Why Did Textile Enterprises Fail In Listing?

Mainland garment companies will be rejected if they apply for A shares IPO (initial public offering) this year. Heavy disaster area 。 According to statistics, this year, a total of 11 clothing enterprises IPO applications, 6 of which were not, the rate of only 45%. Ping An Securities, an investment bank, believes that Stock The rapid decline in turnover rate or the risk of sales and finance is the type of business this year. IPO application One of the important reasons.

The investment bank further explained that the cost of clothing enterprises in the mainland has increased substantially since last year. In order to ease the upward pressure on costs, the enterprises began to substantially increase the selling price of products, which rose by about 10% to 20%. This led to a substantial increase in the inventory of garment enterprises which were too much in pursuit of gross profit margins, a sharp decline in inventory turnover, a greater risk of sales, and continued profitability. This year, IPO applications have no clothing enterprises basically exist such problems.

Rapid decline in inventory turnover

Take the Wiseman dress this year as an example, its prospectus shows that 8 of the 9 raw materials of the company increased substantially last year. At the same time, the company increased the price of the main brand of women's clothing last year by 10.9%. The same is true of another Vigna S fashion.

However, the sharp rise in prices of the two enterprises led to a sharp decline in inventory turnover. According to statistics, from eight to last year, the turnover rate of clothing in Wiseman was 4.4, 3.29 and 2.88 respectively. In the same period, Vigna S's fashion stock turnover rate was 2.23, 2.19 and 1.36 times.

According to statistics, the other 4 clothing enterprises (ladies' house, Li Rui dress, sulang clothing and Fujian's IPO) were not included in this year's IPO. Except for the Piri dress and Fujian's odd, the remaining 2 inventory turnover levels decreased to varying degrees last year: the ladies' house and the sulang clothing inventory turnover rate dropped to 1 times and 0.49 times respectively. This is far from the average stock turnover rate of the clothing companies that have been listed for about 2.4 times.

Facts have proved that the rapid decline of inventory turnover has a great impact on the stable operation of enterprises. Taking Vigna S fashion as an example, the company's gross profit margin increased by 70%, its operating income increased by 56%, output increased by 28%, sales cost increased by 125%, but sales decreased by 7%.

Aforementioned Ping An Securities Investment Bank said: "although the company's profits and revenues have maintained growth, but production and sales are in serious opposite direction, and a large increase in sales and publicity costs have not achieved the desired results. If the company is successfully listed, then the efficiency of raising funds will be very doubtful. Higher inventory and lower production and marketing rates will lead to greater risks in the operation of enterprises."

The competition in garment industry is fierce.

On the other hand, the competition of the garment industry in the mainland is very fierce, and the entry threshold of the industry is also low. Therefore, whether or not it has strong core competitiveness determines the listing prospect of the clothing enterprises to a certain extent. Haitong Securities, an investment bank, suggested that the R & D design and marketing channel construction is the two core competitiveness of clothing enterprises. To be listed clothing enterprises should increase investment in R & D design, on the other hand, it should increase the average sales volume and sales ability of single stores (sales outlets). Take Li Rui dress as an example, one of the main reasons for its IPO is that it only provides OEM business, and lacks the capability of independent R & D.

However, the low passing rate did not affect the IPO enthusiasm of such enterprises. It is reported that Del Hui, Hai Lan's home, Jordan sports, noble bird, Fion women's bag, Zhejiang Georges white dress and Zhejiang Maison cultural creativity and so on many clothing enterprises have already submitted the A share IPO application, is queuing up to wait for the meeting to examine.