The First Performance Of Listed Companies Is Good, Mu Shang Group Speeds Up The Digital Upgrade.

Business fashion at the end of August Men's wear brand GXG 1817.HK announced its interim results in 2019. In May this year, Mu sang Holdings Limited Success Landing at the Hong Kong stock exchange.

In the first half of this year, Mu Shang Group achieved a business income of 1 billion 686 million yuan, an increase of 10.6% over the same period last year, a net profit of about 88 million 200 thousand yuan, a decrease of 17.9% over the same period last year, and a net profit of 89 million 670 thousand yuan for the parent company, a decrease of 18.84% over the same period last year. Although the net profit of moshang group has declined, if we take the performance of the company into the market environment of the clothing industry, we will find that the growth of the double digit income of the group is actually not easy.

First, the garment industry is facing challenges, and enterprises are adjusting their store strategies.

With the change of China's economic structure and population structure, the growth rate of household income and expenditure has declined, and the growth of social retail sales has also slowed down. As of July 2019, the total retail sales of consumer goods increased by 7.6% over the same period last year.

China's textile industry is affected by internal and external factors, and the overall prosperity index has declined. According to the data of the National Bureau of statistics, in 2019 1-6, the total profit of the textile industry was 48 billion 370 million yuan, down 0.1% from the same period last year, and the total profit of the textile and clothing industry reached 38 billion 250 million yuan, down 0.8% from the same period last year.

From the perspective of the management of the listed garment enterprises, the performance of many companies has been increasing slowly or even declining. In the first half of 2019, Taiping bird's operating income was 3 billion 120 million yuan, a year-on-year decline of 1.54%, net profit of 132 million yuan, down 33.06% compared with the same period last year. The former white horse shares also fell into recession. In the first half of the year, its operating income was 2 billion 699 million yuan, down 31.47% compared to the same period last year, with net profit of -1.38 yuan, down 359.61% compared with the same period last year.

Performance pressure, many enterprises take the strategy of closing stores. Mei Bang apparel mentioned in the China Daily that the company took the initiative to close down and adjust inefficient Direct stores. Taiping bird also made a big adjustment to the store, which closed 167 stores in the first half of this year. La Natsu Bell closed 2470 retail outlets in the first half of the year, and expects to close another 800 retail outlets in the second half.

In fact, the adjustment of the store structure by garment enterprises can be regarded as the inevitable result of the development of the times. With the popularity of mobile Internet and the continuous rise of new generation of consumption, the consumption patterns and consumption concepts of clothing have changed significantly. More and more consumers are accustomed to online consumption, and the function of offline stores has changed.

In the past, clothing enterprises mostly occupied the market share by opening stores quickly, and the number of stores increased the income. However, the garment industry in China has entered a mature period of slower growth, and this rugged way of operation no longer meets the needs of the market. This is why we can see that more and more clothing companies no longer insist on expanding the number of stores. For example, Anta said it would not focus on increasing the number of stores, but to improve store efficiency as the primary goal. In 2019, the number of Anta brand stores increased from 10057 to 10233, and the number of stores was minimal.

Therefore, actively closing down inefficient stores can enable enterprises to adapt to market demand, seize new opportunities and get better development. Ryui Masa, chairman and CEO of Japan's fast selling group, a famous brand "UNIQLO", once said, "closing the shop that is not profitable is a process of self change. In the normal operation of an enterprise, the ups and downs of a business are common. "

Two, the benefit of new retail sales, the performance of mousse group is better than the average level of the industry.

In the face of changes in China's fashion apparel industry, in order to arrange new retail sales and improve the efficiency of stores, the group also adjusted its stores, and the total number of stores decreased from 2250 at the end of 2018 to 2139 at the end of June 2019. The 2139 national retail outlets include 447 self operated stores, 426 partnership shops and 1266 distribution outlets.

"In the first half of 2019, the group adjusted the store network and closed down the shops that failed to reach the established sales target. The total number of stores decreased from 2250 at the end of 2018 to 2139 in June 30, 2019," the group said in its earnings report.

From the point of view of operating income, Mu Shang Group still achieved business income growth in a sluggish market environment, which is better than the industry average. In the first half of 2019, Mu Shang Group achieved an operating income of 1 billion 686 million yuan, an increase of 10.6% over the same period last year.

Founded in 2007, the moshang group is a typical new retail digital platform development fashion company in China. In addition to running the fashion menswear brand GXG, the company also has GXG jeans, gxg.kids, Yatlas, 2XU and other brands, while also involved in shoes, underwear and other categories.

