Levi'S May Be Listed On The Successful Listing Of Many Cowboy Companies After The Spin Off.

Levi's, the world's largest jeans brand representing the wild spirit of the United States, its parent company Levi Strauss, after its 34 years of privatization, rode the capital market two times and reappeared in the US NYSE on Thursday, March 21st, with a trading code of LEVI.

The issue price is higher than the upper limit of the interval. The opening price has risen by more than 30%.

The company originally expected to issue a price range of 14 to 16 dollars per share. Due to the strong demand of investors, the final issue price was $17, higher than the upper limit of the expected interval, and 36 million 700 thousand shares were planned to be issued, with a total financing of 623 million US dollars.

Among them, the Haas family of the company's actual controller and founder Levi Strauss can sell 21 million of them, and is expected to achieve over 300 million dollars in revenue.

On Thursday, Levi's opened at $22.22, up 30.7% from the issue price. The intraday rose to $23.15, and IPO rose by 36.2% on the first day, reaching a minimum of 22 dollars, still higher than the issue price.

Subsequently, Levi's handed in to US $22.60, valued at about $8 billion 600 million, and its market value was close to $9 billion at a new high.

In the end, Levi's IPO rose 31.82% on the first day and closed at $22.41, after which it continued to rise nearly 1%.

On the day of the Levi's listing, the interesting details observed by the media are that today traders in the hall of the NYSE allow them to wear jeans to work.

Analysis: Levi's's successful listing has made a good start for this year's IPO company in the US.

According to the Financial Times analysis, Levi's, as a successful IPO case, has made a good start for this year's queuing companies waiting for listing and financing in the US.

At present, more than 300 companies plan to list in the US this year, raising nearly $49 billion.

Goldman Sachs predicted at the end of last year that 2019 could be a record year in the US IPO market, with an overall fund-raising amount of $80 billion.

In this regard, Carolyn Saacke, chief operating officer of the NYSE capital market of the NYSE, said Goldman's expectations may be too optimistic, but Levi's IPO has been well received in the roadshow period. The brand effect has attracted its attention, hoping to lay a good foundation for the IPO season officially opened in 2019.

Analysts pointed out that at the end of last year, US stocks were volatile, and the US government set up some of the longest record stops in the history, which delayed many companies' preparations for the listing.

With the opening of the US government at the end of 1 and the increase of the S & P 500 market by 13% this year, the expectation of IPO warming has also been on the rise. After all, the environment is more friendly to the IPO.

This year, the market focuses on the listing of the "decacorns", a super Unicorn valued at more than $10 billion.

It is believed that after the first Lyft of the network, Pinterest, Uber, Airbnb, Slack and other new star companies will march into IPO's journey one after another.

Wall Street knowledge once mentioned that Lyft, the first shared car giant in the us to be listed, was touted by investors. Lu Yancai had been oversubscribed for two days, and Wall Street analysts gave a "buy" rating at the time when the issue price was uncertain.

Jeans, women, and emerging markets are Levi's's development keywords.

According to Fawkes news, Levi's was first listed in the US in 1971, issuing 1 million 270 thousand shares, issuing a price of $47, and the opening price on the first day was as high as $60.

After 14 years of public trading in the two tier market, the Haas family privatized the company with a leverage purchase price of $1 billion 600 million.

This year is the 166th year of Levi's's establishment. After the re listing, the Haas family still holds 80% of the voting rights.

In the past five years, sales of Levi's's jackets and garments have doubled to $about 1000000000, contributing more than half of the company's revenue growth and currently occupying 20% of revenue, Bloomberg BusinessWeek wrote.

Moodie analyst Michael Zuccaro said this success was the main reason why company management decided to reappear, because it proved Levi's's ability to evolve business outside jeans.

After the last privatization, Levi's's sales fell from $7 billion in 1997 to $4 billion 100 million in 2009.

But in the fiscal year ended November 25, 2018, Levi's realized $5 billion 600 million in revenue, an increase of 14% over the previous year, the best in 25 years. Net profit increased from $281 million 400 thousand to $283 million 100 thousand, showing growth and profitability potential.

The company said it plans to further expand its business, including potential acquisitions or strategic investments, but there is no immediate plan for investment or acquisition.

Last year, the company increased its marketing expenses by 24%, and planned to make efforts in women's clothing.

Last year, the revenue of men's clothing business was US $4 billion, which remained the core driver of total revenue and profits.

The company also hopes to enter key emerging markets such as China, Brazil and India. Last year, revenues from China and Brazil did not exceed 4% of total revenue.

In addition to international market expansion, the company will open new offline stores in the base camp, further expand wholesaler relations, and improve user online shopping experience.

The company believes that users are more convinced of Levi's's brand itself and its performance price ratio.

Media: many cowboy companies will be listed independently after the spin offs this year.

Wall Street knowledge once mentioned that the competition in jeans industry is quite fierce.

According to market research firm Ou Rui International, the five largest Jeans Brands in the world are listed companies except Zara, which are ranked first in sales. Both H&M and Wrangler are listed companies, and both Wrangler and Lee are all listed companies VF Corporation:

Levi's is headquartered in San Francisco Bay area, California, where talent is fierce but competition is fierce.

The third largest jeans brand in the US, Old Navy, is also located in the bay area. Its parent company Navy has direct competition with Levi's in talent recruitment.

Therefore, Levi's after listing can have more chips in employee equity incentives and employee benefits.

Jamie Merriman, an analyst at Bernstein, points out that the jeans industry is not only facing competition from casual fashion clothes such as Lululemon Athletica, but in the past ten years, the annual compound sales growth rate of global jeans is 3.5%, slower than that of the entire garment industry.

For Levi's, annual sales growth has been less than 3% until 2017.

CNBC, the financial media, points out that Levi's can not be taken lightly after its successful launch. Many cowboy companies will be listed independently after the spin off this year.

VF group plans to divest the jeans business, and pack the sub brands of Wrangler, Lee, Rock & Republic into a new company named Kontoor Brands, which will be listed in the first half of this year.

Gap also plans to divest the Old Navy sub brands and launch them independently.

Author: Du Yu