China's Revenue Last Year Exceeded 4 Billion 500 Million, The Latest Partner Is Kappa

With the rapid development of China's economy and the surge in consumer demand for high-end underwear, the urban beauty who sits firmly in the leading position of China's underwear apparel industry is regarded as the strongest opponent of China's entry into China.

Fosun international, which sniffed business opportunities, became the biggest underwear retailer in China in May last year.

In the fiscal year ending December 2017, urban beauty income rose 0.7% to 4 billion 542 million yuan, operating profit rose 37.4% to 420 million yuan, net profit rose 31% to 317 million yuan, gross profit margin was affected by the purchase price of raw materials and sales of unmarketable inventory and other measures and slightly reduced to 43.2%.

By channel:

The group's main revenue still came from franchisee channels, sales fell 3.5% to 2 billion 433 million yuan, accounting for 53.6% of total revenue, while retail channel sales dropped 6.7% to 1 billion 566 million yuan, accounting for 34.5% of total revenue; and sales of e-commerce channels rose 73% to 543 million yuan, accounting for 11.9% of total revenue.

By category:

Sales of bra products increased by 11.9% to 2 billion 285 million yuan, or 50.3% of total sales, and sales of underwear products rose 14.8% to 818 million yuan, accounting for 18% of total sales. Sales of pajamas and household clothing decreased 18.4% to 532 million yuan, accounting for 11.7% of total sales. Sales of thermal clothing decreased by 21.4% to 457 million yuan, accounting for the total sales volume; other products decreased from sales to Yuan Yuan, accounting for the total sales volume.

The city beauty was founded in 1998. It was influenced by the successful mode of the United States in the United States. It was positioned as "the first fast fashion underwear brand in China". Its products are mainly targeted at young women.

In 2012, Lin Chiling became famous as a spokesperson for the city beauty.

In June 26, 2014, the city beauty (China) Holdings Limited was listed on the main board of Hongkong, and was called "the first Chinese underwear".

As of the end of the reporting period, there were 7181 stores in urban beauty, of which 1290 were direct stores, 5891 were franchised stores, and 7250 were employees.

As the global economic environment has gradually increased, the performance of the urban beauty group has been showing signs of improvement since the second half of last year. The group emphasizes that the market of China's personal clothing market is huge and the consumers are numerous, but the market is still dispersed and there is still a great market potential.

In order to further strengthen their competitiveness, the urban beauty took measures to shut down the loss shop, renovate existing stores, open new stores, extend the three or four line cities and online channels, strictly control the operation cost and reform the supply chain last year, so as to enhance the efficiency of communication and logistics.

At the same time, the group has adopted more flexible procurement methods, increased the market research and technological innovation of new products, so as to cope with the rapid change of market environment and consumer preferences.

The brand new stainless steel bra, Tai Chi stone cup and household antiwear fabric made of cationic antistatic fabrics were received positive response from consumers last year.

During the period, the city beauty also signed a cooperation agreement with Kimuratan Corporation and Japan's listed company, and distributed their baby and children's clothing on the Chinese online channel.

According to Frost&Sullivan, an industry consultancy, in 2014, China's underwear market space was about 220 billion yuan, and its market space is expected to reach 500 billion yuan by 2019.

There are people in the industry who believe that most of the products in the middle priced urban beauty occupy a certain advantage, but with the popularity of the world's official layout of the Chinese market last year, urban beauty will be challenged or challenged in the future.

In order to better consolidate the market, in May 5th last year, the city beauty offered shares to Fosun international, the latter subscribed 240 million shares with 2.5 Hong Kong dollars, and became the second largest shareholder of the urban beauty group after the issue of shares, which accounted for 11.18% of the shares.

Fosun shares also signed a performance bet agreement with four major shareholders of urban beauty, including the requirement of revenue. The urban beauty increased by not less than 3% in 2017, but not less than 6% in 2018, or by 9.18% in 2018 compared with 2016.

After deducting non recurring items, the profit growth in 2017 will be no less than 20%, not less than 15% in 2018, or less than 38% in 2018 compared with 2016.

In February 7th this year, the city beauty announced that it would set up a cooperation fund with Jingdong's company, which is mainly used for mergers and acquisitions and resource integration suitable for group business.

According to the main provisions, the target size of the cooperative fund is expected to be 1 billion yuan. In the future, the scale of the fund will be expanded according to the actual needs. The initial investment is expected to be no less than 350 million yuan, of which the urban beauty of Guangdong is expected to invest 250 million yuan, while the Jingdong expects to invest 100 million yuan.

Some analysts point out that the strong penetration of brand and the substantial increase in online sales of urban beauty are important reasons for Jingdong's willingness to cooperate with them.

According to the data Research Institute of Jingdong, from the first half of 2015 to the first half of 2017, sales of women's bra and men's underwear increased significantly, and the consumption maturity was higher. Among them, bra sales increased by 66%.

Since 2014, the urban beauty industry has maintained double-digit high speed growth since 2015, and sales in 2015, 2016 and 2017 increased by 137%, 78.9% and 73% respectively.

According to data monitoring, the number of fans of Tmall's official flagship store has exceeded 2 million 990 thousand, and its fans, Manifen, and vermin have 2 million 380 thousand, 2 million 350 thousand and 1 million 550 thousand fans in Tmall's official flagship store respectively.

It is noteworthy that, at the same time of releasing the earnings report, the city beauty announced that its wholly-owned Tianjin city beauty and its wholly owned subsidiary Shanghai kappa Kappa, a joint venture company in China, will produce and sell men's body clothing and women's sports underwear in China.

The registered capital of the joint venture company is 20 million yuan, and Tianjin urban beauty invested 15 million yuan, accounting for 75%; Shanghai kappa invested 5 million yuan, accounting for 25%.

This also means that the group will continue to improve its core competitiveness in order to maintain its sustainable development capability while diversifying its development.

In March 7th, the second series of Lady Goddess, CO operated by city beauty and spokesperson Lin Chiling, were officially released. CEO Zheng Yaonan said that the cross-border joint name was not only the turn of Lin Chiling from famous artists to designers, but also the upgrading of urban beauty products.

For the 2018 fiscal year, Zheng Yaonan said urban beauty would take a cautious and optimistic attitude, and it is expected that sales will further recover under the promotion of various measures.

Some people in the industry say that as the global fashion industry is changing new nodes, the domestic underwear brands represented by urban beauty, whether brand vitality or product quality, have come to a "promotion Cup".

As of today's release, urban beauty shares fell 0.49% to HK $4.08 per share, with a current market value of HK $8 billion 750 million.