12 Years Three Mention Privatization Buyer Brand JOYCE BOUTIQUE "Goose Go Without Notice"

Once upon a time, buying shops became fashionable labels because they could walk in the forefront of fashion trends, understand industry norms and identify goods, and were welcomed by people of the tide and fashion.

Hongkong, as the fashion capital of Asia, was born in the 70s of last century because of its keen sensitivity to fashion and fashion. Over the past forty years, Hongkong's buyer shops have sprout up everywhere. Some people say that the buyer shop is the development trend of the future fashion market.

However, with the change of the consumer market environment, some local buyers in Hongkong are struggling, and even the JOYCE BOUTIQUE (00647) of the late "ship king" Bao Yugang son-in-law sprouted.

JOYCE BOUTIQUE was awarded 9 of the largest shareholder premium and privatization.

Zhi Tong finance and economics APP learned that JOYCE BOUTIQUE announced in December 12th that the company and the offeror jointly announced that in December 11, 2019, the offeror requested the board of directors to submit a proposal to the shareholders of the agreement to privatize the company in accordance with the 673rd section of the Company Ordinance. The shareholders of the agreement can be paid cash HK $0.280 per share arrangement, which is about 91.78% higher than the closing price in December 6, 2019.

On the date of the joint announcement, the issued capital stock of JOYCE BOUTIQUE consists of 1 billion 624 million shares, and about 440 million shares have been arranged for the issue agreement (about 27.1% of the issued share capital of the company on the date of this joint announcement). At the write off price, the proposed valuation of HK $455 million for all issued shares of the company is about $123 million.

On the date of the joint announcement, the offeror has the interest of about 1 billion 184 million shares (about 72.9% of the issued share capital of the company). The offeror's unanimous activist Wu Zongquan (HSBC Trustee (C.I.) Limited) takes the trust of a trustee (Wu Guangzheng as the property grantee) as the indirect holding company of the offeror, while Wu Zongquan is the son of Wu Guangzheng, and has the interest of 33 million 208 thousand shares (accounting for about 2% of the issued share capital of the company). Such shares will form part of the contractual arrangement, but will not be voted on at the court meeting.

It has been noted that JOYCE BOUTIQUE's share price rose sharply in December 13th and was up to 81.51% throughout the day, influenced by the announcement of privatization.

　 Loss of performance for many years, the scale of stores has been shrinking.

According to the JOYCE BOUTIQUE announcement, there are two main reasons for the privatization of the company. Firstly, because of losses for many years, the last dividend paid by the company was in August 2015. Second, since the last dividend payment, the company's share price has fallen by nearly 65%. In view of the lack of liquidity in the company's shares as a whole, shareholders may not be able to liquidate their investments at a reasonable price or at a reasonable level. Under the circumstances, the offeror considers it appropriate to provide shareholders with the opportunity to realise their investments.

Zhitong finance and economics APP noted that in the 2015/16 fiscal year, JOYCE BOUTIQUE revenue reached HK $1 billion 326 million (the same below). Shareholders should make a profit of 33 million 75 thousand yuan in that year. The total dividend paid by the company was 32 million 480 thousand yuan, and the dividend payout ratio was 98.2%. However, in the next fiscal year, the company's performance has declined sharply, and shareholders should account for a profit loss of 85 million 551 thousand yuan.

The interim results of JOYCE BOUTIQUE issued in the middle of November this year showed that the company achieved 338 million yuan in revenue during the period ended September 30, 2019, a decrease of 18.4% compared with the same period last year, and the loss of shareholders of the company was HK $54 million 924 thousand, an increase of 1.26 times compared with the same period last year.

Not just the decline in performance, but also the shrinking of corporate stores. 2018/19 financial year annual report shows that, on the end of the financial year, JOYCE BOUTIQUE operates thirty-four stores (2018: Thirty-nine), and cooperative equity investment with Marni Group S.r.l. (JOYCE BOUTIQUE holding 49%) operates seven Marni stores in Hongkong.

