Market Value Evaporated 80% Debt Burden La Natsu Bell Said It Would Shrink Business Scale

In January 8th, La Natsu Bell (SH): 5.52 yuan / share, with a total market value of 3 billion 23 million yuan. As the only company in the apparel industry who both listed A shares and H-shares, the total market capitalization of La Natsu Bell A shares exceeded 16 billion yuan in 2017. The market value has shrunk by 80% compared to the high level.
buy-back program
Recently, La Natsu Bell once again announced the progress of its A share repurchase. The announcement shows that the Company repurchased 485 thousand shares of A shares at about 2 million 834 thousand and 200 yuan on the day of January 3rd, accounting for 0.09% of the issued shares.
According to La Natsu Bell's A share announcement released in January 2nd, as of December 31, 2019, the company has accumulated a total of 10 million 165 thousand and 300 yuan to buy back 1 million 881 thousand and 800 shares of A shares through centralized bidding, accounting for 0.34% of the total share capital of the company, accounting for 0.57% of the company's A share capital.
It is reported that the buyback plan stems from La Natsu Bell's third provisional shareholders' meeting in October 2019. The repurchase period is from March 22, 2019 to March 21, 2020, and the proposed repurchase amount is 0.5-1 billion yuan.
The buyback move can be traced back to the stable stock price plan put forward by La Natsu Bell in 2015. In September 15, 2015, La Natsu Bell announced that the company adopted the plan for stabilizing the company's A share price in the three years after the listing of A shares of Shanghai La Natsu Bell apparel Limited by Share Ltd. The plan stipulates that, within three years from the date when the company's A shares are officially listed, it will not be caused by force majeure. Once the stock price of the company has been traded for 20 consecutive trading days, the closing price is lower than that of the latest audited net asset value of the company. The company, as the first place obligate to stabilize the share price, will take the repurchase company's stock as a specific measure to stabilize the company's share price.
From July 18, 2019 to August 14, 2019, the closing price of La Natsu Bell A shares in 20 consecutive trading days was lower than that of the company's latest audited net asset value per share (at the end of 2018 audited net assets per share of about 6.295 yuan / share), triggering a stable stock price plan.
In the new stable stock price plan, La Natsu Bell adjusted the price range of the repurchase share, the total amount of funds, the repurchase purpose and the repurchase period, in which the repurchase period extended 6 months to March 21, 2020.
　 Capital pressure
La Natsu Bell's third quarter report in 2019 showed that as at the end of the three quarter of 2019, the total assets of the company amounted to 9 billion 702 million yuan, the total liabilities amounted to 7 billion 161 million yuan, and the asset liability ratio had reached 73.81%. At the same time, the net cash flow generated by the company's fund-raising activities is -11.04 billion yuan, La Natsu Bell said, mainly due to the increased repayment of bank loans during the current period.
In addition, La Natsu Bell's actual controller Xing Jiaxing's pledge to Haitong Securities's 141 million 600 thousand shares of the company's stock has broken the warehouse constitutes a breach. The second largest shareholder of the company, Shanghai, has also pledged 38 million 500 thousand shares, accounting for 85.17% of its 45 million 204 thousand and 400 share holdings. Xing Jiaxing and Shanghai have accumulated 180 million shares in the summer, accounting for 96.27% of the total shareholding.
In addition, the Internet also circulated a piece of article suspected of La Natsu Bell's suppliers telling La Natsu Bell to repay millions of arrears. The article said that La Natsu Bell had been in arrears since May 2019, and even in November and December, despite repayment plans, it has not been implemented. The contract picture shows that Party A is the La Natsu Bell clothing Limited by Share Ltd in Shanghai. The picture also contains the place of delivery and the purchase order as processing contract.
On the pressure of debt, La Natsu Bell said in reply to the Economic Observer website that the company will focus on the balance of cash flow and insist on improving the structure of assets and liabilities. In addition to existing bank loans and project financing, the company can effectively increase the amount of cash flow generated by current business activities through channel structure adjustment, order optimization, member marketing implementation and product lifecycle management.
La Natsu Bell invigorated long term stock assets to obtain financing and provide financial support for the development of main business. Last November's announcement showed that La Natsu Bell's wholly owned subsidiary La Natsu Bell clothing (Taicang) Co., Ltd. intends to use its 100% stake in Taicang Jiaxing warehousing Co., Ltd. as a pledge to provide mortgage and pledge for 550 million yuan entrusted loans. La Natsu Bell replied to the Economic Observer website that through upstream and downstream supply chain financing and asset backed financing, it will be a useful supplement to bank loans and fully meet the liquidity demand.
High inventory is also a problem La Natsu Bell needs to face. After sorting out, La Natsu Bell's inventory has been maintained at over 2 billion yuan since the end of 2017. The three quarterly report in 2019 showed that the book value of its inventory reached as high as 2 billion 199 million yuan as of the end of the reporting period. In this regard, La Natsu Bell said that for the inventory products, the company will focus on meeting the needs of consumers and achieving sales targets in the aspects of product design, external processing and production, distribution of goods, and circulation in the middle season, so as to effectively improve the turnover efficiency of products.
Focus on women's clothing again and again
La Natsu Bell peeled off related assets for the three time in a row.
On the evening of December 18th 201, La Natsu Bell announced that the Shanghai subsidiary of the company, a wholly owned subsidiary of the company, was to offer a 60% stake in the intermodal Industrial (Shanghai) Co. Ltd., which was transferred to the transaction price of RMB 1 yuan.
In June of the same year, La Natsu Bell, a wholly owned subsidiary of the company, transferred the 98.04% share of the Tianjin Xing Kuang enterprise management consulting partnership (limited partnership) with a transaction price of 275 million yuan.
In May of the same year, La Natsu Bell sold the 54.05% stake of Agel Ecommerce Ltd in Hangzhou to Hangzhou goose Enterprise Management Consulting Co., Ltd. at a transaction price of 200 million yuan.
The three transaction, La Natsu Bell said, to further reduce the company's business burden, focusing on the development of the core women's clothing brand.
In addition, Jack Walker lost 160 million of his men's clothing subsidiary. In October of this year, La Natsu Bell applied for bankruptcy and liquidation to the people's court.
La Natsu Bell's brand involves women's clothing, men's wear, children's clothing and other fields. After continuous divestiture, how will La Natsu Bell's next step go? In this regard, La Natsu Bell said, at this stage, the company has established the brand differentiation development direction with the core of the main women's clothing brand as the core. It will shrink the development scale of the men's clothing brand business, retain the core shops and integrate the men's clothing team, so as to improve the investment return of the resources. Other brands will focus on improving profits, actively shrink the scale of business development and reduce the inefficient input of resources. The following companies will continue to strictly manage the budgetary situation of investment projects, and dispose of projects that are not in line with the company's development strategy and low future expectations, so as to ensure the smooth implementation of the company's adjustment and transformation.