Tian Chong Fashion 9.29 Billion Intelligent Manufacturing Base, Sitting On Six Women's Shoes Brand Annual Capacity 2 Million 700 Thousand Pairs.

Guangzhou Tian Chuang fashion shoe Limited by Share Ltd (hereinafter referred to as "Tian Chuang fashion") issued a notice on the evening of May 30th. The public offering of A shares can be adjusted by the Switching Company bond scheme. The total amount of the public offering can be raised to no more than 600 million yuan. After deducting the issue cost, all the investment will be invested in the construction project of the intelligent manufacturing base and the supplementary liquidity.

Analysts believe that at present, the production capacity of Tian Zhuang fashion footwear is about 2 million 700 thousand pairs / year, and its capacity accounts for about 51.2%. If the convertible bonds project is implemented smoothly, the proportion of the company's own production capacity is expected to increase by 10-20 percentage points, the cost of trial and error will be greatly reduced, the scale customization will be further improved, and the per capita efficiency will be further enhanced.

According to the financial report, in 2018, Tian Chong fashion realized 2 billion 52 million yuan of business income, an increase of 18.37% over the same period last year, and realized a net profit of 242 million yuan attributable to the parent company, an increase of 28.87% over the same period last year. The net profit of the net profit of the parent company was 205 million yuan, an increase of 26.99% over the same period last year, and the gross profit margin was 56.01%, down 1.74 percentage points compared to the same period last year. The net interest rate was 11.93%, up by 1.22 percentage points compared to the same period last year; EPS was 0.56 yuan, an increase of 1.22 over the same period; the weighted ROE was 1.22, a slight decrease of 1% over the same period last year.

During the reporting period, the main business of Tian Zhuang fashion shoes and clothing business achieved 1 billion 743 million yuan, an increase of 2.31% over the same period, a 8.14 percentage point decline in the same period, and a 0.68 percentage point increase in gross profit margin to 58.64%. Among them, footwear business achieved operating income of 1 billion 711 million yuan, an increase of 2.96% over the same period, the growth rate dropped 6.7 percentage points year-on-year, and gross profit margin increased 0.49 percentage points to 58.87% over the same period.

Chen Bo, a Fortune Securities analyst, believes that the growth rate of the main business of Tian Zhuang fashion shoe clothing industry is slowing down. The pressure comes mainly from three aspects:

1) the consumption situation has changed, and higher requirements for product structure and operation management level have been put forward. From the perspective of consumer groups, the consumption power of the Z generation has been significantly improved, and the average age of the main consumption groups has shifted downward; from the perspective of consumption demand, the consumption of leisure sports shoes continues to increase; from the perspective of consumer behavior, consumption is no longer limited to online or offline consumption alone, and the consumption growth caused by social marketing and drainage.

2) the company increased the supply of casual sports shoes and increased the cost of outsourcing. According to the change of consumption situation, the company optimized and adjusted the product structure and increased the supply of leisure sports shoes. But unlike fashion shoes, the company has less experience in data accumulation and production operation in the aspect of leisure sports shoes, and the efficiency of supply chain is relatively low. In the past 3 years, the proportion of the company's own capacity has dropped by about 17 percentage points, accounting for about 51.2%. The cost of outsourcing has increased for double-digit growth for 2 consecutive years (+23.1% 2017 and 2018 +13.6%), and the cost side pressure is more obvious.

3) product response speed and style positioning adjustment factors. KISSCAT is the company with the longest running time and the largest scale of performance (about 50%). In 2018, the brand revenue decreased by 4.75% compared with the same period last year, and the gross profit margin was 0.23 percentage points lower than that of the previous year. Product supply efficiency, category structure and price reduction of competitive brands (BELLE, etc.) have a certain impact on brand performance. KissKitty brand revenue fell 14.81% during the reporting period, mainly due to the continuous adjustment of design style and product positioning.

In Chen Bo's view, skylight fashion footwear business operation focuses on two aspects:

1), differentiated operation brands, ZsaZsaZsu and tigrisso are still the focus of development. In the next stage, the company will differentiate the four core brands from the aspects of product design and price band.

ZsaZsaZsu's "fashion" design style will be more prominent. Tigrisso will keep sinking while keeping its "grace" tonal. On the issue of landing capacity of OBag, the company has also maintained a positive communication with the brand side. Membership system has now completed user portrait labeling, and the future focus is on content output.

2) online channels still maintain a higher rate of new products, which will further enhance the scale and proportion. In 2018, the company's online business grew by 8.1%, accounting for 14.6% of its revenue and 57.5% of gross profit margin. More than 80% of the company's online channel's new product rate will remain. The impact of vip.com's own positioning and strategic adjustment on the company's online business is expected to gradually decrease. In 2019, the growth of online business performance is expected to exceed 10%, and the scale is expected to exceed 15%.

Chen Bo believes that as the brand matrix is perfect and stable in the high-end high-end women's shoes, Tian Chong fashion has obvious advantages in the field of fashion shoes, and has begun to enter the leisure trend shoes category through flexible supply chain. After the completion of the future intelligent manufacturing base, the capacity bottleneck problem will be solved effectively, the cost end pressure will be reduced, and the business efficiency will be further enhanced. At present, the brand differentiation operation effect, store performance performance and the improvement of the company's operating efficiency before the intelligent manufacturing base is put into operation is still a problem that the industry needs to pay close attention to.

Public information shows that our company is mainly engaged in R & D, production, distribution and retail of fashion consumer products. Since its inception, it has been focusing on the fashion women's shoes market, providing fashionable and comfortable footwear products and services for female consumers, and extending it to other fashion categories on the basis of women's shoes business.

Tian Chong fashion has six brands of women's shoes, including five women's own brands: "KISSCAT", "ZSAZSAZSU", "tigrisso", "KissKitty" and "KASMASE". As well as acting as the "Patricia" brand of Spanish women's shoes, based on the core business of women's shoes, Tian Chong fashion is actively developing fashion lifestyle brands and categories, including the extension of multi scene full class menswear's own brand "catalog", acting as the fashion brand of Italy, OBAG, and participating in the international designer brand UnitedNude (UN).