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IPO Reinvented A 10 Billion Family Institution And Questioned Gross Profit Margin Mutation

2011/5/13 10:15:00 45

Nine Wolves Seven Wolves Brand


Seven wolves

After listing, another family


Clothing company


It will land on the Shanghai stock exchange.

The company launched an inquiry yesterday on Shanghai's Shanghai road. The CITIC Securities, the sponsor, gave the company a 25-30 times price earnings ratio, corresponding to a reasonable valuation range of 22.53 yuan / share to 27 yuan / share.

If the valuation limit of 22.53 yuan / share is calculated, the stock market value of Lin Congying, chairman of the nine Mu Wang, will reach 7 billion 604 million yuan, and the market value of Lin Congying and his family members will be as high as 10 billion 205 million yuan.

Family business

Nine Mu Wang is a domestic business casual menswear brand enterprise. The A shares will not be more than 120 million shares in public offering. After the issuance, the total share capital will not exceed 573 million shares. The total amount raised will be 1 billion 647 million yuan, mainly involving four projects, including "marketing network construction, supply chain system optimization and upgrading, information system upgrading, design and research center construction". Among them, we intend to use 1 billion 320 million yuan plan to build 338 special stores and increase the business area of 82 thousand square meters.

Lin Congying, chairman of the nine Mu Wang, is the founder and controller of King Mu.

Public information shows that Lin Congying, 1960, was the Standing Committee of the Jinjiang Municipal Committee of CPPCC, vice president of China clothing association, vice president of Fujian Federation of entrepreneurs and entrepreneurs, vice president of Fujian clothing and apparel industry association, vice president of Quanzhou textile and Garment Chamber of Commerce and vice president of Jinjiang charity Association.

In 2005, nine Mu Wang was awarded the title of "the 100 strong national garment enterprises". In the same year, Lin Congying was also named "the founding of the Quanzhou private enterprise".

In 2005, Lin Congying was awarded the title of "Chinese trademark 50 person".

The predecessor of the nine Mu Wang was the nine herd king company, founded in March 11, 2004.

In March 23, 2010, the company introduced Jinshi investment to increase capital, and the sponsor of CITIC Securities's professional direct investment subsidiary, Jinshi investment, subscribed 2 million 930 thousand new shares in the 8.5362 shares of the company, and the total subscription price was 25 million 11 thousand and 191 yuan.

If the valuation is 22.53 yuan / share, the market value of Jinshi investment holding nine Mu Wang will reach 66 million 12 thousand and 900 yuan.

452 million 930 thousand shares of the total capital of nine Mu Wang, Lin Congying indirectly controlled 337 million 500 thousand shares of his shares through the investment of nine Mu Wang, accounting for 74.5148% of the total share capital before the issue.

The remaining 24.84% shares are owned by Shun Mao investment, wise investment, platinum investment and Chi cube investment controlled by their family members.

In addition, Jinshi investment has a 0.65% stake.

According to the nine Mu Wang prospectus, the original 5 board members are family members. At present, apart from the introduction of 3 independent directors, the remaining 6 are still members of the Lin Congying family. Among the top executives, 5 are Lin Congying family members, and the rest are professional managers.

Among them, Chen Jindun, vice chairman of the company, director Chen Jiaya and director Chen Jiapin are brothers of Lin Congying's wife, and director Lin Chang Jie is Lin Congying's brother.

On the eve of the announcement of the listing of IPO, nine herd King experienced the troubles of Chinese family businesses.

In May 10th, Lin Congying was reported to be accused of taking 80% stake in his uncle Lin and his Ren by illegal means.

The media reported that, for the same reason, the king of Hongkong was forced to suspend the listing in 2008.

Nine Mu Wang issued a clarification notice yesterday that the dispute between Lin Congying and Lin Qiren about the equity dispute of Fujian Jinjiang nine Mu Wang Clothing Co., Ltd. was first examined by the intermediate people's Court of Quanzhou in 2008, and the final decision of the Fujian Provincial Higher People's Court confirmed that Lin Ying Ying holds 80% of the shares of Fujian nine King Clothing Co., Ltd., which is legal and effective.

Clarification notice also said that Fujian Jinjiang nine Mu Wang Clothing Co., Ltd. is a Lin Congying controlled other enterprises, the company began to no longer engage in the clothing industry in 1999, is not the main body of the issue.

The agency questions the mutation of the gross interest rate

For IPO, a domestic brokerage investment manager, said: "there is no prominence in the market share and brand awareness of the nine herd kings compared with the seven rival wolves in the A share market.

In the primary market, the 25 price earnings ratio of the king of nine herds has hit a new price of 22.53 yuan, and it has been rapidly capped.

According to CITIC Securities Research Report, from 2008 to 2010, the income of the nine Mu Wang increased by 16.7%, and the net profit attributable to the parent company increased by 36.6%.

In 2010, the income was 1 billion 675 million yuan, and the net profit scale was 360 million yuan.

In 2010, the income and net profit of the wedding birds were 1 billion 254 million yuan and 244 million yuan, and the net income of the seven wolves was 2 billion 193 million yuan and 280 million yuan respectively, and the American Apparel income and net profit were 7 billion 506 million yuan and 757 million yuan respectively.

In 2011, the dynamic P / E rates of wedding birds, seven wolves and American bond were 25 times, 26 times and 29 times respectively.

In 2011, the average price of brand clothing companies was 31 times earnings.

However, a number of researchers said that taking into account the space for investors to be given, the price earnings ratio of nine herding kings was 25 times more reasonable than that of A.

CITIC Securities Research Report also shows that compared with the news birds, seven wolves and Mei Bang clothing in the market, the nine Mu Wang has not yet realized the serialization of the brand, and the product is located in the second tier market.

Men's trousers and jackets are their core products, accounting for 52.53% and 16.56% of the total revenue respectively.

A number of institutional investors questioned yesterday's roadshow on the sudden increase of gross profit margin in 2010.

According to the research report, the gross profit margin of nine Mu Wang in 2009 was 47.9%, while in 2010 it increased by nearly 8% to 55.6% over the previous year. It is expected to increase by 0.4% to 56% in 2011 compared with the previous year, and 58% and 59% in 2012 and 2013 respectively.

Analysts say the gross margin of the garment industry is 8% higher in one year, and 5% in a year is hard to come by.

With the continuous improvement of raw material prices, coupled with the rise in clothing prices is difficult to achieve, in the future to achieve gross margin growth of 2% is also very difficult.

People who participated in the roadshow said that in the roadshow yesterday, nine herd Wang explained that the company raised the price of clothing after researching the market in 2008 and 2009, and the average return price rose from 148 yuan to 188 yuan in 2010, resulting in a substantial increase in gross margin.

However, market participants believe that the future gross profit margin will not increase significantly as a result of rising raw material prices and market stability.

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