The Reasons For Baosheng International Privatization

According to the world clothing and shoe net, on Sunday, the stock market collapsed 40% in the past year and a half.

Retailers and agents

It announced that it had won the privatization of Baocheng Industrial Company, the controlling shareholder of Yuyuan Industrial parent company.

The notice said the offer price was HK $2.03, a premium of 31.82% compared to the closing price of HK $1.54 on Friday, and the total offer price was HK $10 billion 908 million 300 thousand.

As of the announcement date, Yuyuan industry holds 62.41% of Baosheng international, while Baocheng industry holds 49.99% of Yuyuan industry.

If privatization is completed, Yuyuan Industrial (Group) Co., Ltd. (0551.HK) is expected to record a net income of HK $6 billion 763 million and will be distributed to shareholders as a one-time special dividend.

In explaining the reasons for privatization, Baosheng International (Holdings) Limited (3813.HK) said that the sporting goods industry in the company is experiencing unprecedented changes and challenges, especially

The rise of market competition.

In order to enable Baosheng international to explore and adapt to a challenging environment, a lot of investment is needed to implement the above measures and enhance Baosheng's business, which may involve executive risks or affect the performance of Baosheng in the near future.

At present, Baosheng international is the second largest sporting goods agent and retailer in China. It is worthwhile to say that BELLE international, the biggest competitor in the Chinese market, completed privatization last year. BELLE International's final report showed that the sports revenue of the company in the 2017 fiscal year ended February 2017 was 22 billion 746 million 500 thousand yuan (hereinafter referred to as the "Yuan"). BELLE international is also China's biggest sporting goods agent and retailer.

Baosheng international YYsports Sheng Dao sports image shop

Baosheng international investment expansion has always been questioned by investors, and it is also an important reason for the company's share price collapse over the past year.

Data show that in the first nine months of 2017, Baosheng international revenue increased by 14.1% yuan to 13 billion 883 million 300 thousand yuan in the year, the net profit of 337 million yuan, compared with the same period in 2016, 522 million 200 thousand yuan, plunged 35.5%; operating profit margin of 632 million yuan, compared with the same period in 2016 782 million 800 thousand yuan in the same period fell 19.3%, business profit rate 4.6% dropped, 180 basis points.

For the first 9 months of 2017, the main reason for the decline in profits is Baosheng international, which is to match sales growth, increase the number of partners and inventory provision, and increase depreciation, amortization costs and staff costs.

In the first three quarters of this year, the group's sales cost increased by 19.5% to 3 billion 843 million 400 thousand yuan.

On the grounds of privatization, Baosheng international and BELLE international are the same, but BELLE International's women shoes business is even worse.

Baosheng International said that the risk of investment will cause the fluctuation of the company. The 100% holdings of Baocheng Industrial Industrial Limited by Share Ltd (9904.TW) can more effectively change the way of operation, and enjoy more favorable financing and unified internal financial management, and will benefit from the streamlined business and management structure and enhanced expertise.

In addition, the board of directors of Baosheng industries and Baosheng international board believe that Baosheng's current valuation level and low liquidity indicate that Baosheng's listing status is insufficient to provide adequate funding for Baosheng's business and growth.

By the end of Friday, Baosheng International Limited had a market capitalization of only HK $8 billion 200 million, while Anta Sports Products Limited's ANTA Sports Products Limited 2020.HK (2020.HK) was less than HK $102 billion in revenue.

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