Using HK$150 million to buy back shares, which is the prelude to Xtep’s privatization?
Date: 2018-01-16 15:37
On November 2, 2016, Peak Sports delisted from the Hong Kong Stock Exchange and marked the end of the privatization of Peak Sports, which lasted for three months. Since the general valuation of Hong Kong stocks listed domestic sports brands is low, the industry generally believes that the privatization of Peak will open the prelude to the return of sports to A shares, and leave the guess of who will be the next sports brand.
Return to the prelude to A shares?
On January 2nd, Xtep International announced that the board of directors has resolved to use the public repurchase market shares of not more than HKD 150 million. At the same time, the trustee of the Share Award Scheme has been authorized to purchase shares in the market and hold such shares for the purpose of setting aside future share awards for the Share Award Scheme. In addition, the company has been informed by its chairman Ding Shuibo and certain senior management that they have increased in response to market conditions and intends to continue to increase their respective shareholdings in the company.
Using HK$150 million to buy back shares, which is the prelude to Xtep’s privatization?
The Xtep International Board of Directors believes that the repurchase of shares is in the interest of the company and its shareholders as a whole. First, the level of valuation of shares has been significantly lower than the company's performance and basic value; Second, the Group's 3-year rectification is about to be completed and it is expected that the financial performance will significantly improve in 2018 and the cash flow will be stronger than in the past three years; and third, 2017 On June 30, the Group's financial position was stable, with a net cash value per share of RMB 1.16 (approximately HK$1.37), accounting for approximately 48.6% of the Group’s net assets. The Group expects strong cash flow in the future and the current healthy financial position to be beneficial to the company. It is proposed to repurchase shares while maintaining sufficient financial resources to ensure the continued development of the Group's business.
It is worth mentioning that Ding Shuibo successively increased its holdings of 6.4925 million shares from December 12 to December 27, 2017. After the change, it held 1.333875 billion shares, representing 60.04% of the outstanding shares of Xtep.
The Xtep New Year’s repurchase of shares was seen as a prelude to privatization by the investment market. Ren Huitao, a member of the Fujian Sports Industry Research Center, believes that the sports industry in China is undoubtedly a huge commercial imagination for domestic sports brands. The privatization of Peak in the same city has already taken precedence, and this special move can be used as a privatization process.
As early as more than a year ago, Peak has been successfully privatized, opening the prelude to the return of sports brands to A shares.
In September 2009, Peak Sports was successfully listed in Hong Kong and was transformed from a family-owned enterprise to a public enterprise. In the past seven years, Peak’s domestic and foreign brand market linkages have continuously grown and become China’s internationally influential sports brands.
With the promotion of national fitness as a national policy and other policy dividends, the Chinese sports industry has ushered in a huge business opportunity of the next trillion. On July 26, 2016, under the proposal of the majority shareholder of the Xu family, the general meeting of shareholders resolved to initiate the privatization plan, and on November 2 of that year, the company successfully withdrew from the Hong Kong Stock Exchange.
Low valuation drives repatriation back to A
It seems that people in the industry choose Peak to return to A-shares. On the one hand, the stock price of Hong Kong stocks is too low and there is little room for financing. On the other hand, the upgrading and outbreak of China's sports industry will undoubtedly give domestic sports brands greater imagination. .
Peak President Xu Jingnan told reporters that the privatization has been favored and backed by many capital giants and investors. On the list of Peak Sports shareholders, Doug Capital has joint ventures such as China Everbright Capital, Qianhaimu Fund, Minsheng Bank, Guosen Securities, Guangfa Securities, and CSC Capital.
At present, the vast majority of sports brands in China, including Anta, Peak, Xtep, 361 Degrees, Li Ning, and China Trends, have gathered Hong Kong stocks. Exclusive birds are the only exception. As the first and now the only sports brand of A-shares, the elegant birds can be described as being very successful in the past two or three years. They have established a fund to invest in sports projects and have launched a series of acquisitions in the sports industry. They are moving toward the extension of the sports industry chain. This, in turn, benefits from the high returns on its A-share listing.
Taking 2015 before the privatization of Peak as an example, Guiren Bird’s 2015 annual operating income was 1.969 billion yuan, a year-on-year increase of 2.57%, and net profit of 332 million, an increase of 6.33%; 2016 2016 business income of 1.018 billion, a year-on-year increase of 0.11%, a net profit of 157 million, The year-on-year decrease was 9.92%. In 2015, Peak achieved a turnover of 3.107 billion yuan, an increase of 9.36%, and a net profit of 392 million yuan, an increase of 22.33% over the same period last year. In 2016, the company reported a turnover of 1.298 billion yuan and a net profit of 169 million yuan, a year-on-year decrease of 3.73%.
