Recently, the CSRC updated and disclosed the prospectus of Shanghai October Mommy Networks Co., Ltd. (hereinafter referred to as "October Mommy") (hereinafter referred to as "Prospectus"). October Mommy intends to publicly issue this The number of shares does not exceed 15 million shares, and the raised funds are 219 million yuan, which is not less than 25% of the total share capital of the company after the issue, and the total share capital after the issue does not exceed 60 million shares.
This is October's re-sprint on the capital market. A year ago, affected by factors such as the sluggish overall performance of the clothing industry, Mummy's IPO in October was frustrated. In this regard, some analysts believe that this October Mommy seeks to go public again, or urgently needs "blood transfusion" due to the tight funding chain. Product quality problems are frequent, marketing costs continue to grow, and continued profitability is questionable. Many "internal injuries" make October Mummy's prospects full of uncertainty. In response to the above-mentioned issue, the reporter of the Economic Reference News issued an interview letter to October Mommy, but as of the press release, the other party has not responded.
Low industry concentration and intense competition
Public information shows that in October, Mummy was formerly known as "Youxi Industrial", which was established in 2009, and mainly provides services to the majority of mothers and infants. It owns three major brands of "October Mommy", "Youxi" and "PB", covering maternity clothes, maternal-grade skin care products, maternity products, baby products and other pregnant and baby products.
At the beginning of its establishment, October Mommy was still a little-known foreign trade maternal wear shop. However, in 2007, after spending millions to find the "Spicy Mom" Little S endorsement, October Mommy quickly gained popularity and quickly rose to become A well-known omnichannel brand retailer of domestic maternity supplies. Data show that in October Mommy was already a leader in the maternity apparel market.
In recent years, with the socio-economic development of China, the growth of disposable income of residents and the favorable factors of the "separate two-child" policy, the pregnancy and infant industry has entered a period of rapid development, and the total retail market has maintained a rapid growth trend. According to Frost & Sullivan (Frost & Sullivan Consulting) statistics, the total retail sales of Chinese maternity supplies market increased from 38.480 billion yuan in 2012 to 61.750 billion yuan in 2016, with a compound annual growth rate of 12.60%. On this basis, Frost & Sullivan predicts that the total retail sales of the Chinese maternity products market will reach 120.3 billion yuan in 2021, and the average annual compound growth rate in the next five years will reach 14.30%.
Both market prospects and favorable policies seem to indicate that in October Mummy has stepped onto a new “airport” and will enter an unprecedented golden period of development.
However, some in the industry pointed out that from the perspective of market competition, the concentration of pregnant women's clothing industry is low and the competition is fierce. At present, the more well-known brands in the market are October Mommy, Happy House, Huiyi, Tianxiang, Kini, etc. Most of the brands still have low recognition and the products tend to be homogeneous.
Relevant data also shows that the market share of the top five brands is only 5.8%, of which, in October, Mummy temporarily occupied the position of the industry leader with a market share of 2.4%. This means that October Mommy does not have an absolute competitive advantage in the maternity wear industry.
Products repeatedly appear on the black list of quality
On May 25, Mommy disclosed the prospectus on the official website of the Securities and Futures Commission in October. However, in October of that day, Mummy's products were named by the Beijing Consumers Association and there were unqualified samples. The Beijing Consumers Association announced the results of a comparative test of baby clothing products sold on online shopping platforms. Nine of the 60 samples did not meet the national standard requirements. Among them, the baby label that was produced by October Mommy was octmami. The placket suit did not meet the standards in the test of rope and drawstring items.
Needless to say, safety and health are often the top priority for pregnant and baby products. In October, Mummy repeatedly "dropped the chain" on quality issues.
Public information shows that from December 2015 to February 2016, the General Administration of Quality Supervision, Inspection and Quarantine of the People ’s Republic of China organized the first batch of 25 kinds of knitted underwear under the state supervision sampling test in 2016. Among them, the pH value of knitted underwear sold by Mummy in October was unqualified. ; On January 27, 2016, the General Administration of Quality Supervision, Inspection and Quarantine issued the “2015 Report on Special Inspections of the State Supervision on the Quality of 8 Kinds of Motor Vehicle Gasoline Products, etc.”, in which the knitted underwear operated by the company had an unqualified fiber content; Jiangsu Province The Bureau of Quality and Technical Supervision conducted a product quality supervision and random inspection on the October mommy tie belts sold by Wuxi Yaohan Business Center Co., Ltd. from January 2017 to February 2017. The test results were unqualified, and the unqualified items were the fiber content of the product. Instructions for use-labels.
