Nine Mu Wang Meets With Midlife Crisis: Over 800 Million Inventories Are Too Few, Suspected Of Inflated Profits.

The name of the "man pants expert" has not yet passed the "middle age crisis".

As a well-known garment brand in China, the brand male pants of nine kings have been leading the domestic men's pants Market for 18 years, but in the last 10 years, the company has failed to break through the bottleneck of development.

In May 30, 2011, nine Mu Wang listed on the A stock board. Since its listing, its operating income has been hovering around 2 billion 200 million yuan, and net profit (net profit attributable to shareholders of listed companies) has also stood at about 500 million yuan.

In the same period, the gross profit margin and net interest rate also showed no signs of increase.

Correspondingly, the nine herd kings closed shop.

In 2012, the total number of shops under the nine Mu Wang line was 3264, compared with 2694 at the end of June last year, a net decrease of 570, of which joeone shops were 657 net reduction.

Without considering the opening of stores, less than 6 years since 2013, the company has closed 1624 stores, exceeding half the total number of shops in peak hours.

In the face of the situation, in addition to shutting down shops to stop bleeding, the king also carried out industrial holdings, overweight young fashion brands FUN, and indirectly involved in culture, education, film and television.

At the beginning of this month, the company obtained a profit of 60 million yuan by reducing its stake in CAITONG securities, and it could also prove that the subsidiary industry nurtured itself.

It is noteworthy that the problem remains high.

By the end of 9 last year, its inventory amounted to 826 million yuan, nearly 40% of its current assets.

Not only that, the company is also alleged to be underestimating profits.

In 2017, although the inventory ratio of goods was up to 10%, its inventory ratio was less than 1% in one year, and the proportion in the 1 to 2 years did not reach 10%, which was lower than that in the same industry.

Last week, an interview letter was sent to King Mu for business performance and pformation.

Since the listing, net profit has not stopped.

The nine shepherd king, who has the reputation of "pants king", has not been able to keep pace with the times in terms of business performance, but it is hard to maintain.

Up to now, nine Muwang has not issued a performance bulletin and a notice. Its performance in the first three quarters of last year is relatively dull.

Last year's three quarterly report revealed that its operating income was 1 billion 921 million yuan, an increase of 7.74% and net profit of 3.50%, an increase of 1.86%.

Compared with the same period last year, there is a clear gap.

King Mu is mainly engaged in the design, production and sales of men's business casual brand clothing. Although it has strong competitiveness, its business performance is not brilliant.

Data show that in 2009, its operating income and net profit were 1 billion 404 million yuan and 258 million yuan.

From 2009 to 2011, the operating income and net profit increased rapidly during the IPO reporting period. In 2011, it was 2 billion 257 million yuan and 518 million yuan respectively, with an increase of 34.78% and 43.73% respectively.

Peak appeared in 2012, its operating income of 2 billion 601 million yuan, net profit of 668 million yuan, an increase of 15.20%, 29.07%.

Since then, business revenue has dropped to around 2 billion 200 million yuan, and net profit has dropped to around 400 million yuan.

In the same period, the overall gross margin of the company was hovering around 56%, the highest 57.96%, the lowest 47.90%, and net interest rate maintained at around 20%, the highest being 25.70% in 2012, the lowest being 16.95% in 2014.

In the 8 years since the listing, the assets of the nine Mu Wang have been about 5 billion yuan, which was 5 billion 741 million yuan at the end of September last year. It only increased by about 1 billion yuan at the beginning of the listing.

In the same period, the R & D input also changed very little, the highest in 2013, 28 million yuan, and 23 million yuan in 2017, close to the average level since the listing.

Business has failed to break through the bottleneck of development, and in response to market changes, nine Mu Wang has repeatedly adjusted its stores.

Since listing, there have been two fundraising works by the nine Mu kings, namely, IPO raising 2 billion 640 million yuan and issuing bonds 200 million yuan, totaling 2 billion 840 million yuan.

In the recruitment and investment projects, the marketing network is mainly built.

What is the actual situation?

At the end of 2010, 2710 shops were sold on the eve of the company's listing, reaching 3264 at the end of 2012.

This is the peak of the number of shops. After that, there are more shops and stores.

According to the preliminary statistics of the Yangtze River Commercial Daily reporter, from 2013 to June 30th last year, the number of closed shop was 140, 179, 153, 13, 146 and 64 respectively, accounting for 565 (considering the merger of some brand shops, 570).

Among them, as its core brand store joeone store, in 2013, it was 3087, at the end of June last year, it was 2370, with a total net decrease of 717, accounting for 1/4 of the total number of shops.

In fact, if we only calculate the number of closed stores, the total number of outlets has reached 1624 since 2013 (a net decrease in 2013 and 2014).

There is no doubt that closing the losses in a more serious shop in a timely manner will have a great impact on the performance of the king.

