Mu Shang Group Women'S Clothing Strategy "Hatch + Acquisition" Two Hands Grasp Sports Plate Also Does Not Fall.

After a long time, the GXG parent company 01817-HK finally arrived at the Hong Kong stock market.

The company held a press conference on May 14th to announce details of its listing on the main board of the stock exchange.

The group plans to offer 200 million shares, 10% of which are for sale in Hongkong and 90% for international sale. The public offering will start tomorrow (May 15th) and end in May 20th.

The selling price ranges from HK $4.68 to HK $5.88, with 500 shares per hand and an admission fee of HK $2969.63.

The company is expected to be listed on the stock exchange in May 27th, including Credit Suisse, Citigroup and international bank.

With a median selling price of HK $5.28, the company intends to raise net proceeds of HK $973 million, of which 45% is used to repay existing debts and reduce its financial costs; 15%, to expand the company's brand and product mix through brand acquisition or strategic alliances; 10% to upgrade the offline retail stores to intelligent stores; 20% for the establishment of advanced intelligent logistics centers; and 10% for working capital and general corporate purposes.

Mu Shang currently has 2265 retail outlets nationwide, and online business accounts for 36% of the group.

Yu Yong, executive director and chief executive officer of the company, said the company plans to increase 100 stores next year. The stores are mainly concentrated in 123 line cities, and will advance the pace of opening the main brand in four or five tier cities in the future.

At present, the company is carrying out the improvement of the offline channel structure. Yu Yong said that the company will pform the street store and department store into a shopping center store, and channel the sub brand into the channel, and will open shop in 123 line cities in the next five years.

In the same store sales, Yu Yong said that the same store sales growth slowed down in 2018, because the company made strategic adjustment to raise the price of online sales to keep close to the price of offline stores, although the slowdown has been slowed down, but the base is still at a high level.

In terms of return rate, according to the Prospectus Documents, the actual sales return rates in 2016, 2017 and 2018 were 24.2%, 26.8% and 35% respectively.

The company's prospectus shows that the increase in actual sales returns from 2017 to 2018 was mainly due to the fact that most of the VIP dealers in the company returned products in 2018.

Yu Yong said that the return rate will gradually improve in the future, does not affect inventory turnover, and the company has Taobao and Taobao and other platforms to play a role in inventory digestion channels.

A big aura of mousse comes from the French luxury group Lu Wei Mun Xuan. The group's private equity fund L Catterton is a shareholder of Mu Shang Group. It helps Mu Shang and the Australian sports brand 2XU to establish a joint venture in China.

2XU is famous for its high-tech Compression Tights, such as triathlon, cycling, swimming and running. Yu Yong said the company currently has two single brand line retail stores and Tmall flagship stores, and will gradually penetrate into the domestic market in the future.

According to the prospectus, the company has introduced 2XU to 22 multi brand sporting goods shops.

The company plans to increase to 60 multi brand sporting goods stores and 21 single brand retail outlets before the end of this year, and expand to 100 brand sporting goods stores and 34 single brand retail outlets before 2020.

In addition to the sports series, Mu Shang also expanded her business to the women's wear market.

According to Yu Yong, in the existing brand structure, the company is currently hatching a brand of online women's wear, and has gradually explored the sales status, product structure and product characteristics.

In addition to its own hatching, Yu Yong said the company would also focus on matching the women's clothing brands that were matched with the company's current channels, membership age and consumption ability to form joint ventures or acquisitions to make up for the lack of brand structure in the women's clothing division.

Earlier media reports said that the company had already made a clear bid for women's clothing brand. Yu Yong, a reporter of today's press conference, denied this.

In addition, the company introduced the Wanda and Sha boat group.

Yu Yong said that the cooperation between Wanda and Wanda is not related to Wanda stores sold, but in Wanda Plaza, which now has more than 400 stores.

Wanda, as the investor of Mu Shang cornerstone, subscribed the total number of shares sold for $20 million, Yu Yong said it was Wanda's recognition of the company as a leader in men's clothing.

Another cornerstone investor, Sha Sha shipping group, currently has one experience in developing and operating the retail outlets in China for about 30 years. The company sells the total amount of HK $40 million to the number of shares offered by the company at the selling price.

Huang Hong, chairman and non-executive director of the company, said that listing in Hong Kong was not only aimed at attracting international capital and investors, but also hoped that in the near future, Hong Kong and Macao compatriots could also accept the products of the company.

Yu Yong said, the company has been in communication with Hongkong side channel shop plan, and this as an important development strategy.

The following is a partial record of the press conference.

Q1: how does the company plan to open stores?

A: at present, stores are mainly concentrated in 123 line cities, and will promote the main brand to open stores in four or five tier cities in the future.

The company is improving the channel structure under the line, so that the number and quality of the stores can be improved.

The company will pform the street shops and department stores into shopping centers, and penetrate the sub brands, and will gradually open stores in the 123 tier cities in the next five years.

The company plans to increase 100 stores next year.

Q2: Why did the company start marching into the women's clothing market?

How to develop?

A: at present, the company is incubating a brand of online women's wear. It has gradually explored the sales status, product structure and product characteristics.

In addition, the company will also focus on matching the company's current channels, membership age and consumption ability to match the women's clothing brand joint venture or acquisition, to make up for the lack of brand structure in the women's clothing branch.

However, the company has not yet explicitly acquired the target.

Q3: revenue has increased over the past three years, but net profit growth has slowed down. What is the main reason for the reduction of profit margins?

A: in fact, the adjusted net interest rate of the company remains at around 13%, which reflects that our adjusted profit has kept steady rising on the basis of business growth, which is a steady growth.

Our net profit has declined because we made overseas loans in 2017, which helped us adjust our capital structure at that time, which would return some of our fundraising funds, and then have a better capital structure. At the same time, reduced loans would reduce interest expense and enhance net profit after tax.