Industry insiders said that multiple failed product sampling inspections to some extent indicate that there is a problem with the company's product quality, which is likely to affect the brand effect of Mummy in October, and the company's performance may also be under pressure or further affect its Market share and market position.
The quality of the product is often unrelated or related to its unique production mode. It is understood that Mummy's pregnant women's clothing in October mainly adopts OEM (OEM) outsourcing production or outsourcing processing mode, and pregnant women's cosmetics mainly use ODM (OEM) outsourcing production mode. Industry insiders said that this outsourcing production model is difficult to ensure the stability of product quality.
In addition, the prospectus shows that during the reporting period, the company's R & D expenditure in 2016 was RMB 4.5699 million, and its operating income was RMB 3.4005529 million, and its R & D expenditure accounted for only 1.34% of its operating income.
In stark contrast to light R & D, October Mommy was particularly addicted to marketing money. In October, Mummy's official website showed that it is currently launching the so-called "Fortune Joining Action" investment promotion campaign. The prominent position on the page is marked with large fonts indicating "IPO intends to list A shares", "Globally renowned venture capital Sequoia and Bega Capital injection brands." ", Especially mentioning that" tens of millions of marketing expenses throughout the year, sea, land and air have been rolled out. "
The prospectus also shows that in the reporting period, in 2016, Mummy spent 30.525 million yuan on advertising and advertising expenses alone, accounting for nearly 10% of its operating income.
The data shows that although Mummy's revenue has increased in recent years in October, its net profit is a warning line below the IPO's net profit of 30 million yuan for four consecutive years. The prospectus shows that from October to 2013, Mummy realized operating income of RMB 23,920,400, RMB 27,381,300, RMB 27,903,500, and RMB 3,400,529; the net profit attributable to the owner of the parent company was RMB 11,092,000, 23,238,800 yuan, 12,446,600 yuan, and 24,052,400 yuan.
It is particularly worth noting that the prospectus also showed that the net cash flow generated by Mummy's operating activities in October 2016 was 20.725 million yuan, which was lower than its net profit of 24.052 million yuan.
Industry insiders said that this means that with the expansion of the company's production scale and sales income, the balance of accounts receivable may further expand, and it may be necessary to raise more funds to meet liquidity needs. If the company cannot raise in multiple channels in a timely manner Failure to recover funds or accounts receivable in a timely manner may lead to a shortage of funds for production and operation activities, and thus face the risk of shortage of funds.
In addition, Mummy's inventory has remained high in October. The prospectus shows that from 2014 to 2016, the proportion of the book balance of Mommy's inventory in October to the total assets of the same period were 52.45%, 55.8%, and 54.42%, and the proportion of its inventory products to the inventory balance was 90.36%, 88.96%, and 85.09%.
"As the clothing retail industry, the necessary stocking is necessary. However, the clothing industry is updating very fast. A large amount of inventory means that it needs to be fully digested for a long time. The backlog of inventory occupies a lot of funds, and the inventory may bring losses. This will To a certain extent, October ’s mommy ’s profitability and cash flow have put more pressure on it. ”Some people in the industry told the Economic Reference News reporter.
It is understood that this October Mommy raised funds and planned to use 24.9362 million yuan to build a marketing network to increase the number of directly operated stores. However, public information shows that in October alone, Mummy closed 28 stores in 2014, closed 12 stores in 2015, and closed 36 stores in 2016 (20 new stores opened).
"This shows that in October's previous planning and site selection, Mommy was somewhat blind, and marketing estimates also deviated. At present, chain companies like October Mommy often open long-term leases to open stores. Once the site is selected, Failure, business income can not go up, in order to avoid causing greater losses, you have to close or transfer stores, which will cause a huge waste of resources. "The industry insider said to reporters.
The prospectus also shows that if the company fails to continue to successfully develop new key department stores, large shopping malls and other mid-to-high-end commercial channels in the future channel expansion process, and obtains excellent store locations therein, the company's offline direct sales business may develop Subject to certain restrictions.
On the other hand, in October Mommy plans to use 100 million yuan to supplement other operating funds related to the main business, accounting for 45.73% of the funds raised, coupled with the large inventory data, the accounts receivable and management costs are increasing. . "The raised funds are used to supplement funds. Although it can improve the company's market competitiveness and anti-risk ability, if the proportion is too high, it may be unreasonable. Generally, the proportion is above 40%, which can be to a certain extent. This shows that the company's capital chain is tight. "Experts said.
The industry believes that if the IPO is successful, the fundraising funds will greatly improve the tightness of mommy's liquidity in October. However, the blessing of capital can only inject a strong agent for its large-scale development in the short term, and it cannot fundamentally achieve sustainable profitability. The future prospects of Mummy in October are still full of uncertainty.