Shan Shan Spin Off Clothing Business Listed Zheng Yonggang Spanformation New Energy Leader

Zheng Yonggang, chairman of the board of directors of Shanshan Group, has multiple labels. He is not only the biggest clothing dealer in China who built the first domestic clothing brand in 1990s, but also a new energy leader who has a forward-looking vision and has successfully spanformed lithium battery materials business, and is probably more willing to call him "shell king" for those who are familiar with Zheng Yonggang's deeds of "attack and retreat" in the capital market.

Now, when the investment action of Shanshan is slightly stable, Zheng Yonggang has made new moves in the capital market.

In May 10th, Shanshan stock company announced that its subsidiary company, Shanshan brand operation Limited by Share Ltd received the approval of the SFC on Approving the issuance of foreign listed stocks by Shanshan brand. This means that Shanshan stock will split up its clothing business to achieve IPO in Hong Kong, and Zheng Yonggang's multi business kingdom will build a financing territory across A shares and H-shares.

After the completion of the split, according to the 2017 annual performance briefing of Shanshan stock company, we will look forward to the future: "Shanshan Group will focus on the new energy industry in 2018, take the new energy business as a strategic development focus, and integrate the superior and downstream resources of the industrial chain." On the other hand, the Chinese fir clothing business that can get capital spanfusion in Hong Kong stocks will also usher in a new development.

Apparel business spin off integration

It was the decision made by Shanshan in 2016 that the apparel business was stripped from the listing platform. Shanshan shares said that the spin off is conducive to maximizing the subjective initiative of subsidiaries, while helping subordinate industry subsidiaries broaden their financing channels and enhance their independent financing capability.

The clothing business is the start business of Shanshan stock company. It was flourished in several years after its establishment in 1989, and the market share also reached 37.4%.

But as Zheng Yonggang had expected - fir fir Man's suit The success is just the product of the shortage economy era. According to Wan de statistics, the annual revenue composition of Shanshan stock company in 2017 accounted for only 8.06% of the clothing products, and became the "chicken ribs" of the company's performance.

However, in this report, the main business income of the clothing business in 2017 reached 670 million yuan, an increase of 27.23% over the same period, and the net profit attributable to the listed shareholders was 49 million 374 thousand and 800 yuan, up by 36.16% compared with the same period last year. Judging from the gross profit margin of various businesses, the clothing business of Shan Shan ranked first in terms of over 40%.

Obviously, although the total revenue is relatively small, Zheng Yonggang did not intend to give up in the field of clothing, he has been trying to split the business and run the listing. It is understood that, while splitting Shanshan brand, Shanshan stock also takes Shanshan brand as a platform to sort out the related assets of its clothing business, and sell and cancel some of its subsidiaries when the related assets of clothing business are loaded into the brand of Shanshan. These include the sale of poorly performing joint brands MARCO AZZALI and LUBIAM.

Shanshan brand said the move was to streamline the group structure and streamline business and brand mix. It is reported that the brand of Shanshan, after splitting and finishing, will no longer produce products, instead of OEM production mode. Shanshan shares said in the prospectus that this is to concentrate resources on the core competitiveness of brand management, design and product development, sales and distribution management.

It is worth noting that the separation of fir clothing To build Shanshan brand as the only clothing platform, Shanshan brand began to train another sub brand, SHANSHAN. FIRS, which is different from the brand name of Shanshan brand, is positioned as a business man's clothing for a 35-45 year old man. SHANSHAN's position is relatively young, and it faces a 25-35 year old man.

New energy and new dream

Stripping the clothing business, Zheng Yonggang placed a big dream on the new energy vehicle for Shanshan stock.

After more than twenty years of development, Shanshan stock has entered into garments and lithium batteries. industry Car rental, finance and venture capital business, and the new energy business based on lithium ion materials has become the mainstay of Shanshan stock company's brilliant revenue.

In 2017, the achievement of 8 billion 270 million yuan revenue and 51.07% year-on-year growth in Shanshan Group was due to the substantial growth in the positive business performance of lithium battery materials. It is reported that the total revenue of positive materials is 51.5%. From the list released by several domestic media, the stakes in Shanshan Group ranked first in the list for four consecutive years, the first in 2017 for negative materials, and fourth in the electrolysis level.

After being spanformed into a leader in new energy materials, Shanshan shares said it will continue to consolidate the leading position of lithium battery materials in the future, with market demand as the guide, independent research and development as the core and cost control as the means to further expand the capacity and enhance the scale advantage in order to cope with and grasp the good opportunities and development dividends brought about by the rapid development of the new energy automobile industry.

In fact, as early as 2017, Shanshan stock has been used as cathode material and anode in lithium battery business. Material Science And increase the capacity of electrolyte business. The two phase lithium cobalt oxide production line of cathode material in Ningxiang was put into operation in April 2017, and the three yuan production line was put into trial production in late 2017. In addition, Shanshan energy started an annual output of 7200 tons of high nickel three yuan and precursor projects in Shizuishan, Ningxia, and was put into trial production in March 2018. In January 2018, Shanshan energy started 100 thousand tons of high energy density cathode materials for lithium-ion batteries. One phase 10 thousand tons of capacity is expected to be put into trial production by the end of 2018.

However, the expansion of many businesses has also brought about greater financial pressure. According to the 2017 annual report of Shanshan stock, the inventory of lithium battery materials increased by 131% compared with the same period last year. Inventory turnover was 3.57 this year, down 0.71 from 4.28 in the previous year. In addition, due to the sharp rise in raw materials of the positive and negative poles and tight supply, the accounts payable of Shanshan stock also reached 739 million yuan at the end of 2017, an increase of 46% over the same period last year. The turnover rate of accounts payable was 7.29, 0.44 more than that of the previous year; accounts receivable also reached 2 billion yuan, and the turnover rate increased by 2.94 over the previous year.

It is worth noting that the new expansion of new energy vehicle business of Shanshan stock company brought about 545 million yuan of revenue and a substantial increase of 476.64% year-on-year in 2017. However, due to the fluctuation of the subsidy policy, the change of market environment and the initial investment in industrial cultivation, its net profit attributable to shareholders of listed companies is still a loss of -1.8 billion yuan. At the same time, this business also increased the accounts receivable mentioned above.

Visible, lithium industry industry slow, upstream raw material prices and capacity expansion is the impact of Shanshan shares in the performance. At the beginning of the year, in a forum, Zheng Yonggang once said that the "investment impulse, development and risk control relationship is particularly important". Perhaps it is more necessary to understand the necessity of "cash flow is king".

It is worth noting that in the upsurge of building new energy vehicles, Shanshan stock has already decided to enter new energy vehicles as early as last year, and has already made some related layout both at home and abroad. This April, Shanshan stock company announced that its subsidiary Ningbo Shanshan electric vehicle has obtained the qualification of national special vehicle production. At present, the Chinese fir has been laid out in 15 cities, with 3000 charging piles and 600 new energy vehicles.

Shan Shan 2017 annual report shows that during the reporting period, Shanshan automobile has obtained the qualification of new energy special vehicle production. Independent research and development of 1.5 tons of pure electric logistics models, 0.5 tons of pure electric logistics models, etc., entered the announcement of the Ministry of industry and commerce, and entered the new energy vehicle promotion directory; trailer RV business achieved mass sales, and the products were mainly sold to the Australian market. Qingshan automobile has completed the design and research and development of 11 new energy buses, of which 8 are pure electric city buses, and 3 are plug-in hybrid buses.