Gross profit exceeds 60%, what should jiangnan cloth garment go public raise fund 1 billion Hong Kon

The country's bigger designers will finally go on sale in Hong Kong on January 31.

An IPO will be held in Hong Kong on October 18, and 125 million h-shares will be sold globally from October 19 to 24.

The prospectus further shows that it includes 100 million new shares, 10 per cent in Hong Kong and 90 per cent in international sales. Priced at HK $608-hk $7.73 per share, the company raised HK $966 million and officially began trading at 9 am on January 31 under the symbol "3306.hk". One of the few sponsors and one of the few global coordinators is CCB international.

The IPO will bring in tianhai international holdings, a cornerstone investor, to subscribe for $15m of shares, about 12-15.26 per cent of the total. According to the public information, its parent company is guangzhou tianhai lace co., LTD., which is a fabric supplier in jiangnan. Its main business is designing and manufacturing lace and other fabrics.

Wu jian, founder, chairman and CEO of jiangnan buyi group, said that the introduction shows that the upstream industry has confidence in the company's development. At the same time, the company has good cash flow, and 75% of its annual net profit will be used for dividends after listing, so that shareholders can share in the long-term growth of the company.

Forty percent of the funds will be used to build logistics centers

In terms of fundraising, caixin reported that 37 percent will be used to build a new logistics center. Wu further said that the logistics center in xiaoshan, hangzhou, which will be completed in the middle of 2019, is expected to support the company's development in the next five years and will play the role of inventory restocking and distribution to help reduce costs.

Inventory has always been one of the main pain points for all manufacturing and sales companies. Therefore, continuous improvement of supply chain and logistics management ability will further form competition barriers.

Jiangnan buyi will first improve the supply chain and logistics infrastructure to optimize product replenishment, delivery coordination, inventory and quality control. For example, a new logistics center with a total construction area of 90,000 square meters is expected to have an annual sorting and distribution capacity of 12.8 million products and total capital expenditure of 319 million yuan.

At the same time, jiangnan buyi will continue to invest in supply chain management, upgrade inventory sharing and distribution systems to optimize internal order and inventory management and reduce redundancy.

Wu jian explained that although the company is now mainly in physical stores, but more and more online orders, the new logistics center and the burden of distribution, quality control and other functions, if the outsourcing logistics costs will be higher, so inclined to build their own logistics center, is expected to be put into operation by 2019, can support the company's development needs in the next five years.

In addition, 30% is used to expand the company's brand and product portfolio, 28% is used to strengthen the all-channel interactive platform, and 5% is used for the company's operating capital and other general corporate purposes.

Dividends are as high as 75%

There is no shortage of competitors in the domestic designer market. Suran of Shanghai, MO&Co. Of guangzhou, etc., how can jiangnan cloth garment maintain its leading competitive edge?

In terms of market share, jiangnan cloth garment, founded in 1997, has become the leader. Jiangnan's total retail sales of cloth and clothing accounted for 9.6 percent in 2015, ranking among the top of the fashion industry of Chinese designer brands and accounting for 0.2 percent of China's apparel industry, according to a previously released prospectus application version.

From the perspective of financial data, the total revenue of jiangnan buyi group was 1.535 billion yuan in the nine months ending March 31, 2016, 70% of which came from the gross profit rate rising to 62.6%, and the sketch reached 68.3%. Profits were about 213 million yuan, up 13.9 percent from a year earlier.

Operating profit of jiangnan buyi group has increased at a compound annual growth rate of 23% in the past three years, reaching 343 million yuan in 2016. The group has abundant cash flow, and the annual compound growth rate of cash flow of operating activities from 2014 to 2016 reached 83.7%.

Thanks to the company's steady growth and healthy cash flow, jiangnan buyi will be listed after a long-term dividend plan, dividend ratio will be as high as 75%.

At present, jiangnan cloth clothing includes five brands, namely, women's JNBY, men's CROQUIS(sketch), children's JNBY by JNBY, high-end women's less and the new children's clothing brand Pomme DE terre.