With Little Swallowing And Leaving "Sequela", Can The Growth Of Vega High?

Two years ago, the acquisition of "TEENIE WEENIE" by small swallowing company brought a sharp increase in revenue and net profit to Vigna ribbon. But in the first quarter of 2019, there was a sharp decline in the performance of the first quarter.

In June 21st, 603518.SH announced that after the approval of the Shanghai stock exchange, the company's securities abbreviation will be changed from "Vig Nash" to "Jin Hong Group" since June 26th, and the securities code remains unchanged. The main body of the listed company will also be renamed by "Vigna S fashion company" to "Jinhong fashion group Limited by Share Ltd".

As for why it changed its name, the representative of wicknash securities affairs told investors net in summer that "the company changed its name mainly because of integrating resources and enhancing the overall competitiveness of the group." As the company's brand continues to grow, the group name is no longer suitable for the use of a brand name. "

Vigna S is mainly engaged in costume design, production and sales, and currently owns three brands: "VGRASS" (Chinese name "Vigna S"), "Yuan Qian" and "TEENIE WEENIE".

In 2017, Vigna S bought the TEENIE WEENIE brand from the Korean attachment group in the way of "snake swallow elephants". At that time, the income and profit of TEENIE WEENIE was nearly three times that of Vigna S. Later. The company has been digesting and integrating the merger, and the company's renaming can be seen as a continuation of this integration. Mergers and acquisitions not only bring the company performance growth, but also bring "trouble".

The clothing company went to court.

The latest "trouble" comes from the old TEENIE WEENIE brand attachment.

In recent times, Yi Nian (Shanghai) Fashion Trading Co., Ltd., affiliated with the group of affiliated companies, brought Vigna S to court because it was thought that the sweet Shanghai (WEENIE) trading company did not pay the payment on time in the process of trading TEENIE's brand and assets.

In the indictment, Yi Nian said the two sides signed the agreement on the spanfer of assets and business of the TEENIE WEENIE brand in August 31, 2016, and agreed that Yi Nian would deliver assets to Vigna S in two batches.

The specific arrangements are as follows: within thirteen days after the completion of the first delivery, the proportion of actual assets delivered is not less than 80%.

Within thirteen days after the completion of the second deliveries of assets, the company actually delivered 97% of its assets. If the company fails to pay in time according to the agreement, Yi Nian company has the right to demand payment of late liquidated damages.

Yi Nian believes that through the second delivery, the proportion of the actual assets delivered has reached 98.1%. Therefore, wgnnasi should pay all the remaining spanfers 454 million yuan (including tax) to Yi in accordance with the agreement within thirteen days, but Yi did not receive Vigna S's money in time. He now asked and asked Vigna S to pay the tail and the corresponding overdue liquidated damages.

Regarding the lawsuit, vicknus said that the lawsuit was due to differences between the two sides in the full payment of the tail, and negotiations failed. Yi believes that the proportion of its delivery has reached 98.1%, and the total payment should be paid in full. Vigna S thought that Yi didn't make second deliveries in accordance with the agreement, and the actual delivery ratio of the company did not meet the requirements of full payment of the final payment after the acceptance of the company. That is, the proportion of the actual delivered assets did not meet the requirements of 97% of the agreement. ?

"The differences are not related to Vigna S's ability to pay," the company told the investment net. The company has raised funds to pay the full amount of funds by means of convertible bonds and other financing methods by the end of January this year. The case is not yet open at present (June 19th). The company has organized a professional lawyer team to respond. The litigation will not have a significant negative impact on the company's daily operations and profits. "

Snakes swallow up the company's performance

Vigna S landed on A shares in 2014, but in the first few years of listing, the company's performance was sluggish. In 2014, the company's revenue and net profit were 847 million yuan and 138 million yuan. By 2016, the company's revenue and net profit fell to 744 million yuan and 102 million yuan respectively. In 2015, Wien Nash bought the Nanjing brocade Institute Limited by Share Ltd (product brand "Yuan Qian") 100% shares, the strength luxury market, but the performance is still not good.

In March 2017, Vigna S bought the assets of the "TEENIE WEENIE" brand in China. At that time, the market value of the company was about 4 billion 500 million yuan, but the acquisition needed more than 5 billion 500 million yuan.

In 2017, Vigna S's performance of TEENIE WEENIE showed that the total revenue of the company was 2 billion 564 million yuan, up 244.5% from the same period last year, and its net profit to the parent company was 187 million yuan, up 89.32% compared to the same period last year.

In 2018, the company achieved a revenue of 3 billion 86 million yuan, an increase of 20.34% over the same period last year, and a net profit of 273 million yuan, an increase of 43.65% over the same period last year. From the point of view of sub brands, TEENIE WEENIE2018 achieved 2 billion 193 million yuan in revenue, accounting for 70.06% of total revenue, and the most outstanding contribution, while VGRASS achieved 862 million of revenue and 27.93% of total revenue. And the gross profit margin of TEENIE WEENIE is 69.21%, the highest among the three brands.

In addition to raising revenues and profits, TEENIE WEENIE also helped Vigna S get into children's wear and men's wear market. ?

Steady growth and hidden worries

However, by the end of the first quarter of 2019, the high growth of Wenger had not been sustained.

In the first quarter of 2019, Wiener achieved 688 million yuan in revenue, down 8.71% from the same period last year, and net profit of 13 million 290 thousand and 100 yuan, a decrease of 79.59% compared with the same period last year. The net profit of non return to mother was 10 million 364 thousand yuan, down 83.91% from the same period last year.

Sub brands, TEENIE WEENIE revenue fell 7.4%, VGRASS revenue fell 12.2%, cloud first revenue fell 1.5%. And the gross profit margin of the three brands declined during the same period, of which TEENIE WEENIE slipped 2.08%, cloud first slipped 2.17% and VGRASS declined 0.37%. In the same period, the sales cost of the company increased by 11%. ?

In addition, the "snake swallow elephant" merger has brought high financial costs to the company. In 2017, the acquisition of TEENIE WEENIE formed a long-term loan of 3 billion 330 million yuan, of which 1 billion 710 million yuan annual interest rate 7%, 1 billion 642 million yuan annual interest rate 4.75%.

Although the company raised funds through the way of private placement and the discovery of convertible bonds, at the end of January this year, it raised $746 million by issuing convertible bonds (both for mergers and acquisitions, and for long-term loans), which led to a decline in long-term borrowings. However, as of the first quarter of 2019, the company's long-term borrowing balance remained as high as 2 billion 436 million yuan. The financial cost of the company in the first quarter was 57 million 839 thousand and 200 yuan.

With regard to the above problems, Wien Nash replied to the investment net. "The first quarter results are short term fluctuations, mainly due to the decline in the main brand income, which leads to a decline in operating profits. Meanwhile, the impact of the cost rigidity, the increase in sales costs (mainly the increase in online and offline discount promotions), and the increase in interest rate on convertible bonds, and other factors. The first quarter returns are short-term fluctuations, which will not affect the goodwill of the company. The company has made corresponding adjustments in product design, pricing, store development, marketing promotion, promotional activities and cost control in the two quarter, and the above measures have initially met the company's expectations. Judging from the current situation, the downward trend of performance in the first quarter has obviously reversed, and the two quarter is expected to return to the track of steady growth. At the same time, the company will adopt various ways to raise funds and reduce financial costs.