The Potential Of Chinese Brands

There is no "financing craze" and "listing tide", but 2021 of clothing, shoes and bags listed companies is not without water. Anta's market value has caught up with Adidas, hillhood capital has injected capital into special step, and Hailan home has entered the yuanuniverse, which has made the industry see the potential of Chinese brands. To talk about "going abroad", clothing, shoes and bags are also in front of many industries.

In particular, in the field of local sportswear brands, in addition to "Ang Lee" two strong, the rest of the companies are also good at their own areas of performance. With the continuous improvement of product strength, local sports brands are not only highly praised by consumers, but also reaped corresponding returns in the secondary market. This article will focus on the analysis of 2021 annual reports of five parent companies of local sports brands in the second part.

Of the 20268 companies that have reported net losses in the annual report, only 14 enterprises have reported losses in the online market. In addition to profitability, what else does their annual report reveal?

[note]

(1) the revenue data of some Hong Kong listed companies are converted into RMB at the current exchange rate;

(2) the deadline for updating the financial information of the enterprises involved in this article: 12:00, April 29, 2022

Overview of clothing, shoes and bags Market

On the whole, among the 84 clothing, shoe and bag listed companies, 28 are listed in Hong Kong stock market, and the remaining 56 are A-share listed companies. According to the subdivision, 17 enterprises are mainly engaged in jewelry accessories related business, 53 enterprises are engaged in the production of clothing, shoes and bags of their own brands, and the remaining 14 are mostly OEM factories of first-line brands, and some of them also operate their own brands.

As of 12:00 on April 29, among the 68 enterprises that have released financial reports, 14 of them have exceeded 10 billion yuan in revenue, and Lao Fengxiang and Yu Yuan group, which works for Nike Adidas and other international sports brands, have more than 50 billion yuan in revenue; The main reason for the net loss of the company was the net profit of the company; Among them, Jiangnan cloth clothing, China LiLang, seven wolves and Desu group are all well-known brands or fashion groups; Among the enterprises with revenue less than 1 billion yuan, 4 enterprises recorded net losses, 7 enterprises had net profits less than 100 million yuan, and the net profit of golden cat and silver cat was even only 70000 yuan.

Back to the sports apparel segment, the five companies that published financial reports: Anta, Li Ning, Tebu, 361 ° and St noble all recorded net profits. How do they perform in 2021?

Competition of domestic sports brands

As soon as the 2021 annual report is published, the "Echelon trend" of local sportswear enterprises seems to be more and more obvious.

From the perspective of key data, Li Ning's revenue has reached 20 billion yuan, Anta is pushing 50 billion yuan, and net profit has more than tripled the third special step in revenue. Tebu's revenue just exceeded 10 billion yuan, but its net profit was far less than the first two. It is worth mentioning that the noble bird, which is still in the "ST" stage, will turn losses into profits in 2021.

From the financial situation of the listed companies of five local sports brands, we may divide them into three echelons: the first echelon is Anta and Li Ning, the second is the year-on-year growth of special step and 361%; the third is the struggling st noble. Next, we will take apart the operation status of these five brands in 2021.

The dispute between Anta and Li Ning

Before discussing "who is the first brother", we should first review their positive contributions to the local sports brand market: the revenue of 49.33 billion yuan in 2021 made Anta surpass Adidas China and become the second largest global sports brand, which greatly encouraged the morale of local brands; It is not only the fashion show held in Dunhuang and other countries, but also the fashion show in China and abroad. From this perspective, the benign competition among local brands is actually a great good thing for itself and the industry.

Back to the beginning of the problem, from the revenue and net profit data of 2021 annual report, Anta is undoubtedly a winner. The "multi brand" and "multi category" strategies of both sides also deserve attention.

The first is Anta. Under the multi brand development strategy, Anta and FILA contributed more than 90% of the company's revenue in 2021, but this is not entirely good news. The excessive dependence of revenue on two sub brands shows that Anta has not been able to create a "second FILA". Although the revenue of other brands, including Kolon sport and dishant, has increased by more than 50%, the crowd or sport involved in the brand itself is still relatively small, and "breaking the circle" will take some time.

Photo source: Anta's financial report in 2021

In addition, behind the substantial increase in revenue, Anta and FILA's operating profit (equivalent to net operating profit) is declining. However, the increase in "advertising expenses" and "other expenses related to the construction of high-end stores" was affected by the increase of "1.3% in advertising expenses" and "other expenses related to the construction of the stores".

