a lower level than in 2014. According to the HKEx data, the decline of urban beauty in 2016 is mainly due to the structural adjustment of the industry, which has an impact on the performance of the group, including further diversification of sales channels and changes in the structure of product sales. However, the author noted that its gross profit margin has also been increasing over the past three years.

(source: HKU city beauty 2016 results announcement)

Stop the sheep and make the best.

In the 2016 year, it made 55.18% less! Without brilliant performance, how to face investors in the future? It is not hard to find that after the decline in performance in 2016, the urban beauty is not totally helpless, but immediately drums and drums to "remedy".

In December 1, 2016, before the announcement of performance, the finance officer had changed. Yu Zhenqiu, vice president, chief financial officer and secretary and authorized representative of the company, was replaced by Lu Kang Cheng.

In May 5, 2017, the urban beauty entered into a subscription agreement with the wholly-owned subsidiary Fosun Ruizhe Grace Investments Limited (subscriber) of 00656-HK, which will pay a premium of about 9.17% of the closing market price to HK $2.5 per share, issuing 240 million shares to Fosun Ruizhe Grace Investments Limited, accounting for about 11.18% of the enlarged share capital. The net amount is intended to provide funds for the group's sales and distribution channels reform, potential merger, acquisition and cooperation projects and general liquidity funds.

(source: HKEx)

On the same day, the company signed a strategic cooperation agreement with Fosun Group. The two sides made use of their resources, expertise and experience to explore the possibility of various deep cooperation, and further promoted the brand development of the group in China's close fitting clothing field.

It is worth mentioning that the people behind Fosun are Guo Guangchang. The British Financial Times called Guo Guangchang "China's own Buffett". The top player has been in the game and what he is planning.

At this point, the "beauty of the sheep" matters, the beauty of the city is still beating drums and drums. Just three days after the subscription agreement with Fosun international, the city beauty entered into a strategic cooperation agreement with KIMURATANCorporation and Qingdao Dadu International Trading Co., Ltd. (KIMURATAN's exclusive agent in mainland China), which includes baby and children's clothing of several flagship brands in China's marketing and distribution KIMURATAN.

According to the strategic cooperation agreement, all sides will work together to develop the infant and child clothing market in mainland China. The group has been commissioned as a sales representative and distributor to sell and distribute KIMURATAN's two flagship brands (love design and BIQUETTE (Bekat)) through the online and traditional marketing and distribution channels in the mainland of China.

(source: HKEx)

In August 17th of the same year, city beauty introduced Yang Weiqiang, a Fosun star, to a non executive director. Yang Weiqiang is not easy at all. He has more than 18 years of practical experience in the manufacturing industry. Prior to joining Fosun, he served as senior vice president and executive director of TCL group (000100-CN). Later, he joined in the investment industry and served as CEO and managing director of Silicon Valley paradise asset management from 2008 to 2013. It also participated in the preparation of the Shenzhen stock exchange's "question and answer on mergers and acquisitions of listed companies" and the core lecturer invited to be the merger and reorganization of Shenzhen stock exchange. Another person who will invest in the game will have a better story development.

Good fortune and good fortune

After the decline in performance in 2016, the urban beauty began to replace the financial officer, introduce Fosun as a shareholder, then attack the children's clothing market with the strategic cooperation agreement between KIMURATAN and Qingdao, and bring the talents from the Fosun investment company to the board of directors.

In January 24th, the city was full of happiness, expecting to earn more than 28%-35% in the year 2017. The expected profit growth is mainly due to the fact that the company has taken many measures to strictly control costs so as to achieve cost savings and related costs. In addition, despite a slight decrease of about 6% in the first half of the year, compared with the same period in 2016, the total sales revenue is expected to improve in the second half of the year, up from 5% to 9% in the same period in 2016, and also contributed to the second half of 2017, which is more than that of the same period in 2016.

Directors and company holdings have always been confident of the company. According to the HKEx data, chairman Zheng Yaonan continued to increase shares in the company at the end of 2017. After the completion of its holdings in December 19, 2017, Zheng Yaonan's shareholding rose to 55.53%. In addition, the Company repurchased 5 million 505 thousand shares in January 16, 2018, January 17th, January 18th and January 19, which cost HK $14 million 520 thousand and 150.

The road of electric business is improving.

Return the focus to the foundation of the city beauty and the Jingdong. In fact, this cooperation with Jingdong is not the first time that urban beauty has been in business. Open Taobao, search "urban beauty", will see the company in Tmall flagship store, and the number of fans has reached 2 million 910 thousand people. Among them, according to the sales volume, the most popular selling item from Tmall is the underwear of 69 yuan, and the underwear price in the range of 5 thousand -1.6 million is between 40-70 yuan. The highest price is 359 of the pajamas only 1 people pay. It can be seen that the customers of urban beauty in Tmall flagship store mainly pursue women with high performance price ratio.

It is obvious that we can learn from others. If the urban beauty will continue to lock in the above customer groups in cooperation with Jingdong, and launch more comfortable products (such as track less underwear) and products with special functions (such as sports bra), its performance will be even brighter. Jingdong group is China's leading integrated network retailer, mainly engaged in online business. The Jingdong century will also participate in the investment management of the cooperative fund. With the Jingdong group's investment experience in different fields for many years, we believe that the development of the cooperative fund will be optimistic.

Faced with the downturn, the urban beauty knows the way to find a way online, and also to flag children's business. Now comes another Liu Qiangdong's Jingdong. As for the future cooperation between the urban beauty and the Jingdong century and fund management team, what merger and acquisition plans will be made, whether it can win more profits for the shareholders, when will the stock price recover to a high level of 8.48 yuan in 2015? How will the urban beauty use the money from Fosun? Let's make a good coffee, prepare the peanuts and observe them.

As of February 8th closing, urban beauty reported 3.32 yuan, down 0.18 yuan, or 5.14%, closing 5 million 250 thousand shares, with a turnover of HK $17 million 100 thousand. It is worth mentioning that the 240 million shares of Fosun started in May 2017, priced at HK $2.5 per share. At the end of 2017, chairman Zheng Yaonan increased 1 million 543 thousand shares and the average price per share was not more than 2.9 yuan.

More interesting reports, please pay attention to the world clothing shoes and hats net.