Twenty-two years ago, in order to meet his "willfulness" dressing needs, Li Lin, a graduate of the Chemistry Department of Zhejiang University, opened a clothing store on the wall of his alma mater and sold clothes that he had bought from Guangzhou. As the flow of customers increased, Li Lin’s family named the small clothing store “Jiangnan Cloth†(03306), which means cotton clothes from Jiangnan.
Twenty-two years later, Jiangnan Cloth not only has its own designer brand, but also become another dark horse for the Chinese clothing industry to go public in Hong Kong.
Zhitong Finance was informed that on October 31, Jiangnan Cloth was officially listed on the Hong Kong stock market. According to the results of the placement released yesterday, the Jiangnan Cloth public offering was oversubscribed by 0.32 times, and the placement was also fully subscribed. Although the subscription multiple failed to double, the offer price of Jiangnan Cloth was still priced at the lower limit of the offer price of HK$6.08, which was favored by investors.
The offer price of HK$6.08 has indeed injected a lot of energy into the Hong Kong stocks that have been exhausted in the near future. Zhitong Finance learned that in the dark trading of Phillip Securities yesterday, the price of Jiangnan Cloth opened at HK$6.49, 1.4% higher than the listed price of HK$6.4; the highest was HK$6.55, which was HK$6.52, which was higher than the listed price. Nearly 1.9%, turnover of 150,000 shares.
Even with the integration of designer brands, sales channels and fan economy, the future of Jiangnan cloth is bright, but excessive dependence on women's clothing brands and higher return rates have also brought uncertainty to the development of Jiangnan cloth.
Sales channel integration helps performance growth
According to the information, Jiangnan Cloth, which was established in Hangzhou in 1997, mainly focuses on the design, promotion and sale of fashionable clothing, footwear and accessories for women, men, children and adolescents. The company currently has five apparel brands including JNBY, CROQUIS, jnbybyJNBY, less and Pommedeterre. According to CIC statistics of third-party data companies, in 2015, Jiangnan Cloth ranked first in the Chinese designer brand apparel industry with a market share of 9.6%.
Zhitong Finance understands that as of fiscal year 2014 and fiscal year 2015, the revenue of Jiangnan Cloth increased from 1.383 billion yuan (the same unit) to 1.613 billion, with an annual growth rate of 16.6%; and as of 2015 and March 31, 2016 In the month, the revenue of Jiangnan Cloth increased from RMB 1.293 billion to 1.535 billion, with a year-on-year growth rate of 18.6%. Its net profit margin increased from 150 million in FY2014 to 197 million in FY2015. As of 2015 and March 29, 2016, the net profit of Jiangnan Cloth increased from 172 million to 213 million.
Jiangnan Cloth has seen an increase in revenue in recent years, which is mainly due to various results. The expansion of the Chinese clothing market is an important positive factor.
The data shows that as China's per capita disposable income and net income continue to rise, the Chinese clothing market has also been fully developed, which has increased from 79.6 billion yuan in 2011 to 1.41 trillion in 2015. It is expected that the Chinese apparel market will reach a compound annual growth rate of 14.2% from 2016 to 2020.
At the same time, the market expansion of Chinese designer brands has also been very rapid, increasing from 11.1 billion in 2011 to 28.2 billion in 2015, with a compound annual growth rate of 26.2%. It is expected that the designer brand time will maintain a high growth rate of 26.7% compound annual growth rate from 2016 to 2020. Tracing back to the cause, it is mostly because consumers usually pay more attention to design, style and unique shopping experience, so the sensitivity to price is lower.
In this context, as one of the few fashion companies in China with designer brands, Jiangnan Cloth is bound to benefit from a good environment.
2011-2020 segment of the Chinese adult apparel market
In addition to the favorable environment, the integration of Jiangnan Cloth's sales channels is also an important guarantee for its revenue growth. As of June 30, 2016, Jiangnan Buyao's omni-channel interactive platform has covered all first- and second-tier cities in China and 12 other countries or regions (a total of 13,16 shops, including 432 self-operated stores and 855 dealers) And 29 overseas customers' stores and online channels, as well as major online platforms such as Tmall, Jingdong and Vipshop, and WeChat marketing service platform). Under high coverage, in the fiscal year 2014, fiscal year 2015 and fiscal year 2016, the revenue of the Jiangnan Buyi offline retail network accounted for 91.7%, 92.1% and 92.5% of the company's total revenue, respectively.
