The Performance Of AOKANG Has Been Reduced For 4 Years. Only The Brand Authorization Has Been Allowed.

Many years ago, I bought more than a pair of AOKANG shoes, but I never bought them again.

Why do I no longer prefer AOKANG? I really don't know. This is probably the problem that the chairman and President Wang Zhentao and Wang Jinquan have been thinking over the past few years.

Private brand continues to decline, agency brand development is not as good as expected, the company's performance has dropped for 4 years and is at the edge of losses. Is it true that the "light of domestic products" really only had the way of brand authorization?

4 consecutive performance

The good days of AOKANG international are long gone. Since 2016, the company has entered the path of declining performance.

According to the latest data, in 2015 -2019, the company's operating income dropped from 3 billion 320 million yuan to 2 billion 730 million yuan, and the net profit from mother yuan to 390 million yuan to 22 million yuan. In 2019, the net profit was -0.30 billion yuan, the first loss since 2012.

AOKANG is a well-known leather shoe manufacturer in China. It has a history of 32 years. It owns two major brands of AOKANG and Kanglong, as well as international sports brands such as Skech and Puma.

AOKANG international is originally a brand of leather shoes based on men's shoes. In recent years, according to market conditions, the company has gradually increased investment in women's shoes and has passed the field of testing water sports shoes by proxy.

From the annual earnings report, the company's most serious decline is the company's main brand AOKANG and men's shoes category.

In 2015, AOKANG brand revenue was 2 billion 84 million yuan, Kanglong brand income was 414 million yuan; in 2019, the income of the above two brands was 1 billion 730 million yuan and 389 million yuan respectively. In the same period, sales of men's shoes were 12 million 3 thousand and 400 pairs and 9 million 670 thousand and 300 pairs respectively.

While the sales of men's shoes declined, women's shoes did not achieve the expected growth. In 2019, the company sold 6 million 801 thousand and 300 pairs of women's shoes, and sold 290 thousand pairs less than in 2015.

In 2012, AOKANG acquired the brand ownership of the first brand of Italy shoe industry, "Wanli Wei" Greater China, and realized the dream of acquiring the world's largest brand, and hoped to occupy the high-end market through the brand. But after the listing, the brand has disappeared from the company's annual report.

Product sales declined and revenue decreased, and AOKANG international brand's market influence gradually weakened.

In the latest reply to the annual report of the exchange, AOKANG international revealed that in 2019, the market share of men and women shoes was about 0.36%, compared with 0.41% last year.

According to the company analysis, the main reason for the decline of the market share is that with the trend of leisure sports increasing, the demand for casual shoes and sports shoes grows, which has affected the traditional leather shoes to a certain extent.

Skech's development is not as good as expected.

Despite the rapid growth of leisure and sports shoes, leather shoes and sports shoes are interlaced with each other. AOKANG international is involved in this field by acting as an international sports brand such as Skech and Puma.

In 2015, AOKANG international and Guangzhou City Kai Jie Commercial Co., Ltd. reached strategic cooperation and became Skech's agent in mainland China, and planned to open 1000 stores in Cage in 5 years.

Skech was founded in 1992 in California, USA, because products and marketing cater to the trend of consumption of young people.

Skech needs to open up the Chinese market, while AOKANG needs to enrich its products and find new profit growth points. Under the clear demand, the two sides chime in with each other.

After becoming the agent of Cage, the brand has become the highlight of AOKANG International's earnings in recent years.

In 2019, Skech's brand operating income was 239 million yuan, up 25.13% from the same period last year, with a gross margin of 37.54%, an increase of 3.47 percentage points.

Even so, AOKANG International's expansion of Skech brand is still far behind expectations.

In 2019, Skech store grew by 10, and the total number of stores at the end of the year was 155, far from the planned 5 thousand stores.

Over the years, AOKANG International's investment in Lanting Pavilion has also become a drag on its performance in 2019.

In 2015, AOKANG international invested $77 million 344 thousand and 500 through its subsidiary Austria port international, gaining 25.66% stake in cross-border electricity supplier Lanting Pavilion. Later, due to the issuance of shares of the company, the Austrian port's international shareholding was diluted to 10.92%. In 2019, the company prepared 103 million yuan for the long-term equity investment.

Since its listing on NASDAQ in 2013, Lanting Pavilion's stock price has continued to fall, and its latest market value is only $105 million.

Brand authorization?

After that, don't be surprised to get AOKANG's clothes and pants online.

While acting on other brand products, AOKANG international has begun to move to the other side through the authorization of external brands.

In December 2019, AOKANG international signed the trademark licensing contract with Hangzhou's Agel Ecommerce Ltd and Wenzhou Xiang ye Agel Ecommerce Ltd respectively, and authorized the above two companies to sell AOKANG's brand men's wear, children's wear and children's shoes on the electronic business platform.

Qixin Bao shows that Hangzhou's 2016 has registered capital of 1 million yuan, and Wenzhou Xiang Ye is a sole proprietorship enterprise established in December 2019.

AOKANG brand has been developing for more than 30 years, and is still a strong family management enterprise. Wang Zhentao and Wang Jinquan were appointed as chairman and CEO of the company. At the end of 2019, Wang Chen, the son of Wang Zhentao, was elected director of the company and entered the core of management.

Wang Zhentao holds 27.73% stake in AOKANG international through AOKANG investment, and another person directly shares 15.10%; Wang Jinquan shares 4.98% directly and is fourth largest shareholder.

Up to now, AOKANG investment and Wang Zhentao's AOKANG international shares have been heavily pledged, accounting for 96.51% and 98.45% of the shares respectively.