What Makes It Difficult For A Noble Bird To Fly? New Crown Pneumonia Makes The Noble Bird Worse

"The first stock of A-share sports brand" noble bird (603555. SH) once soared above nine days with a market value of more than 40 billion yuan. Today, the bird has broken wings and is difficult to fly. By noon on July 22, its market value was only 1.1 billion yuan.

What makes a noble bird break its wings?

On July 20, the supervision letter issued by the Shanghai Stock Exchange to * ST noble showed that the wholly-owned subsidiary of * ST noble person borrowed 5 million euro from a joint-stock company and failed to repay it on schedule. The other party fined and confiscated all the corresponding shares held by * ST noble. The Shanghai Stock Exchange pointed out that the equity was confiscated and the corresponding debt was offset, which is expected to affect the current profit of - 83 million yuan in 2019, but the disclosure of * ST is not accurate and inconsistent.

This debt is only a small part of the huge debt of * ST noble. *St Guiren disclosed on July 17 that due to liquidity constraints, the company failed to pay the loan interest of each bank on time on June 21, 2020, and the total loan principal of the company in each bank was 1.41 billion yuan, all overdue.

It is not hard to imagine that * ST nobles are involved in many debt disputes. The latest one is that the Jinjiang Qingyang sub branch of Industrial Bank Co., Ltd. applied for arbitration, requiring * st to repay the loan principal of 369 million yuan and interest of 6.0646 million yuan.

With debts, the main business of * ST noble people has been dragged down. *St Guiren lost 686 million yuan in 2018, 1.018 billion yuan in 2019, and 200 million yuan in the first quarter of 2020.

In China's sports shoes and clothing enterprises, guirenniao was once one of the leading companies. In addition to its own brand "noble bird", it also has a holding subsidiary, jiezhixing, mingshiku, as well as international and domestic first-line famous brand sports products, such as Nike, ADI, UA, converse, new balance, Li Ning, new Bailun, skykey, Arthur, DC, puma, etc.

The peak time of the noble bird remains in 2017. As of December 31, 2017, the noble bird brand marketing network has covered 31 provinces, autonomous regions and municipalities directly under the central government, and the number of retail terminals has reached 3730. In this year, its operating revenue was 3.252 billion yuan, an increase of 42.70% year on year. However, there are also worries. Although its net profit increased by 46.25%, its net profit decreased by 46.25%.

The revenue growth relies on large-scale M & A. jiezhixing, mingshoku and Prince brands purchased by US $20 million are all under its control, which is accompanied by high costs: in 2017, the operating costs increased by 57.42% year-on-year, nearly 15 points higher than the growth rate of revenue.

In the annual report of 2017, guirenniao was full of confidence. It believed that with the help of M & A, the company successfully implemented the strategy of multi brand, multi-channel and multi market, and got rid of the risk of relying on the single private brand of "noble bird". The agency sales revenue of Nike, Adidas, Li Ning and other multi brands accounted for 38.72% of the company's main business income; After the merger of famous shoe stores, online revenue accounted for 12.42%.

In 2017, guirenniao also invested 368 million yuan to acquire 49% equity held by minority shareholders of mingshoku, a holding subsidiary, and became its only shareholder.

Such a layout should support the prosperous future performance of the noble bird, and the management of the noble bird has given an optimistic expectation. It's cold water for reality.

In the annual report of 2018, the noble bird said: "2018 is the most tested year in the company's development history. The social financing costs have increased significantly, and the high interest expenses continue to dilute the company's profits. However, the government's support for private enterprises has been greatly reduced, while the government's support for private enterprises has been greatly reduced; The company is also unable to obtain new financing in the capital market, and the original China notes, short-term financing and foreign debt financing plans can not be implemented. "

In order to get rid of the debt crisis, the noble bird raised funds from various parties, and did not hesitate to sell assets. At that time, the continued large-scale foreign investment of the noble bird in 2016 and 2017 not only failed to generate income, but became a drag. The disposal income of its sports industry assets such as Hupu equity and Kangpaisi equity did not meet the expectation. The external transfer of some fixed assets and sports industry investment objects only realized the recovery of input cost. The holding subsidiary jiezhixing turned into a loss in 2018, and the noble bird made a loss of 50.01% equity of jiezhixing.

In 2018, the guirenniao paid off debts of up to 1.8 billion yuan, with a current loss of 686 million yuan, the first loss since listing.

By 2019, the information released by the noble bird will be almost mournful - litigation, asset freeze, debt, etc. It reported in 2019 that the company could not find new financing channels in the capital market. Some financial institutions continued to make loans or increase credit conditions for the company. The company has mortgaged and pledged land, houses and equity assets of important subsidiaries. The disposal and Realization of non core business assets did not meet the expectation.

Liquidity constraints make it more difficult for noble birds to operate their main business. In the whole year of 2019, guirenniao will lose 1.018 billion yuan.

By the end of the first quarter of 2020, the balance of guirenniao's debt was 3.377 billion yuan, including current liabilities of 3.366 billion yuan.

Do you still have a chance to fly high?

In fact, the main business of the noble bird is not in a mess. In 2019, the sales revenue of the single noble bird brand was 1.11 billion yuan, an increase of 5.24% over the previous year, and the brand sales situation was basically stable. The company still has a huge sales network. By the end of 2019, there are 2358 noble bird brand terminal stores, covering 31 provinces, municipalities and autonomous regions in China.

However, the new crown pneumonia epidemic made the noble birds worse. In the first quarter of 2020, the company's revenue decreased by 66.92% year-on-year, and the net profit was changed from profit to loss compared with the same period of last year.

On May 6, this year, the stock abbreviation of noble bird was changed to * ST noble. According to the stock listing rules, if the noble bird continues to lose money in 2020, the company's stock may be suspended from listing, and 2020 will be the year of its shell.