The Main Business Of Nine Mu Wang Is Weak. Last Year, "Stocks" Lost Nearly 900 Million Yuan.

A, a listed company known as "trousers king" by the market, disclosed the 2018 annual report.

The annual report shows that the company's net profit attributable to shareholders of listed companies reached 534 million yuan in 2018, representing an increase of 8% over the same period last year.

However, behind the growth of net profit, net assets and net profit have dropped sharply.

Looking at the annual report data, we found that in addition to the net profit growth of the parent company, the net assets (hereinafter referred to as net assets) attributable to shareholders of Listed Companies in 2018 and the net profit (excluding net profit) after deducting non recurring gains and losses from shareholders belonging to the listed companies were all down sharply, with a decrease of 16.84% and 17.98% respectively.

It is precisely this "one increase, two reduction" data that uncovers the dilemma of 2018's stock loss and main business weakness.

The annual report showed that the net profit of the company was 534 million yuan in 2018, up 8% from the same period, while the net assets were 4 billion 432 million yuan, 16.84% of the year-on-year decline.

Behind the two groups of disparate data is a huge loss of investment in 2018.

To put it simply, it is the loss of investment in stocks in 2018, which was recorded in the net assets of the company rather than the net profit of the company.

Generally speaking, in the annual report, the stock held by the enterprise will be counted into the current assets and liabilities table in two ways: first, the enterprise will recognize the stock held as a financial asset measured by fair value and whose changes are included in the current profits and losses. The change in the stock value recorded in this way will be directly reflected in the net profit of that year.

The second is that the enterprise will identify the shares held for sale as a financial asset and enter it in this way. The changes in the value of the stock will be listed in the form of "other comprehensive income", which will not affect the net profit of the current company, but will cause changes in the net assets of the company.

The way in which an enterprise holds a stock depends on its ownership purpose.

If an enterprise determines that the stocks held are bought for short-term trading purposes, it can be accounted for in the first way. On the contrary, if these stocks are not bought for short-term profits, they can be accounted for in second ways.

Specifically, in the annual report of nine herd Wang, one of the most important reasons for the decline in net assets in 2018 was the other comprehensive income of the company, which dropped by 857 million yuan.

The reason for the decline in other comprehensive income is that the profit and loss of the fair value of the 2018 companies' financial assets for sale is -8.95 billion yuan.

That is to say, in 2018, the loss of nine Mu Wang in stocks and bonds and other financial assets reached 895 million yuan.

The company recognised the financial assets of these stocks and bonds as a sale of financial assets, and entered them in the second ways mentioned above so that the loss would not affect the net profit of the company, but the net assets of the company declined.

What stocks or financial assets actually made the nine kings lose nearly 895 million yuan in 2018? From the previous announcement, one of the important "culprits" who made the loss of nearly nine thousand mu Wang close to 900 million yuan is probably CAITONG securities.

In November 2014, the nine capital invested by nine Mu Wang's wholly-owned subsidiary invested 2.98 yuan / share to subscribe for 62 million shares before the issuance of CAITONG securities.

Since then, CAITONG securities has been listed successfully at the end of 2017, which led to a good investment income.

After the listing of CAITONG securities in 2017, the share price continued to go up, which was as high as 25.69 yuan / share. After that, although the stock price had a callback, the last trading day in 2017 still closed at 18.08 yuan / share, which was 6 times the price of the holding company.

According to the 2017 annual report, the other comprehensive income of the year was 953 million yuan.

But since then, in 2018, because of the overall downturn in the stock market, the stock price of CAITONG securities also fell all the way, from 18.08 yuan / share on the last trading day in 2017 to 7.22 yuan / share on the last trading day in 2018.

According to the difference between the two years, the stock value of the Treasury securities held by the king in 2018 was reduced by 673 million yuan compared with that in 2017.

In fact, in the annual report, CAITONG securities also explained why the sale of financial assets decreased at the end of the year compared with the beginning of the year, mainly due to the decline in the fair value of the shares held by the company during the reporting period.

