Deep In The Mire Of Loss, The Lion Dragon Is Easily Reborn.

? ? ? ? In recent years, with the impact of fast fashion brands such as GAP, H&M, UNIQLO and Zara, many veteran fashion dealers have not developed smoothly in China. In recent years, 00330-HK has been losing money in recent years. Its market value has fallen from the highest point of HK $170 billion to less than HK $2 billion now, and it has suffered heavy losses. In 2018, La Natsu Bell, a company with more than 10 billion yuan of revenue, was in a loss. And two consecutive losses in 2019, facing the risk of delisting.

Coincidentally, 00592-HK, as an old fashion dealer, has been hit by fast fashion brands such as GAP, H&M, UNIQLO, Zara and so on. In recent years, it has been discounted, its revenue has been slippery, and its performance has been losing money for many years.

Loss of performance in successive years, seventy percent off helpless Lining

Speaking of the burger lion, we are no stranger to it. The history of burshlung is beginning in 1987.

In 1987, Hongkong "knitted king" Rodin Bang founded the burglung dragon, which was listed on the Hong Kong Stock Exchange in 1993. Once it was once popular in Hongkong and Macao, one of the benchmarks of clothing retailing was facing the rapid growth of Hongkong and Macao. The burshalon precision positioning leisure and youth dress were deeply loved by young people in Hongkong.

Not only that, with the liberalization of mainland tourists to Hongkong, more and more people travel to Hong Kong, and the retail clothing industry in Hongkong is also booming. The burshilong has accelerated the pace of expansion in the mainland, and its performance has also risen significantly. It has become the three largest player in Hong Kong's clothing brand with Baleno and Baleno. The net profit of the company in the fiscal year 2015/2016 amounted to HK $292 million.

After 2016, the company's revenue declined year by year, and profitability began to decline significantly. The net profit of 2016/2017 in the fiscal year was HK $4 million 886 thousand, and it lost HK $29 million and HK $139 million in the 2017/2018 fiscal year and 2018/2019 fiscal year respectively.

It is worth noting that since the second half of 2019, the number of visitors to Hongkong has decreased significantly, leading to the fastest slowdown in same store sales in Macao and Hongkong. In the 6 months ended December 31, 2019, the same store sales in Hong Kong and Macao decreased by 14% compared with the same period in December 31, 2019, which is 5% higher than that in mainland China, and 5% in Singapore compared with the same period last year, while Taiwan remained unchanged.

The market of burshlung is mainly in Hongkong. As of the 6 months ended December 31, 2019, the revenue of the company in Hongkong and Macao accounted for about 58%, and Hongkong's revenue accounted for half of the total. The sharp decrease in the number of visitors to Hong Kong led to a further increase in burshilong's losses.

In 2020, under the influence of the epidemic, the other core markets of Hongkong and its company were in the semi urban state during that period, and the retail activities almost stopped. The losses in burshilon increased further, and the company lost about 195 million Hong Kong dollars in the 10 months ending April 30, 2020.

In June 17th, burshlung issued a profit warning. The company's estimated loss was between HK $295 million and HK $325 million in the 11 months ended May 31, 2020. It was mainly due to the provision for impairment of property, plant and equipment and the right to use assets.

This means that the company lost about HK $101 million in the first 4 months of 2020, and lost 100 million Hong Kong dollars to HK $130 million in May 2020.

In addition, in June 18th, the company announced that the data of the company's e-commerce customers and loyalty plan members were unauthorized access before June 3, 2020, but the leakage documents did not relate to the customer ID card number and credit card number or payment information, only involving the customer's name, telephone number, address, etc.

At present, although the company has taken action to contain the incident, today's consumers are very concerned about personal privacy. No one wants to disclose personal privacy. Even the leakage of customer names, telephone numbers and addresses will also affect consumers' life and become one of the negative points of the company.

Although burshalon is in a number of predicament, it is noteworthy that the company announced the announcement in May 15th that Lining, the 08032-HK holding China and the nephew of Luo Zhengjie, the largest shareholder of burshalon, bought Luo Jiasheng's 66.6% stake in burshalon.

The price of the burger lion is about 70.95% sold to 08032-HK. Lining, the great shareholder of the extraordinary China, is also a controlling shareholder of the Li Ning Co (02331-HK). Under the impact of the Burger's performance decline and the overthrow of the epidemic, can the extraordinary China's stake in burshilong change the crisis pattern of burlung?

The same as that of Fort Shilong, Li Ning Co has also been brilliant, but also under the impact of international brands such as ADI, Nike and so on. But Lining had led Li Ning Co to run away and underestimated, and then moved to the leading brand of domestic sports brand. Its performance and share price have increased significantly in recent years.

The global fast fashion giant is struggling to cope with the epidemic.

In 2020, the clothing industry took the lead because of the global impact of the epidemic and the decline in retail demand worldwide. In recent days, a number of well-known fashion dealers released the first quarter results in 2020. The same is that almost all these well-known clothing manufacturers are reducing their stores and reducing their costs.

In recent days, GAP, H&M, Zara, Metersbonwe and other famous garment manufacturers released a quarterly report. Among them, GAAP as the parent company of Gap, in the first quarter of 2020 (February 1st to May 2nd), the sales of GAPP fell 43.1% to 2 billion 107 million US dollars, a loss of 932 million US dollars.

Inditex group is the parent company of Zara parent company. As of the end of 4, Inditex only had 965 stores in the world, accounting for only about 1/7 of the total number. In the first quarter of 2020 (February 1st to May 2nd), Inditex sales fell 44% to 3 billion 303 million euros, net profit loss of 409 million euros, and 734 million euros in the same period last year.

Sweden's chain clothing store H&M, Europe's largest apparel retailer, lost 46% of its sales in March. Its sales fell by 50% to 28 billion 660 million Krona at the end of May.

As a domestic casual wear dealer, 002269-CN has lost 46.70% yuan to 921 million yuan in the first quarter of 2020, a loss of 219 million yuan, and a profit of 38 million yuan in the same period in 2019.

It can be seen that under the impact of the epidemic, the global fast fashion clothing business has been greatly affected, and the loss of Burson's performance forecast in 2020 has also increased.

At present, the recent salmon incident in Beijing has resulted in new patients. Beijing has entered a strict state of prevention and control. The concept of the two outbreak of the outbreak is relatively small. However, if the future Hongkong's opening up and opening up to the mainland, it will increase the performance pressure of burshilong.

If the acquisition is successful, Li Ning Co will make use of its own business links and its strong business chain in the apparel industry to help burshlung's marketing, supply chain solutions and distribution channels to enable burshlung to get out of its performance quagmire.