Where Is The Future Development Of Hai Lan'S Home, Zhou Lichen?

Everything is going smoothly? It's not that easy! The market is waiting for Zhou Lichen's earnings report after one year.

Prior to Teng Xun's 2 billion 500 million stake in 5.31% of the move, although the market took a high look, but the latest annual report shows that the company has entered the development bottleneck period, the women's clothing series low gross profit margin, and the Hay Lan's home that handles the tail cargo has not completed its mission.

Zhou Lichen is 30 years old.

In the year of his birth, his father, an ordinary Jiangyin native, Zhou Jianping made a bold decision: he used the 300 thousand yuan he had saved from the museum to contract the third woollen mill of Xinqiao Town.

6 years later, the township enterprise turned into Jiangsu San Mao Group and landed on the Shanghai Stock Exchange in December of the year of the turn of the century. In 2001, it became officially known as Hai Lan group.

This is a typical Chinese story of a tiger without a dog.

As a father, Zhou Jianping became the 2017 Forbes global Chinese rich list in 23 billion 900 million yuan.

The richest person in retail business.

Zhou Lichen, a finance major graduated from Tsinghua University, has entered the family business since 2012. He successively took over the core departments such as advertising department, commodity center, information center, electricity supplier and so on, and became president of the group in February 2017.

Zhou Jianping's old taste is beyond doubt.

By the end of the last trading day in April 2018, the total market capitalization of 53 billion 400 million yuan of 600398.SH was 183% of YOUNGOR in the same industry, and 5 times higher than that of the new leader.

Zhou Lichen's vigor is obvious to all.

Under their own hands, the corporate spokesperson changed from Yin Xiaotian and Du Chun to "national husband" Lin renewal. For the "running brothers", "the strongest brain", "Mars Intelligence Bureau 2" and other popular variety shows, the naming and soft planting were equally effective.

The joke about "old man's Wardrobe" gradually faded away.

Although Zhou Jianping, 58, is still in the prime of his career, the outside world seems to take a big look at the "young man". He believes that when he has more power, the first brand of the Chinese men's clothing brand of the Chinese local UNIQLO will have more opportunities to develop in the new retail era.

When the end of the year came, Zhou Lichen really received a heavy gift. The Tencent announced in February 3, 2018 that it would buy a 5.31% stake in Hai Lan's home at 2 billion 500 million yuan. At the same time, the two sides intend to jointly set up a 10 billion yuan scale clothing industry investment fund.

Soon, Tencent, the most heavyweight member of the circle of friends, delivered an olive branch, and Liu Qiangdong himself even endorsed it personally.

Everything is going smoothly? It's not that easy! The market is waiting for Zhou Lichen's earnings report after one year.

Unfortunately, someone is going to be disappointed.

From "men's Wardrobe" to women's clothing,

Haolan's home in the field continued to decline in 2017 in terms of operating income and net profit growth. The growth rate of the number of units in 2016 continued to grow by 7.06% and 6.6% respectively, with revenue and net profit reaching 18 billion 200 million yuan and 3 billion 329 million yuan respectively, while gross profit fell 0.25 percentage points to 39.63%.

In addition, the men's wear Hai Lan's home and the newly developed women's clothing love rabbit single store business income continued to decline, respectively reduced by 9.03% and 9.02%, previously planned to digest the stock of the sea one store also significantly reduced and adjusted, resulting in other brands statistical caliber average single store business income fell 33.59%, gross profit sharply reduced 48.87% to -26.15%.

The decline in single store revenue led to the overall opening rate of Hai Lan home in 2017, which was not as good as expected, and did not complete the target of "750 stores with a net increase of 2017" put forward in 2016.

It is important to note that the "light assets" mode, which distinguishes the Hai Lan family from its peers, remains at a high inventory level. In 2014 -2017, the inventory balance of Hai Lan's home was 6 billion 86 million yuan, 9 billion 580 million yuan, 8 billion 632 million yuan and 8 billion 493 million yuan respectively.

Single store operating income continues to decline

The second year after the slowdown in revenue and net profit growth to the number of units in 2016 is the first reaction of investors after the 2017 annual report.

In 2014 -2017, the company's operating income in turn was 12 billion 338 million yuan, 15 billion 830 million yuan, 17 billion yuan and 18 billion 200 million yuan, up 72.56%, 28.30%, 7.39% and 7.06% respectively.

Among them, the main men's clothing business income respectively achieved 10 billion 125 million yuan, 12 billion 874 million yuan, 14 billion 31 million yuan and 14 billion 758 million yuan, the growth rate was 49.58%, 27.16%, 8.98% and 5.18% respectively, the curve is quite obvious, declining year by year.

The only good news is that the overall gross profit margin of Haolan's brand in 2017 was 40.34%, up 0.42% over the same period last year.

The Hai family, which aims to digest its inventory, closed more than 100 stores in 2017, operating income fell 15.14% to 299 million yuan and the gross profit margin was -26.15%.

In the field of women's clothing, adjusting the overall tonal of clothing has been judged by the market as an important strategic move for the pformation of Hai Lan's home.

Well, let's take a look at this business.

In 2017, the women's clothing earned 895 million yuan in business income, a 75.46% increase compared with the same period last year, and a gross margin of 8.63% to 27.79%. However, compared with men's gross profit margin of more than 40%, the competition for women's clothing industry became more intense, and the gross margin was at least 12 percentage points lower.