It is worth noting that although the value of the Treasury securities held by the king of nine herd has shrunk in 2018, but because of the lower shareholding price of the nine herd kings, it has made good profits in the investment of CAITONG securities in the long run.

However, even if it does not calculate the value of the 673 million yuan of the value of the stock.

The operation of the nine Mu Wang in the capital market in 2018 still made the company lose 222 million yuan.

In contrast, the net profit growth of the company in 2018 was less than 40 million yuan.

In the background of the stock investment loss in 2018, the main reason for the growth of net profit of the nine Mu Wang is that it relies on the proceeds from the sale of shares.

In explaining the reasons for the growth of net profit of the parent company, he said the growth was mainly based on the disposal of some of the Treasury securities held during the reporting period.

At the end of October 2018, the Treasury securities held by nine Mu Wang officially lifted the ban. Subsequently, the king of nine herdmen quickly opened the mode of reduction.

The announcement shows that as at the end of 2018, the nine Mu Wang had reduced 35 million 830 thousand shares of Treasury securities, with a reduction of 7.54 yuan per share.

In the annual report, nine Mu Wang said the sale of some of the shares held in the Treasury securities account for an investment income of 164 million yuan.

In 2018, after deducting the investment income generated from the sale of CAITONG securities and the non recurring gains and losses of government subsidies, etc.

The net profit of Kun Wang's main business is 361 million yuan, which is 17.98% lower than that of the same period last year.

For the reasons for the decline, nine Mu Wang said that the main period is the new brand business expansion costs during the reporting period, the purchase of ZIOZIA brand losses during the reporting period, the increase in inventory during the reporting period, and the increase in inventory depreciation.

As we all know, nine Mu Wang is a Chinese business casual menswear brand enterprise, positioning men's high-end market, men's pants business is one of the company's most important source of income.

In 2018, the male trousers business income of nine Mu Wang accounted for 41.1% of the total revenue.

In addition, nine shepherd's jackets, shirts and T-shirts accounted for 27.4%, 10.92% and 10.6% of revenue respectively.

However, in 2012, when the company's revenue reached 2 billion 600 million yuan and the net profit of the parent company reached 668 million yuan, the company's revenue and net profit fell into stagnation and even continued to decline. Until 2018, the company's revenue was slightly higher than that of 2012, but the net return to the parent company was hard to reach its peak.

While the main business growth is weak, the next store of the nine Mu Wang line is still being shut down.

Since the beginning of 2013, the number of stores in nine Mu Wang has been declining. Among them, the core brand store Joeone has been on the decline after reaching the peak of 3087 in 2013, reaching 2411 at the end of 2018, with a total net decrease of 676.

"In fact, from the whole men's clothing industry, the competitive environment is very fierce. There are twenty or thirty men's clothing companies in China. From the perspective of market demand, men's clothing industry is surplus.

In the twenty or thirty listed men's clothing companies, most of them are men's clothing enterprises, which are positioned like the middle and high-end market in the same way as King Mu, so the competition will be more intense in the market of men's clothing.

Ma Gang, a clothing industry expert, said to the Sino Singapore Jingwei client.

In addition, insiders pointed out that the brands of nine herders, seven wolves, Shanshan and Lelang have been in the men's clothing market for more than 20 years. The consumers who have supported these brands have already entered middle age or even old age. But the new generation of post-80s, post-90s and 00 consumers have little interest in the "father's generation" brand, and the recognition rate is relatively low in the new generation.

In view of this point, Ma Gang thinks that it is biased. "The old brand is not the brand, but the product structure. Only those brands that do not keep pace with the times because of the style of the products will be abandoned by young people and eliminated in the market competition."

Ma Gang believes that in recent years, young consumer groups have gradually risen, and market demand for products and consumption has changed.

The old men's clothing enterprises, like the nine herd kings, are not as quick and keen as new brands because of their large scale in changing their product structure and realizing product innovation.

Therefore, in the future, how to meet the change of consumers and change the product structure will be a problem for every veteran men's clothing enterprise.