Anta has indeed spent a lot of money on celebrity spokesmen in the past few years. According to the financial report, Anta Group's advertising and publicity activities accounted for 12.4% of revenue in 2021, the highest in Anta's "Five-Year Plan". Anta signed a contract with Wang Yibo as the world's chief spokesman, and cooperated with the Chinese Olympic Committee and the Chinese national swimming team to make efforts in competitive sports; FILA has also signed contracts with Quan Zhixian, Zhang Yixing, Gao Yuanyuan, Huang Jingyu, Cai Xukun, etc. to create a high-end brand positioning.

Looking at Li Ning, it implements the strategy of "single brand, multi category and multi-channel". Therefore, the data dimension disclosed by Li Ning is different from that of Anta. The specific performance is as follows:

Photo source: Li Ning's financial report in 2021

According to the types of products, the revenue of shoes and clothing still accounts for more than 90%, while the sales of equipment and accessories only account for 5.5%. However, the equipment itself is much smaller, and shoes and clothing account for a large proportion. It can also be seen from e-commerce platforms such as dewu that Li Ning's "Savvy" and "Wade's way" are popular among young people, and the price of popular sizes has even increased by more than 7 times. In addition, Li Ning is also very good at promoting new products through co branding and national fashion elements, and has gained many young loyal fans.

In addition, although the revenue of Li Ning group in 2021 is not comparable to Anta, but throughout its financial data in recent five years, both revenue and net profit are steadily increasing year by year. In terms of brand, with the launch of Li Ning's trendy sub brand Li-Ning 1990 at the end of 2021, the battle among the first echelons seems to continue.

Photo source: Li Ning's financial report in 2021

Catch up with the wind

If we look at the second echelon, the revenue and net profit of Tebu are twice as much as 361 °. From the perspective of its development strategy, Tebu has formulated a "multi brand business model", which is divided into three dimensions: mass sports, fashion sports and professional sports. Among them, the revenue of mass sports brand special step accounted for 88%; Fashion and sports brands gasway and paladin account for 10% of the revenue; Although soconi, a professional sports brand acquired in 2019, is popular among consumers on platforms such as xiaohongshu, it only accounts for 2% of its revenue.

On the whole, although Tebu's multi brand model is in its infancy, it has great potential. According to the financial report, the overseas business of gaswell and paladin was affected by the epidemic and recorded a revenue of 971 million yuan. Although it was not clearly stated, it should have decreased year on year. However, in July 2021, Hillhouse injected $65 million into the two brands, which is bound to bring some changes this year.

In addition, the professional income increased to RMB 20.1 billion. With the development of e-commerce business, the total amount of commodity transactions of sokoni and Melo increased by 140% and 138% respectively.

Photo source: Tebu's financial report in 2021

By dismantling the main brand of Tebu, we can find that it is deeply bound with domestic mass sports events, especially a large number of Marathon events. In the annual report, special step described the series of shoes and clothing products and sports clubs of professional running line. According to reports, the wearing rate of Tebu's flagship carbon board running shoe "160x" during the Xiamen marathon in 2021 is more than 50%, which is equivalent to more than 6000 people wearing this pair of domestic running shoes with a price of over 1000 yuan. In addition, special step has sponsored a number of domestic marathon events, and has a certain brand loyalty among marathon runners.

Photo source: Tebu's financial report in 2021

But also because of this, the main brand of Tebu is also facing the risk of performance decline. Since 2020, affected by the epidemic situation, the domestic road running industry has spent more than two years in repeated suspension, restart and cancellation, and the race has been reduced from more than 1800 in 2019 to less than 200 in 2021. Such a large-scale reduction will have a certain impact on the sales of Tebu related products.

Fortunately, the high capital into the board, to special step eat a reassurance. Now in the second echelon and the rising trend of the special step is undoubtedly a good target. The next step is to carry out the brand for young people.

If we look at 361 ° again, in the 2021 annual report, the proportion of adult footwear and clothing revenue added up to 78.9%, which is still the largest. Since the outbreak of the epidemic, 361 ° has more platforms for small programs, pinduoduo, Douyin and xiaohongshu, with sales in e-commerce channels increasing by 55.1%.