In 2015 and 2017, its net profit increased by more than two digits.

The inventory ratio is low in one year.

In the midst of the midlife crisis, the king of nine herd is also facing the problem of high inventory. This problem remains unresolved.

The stock of King nine has surged from its first year of listing.

At the end of 2010, its inventory was 449 million yuan, and its growth rate increased to 722 million yuan in 2011, an increase of 60.80%.

From 2012 to 2017, the stock numbers were 650 million yuan, 625 million yuan, 593 million yuan, 584 million yuan, 736 million yuan and 739 million yuan respectively.

In order to solve the problem of high inventory, King Mu has also been conscious of reducing inventory. The most important measure is to close stores and reduce inventories.

The above data show that in 2016, 317 new stores and 330 stores were closed, with a net decrease of 13. In that year, inventories increased by 152 million yuan, an increase of 26.03%.

In 2017, 146 stores were closed, and the stock increased by only 3 million yuan.

As at the end of 9 last year, the balance of nine Mu Wang's inventory was 826 million yuan, accounting for 38.98% of current assets and a substantial increase again.

The number of days of inventory turnover is 256.22 days, which means that it takes 8 months for the company to carry out inventory turnover.

In the same period, Semir clothing inventory turnover days were 147.88 days.

In fact, in recent years, the loss of company assets impairment is almost entirely contributed by the decline in stock prices.

From 2016 to the first three quarters of last year, its assets impairment losses were 74 million yuan, 78 million yuan and 63 million yuan, of which, the loss of inventory depreciation was 70 million yuan, 74 million yuan and 101 million yuan.

In fact, in terms of inventory provision, there is a suspicion that there is a shortage of profits.

In 2017, the company's 825 million yuan inventory, 700 million yuan for the inventory of goods, its provision for depreciation is 70 million yuan, about 10%.

The proportion of Semir clothing in the same year was 16.75%.

Moreover, the inventory commodities in the 1 years and 1 to 2 years of the stock in the nine storehouse are 487 million yuan and 129 million yuan respectively, and the provision for depreciation is 4 million 598 thousand and 500 yuan and 9 million 887 thousand yuan respectively, with a ratio of 0.94% and 7.66% respectively.

Even for more than 3 years, the proportion is only 88.90%.

In the first half of last year, the proportion of inventories of goods within one year was lower than 0.64%.

Cross border education diversification

Wang Mu Wang, who has not been able to break through the bottleneck of development, has tried to diversify.

In 2017, King Mu moved continuously.

In those days, the company put forward three major platform changes: Seiko quality, personality trend and fashion quality.

Specifically, the brand reconstruction and channel upgrading of the nine herd kings, the high-end men's trousers brand entered the 7 major markets, such as Tianjin and Zhengzhou.

Based on FUN Chao brand brand, the acquisition of BEEN TRILL trademark rights in mainland China, Hongkong and Macao has opened 30 independent GARFIELD BY FUN stores in 10 years.

In addition, the Korean brand designer NASTYPALM trademark in mainland China has been awarded the brand of the young fashion quality menswear brand ZIOZIA Greater China through the way of capital increase.

In February 19th this year, the company announced that it plans to invest 76 million 500 thousand yuan with KitsuneFrance to set up fox (China) Co., Ltd. to carry out the business of "MaisonKitsun e" brand and "Kitsun e" brand clothing, accessories, bags, cosmetics and perfume products in mainland China, Hongkong and Macao.

In addition to constantly improving the main industry and enriching the product line, the king also plays cross-border.

In April of that year, the company declared that its wholly owned subsidiary signed a partnership agreement with "Shanghai Mu Hua" to invest in "Hangzhou Mu Hua" fund with a scale of 1 billion yuan, investing in cultural education and its derivatives industry and emerging industries. The nine largest investment company has signed a partnership agreement.

In March last year, the company announced that the wholly-owned subsidiary of the nine Mu Wang retail Cci Capital Ltd signed an agreement with TH education capital, and nine Mu Wang retail was intended to act as a limited partner (LP) to participate in the subscription of the TH education capital phase I Fund (limited partnership).

This shows that its cross-border move is further.

In July 6th last year, the company also announced that the wholly-owned subsidiary invested nine yuan to invest 10 million yuan in Zhongguang film and television to subscribe to Shenzhen Huaqiang Fang culture and Technology Group's non-public offering of investment projects.

Previously, the company also held 2% stake in CAITONG securities and 8.31% stake in Korea's clothes house.

At present, these investments have seen initial benefits.

In March 1st this year, the company announced that since February this year, it has sold 9 million 17 thousand and 800 shares of CAITONG securities and gained an investment income of 59 million 857 thousand and 100 yuan.

However, it remains to be seen whether the path of diversification of the king of nine herd can go smoothly and whether the bottleneck of the main industry can be achieved.

Author: Shen Yourong