In 2015, the operating income of the noble bird was lower than Peak, but its dynamic price-earnings ratio was 43.39 times. Peak was reported to be 1.92 yuan before the suspension, and the price-earnings ratio was only 9.2 times. The issue price of elegant bird from the time of listing in 2014 was 10.6 yuan, up to 69.37 yuan in 2015, and the total market value was once more than 20 billion yuan.
People in the investment community expect that, if they are compared horizontally according to the valuation, Peak Sports, which will return to A shares in the future, will increase its valuation by a factor of three. Back to A-share listed Peak Sports or up to 20 billion yuan.
Overseas Chinese stocks return to A shares
The enthusiasm of the giants to return to A shares. Except for companies listed on the Hong Kong Stock Exchange, such as Peak and Wanda Business, Chinese companies listed overseas, including 360, Momo, Dangdang, and Auto House, have planned to return to A shares in the past two years.
In 2016, with the delisting of Peak HK stocks, Wanda Commercial also successfully withdrew from Hong Kong. In the past two years, Evergrande Real Estate has also increased its repurchase of stocks, and it is also possible that R&F Properties, Country Garden, Agile, and other housing companies have returned to A shares.
In the United States listed stocks, Qihoo 360 succeeded in returning A shares to Jiangnan Jiajie in November last year after delisting from the United States in 2016. On the day of resumption of trading on January 2 of this year, the daily limit was set at 15 minutes. On January 3, the daily limit was again set to close at 55.63 yuan. Zhou Hongyi’s worth soared to 88 billion yuan, surpassing Liu Qiangdong and approaching Li Yanhong. Qihoo 360's backdoor return to the A-shares' soaring trend undoubtedly touched the hearts of the public stocks.
Xu Jingnan said: The completion of privatization is only the first step. Peak will embark on the journey of returning to A-shares. The road to upgrade from a single sports equipment brand to a sports industry group has only just begun.
Analysts believe that with the rapid development of China’s economy, more and more domestic investors gradually recognize the business models and development methods of Chinese Internet companies, innovative and entrepreneurial enterprises, and the state’s supporting policies for emerging domestic companies listed on the market Gradually increase, this allows a large number of companies to embark on a road to return to the country. In addition, valuation differences are also considered to be another reason for overseas listed companies to return to the wave of A shares.
Source: Southeast Morning Post
Date: 2018-01-16 15:37
On November 2, 2016, Peak Sports delisted from the Hong Kong Stock Exchange and marked the end of the privatization of Peak Sports, which lasted for three months. Since the general valuation of Hong Kong stocks listed domestic sports brands is low, the industry generally believes that the privatization of Peak will open the prelude to the return of sports to A shares, and leave the guess of who will be the next sports brand.
Return to the prelude to A shares?
On January 2nd, Xtep International announced that the board of directors has resolved to use the public repurchase market shares of not more than HKD 150 million. At the same time, the trustee of the Share Award Scheme has been authorized to purchase shares in the market and hold such shares for the purpose of setting aside future share awards for the Share Award Scheme. In addition, the company has been informed by its chairman Ding Shuibo and certain senior management that they have increased in response to market conditions and intends to continue to increase their respective shareholdings in the company.
Using HK$150 million to buy back shares, which is the prelude to Xtep’s privatization?
The Xtep International Board of Directors believes that the repurchase of shares is in the interest of the company and its shareholders as a whole. First, the level of valuation of shares has been significantly lower than the company's performance and basic value; Second, the Group's 3-year rectification is about to be completed and it is expected that the financial performance will significantly improve in 2018 and the cash flow will be stronger than in the past three years; and third, 2017 On June 30, the Group's financial position was stable, with a net cash value per share of RMB 1.16 (approximately HK$1.37), accounting for approximately 48.6% of the Group’s net assets. The Group expects strong cash flow in the future and the current healthy financial position to be beneficial to the company. It is proposed to repurchase shares while maintaining sufficient financial resources to ensure the continued development of the Group's business.
It is worth mentioning that Ding Shuibo successively increased its holdings of 6.4925 million shares from December 12 to December 27, 2017. After the change, it held 1.333875 billion shares, representing 60.04% of the outstanding shares of Xtep.
The Xtep New Year’s repurchase of shares was seen as a prelude to privatization by the investment market. Ren Huitao, a member of the Fujian Sports Industry Research Center, believes that the sports industry in China is undoubtedly a huge commercial imagination for domestic sports brands. The privatization of Peak in the same city has already taken precedence, and this special move can be used as a privatization process.
As early as more than a year ago, Peak has been successfully privatized, opening the prelude to the return of sports brands to A shares.