For AI Ju rabbit, Hai Lan's home has continued to use the whole Tuen Tuen franchise mode of men's wear, and this unique mode of "headquarters brand management - Production Outsourcing - General Library logistics chain sales" has also made Hai Lan's home industry achieve rapid growth in the overall downturn of the industry.

2016 annual report data show that the company has a net growth of more than 1000 shops a year, up to 1253, with a total of 5243.

However, while the number of shops is increasing, single store operating income has declined.

In 2017, Hai Lan home brand single store business income 3 million 573 thousand yuan, compared with 3 million 702 thousand yuan in 2016 reduced by 3.47%; the women's clothing brand AI rabbit single shop average business income of 1 million 306 thousand yuan, an increase of 23.76% over the same period; sea a single store average income 1 million 593 thousand yuan, down 45.79 percentage points.

The decline of single store income has a great impact on the willingness of franchisees and the strategic layout of the company.

The 2016 annual report shows that in 2017, the company originally planned to add 750 stores to the net, of which 350 of Hai Lan's family stores increased by 400.

The 2017 annual report shows that the total number of stores was 4472 at the end of that year, and 505 in 2016. Among them, Hai Lan's home had a net increase of 266, and the love of the rabbit increased by 420, while the other (mainly for the sea) reduced by 137, and did not complete the annual new store plan in 2017.

More than the number of new stores fails to meet the standards, what is even more worrying is the fact that its single store operating income declined in 2016, and the rate of decline is increasing.

It is reported that on the basis of the brand of Hai Lan home in 2016, its average single store revenue declined by 9.03 percentage points to 3 million 250 thousand and 800 yuan, and the love house rabbit fell 9.02% percentage points to 1 million 188 thousand and 600 yuan, while other brands dropped 33.59% to 1 million 57 thousand and 600 yuan.

In the annual report, the company reported that the average single store business income of Hai Lan home brand and AI Ju rabbit brand decreased year-on-year, mainly due to the large number of new stores opened in the previous year, and the single store business income of the new store was generally lower than that of the old store.

While other brand single store business income decreased by 33.59% compared with the same period last year, mainly due to the adjustment of one store in the reporting period.

According to the annual report, the company's stores have covered the whole country, including 2852 county-level divisions, 333 prefecture level administrative units, 4 municipalities, 2 special administrative regions and Taiwan province.

In the face of the huge base, the difficulty of increasing the number of new stores will increase significantly in the future.

Perhaps based on practical considerations, Hai Lan's home has lowered the annual store expansion plan in 2018 on the basis of 2017.

It is reported that in the coming year, there will be a net increase of 400 brand stores in the Hai Lan's home, and a 300 increase in AI rabbit store.

High inventory crisis continues

According to the 2017 annual report, the number of stores in Hai family in 2017 was over 100, which was defeated by Hai Lan's family's hope to throw in inventory, and the inventory of Hai Lan's home has been running at a high level at present.

Data show that the inventory balance of Hai Lan's home in 2017 was 8 billion 493 million yuan.

As early as 2012, when Hai Lan's home wanted to separate the IPO from the group, when it wanted to initial public offerings, it was not allowed because of its inventory of up to 3 billion 871 million yuan and the high inventory ratio of 56.94% of the total assets.

From the prospectus submitted in that year, we can see that from 2009 to 2011, the corresponding book amount of inventory was 1 billion 305 million yuan, 1 billion 693 million yuan and 3 billion 863 million yuan respectively, with an average annual compound growth rate of 61.37%, accounting for 50.21%, 44.41% and 56.82% of the total assets of that year respectively.

As the number of shops surged and the original mode did not make major adjustments, the inventory of Hai Lan's home continued to climb.

By 2014, its inventory balance reached 6 billion 86 million yuan.

Over the next three years, stocks remained high, with inventory balances of 9 billion 580 million yuan, 8 billion 632 million yuan and 8 billion 493 million yuan respectively.

We may as well compare with the same industry.

As of the third quarter of 2017, China's 01234.HK inventory was 323 million yuan, 002269.SZ was 2 billion 219 million yuan, 002029.SZ was 1 billion 81 million yuan, and 002154.SZ was 809 million yuan.

clothing

The inventory is quite different from other industries.

In order to meet the needs of consumers,

Enterprises need to constantly innovate and not stop production like other industries.

Imports and production pause to reduce inventories, resulting in a growing snowball.

Although Hai Lan home has designed the existing business model, it has planned to shift all the inventory risk to the upstream suppliers, that is, in addition to the return of unqualified and defective products, it is also agreed that a certain period of time (usually two marketable seasons) is still unsaleable goods can be returned.

According to the 2017 annual report, Hai Lan's home has signed a return clause with the supplier, so the company does not bear the risk of tail cargo.

At the same time, the annual report pointed out that, in order to strengthen the close cooperation with suppliers, the company handles some of the goods through a offshore platform to reduce the pressure and pressure of the suppliers.

This is also called "effective complement to the business mode of Hai Lan home".

In practice, Hai Lan's home does have the right to return.

However, according to its prospectus, 2009-2011 years, the company's replacement amount accounted for the current period of the initial inventory balance of not more than 15%.

Take 2009-2011 years as an example, the 3 year return amount accounts for 9.95%, 11.48% and 14.17% of the initial inventory balance respectively.

As a platform for dealing with part of the goods, Hai family has apparently not completed its mission.

According to the 2017 annual report, Hai family realized a business income of 299 million yuan, a year-on-year decrease of 15.14% in operating income, a 48.87% decrease in gross profit margin and a gross profit margin of -26.15%.

In terms of quantity, the number of stores under other brands has decreased by 137, most of which are contributed by the sea.