La Natsu Bell Continued To Expand The 1 Billion 500 Million Convertible Bonds And Continued To Expand.

La Natsu Bell (603157.SH) wants to issue bonds and continue to expand.

In September 21st, La Natsu Bell announced that the board of directors had been able to issue convertible bonds through issuing A shares, subject to the approval of the SFC.

The term of convertible bonds is 6 years, and the company will raise funds up to 1 billion 530 million yuan.

The initial convertible price of convertible bonds issued by this issue is no less than the average price of A share trading on the 20 trading days before the announcement of the prospectus, and the average trading price of A shares of the company on the first 1 trading days. The specific initial stock price is determined by the Licensing Companies Board of directors of the shareholders' meeting according to the specific circumstances of the market and the company and the sponsor (principal underwriter).

According to the announcement, the company will be used as a retail expansion project, a store upgrading project, a smart store construction project and a logistics center construction project after the fund is raised.

La Natsu Bell is the first A share +H share to be listed in China.

Enterprises, the company has been adhering to the multi brand differentiation strategy, its nearly 20 clothing brands.

From the earnings report, women's clothing brand

Puella, 7 Modifier, La Babit E and Candie s are the main force of the company, contributing 81.05% of the revenue in the first half of this year.

La Natsu Bell has been walking on the road of brand expansion and offline store expansion, but it seems to have failed to save its sluggish performance.

On the evening of August 28th, La Natsu Bell issued 2018 semi annual reports, which showed that in the first half of the year, the company achieved operating income of 4 billion 379 million yuan, up 2.26% compared to the same period last year. Net profit and net profit were 236 million yuan and 185 million yuan respectively, down 16.3% and 24.29% respectively compared with the same period last year.

It is worth mentioning that since 2016, the company has continued to show the situation of increasing profits without increasing profits, and the year-on-year growth rate of revenue also showed a trend of continuous narrowing. The net profit after deducting non profits increased from 6.5% in 2017 to 24.29% in 2018.

For the reasons for the decline in performance, the company said it was mainly due to the decline in gross margin and the loss of new brands during the cultivation period.

Financial reports show that in the first half of this year, the company's operating costs increased by 8.45% over the same period, and the super revenue growth rate was about 6 points.

As of June 30, 2018, the company had 9674 offline retail outlets. In 2017, its offline retail outlets were 9448, increasing by 226 in half a year.

Moreover, La Natsu Bell has not stopped the pace of "expansion" of offline stores. The daily report shows that the amount of construction works has increased by 56.57%, up to 904 million yuan.

While expanding, La Natsu Bell's cash flow is on the decline.

Starting from this half year report, the net cash flow generated by La Natsu Bell's business activities is positive and negative, which is -2.56 billion yuan.

As for the reasons for the decline in cash flow, the company explained that due to the decline in sales in the two quarter, resulting in an increase in inventories, and some new brands were in the nurturing stage, and the operating capital expenditure of goods increased year by year.

The company adopts the direct sales mode, and needs to maintain sufficient inventory products compared to the franchisee mode. Therefore, high inventory has also become a "landmine" in the development of La Natsu Bell.

Public information shows that in 2014 -2017, the inventory of the company was 1 billion 327 million yuan, 1 billion 756 million yuan, 1 billion 714 million yuan and 2 billion 345 million yuan respectively, accounting for 23.16%, 29.93%, 27.18% and 29.79% of the total assets of the current period.

As of June 30, 2018, La Natsu Bell's inventory was 2 billion 37 million yuan, accounting for 27.32% of total assets.

Inventory turnover decreased from 0.93 in the same period last year to 0.74.

Low inventory turnover will not only give companies

Bringing pressure will also increase inventories.

In the first half of this year, the company's inventory price drop was set at 288 million yuan, an increase of 22.03% over the same period last year.

In the doldrums of low performance, declining cash flow and high inventory, La Natsu Bell Jo wants to maintain the pace of continuous expansion, and issuing bonds to support development may be the only option.

In the semi annual report, La Natsu Bell has said that men's wear and clothing will be accelerated in the second half of the year.

Channel construction and foster new business growth points.

In September 25th, La Natsu Bell closed at 11.64 yuan per share, a slight increase of 0.69%.