In September 2009, Peak Sports was successfully listed in Hong Kong and was transformed from a family-owned enterprise to a public enterprise. In the past seven years, Peak’s domestic and foreign brand market linkages have continuously grown and become China’s internationally influential sports brands.
With the promotion of national fitness as a national policy and other policy dividends, the Chinese sports industry has ushered in a huge business opportunity of the next trillion. On July 26, 2016, under the proposal of the majority shareholder of the Xu family, the general meeting of shareholders resolved to initiate the privatization plan, and on November 2 of that year, the company successfully withdrew from the Hong Kong Stock Exchange.
Low valuation drives repatriation back to A
It seems that people in the industry choose Peak to return to A-shares. On the one hand, the stock price of Hong Kong stocks is too low and there is little room for financing. On the other hand, the upgrading and outbreak of China's sports industry will undoubtedly give domestic sports brands greater imagination. .
Peak President Xu Jingnan told reporters that the privatization has been favored and backed by many capital giants and investors. On the list of Peak Sports shareholders, Doug Capital has joint ventures such as China Everbright Capital, Qianhaimu Fund, Minsheng Bank, Guosen Securities, Guangfa Securities, and CSC Capital.
At present, the vast majority of sports brands in China, including Anta, Peak, Xtep, 361 Degrees, Li Ning, and China Trends, have gathered Hong Kong stocks. Exclusive birds are the only exception. As the first and now the only sports brand of A-shares, the elegant birds can be described as being very successful in the past two or three years. They have established a fund to invest in sports projects and have launched a series of acquisitions in the sports industry. They are moving toward the extension of the sports industry chain. This, in turn, benefits from the high returns on its A-share listing.
Taking 2015 before the privatization of Peak as an example, Guiren Bird’s 2015 annual operating income was 1.969 billion yuan, a year-on-year increase of 2.57%, and net profit of 332 million, an increase of 6.33%; 2016 2016 business income of 1.018 billion, a year-on-year increase of 0.11%, a net profit of 157 million, The year-on-year decrease was 9.92%. In 2015, Peak achieved a turnover of 3.107 billion yuan, an increase of 9.36%, and a net profit of 392 million yuan, an increase of 22.33% over the same period last year. In 2016, the company reported a turnover of 1.298 billion yuan and a net profit of 169 million yuan, a year-on-year decrease of 3.73%.
In 2015, the operating income of the noble bird was lower than Peak, but its dynamic price-earnings ratio was 43.39 times. Peak was reported to be 1.92 yuan before the suspension, and the price-earnings ratio was only 9.2 times. The issue price of elegant bird from the time of listing in 2014 was 10.6 yuan, up to 69.37 yuan in 2015, and the total market value was once more than 20 billion yuan.
People in the investment community expect that, if they are compared horizontally according to the valuation, Peak Sports, which will return to A shares in the future, will increase its valuation by a factor of three. Back to A-share listed Peak Sports or up to 20 billion yuan.
Overseas Chinese stocks return to A shares
The enthusiasm of the giants to return to A shares. Except for companies listed on the Hong Kong Stock Exchange, such as Peak and Wanda Business, Chinese companies listed overseas, including 360, Momo, Dangdang, and Auto House, have planned to return to A shares in the past two years.
In 2016, with the delisting of Peak HK stocks, Wanda Commercial also successfully withdrew from Hong Kong. In the past two years, Evergrande Real Estate has also increased its repurchase of stocks, and it is also possible that R&F Properties, Country Garden, Agile, and other housing companies have returned to A shares.
In the United States listed stocks, Qihoo 360 succeeded in returning A shares to Jiangnan Jiajie in November last year after delisting from the United States in 2016. On the day of resumption of trading on January 2 of this year, the daily limit was set at 15 minutes. On January 3, the daily limit was again set to close at 55.63 yuan. Zhou Hongyi’s worth soared to 88 billion yuan, surpassing Liu Qiangdong and approaching Li Yanhong. Qihoo 360's backdoor return to the A-shares' soaring trend undoubtedly touched the hearts of the public stocks.
Xu Jingnan said: The completion of privatization is only the first step. Peak will embark on the journey of returning to A-shares. The road to upgrade from a single sports equipment brand to a sports industry group has only just begun.
Analysts believe that with the rapid development of China’s economy, more and more domestic investors gradually recognize the business models and development methods of Chinese Internet companies, innovative and entrepreneurial enterprises, and the state’s supporting policies for emerging domestic companies listed on the market Gradually increase, this allows a large number of companies to embark on a road to return to the country. In addition, valuation differences are also considered to be another reason for overseas listed companies to return to the wave of A shares.
Source: Southeast Morning Post
Cash Box,Money Safe Box,Petty Cash Box,Cash Box With Lock
Eagle (Guangzhou) Technology Development Limited , https://www.eagle-factory.com