In addition, Jiangnan Cloth has also established an omni-channel interactive platform using the integration of sales channels to cultivate a “fan economy†(based on the purchase of fan groups driven by its preference for the lifestyle advocated by Jiangnan Cloth). The "fan economy" has indeed brought benefits to the company.
In 2015, Jiangnan Cloth launched the WeChat service number. As of March 31, 2016, there were 570,000 users, attracting an average of about 40,000 new users each month. At the same time, its membership account increased from 360,000 on June 30, 2014 to 1.1 million as of March 31 this year. The number of active members increased rapidly from approximately 86,000 as of June 30, 2014. 170,000 people by March 31, 2016. Among them, women's JNBY ranked first in the domestic women's clothing on the WeChat platform.
Clothing WeChat platform fans number ranking
Due in part to the effectiveness of the fan economy strategy and the omni-channel interactive platform, the same store sales growth rate of the company's retail stores was 0.1% in fiscal year 2014, fiscal year 2015 and the nine months ended March 31, 2015 and 2015. 7.1%, 6.3% and 8.0%. The proportion of retail revenue contributed by members increased from 40.2% in FY2014 to 56.7% in FY2016. In other words, the members supported the Jiangshan above the half of the Jiangnan cloth.
Revenue depends on East China and North China women's brands
Although you are the boss of the Chinese designer brand clothing industry, the performance income growth is obvious, but Zhitong Finance found that, like other clothing brands, Jiangnan Cloth also faces the risk of single source of income and regional concentration.
According to the prospectus, in the fiscal year 2014 and fiscal year 2015, Jiangnan Cloth's men's wear brand CROQUIS and children's brand jnbybyJNBY increased by 25.3% and 174.7% respectively. However, the women's wear brand JNBY,less in the fiscal year 2014, fiscal year 2015 and the nine months ended March 31, 2015 and 2015, the revenues were 1.104 billion, 1.2 billion, 987 million and 1.076 billion, respectively, accounting for total revenue. 79.8%, 74.4%, 75.7% and 70.1%.
Product revenue classification
At the same time that the income depends on women's clothing, the main source of income of Jiangnan Cloth is also slightly concentrated. According to geographical location, East China and North China are the largest sources of revenue for Jiangnan Cloth. In fiscal year 2014, FY2015 and FY2016, the total contribution from these two regions was approximately 49.6%, 51.2% and 50.8%.
Main source of income
In addition to the above risks, the return rate of Jiangnan Cloth in recent years is also one of the unfavorable factors that plague its development. In fiscal year 2014, fiscal year 2015 and the nine months ended March 31, 2015 and 2015, the percentage of company policy returns to total sales to distributors and overseas customers increased from 8.4% to 12.9% and from 12.9. % rose to 16.4%.
In addition, Jiangnan Cloth's strategy of outsourcing all production to OEM suppliers in July 2015 also brought certain risks to its product quality and delivery speed. During the Track Record Period, the company maintains a wide network of OEM suppliers. Its OEM suppliers include two categories: one is a finished product supplier, which is responsible for processing the raw materials and fabrics they purchase, and supplies finished products to Jiangnan Cloth. The other is a processing supplier that processes the raw materials and fabrics supplied by Jiangnan Cloth and supplies processed products to Jiangnan Cloth. In fiscal year 2014, fiscal year 2015 and the nine months ended March 31, 2016, the company has 180, 208 and 223 OEM suppliers in China. If the company cannot maintain a good cooperative relationship with the OEM supplier in the future, it will inevitably pose a significant risk to the operating performance of Jiangnan Cloth.
Finally, Jiangnan Cloth has certain risks in controlling third-party logistics. With the rising transportation costs, if Jiangnan Cloth has a dispute with one or more transportation service providers or terminates its contractual relationship, it will only lead to delays in the delivery of its products or increase in costs, thus affecting the company's business, prospects and operations. Performance.
In many ways, Jiangnan Cloth will still face multiple challenges in the future.
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