Bosideng And Anta Are Frequently Short Selling "Sniping", And International Short Selling Agencies Are Targeting Mainland Brands.

Preface:

In June 23rd, Bosideng international apparel (03998-HK), a leading enterprise in the mainland down garment industry, was shorted by the international short selling agency, Boda DAS. In a 35 page short selling report, boeras listed a number of problems such as Boston net profit growth, management corruption, undisclosed related party spanactions, and directly gave Bosideng target price: zero.

Affected by this, in June 24th, Bosideng share price fell nearly 25%, and announced an urgent suspension. At the end of the session, the stock price closed at HK $1.730 / share, which was HK $about 6000000000 higher than the closing market value on the previous trading day (June 21st). By the end of June 26th, Boston share price climbed to HK $1.990 / share.

It is worth noting that, according to Wind data, Boston stock short sales soared from 3 million 334 thousand shares in May 17th to 34 million 316 thousand shares in June 21st. And Bosideng securities representative Liang Shuang said that the short selling report content could not reflect the real situation of the company, and the purpose of short selling organization was not clear at the moment.

Leading enterprises have a market value of "0"? Elaboration of the report of Bo Li Da Si

What kind of report is it? With just 35 pages, a leading industry in the mainland could evaporate about 6000000000 Hong Kong dollars in just a few hours, so that it would have to stop trading urgently.

According to the report released by the group, there are four main reasons for its short selling:

First, since 2015, Bosideng has attracted 807 million retail interest to attract retail investors.

It is reported that bosidas obtained the credit report of Bosideng multi subsidiaries from the documents disclosed by the HKEx, and compared the financial performance of these subsidiaries with Bosideng's open financial results. The total income of Bosideng's main business entities in China from 2015 to 2017 was 20 billion 300 million yuan, while the total revenue from Boston's annual report submitted to the HKEx was 21 billion 500 million yuan.

However, taking into account the limited volume of spanactions between Bosideng branches and the lack of disclosure of related company spanactions, the company attributed the 9% difference to the time lag in the reporting period. Because Bosteng's fiscal year ended in March 31st, and the data of the subsidiary company that he received from the government was 3 months later than last December 31st.

Although the income is matched, the combined credit report shows that Bosideng has exaggerated the net profit reported by Bosideng in its Hongkong exchange declaration: the Hongkong exchange's disclosure of Bosideng's accumulated net profit of 3 yuan to 1 billion 300 million yuan, but the combined credit report shows that the net profit of Bosideng's subsidiary is only RMB 463 million yuan. In other words, Bosideng has fabricated a net profit of 807 million yuan since 2015, and reported 174% more.

Secondly, Bosideng made many acquisitions to the undisclosed insiders, and paid more than 2 billion yuan artificially.

Mr bosidas said that Chairman Bosideng used three main false spanactions to deliver Bosideng's cash and shares to the undisclosed related parties: Jessie, Buoubuou and Tianjin Ladieswear. In all three independent spanactions, Bosideng always buys a nearly worthless brand of women's clothing in a Mr. Zhou, and the acquisition cost is almost 40 times the cost of Mr. Zhou's acquisition of the three brands of women's clothing.

In addition, bosidas also said that Bosideng had disposed of the land assets of RMB 50 thousand yuan at a low price (RMB 5 million 400 thousand yuan, equivalent to 10% of the initial consideration), and paid significant historical interest to Bosideng insiders who owned more than 65% of Boston's shares.

What is more exaggerated is that in the report, Boda said, "we are short of Bosideng and believe that its share price will eventually fall to HK $0". As a leading enterprise in the down garment industry, Bosideng is directly positioned as a worthless enterprise.

Why on earth? Bosideng turned out to be a short target.

In the morning of June 25th, Bosideng issued a clarification announcement to deny and clarify the doubts raised in the short selling report. In addition, Bosideng made it clear that the contents contained in the short selling report were false and misleading. "If there is any significant loss to the company, shareholders and investors, the company will retain all its rights and maintain such interests through law or any other means where appropriate or necessary."

It is interesting that bostin will hold a board meeting in June 26th to consider and approve the performance bulletins of bostin and its Affiliated Companies as of March 31, 2019, and the online exchange will be held in June 27th.

The coincidence of time converge, from the previous big increase Bosideng short trading share, followed by the release of short report, but not a week's time is Bosideng performance announcement and online communication day.

