Expensive Bird 1 Billion 100 Million Bonds Face Default Cost Price Is Only The Tag Price 1/5

In August 15th, the price of the precious bird fell again, and the closing price at noon was 4.31 yuan / share. The continued decline in share prices is exacerbating the crisis. Not long ago, the company announced that the 426 million shares of the company were frozen, accounting for 67.86% of the total share capital of the company.

Up to now, the company has held 479 million shares of the company, accounting for 76.22% of its total share capital. In August 3rd, the company's share price was frozen at 4.59 yuan / share, compared with 10 days, while the price of the bird dropped 6.1%. In fact, as the share price continues to fall, the remaining shares held by the company may also be frozen by the judiciary. If the frozen shares are disposed of by the judiciary, the company's actual controllers will be changed.

What is more noteworthy is that the cost price of expensive birds is very low, and its cost price is only 1/5 of the tag price. In addition, at the end of this year, 1 billion 146 million of the bonds will expire. In the context of the worsening corporate crisis, the risk of default is increasing.

　　 The first crisis of sports shoes and clothes: blind expansion and hidden danger

Founded in 1987, the company is mainly engaged in R & D, production and sales of the brand sports shoes and clothing. It was listed on the Shanghai Stock Exchange in early 2014. It is the first stock market of Chinese A shares.

However, after the listing, the performance of the precious birds continued to decline. In 2014, the company's net profit was 312 million, down 26.25% compared with the same period last year. In 2015, its net profit rebounded slightly; in 2016, it fell again; in that year, its net profit was 293 million, down 11.75% compared to the same period last year; the main reason for its decline was that the financial cost jumped 57.35% to 150 million, and the government subsidies received decreased by 26% compared with the same period last year.

In the context of declining performance, the noble bird tried to reverse the situation through mergers and acquisitions. In 2016, it was a year of rapid expansion of the precious birds. The birds kept the controlling power of the 3 subsidiaries and generated 575 million goodwill through the continuous acquisition of 810 million. This is also a great potential problem for the company's performance.

In June 2016, the precious bird invested 383 million in the acquisition of Jay's 50.01% stake and increased its capital. As a percentage of the company's holdings, Jay's net assets amounted to 149 million, resulting in the acquisition of 234 million goodwill and a premium of 157%.

In August 2016, the precious bird invested 382 million 500 thousand in the acquisition of a 51% stake in the shoe store. According to its holding ratio, the net assets of the shoe store were 68 million 730 thousand, resulting in a huge goodwill of 314 million and a 456.5% premium for the expensive birds.

In October 2016, BOY signed an agreement with the original shareholder of the company. The agreement stipulates that the number of directors sent by the company to BOY will increase from 2 to 4, and the total number of the board will be 5, so that the company can control the operation and financial management of BOY. At the same time, 44 million 710 thousand of BOY30.77% shares were invested, and 26 million 900 thousand of goodwill was generated because of its net assets of 10 million 660 thousand.

However, after frequent mergers and acquisitions, the performance of expensive birds has accelerated. In 2017, the net profit of precious birds was only 157 million, down 46.42% from the same period last year. The main reason is the increase in operating costs, including a sharp increase in sales cost of 89.3%, an increase of 52.3% in administrative expenses and a 50.3% increase in financial costs. In 2018, the company achieved 2 billion 812 million yuan in revenue, a decrease of 13.52% over the same period last year, and a net loss of shareholders attributable to listed companies amounted to 685 million yuan, down 536.01% from the same period last year.

　 Huge assets impairment, birds fall into financial crisis

The decline of your performance is mainly affected by the low performance of M & amp; a companies.

In the case of company mergers and acquisitions, JB's original shareholders made performance commitments, and the performance commitment period was 2016, 2017 and 2018. The commitment side (Qiu Xiaojie, Wang Li and Wuhan Jay Investment Center) promised that Jay's net profit in 2016 would be no less than 50 million, and net profit in three years would be no less than 200 million.

However, according to the audit report of Tianjian accounting firm's trip to Jay, Jay's net profit was 40 million 346 thousand and 600 in 2016, net profit was 40 million 754 thousand and 900 in 2017, and net profit of -1189.42 million in 2018 was far less than 200 million of its commitment.

Against this background, the precious birds sell the shares of Jay's trip. In December 2018, the precious birds sold 50.01% of Jay's trip, resulting in a total loss of 112 million of investment losses.

In addition, in 2017, the precious bird invested 367 million 500 thousand and acquired the remaining 49% shares of its shoe base to become its sole shareholder. When the first shoe store was acquired, the original shareholders of the shoe warehouse made a performance commitment. The performance commitment period was from 2016 to 2018. The net profit realized in each year was no less than 30 million, 40 million, 50 million, and the net profit realized in three years was no less than 120 million. However, in fact, the shoe library achieved 16 million 575 thousand and 700 net profit in 2016, 44 million 143 thousand and 800 net profit in 2017 and 47 million 42 thousand and 100 net profit in 2018.