Compared with the special step's investment in mass events, 361 ° focuses more on the Asian Games. In the second half of 2022, Hangzhou Asian Games will open soon, and 361 ° is also one of the sponsors. Compared with Anta's sponsorship of the Beijing Winter Olympics, the size and attention of the Asian Games are relatively small. However, at the moment when domestic and international events are extremely cautious, sponsoring the Asian Games is also a good opportunity to boost its influence.

In addition, the revenue growth of 361 ° children's products was quite eye-catching, reaching 1.107 billion yuan, accounting for 18.7% of the revenue, with a year-on-year increase of 18.7%.

361 ° seems to be particularly optimistic about the development of children's clothing industry, so we should focus on developing clothing in 361 ° children's brands. From the perspective of adult clothing, the average price of clothing for adults is 3.7 yuan lower than that of adult clothing.

Photo source: 361 ° financial report in 2021

From a policy perspective, 361 ° believes that "three children" and a series of measures to improve the birth rate will make "children's business become the main source of income of the group and the driving force of growth in the next few years". However, compared with many professional children's clothing brands, the brand premium ability and competitiveness of 361 ° sports brand are not obvious. How to make the special children's clothing of sports brand, 361 ° still needs to find the correct positioning.  

St noble performance is questioned, who still remember the noble bird?

St noble is the only company listed in a shares among these five enterprises. In the consumer's field of vision, the noble bird seems to have no sense of existence, and its parent company has been "ST" because of financial problems. However, the financial report of St noble in 2021 seems to give people a glimmer of hope of "taking off the hat".

　　 How are you doing? The annual report shows that in 2021, the actual revenue is 1.419 billion yuan, with a year-on-year growth of 19.43%; The net profit of return shares was 360 million yuan, turning losses into profits year on year. Among them, in Q4 of 2021, the company's operating revenue reached 545 million yuan, accounting for 38% of the annual revenue, increasing to 59.59% year-on-year, significantly higher than the first three quarters.

Photo source: St noble's financial report in 2021

It seems that from the company's pure brand has been gradually away from. According to the financial report, St Guiren's main business is divided into sports shoes and clothing industry, investment promotion and agent operation business and food trade industry, of which the latter two have accounted for 36.6% of revenue.

Photo source: St noble's financial report in 2021

In the sports shoes and clothing industry, which accounts for the largest proportion of revenue, the noble bird brand is not all. According to the financial report information, the current business model of guirenniao brand is independent R & D + procurement mode. Generally speaking, from the second half of 2021, all products of noble bird brand have been handed over to outsourcing companies. In terms of sales mode, all the noble bird brands adopt the distribution mode. They are only responsible for the supply of goods and do not bear the inventory risk.

Under such a restructuring, St noble's sports shoes and clothing sector's revenue still fell by 14.65% year-on-year, and the gross profit rate also decreased by 10.15%.

St noble's sports shoes and clothing business also includes vertical platform name shoe storehouse. The first-line brand of tmall is purchased and purchased from the first-line brand of tmall. In addition, related subsidiaries also provide agency operation services for other sports brands. According to the annual report, during the reporting period, the sales revenue of famous shoes store reached 436 million yuan, accounting for 31%. The annual sales volume of clothing, shoes and accessories totaled 690000 pieces, with an average of 58000 pieces per month.

From the noble bird to the famous shoe store, and then to investment promotion and grain wholesale business, the relevant data about the noble bird brand mentioned in the financial report are very few.

The above "beautiful" sales data were questioned by the Shanghai stock exchange for some time after the financial report was issued. On April 22, St Guiren received the inquiry letter from Shanghai Stock Exchange, asking questions on the abnormal growth of revenue in the fourth quarter, the market share of guirenniao and brand development, the public sales data and annual report of famous shoes storehouse, and the wholesale business of grain products.

There are some problems such as vague disclosure and missing data in the major business growth or turning loss into profit. According to the time finance and economics report, the famous shoe store's products such as Adidas and puma sold in shuoyin are suspected of being fake. Consumers have published several rights protection messages on platforms such as black cat complaints and consumer protection. Once the parent company of national sports brand falls into the present situation, perhaps the noble bird has "gone forever".

However, it is gratifying that a number of local sports brands have begun to return to the public view. For example, Hongxing Erke, which is "wild consumption", relies on the design of the peak, and relies on the national tide to subvert the stereotype of the public on time-honored shoe enterprises. Perhaps they may not all become Anta and Li Ning, but there is still hope that they will hold up a piece of "national sports tide".