Cheng Weixiong, an independent analyst in shoe and garment industry, said that this is the brilliance of short selling organizations. This time point allows the listed companies to be restricted by some rules and can not read or explain too much. For short selling companies, not only did they sell the short selling volume earlier, but also the market counterattack was limited and the largest share was earned.

Catching the time point is one aspect. From the point of view of enterprise operation, Bosideng's development in recent years is not stable, especially the "many bottlenecks" in brand positioning, all of which provide an opportunity for short selling organizations.

The annual report shows that since the listing in 2009, Bosideng channel expansion has been accelerating, and has reached 1.3 peak in fiscal year 2013. Since the 2014 financial year, the industry has entered a cold winter. The company actively optimizes the retail network in the difficult operation, and closes the inefficient shops to enhance the quality of the shops. Since 2014, Bosideng's revenue has declined for three consecutive years.

Since 2017, with the group's focus on the down jacket industry, shrinking men's clothing, home, children's clothing and other non feather business, Bosideng revenue has improved, but there is still a long way to go back to the summit. However, according to statistics, Bosideng down clothing prices rose by 20%-30% in 2018. How to balance the development of high-end and popular market has become a big problem for the development of enterprises.

In addition, with the continuous development of the garment industry in the mainland, how to solve the problem of fashion integration, internationalization, trend and integration of IP and other products has become a problem of brand promotion at Bosideng. The "bottleneck" and uncertainties of these enterprises' development just gave the opportunity for the short selling organization to make money.

Mainland brands are frequently short selling, and financial reform is the key.

In fact, in recent years, short selling agencies have repeatedly targeted domestic brands. Since 2019 alone, Zhou Heiya, Anta and other brands have not been spared. Short selling agencies frequently "invade", and financial regulatory authorities should be vigilant.

In March 1, 2019, the short selling agency Emerson Analytics issued a short selling report, accusing Zhou Heiya of its business operations and financial performance, predicting that the real profit of the week's black duck in March 1, 2019 was only 255 million yuan, which indicated that the stock's share price had a larger drop. The agency also pointed out that in the third quarter of 2018, the central part of the mainland of China (which accounted for more than half of the weekly black duck's income) was surveyed, and 524 stores were investigated. It was found that the sales of weekly black duck stores in Henan and the Jiangxi were "increased by 28%".

In March 5th, Zhou Heiya issued a short notice of suspension and issued a clarification notice in March 6th, calling the agency "report mixed misrepresentation" and believed that the agency "is designed to manipulate share prices and damage our reputation."

At the beginning of June, because of the short selling "Blue Orca Capital" questioned the performance, recently, Anta sports (02020-HK) issued two announcements, strongly denied this false speculation, and disclosed that the related party subscribe for new shares, accounting for 0.59% of the total share capital. It is worth noting that in June last year, Anta also suffered short selling "attack" and its performance was questioned.

From the short selling report, the way of short selling organization is basically the same, that is, starting from the angle of enterprise finance, such as whether to increase profits, conceal related spanactions or false spanactions, etc., and then make an ambush in advance to borrow money from securities dealers, and choose a suitable time to burst out.

Due to the continuous development of the mainland economy, short selling behavior only affects stock prices intermittently, but it can not underestimate the impact of short selling on the development of enterprises. Song Qinghui, a well-known economist, said that the short selling would have a negative impact on Bosideng's performance, especially its revenue, and would also have a vicious impact on the future development of Bosideng, or it would go downhill from then on.

Therefore, for domestic financial regulators, it is very important to push forward the reform of financial system. In particular, a sound, mature and mature financial risk control mechanism is established, which constrains the intentional short selling behavior of financial markets and effectively protects the development interests of enterprises. Of course, as the main body of the market, the listed companies are familiar with financial rules and reasonably avoid the risk of short selling.

epilogue

To be sure, with the gradual introduction of the financial system reform and the continuous expansion of the openness of the financial market, the continuous development of the mainland financial market has attracted the attention of the international financial institutions. In order to avoid being eyed by short selling organizations and not giving short selling opportunities to enterprises, mainland enterprises need to constantly strengthen their financial awareness and risk perception.

In the current contest, Bosideng responded promptly and counterattacked, which was a good example for mainland enterprises. Of course, there are many such "battles" in the future, and we should not relax our vigilance.