Anel'S Internal And External Troubles: Performance Plummeting, Investment Explosion

After the performance cut back in 2019, the net decline of "children's clothing first stock" anel in 2020 will be more than 206%, with a loss of 53 million yuan - 45 million yuan.

It is reasonable to say that children's wear should be the most potential sector in the whole footwear and clothing industry. In recent years, the industry's compound annual growth rate has exceeded 12%. However, the limited consumption behavior, fierce market competition, industrial inventory problems, and rising costs have led to the company's poor performance.

Can the recently approved fixed increase save the company from being in dire straits?

The crisis is more than that. The company is involved in two major disputes due to investment mistakes and suspected trademark infringement.

Under the internal and external troubles, the "three-year itch" of the company's listing has begun to show signs. The directors, supervisors and senior executives who hold a large number of shares quit and reduce their holdings on a large scale, which has a great impact on the market value of the company. The company has launched plans such as stock incentive and repurchase cancellation to try to turn the tide. However, the stock price on the roller coaster has fallen to the lowest point, and the market value is only 1.387 billion yuan.

Performance down more than 206%

On January 27, the "children's wear No.1 stock" anel (002857. SZ) disclosed its performance forecast in 2020. The company's net net return to its parent was RMB ￥ - 53 million to - 45 million, with a year-on-year decrease of 225.84% - 206.84%, and the deduction of non net ￥ - 59 million to - 51 million yuan, with a year-on-year decrease of 336.30% - 304.26%.

In addition to the impact of the epidemic on the sales of children's clothing, the company's investment failure led to the withdrawal of all the long-term equity investment balance for asset impairment, which also had a certain impact on the company's net worth.

In fact, anel's performance has declined sharply since 2019, and the epidemic since last year has only exacerbated the decline.

In 2019, the company's operating revenue was 1.327 billion yuan, with a year-on-year growth of 9.41%. The net amount of net assets attributable to the parent company was 42.117100 yuan, a year-on-year decrease of 49.49%, and the non net income of the company decreased by 63.92% to 24.9678 million yuan.

In that year, the company's net cash flow from operating activities was -46.1727 million yuan, down 203.51% year-on-year, which was the negative operating cash flow of the company since the company disclosed its performance in 2012.

In 2020, a large number of offline stores of the company were closed, with 43, 97, 46 and 39 stores closed respectively in the four quarters. The number of stores has decreased from 1505 at the end of 2019 to 1280 by the end of 2020.

The closure of stores, the decline of revenue, the continued decline of gross profit margin, and the decline of annals' annual performance and even losses were expected.

In 1996, Cao Zhang and Wang Jianqing founded the "Anil children's clothing store" in Shenzhen, and then established the children's clothing brand "annil anel" on this basis, which gradually became the Chinese children's wear brand second only to balabalabala (Senma clothing 002563. SZ), which was listed in 2017.

However, after the listing, the overall performance of the company is not as good as that before listing. The increase of income does not increase the profit, resulting in the net interest rate falling from 10% to 3%, and directly falling into a loss in 2020.

The main reason is that although the number of stores has increased steadily after the company went public, the operating efficiency has declined, resulting in the limited growth of the offline sector's revenue. In recent years, the growth of the business income mainly relies on the online sector. However, the e-commerce business is affected by the price war and operating costs, and the gross profit margin is low, which reduces the overall profitability of the company.

Before listing, the company's overall gross profit margin exceeded 60%, which was only 54.06% in 2019, and continued to drop by 0.28% in the first half of 2020.

Recently, the company has approved a fixed increase of 408 million yuan, and plans to invest in the digital marketing network, e-commerce operation center and other projects. The company has suffered a lot in the e-commerce channel. If we continue to invest, can we get different results?

In addition, high inventory, a common problem in the shoe and clothing industry, also plagues anel. By the end of September 2020, the company's inventory was 426 million yuan, accounting for 36.19% of the company's total assets, which was far higher than the overall level of children's clothing listed companies such as SEMAR clothing, Jinfa rabbi (002762. SZ) and start-up shares.