2018/19 financial year JOYCE BOUTIQUE ended four poor performing Hongkong shops, one Marni store in Taiwan and one JOYCE Warehouse store in the mainland of China. In fiscal year 2019/2020, the company ended another JOYCE Warehouse store in Beijing.

The management of the company is dismal and the stock market is unsatisfactory in the capital market. According to Fu Road Securities data, in the past 227 trading days in 2019, the total turnover of JOYCE BOUTIQUE stock was 16 million 184 thousand and 600 yuan. The single day turnover alone reached 8 million 738 thousand and 800 yuan in December 13th alone.

In the past 50 years, the brand of the buyer's shop is desolate, and the delisting party is the "best solution".

From this point of view, from the perspective of investors' interests, JOYCE BOUTIQUE may be "optimal solution" by delisting through privatization.

However, as a buyer's shop brand that has set up nearly 50 years to serve the countless fashion people in the Greater China region, the past of JOYCE BOUTIQUE is worth remembering.

According to understanding, JOYCE BOUTIQUE was founded in 1970s, the founder of Guo Zhiqing is the fourth generation descendants of the Guo Peixun family in Hongkong.

In 1970s, European imported fashions were not popular in Hongkong. Ma Guo Zhiqing imported fashion from Britain to Hongkong and won widespread acclaim. In the twenty years since then, Guo Zhiqing has introduced the Joyce Boutique designer brand to Hongkong's most important platform. At its height, JOYCE owns more than 200 internationally renowned fashion, accessories and cosmetics brands, many of which are exclusively owned by JOYCE in Hongkong and Mainland China. Ma Guo Zhi Qing has also won the reputation of "Hongkong fashion godmother". JOYCE BOUTIQUE was also listed on the Hongkong stock exchange in 1990.

Unfortunately, Guo Zhiqing brought the prosperity of the Hongkong buyer shop, but still in the fierce competition. In 1990s, the buyer shops spread all over the streets of Hongkong, and the competition became increasingly fierce.

In order to cope with competition, Guo Zhiqing opened some brand stores in 2000 from "Joyce Boutique". In the same year, 51% controlling shares were sold to the Wu Guangzheng family's Fung Feng (00020). Under the banner of Hui de Feng, Joyce Boutique was further developed. In 2001, the Joyce branch of Taigu square was expanded to a two level shop. In March 2003, the German Fung Limited transferred its JOYCE stake to Mr. Wu Guangzheng's family trust and became a member of Lane Crawford Joyce Group.

In 2007, Joyce Boutique entered the "troubled times". This year, the group reduced Taiwan's business and concentrated its financial and management resources on the mainland and Hongkong's core markets, ending Taiwan's business. With the end of Taiwan's business, Guo Zhiqing also formally withdrew from management this year. In addition, the news of Joyce Boutique's privatization of the delisting this year also failed.

Since then, the operation of Joyce Boutique has had ups and downs. In November 2011, the company introduced the concept of men's beauty to JOYCE Beauty and opened a 1200 square foot beauty shop. In the 2011/12 fiscal year, Joyce Boutique operates 48 stores, even one more than the 2010/11 fiscal year. In that year, the turnover of Joyce Boutique was 1 billion 324 million yuan, and the profit of shareholders should be 151 million yuan. It is reported that in 2011 Joyce Boutique also announced the intention of privatization, but the company still has a good report card, and it is not easy to privatize. But looking back now, that is the last prosperity of Joyce Boutique.

According to the notice of Joyce Boutique, the privatization of the code of acquisition is subject to the provisions of the code of acquisition, if any condition is not reached or waived (if applicable) by the final completion date (or the latter may agree with the company, or within the applicable scope), or before the high court may indicate a later date, the proposed matter will be invalid.

If the agreement is not approved or the proposal is lost in other circumstances, the listing status of the shares on the stock exchange will not be withdrawn.

This means that Joyce Boutique still has the possibility of retaining its listing status, but to date, Joyce Boutique is afraid of "tasteless food" for public investors.