After The Brand Of Shanshan, Another Ningbo Garment Enterprise Went To IPO.

In recent years, GXG revenue has increased steadily from 3 billion 17 million yuan in 2016 to 3 billion 787 million yuan in 2018.

According to IPO, the group of GXG, a well-known menswear brand, has submitted a IPO application to the HKEx for about HK $2 billion 300 million. This is also followed by the listing of Shanshan Brand Hong Kong stock last year, and another Ningbo clothing enterprise went to Hong Kong IPO.

From the prospectus, its brand includes GXG, GXG jeans, GXG kids, and sportswear Yatlas and 2XU, mainly for high-end customers who pursue fashion and pay attention to fashion.

From 2016 to 2018, the company's income increased steadily from 3 billion 17 million yuan in 2016 to 3 billion 787 million yuan in 2018. Among them, in 2016 -2018, GXG's online clothing sales revenue was 715 million yuan, 1 billion 210 million yuan, 1 billion 350 million yuan, showing a sharp rise.

It can be seen that the proportion of online sales increased significantly, from 23.7% in 2016 to 34.5% in 2017, and further increased to 35.7% in 2018. At the same time, the proportion of offline sales in total revenue continued to decline, from 74.8% in 2016 to 64% in 2018, but it is still the most profitable business.

In terms of gross profit, these three years were 1 billion 617 million yuan, 1 billion 899 million yuan and 2 billion 32 million yuan respectively, and the gross gross profit margin reached 53.6%, 54.1% and 53.7% respectively. The main reason is that the revenue from self owned shops is large, and the partnership stores and dealers have more gross margins, while the increase in online sales leads to lower operating costs. Therefore, a relatively high and stable gross profit margin is likely to be one of the main competitive advantages of GXG in the market in the future.

However, in the face of fierce market competition, GXG still faces many challenges. Prospectus disclosure, by 2018, by the increase of raw material costs and product sales problems and other problems, GXG net profit fell 12% compared to the same period last year, which makes the company's holding costs continue to increase, the profit space is compressed. At the same time, from the return rate, the actual sales return rate of GXG in the past three years was 24.2%, 26.8% and 35%, much higher than expected, and the product inventory cycle lasted for three years to 195 days.

Previously, GXG emphasized that in the future, we must control a certain scale and increase profits to become a new retail mode driven company. But at present, the company still faces the pressure of profit space compression, liabilities and so on. From the balance sheet of the prospectus, from 2016 to 2017, the company's liabilities increased from 1 billion 439 million yuan to 3 billion 193 million yuan, and net assets changed from 1 billion 7 million yuan to minus 230 million yuan. In this regard, GXG will reverse its weakness and seek new growth.