The income of the group is mainly from selling products to its end customers through its own stores, distributors, partnerships and online channels. The company's overall business revenue has achieved double-digit growth, largely due to the adoption of multi brand strategy and the development mode of new retail business. In the proportion of operating income of the mosang group, online channel sales accounted for the first place, reaching 33.4%, followed by self operated stores and distribution outlets, respectively, accounting for 28.6% and 27.7% respectively. In the first half of this year, the sales of online sales of mosang group maintained a rapid growth of 14.9% to 562 million yuan.

It is worth noting that with the growth of China's consumption and the increasing number of commercial and innovative business models in the country, the opportunities and challenges of the apparel industry will continue to exist in the second half of this year. The online business of moshang group will provide important support for the growth of the company's performance.

Three, online business provides margin of safety, and mousse group speeds up the digital upgrade.

At present, the scale of online retail transactions in China is still growing rapidly, and the bonus of e-commerce is still continuing. Data show that the growth rate of China's online retail sales is higher than that of social retail sales, which has increased by 17.8% over the first half of this year.

Recently, Alibaba, Jingdong, and many other e-commerce giants have handed in the beautiful mid term earnings report, which shows that China's online consumption continues to be highly scenic. In addition, according to the data from the prospective industry research institute, the proportion of online shopping in China has increased continuously in the 2010-2018 years.

Moshang group has a significant lead in online retailing, and the company has entered 13 online platforms such as Tmall, WeChat applet and vip.com. In this year's Tmall 618 activities, the sales volume of GXG ten minutes of mosang group is more than that of last year's sales.

In addition, data show that in terms of total retail revenue, the MOS group has a market share of 3.3% in China's fashion men's clothing market in 2018 and second in the country. In line with total retail revenue, Mu Shang ranked first in China in 2018, with a total retail income of about 5.2% and online penetration of 36%.

With the support of big data analysis, the company continues to integrate online retail outlets and online channels to provide seamless shopping experience for customers. New retail is the development trend in the future. Therefore, the electricity business of Mu Shang Group is strong, and the electricity business in the first half of 2019 has maintained a good growth. It is expected that the second half of this year will provide a certain margin of safety for the company's performance.

Looking forward to the future, moshang group indicates that the company will take the following measures: 1) develop new product mix and brand matrix through multi brand strategy, further integrate online retail channels and enhance operational capability. 2) continue to attract more followers through innovative marketing methods, and enhance the experience of members through new retail technologies and advantages. 3) to further develop the leading supply chain system, enhance the service ability of the front and rear ends of the industry, and improve the quality and service of the products to meet the needs of customers.

Moshang group widely used big data in designing production logistics links, including intelligent warehouse, intelligent supply chain, intelligent logistics, intelligent stores, etc. According to the company's prospectus, Mu Shang Group plans to upgrade the offline retail store into an intelligent store. In 2018, Mu Shang Group upgraded 121 retail outlets to intelligent stores. In 2019 -2021, the company plans to complete about 500 offline retail stores every year to upgrade to intelligent stores.

Four, conclusion

China's consumption growth is slowing down, and the new retail industry is reshaping the competition pattern of the garment industry, giving rise to the upgrading of the industry concentration. Those companies that are closely following the trend of consumption development and push for new retail and digitalization will become the beneficiaries of the industry's concentration enhancement.

If we look back at the growth experience of the Japanese clothing leader, we can see that those world-class costume tycoons are emerging in the later stage of the mature development of the industry. In 1980s, Japan's economic growth rate continued to slow down. UNIQLO, with its refined operation and cost-effective products, came out and continued to benefit from the upgrading of industry concentration in the long decades following the decades, and gradually grew into a global apparel giant.

International experience shows that Matthew effect is highlighted in the mature stage of garment industry, and market concentration will continue to improve. Leading enterprises are facing growth opportunities. At present, the concentration ratio of China's clothing market is far lower than that of developed countries such as the United States and Japan. In the field of Chinese fashion men's clothing, the market concentration is also very low. The market share of the top five companies in 2018 was only 14.4%.

Mosang group has a leading position in highly competitive and competitive Chinese fashion men's wear market. With total retail revenue, the market share is about 3.3% and the country ranks second. Mozon group is actively promoting new retail and digitalization, enhancing the efficiency of the company and strengthening the advantages of the electricity supplier business.

Since its listing in May 27th, mosang Group Holdings has achieved a good share price performance in the Hong Kong stock market. As of the close of September 3rd, the price of mosang Group Holdings was HK $5.49, with a total market value of HK $5 billion 220 million. According to the data of Wan De, the median of dynamic P / E of SW garment home textile is about 15.5. The latest dynamic price earnings ratio of mosang Group Holdings is about 12.6 times lower than the industry average. Although the share price has risen, the valuation still has the advantage.