Investment explosion, deep litigation

The value of children's wear plate in the whole footwear industry, almost no one is against it.

The data shows that the scale of children's wear in 2018 was 209.1 billion yuan, and the compound annual growth rate from 2013 to 2018 was as high as 12.4%, and the CR10 of that year was only 12%. There is still a lot of room to improve the scale and market concentration.

In 2019, the company increased the number of Zhenzhen Xinyu baby children Clothing Co., Ltd. with cash of 24 million yuan, acquired 20% of its equity and sent directors to continue to expand its territory in the child clothing industry.

The company disclosed that its brand sunroo has a certain brand awareness and reputation in the infant and child market, and can form a synergistic effect with the company.

However, this investment has exploded in only one year.

Affected by the epidemic situation, the company suffered losses one after another, capital turnover was tight, and there were many problems in internal management. In May 2020, anel reached a buyback agreement with the company and its major shareholders and actual controllers, but it failed to fulfill it. At present, the company has been unable to perform audit procedures and issue financial statements for 2020.

The company has submitted a lawsuit filing application to Shenzhen Longgang court in view of the above situation. At the same time, the provision for impairment of assets was 19.0175 million yuan, which aggravated the company's loss.

The company has been involved in a series of trademark infringement cases in recent years.

At the beginning of 2019, Honglian International Trade Co., Ltd. filed a lawsuit in Ningbo, Shanghai, Jinan, Beijing and Shenzhen for infringement of its five trademarks, demanding that the company stop the infringement, publicly apologize and compensate for economic losses, with a total claim of 61 million yuan.

In August 2019, the Shenzhen case was heard in court, and a judgment was formed two months later. In addition to stopping the infringement, she was awarded a compensation of 3 million yuan. The company filed an appeal at the end of 2019, and the case was remanded for retrial, and the hacksaw continues.

Qixinbao shows that in addition to the above-mentioned major litigation, the company's own risks 86, involving labor disputes, contract disputes, intellectual property disputes, etc.

Even if it has entered the list of Chinese head children's wear enterprises, the company is still deeply involved in so many disputes and lawsuits, which shows that there are still great problems in internal control.

Escape from annals

Arnel is a typical management shareholding company. Before listing, all shares of the company were held by the founders Cao Zhang and Wang Jianqing, and the management of Long Yan and Liao Zhigang.

After the listing, although some institutions came to knock on the door occasionally, they did not stay for a long time. Most of the time when the company was listed for three and a half years, the top ten shareholders were still the directors, supervisors and senior executives.

In 2018, Liao Zhigang, the chief financial officer and Secretary of the board of directors, and Nie Yufen, chairman of the board of supervisors, resigned. In 2019, Wang Yipeng, deputy general manager, and Xiong Xiaobing, chief financial officer, left the company. After that, the shares were reduced naturally.

Even some in-service executives can't wait to open the cash out road, such as long Yan, director and deputy general manager, Xiao Yan, supervisor and person in charge of planning support department, Jiang Chun, Secretary of the board of directors, Wang Jianguo, chairman of the board of supervisors and head of the production center, Cheng Shuxia, supervisor of employee representative and manager of risk control department.

Cao Zhang and Wang Jianqing, the actual controllers of the company, have obtained permanent residency in Gambia and Hong Kong residents in China. Xu Wenli, the second largest shareholder, owns the permanent residency right in Gambia and Macao permanent residents in China. Together, they hold nearly 70% of the company's equity, and have not reduced their holdings. What future direction is unknown.

In order to stabilize the team and stabilize the stock price, the company launched a new round of stock incentive plan in May 2020, continuing to distribute shares to key employees, and at the same time, the company carried out repurchase cancellation.

However, these measures have failed to stabilize stock prices. The company closed on January 27 with a stock price of 8.14 yuan and a market value of only 1.387 billion yuan. The high point has dropped by more than half.