Semir Apparel: Revenue Grew Steadily, Inventories Increased Significantly

Recently, Semir apparel (002563, SZ) introduced the company's 2017~2018 development in investor activities.

Morima Fukusomegumiharu said that 2018 was the year of dividend release.

In 2018, the company's business development was good, the first three quarters of revenue and profits have achieved more than 20% growth, the fourth quarter of the overall operation is good, the retail end year-on-year growth.

The growth rate showed a slowdown in the second half of the year compared with the first half of the year, and the annual revenue performance was in line with the business plan.

At the beginning of this year, Semir clothing also issued a series of related announcements to launch the children's wear market.

Market enters "Red Sea"

Why did Zong Huichun say that Semir clothing entered the bonus release period last year? In fact, Semir's clothing last year's semi annual report and the three quarterly report have been reflected.

Semir clothing 2018 semi annual report shows that during the reporting period, the company achieved operating income of 5 billion 532 million yuan, an increase of 24.80% over the same period last year, and achieved a net profit of 667 million yuan for shareholders belonging to listed companies, an increase of 25% over the same period last year.

The company's three quarterly report in 2018 showed that in the third quarter, the company achieved operating income of 4 billion 232 million yuan, an increase of 17.25% over the same period last year. The net profit of shareholders belonging to the listed company was 604 million yuan, an increase of 26.41% over the same period last year.

As a matter of fact, the children's clothing business which started with casual wear has attracted more attention from the children's clothing business of.

The company's semi annual report 2018 showed that during the reporting period, children's clothing business achieved a revenue of 2 billion 869 million yuan, accounting for 51.86% of total revenue.

Cheng Weixiong, general manager of Shanghai Liang habitat Brand Management Co., Ltd. analyzed to the daily economic news reporter, "balbala has done well online and online, but with the brand of children's clothing springing up, the popular brand of children's wear has actually entered the Red Sea stage in the past two years.

The involvement of many brands and capital at home and abroad has led to a blowout of children's clothing, and the market capacity is not as big as expected. Balbara's development has also slowed down significantly, and the gross profit margin has narrowed due to intensified competition.

Semir clothing seems to have realized this.

At the beginning of this year, the company issued a bulletin, announcing the children's clothing market in a high-profile manner.

In the evening of January 8th, the company announced that it was planning to sign a joint venture contract with KIDILIZ GROUP, the largest children's clothing group in Europe, and jointly set up a joint venture, happy chestnut (Shanghai) Co., Ltd. (hereinafter referred to as the joint venture company), and the joint venture company will promote the brand of KIDILIZ GROUP and sell its products and develop related businesses.

According to the announcement, Semir apparel invested 21 million yuan in cash, accounting for 70% of the registered capital of the joint venture company.

The joint venture's business scope covers clothing, footwear, accessories, cosmetics, glasses, household products, design, sales, import and export, technology development, technology pfer and business consulting.

Public information shows that Kidiliz Group is a European high-end children's clothing industry, headquartered in Paris, France, has 11000 sales outlets and 829 stores.

Its own Absorba, Catmini and other 10 own children's wear brands, as well as Kenzo Kids, Levis Kids and other 5 authorized business brand.

In the evening of January 8th, Semir clothing announced that it intends to set up a wholly owned subsidiary, Shanghai Sen he Enterprise Management Co., Ltd. (hereinafter referred to as Shanghai Sen he) with its own funds, with a registered capital of 20 million yuan, mainly engaged in business management consulting and business information consultation.

Year-on-year growth in inventories

It is worth noting that Semir clothing announced in May last year that it signed a final binding offer on acquisition of Kidiliz group with Inchiostro SA and its annex "share purchase agreement" and other documents, and intends to acquire Sofiza SAS100% equity and creditor's rights.

To smooth the implementation of the relevant agreements, the company intends to set up a wholly owned subsidiary Semir Holdings (Hongkong) Limited in Hongkong, China, with a registered capital of 10 thousand Hong Kong dollars, and acquire the Sofiza SAS100% equity and creditor's rights through the company.

For this acquisition, Cheng Weixiong said that foreign brands have advantages in brand positioning, design and research, operation and promotion, supply chain management and so on.

However, related earnings showed that as of December 31, 2017, the total assets of Kidiliz Group were 496 million euros, the total liabilities amounted to 210 million euros, and the net assets were 285 million euros; in 2017, the Kidiliz group achieved operating income of 427 million euros, the pre tax net profit was 24 million euros, and the net profit after tax was negative 27 million euros.

At the same time, Semir clothing 2018 three quarterly report shows that as of September 30th last year, the net cash flow generated by the company's business activities was 29 million 171 thousand and 500 yuan, down 95.36% from the same period last year.

In addition, as of the end of the third quarter of 2018, the company's inventory was 4 billion 165 million yuan, an increase of 23.90% over the same period last year.

In this regard, Cheng Weixiong believes that Semir's affiliate order mode has some risks: "first, six months ahead of time ordering has limitations in the grasp of the trend; secondly, although Semir has launched the 10%~20% quick single and small order replenish on the basis of the existing order mode, it is nearly 25% more than its inventory growth year on year, and the role of small batch ordering is limited.