For the acquired BOY, the expensive bird excluded the consolidated statement. In 2018, the number of directors appointed by BOY was reduced from 4 to 2. The parties have signed the agreement on the change of seats in November 1, 2018. Therefore, since November 1, 2018, the company has no longer included BOY in the consolidated statements. In the first 10 months of 2018, BOY achieved a net profit of -173.38 million.

However, although the company has disposed of the merged company, mergers and acquisitions still bring huge losses to the company. According to the blue whale red shore risk mining system, in 2018, the loss of assets was 150 million, including the loss of inventory price loss of 64 million 10 thousand, and the impairment of the goodwill of its shoe base was 93 million 200 thousand, which directly led to the loss of 2018 year's performance.

Besides, the expensive birds paid huge financial costs for mergers and acquisitions. In 2016, the precious birds issued 14 million 600 thousand shares of non-public offering, with a total net proceeds of 382 million. At the same time, the noble bird also issued 600 million ultra short term financing bills and 500 million non-public directional debt financing instruments. This also resulted in a sharp increase in the company's financial expenses in the next few years, increasing 57.35% to 150 million in 2016, 52% to 228 million in 2017 and 2% to 233 million in 2018.

The number of expensive stores is sharply reduced. The cost price is only 1/5 of the tag price.

What is more noteworthy is that the number of retail stores that started with retail sales has been decreasing in recent years. As of June 30, 2018, the number of stores has decreased from 4106 in 2016 to 3526, a drop of 14.12%.

The company's cost profit margins also declined all the way, from around 35% in 2015 to negative, and in 2018, the cost profit dropped to -31.3%.

After listing, the sale of gross profit margins of expensive birds began to decline year after year. Gross profit margin for sales in 2014 was 41%. In 2015, it rose slightly to 45%, down to 40.5% in 2016, to 34.45% in 2017 and only 28.65% in 2018.

According to your 2018 annual report, the gross profit margin of its main business (sports shoes and clothing) is only 26.18%, down 6.58 percentage points from the same period last year. The gross margin of the sale of the famous shoe store and Jerry row is lower than the average, 12.57% and 26.22% respectively. The company even said that in order to promote terminal sales, in the second half of 2018, the company lowered the supply price of the brand to the agent, and the reduction amount was 6% of the tag price, which dropped 16.21% at a draught. But even so, in 2018, the gross profit margin of the brand was still up to 30.6%, and the cost price was only 1/5 of the tag price.

Despite the fact that all the brands of the company are doing their best in discount sales, sales have not reached the expected target, resulting in a sharp increase in inventories. With the production of all lines decreasing, the clothing inventory in 2018 increased by 2012% compared with the previous year, the stock of shoes increased by 558% over the previous year, and the accessories inventory increased by 807% over the previous year.

As of December 31, 2018, the book value of the company was 503 million, and the single book value of the end of the world brand was 400 million, an increase of 365.6% over the same period last year, resulting in 49 million 115 thousand of the inventory depreciation. This also led to a decline in inventory turnover and the increase in inventory turnover from 81.63 days to 94.89 days.

In addition, most of the birds get government subsidies every year. In 2016, the company and its subsidiaries received 51 million 307 thousand of local government subsidies, 61 million 61 thousand in 2017 and 11 million 896 thousand in 2018.

　　 Financing channel disruption facing 1 billion 100 million bond default

According to the financial report, by the end of March 2019, the amount of money in the ledger account was only 138 million, compared with the end of 2017, the drop was as high as 81.53%. At the same time, the company's accounts receivable is increasing. By the end of March 2019, its accounts payable (including notes payable) has reached 860 million.

At present, there are two unexpired bonds issued by the popular bird, which are the first non-public directional bonds issued in 2016, the amount of 500 million yuan, and the amount of corporate bonds issued in 2014 is 647 million yuan. The two bonds will expire in November 10, 2019 and December 2, 2019 respectively.

However, under the background of the deepening financial crisis, the rating agencies of the noble bird did not significantly reduce the company's rating. In June 21, 2019, the joint credit Rating firm issued a tracking rating report, which lowered the long-term credit rating of the main bird from AA to AA-, and the rating outlook was stable. The credit rating of "14 noble bird" corporate bonds issued by the "bird of honor" was also reduced from AA to AA-.

However, for the deteriorating financial situation of the birds and birds, the red bank risk risk mining system has made an early warning. According to the financial data of the great bird, the red bank began to continuously reduce the company's bond rating at the end of 2017 by building a credit risk model. Up to now, Hong Hong has given the company a rating of CCC+. In the blue whale red shore risk mining system, the CCC+ level is the risk level, which means that the credit rating entity still has the ability to repay the debt. However, the unfavorable commercial, financial and economic conditions may cause the credit rating entity not enough to repay the debt.

It is noteworthy that at present, the financing channels of the expensive birds have been interrupted. In mid July of this year, Lin Tianfu, chairman of the 2019 year investor online collective reception held by the Fujian area, said that due to changes in the economic policy and market environment, the company failed to obtain new financing since 2018. The original Chinese ticket, short fuse and overseas financing plan could not be implemented. Author: Xue Yanwen