Red Dragonfly Shoe Industry High Inventory, Low Gross Profit

< p > here, the world is < a target= "_blank" href= "http://www.91se91.com/" > clothing < /a > a target= "_blank" href= "_blank".

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< p > inventory is undoubtedly the biggest chronic disease of Chinese clothing and footwear enterprises.

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< p > recently, Zhejiang Red Dragonfly (Red Dragonfly franchised store) footwear Limited by Share Ltd (hereinafter referred to as "Red Dragonfly") disclosed that the prospectus is going to land on the Shanghai stock exchange. This is the third footwear manufacturing company that may enter the A share market after Saturday (002291.SZ) and AOKANG (AOKANG store) International (603001.SH). However, the high inventory and far below the gross profit margin of the same industry make its landing on the capital market full of worries.

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< p > < strong > inventory and accounts receivable < /strong > < /p >

< p > "inventory is a chronic disease."

In an interview with the first financial daily, a PE organization in Shanghai said, "our company never put on clothing and footwear manufacturing enterprises, it is worried about inventory problems.

At the same time, many companies recognize the revenue after selling the goods to the distributor, causing a lot of accounts receivable problems.

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< p > for the red dragonfly, the problem of inventory and accounts receivable seems to be troubled in recent years.

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< p > the development of red dragonfly in recent three years is still ideal (ideal store).

Prospectus shows that in 2013, the overall economic downturn achieved a net profit of 257 million yuan, down 12.44% compared to 293 million yuan in 2012.

Meanwhile, AOKANG International's net profit fell by 50.41% over the same period, and its net profit fell 39.91% on Saturday.

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< p > for this reason, the Red Dragonfly explained that the net cash flow generated by business activities in 2013 increased by 308.76%, because the company's sales revenue increased by 179 million yuan that year, resulting in a substantial increase in cash inflows and a substantial reduction in cash flow from purchases.

But access to information found that the rapid growth of operating income is accompanied by a sharp increase in accounts receivable.

At the end of 2012, red dragonfly receivables amounted to 293 million yuan, but by the end of last year, the figure had increased to 411 million yuan, and the increase was 40.27%.

By contrast, its operating income has increased by only 5%.

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< p > inventory is also increasing significantly.

Prospectus shows that at the end of 2011, the end of 2012 and the end of 2013, the book value of the company's inventory was 497 million yuan, 606 million yuan and 623 million yuan respectively.

At the end of 2013, the value of stock accounted for 41.27% of current assets, accounting for 23.53% of total assets.

The book balance of inventory goods is 615 million yuan, accounting for 92.44% of total inventory, which is the main component of final inventory.

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In the same period, the average book value and current assets ratio of the industry was only 33.94%. The level of Red Dragonfly 42.90% was obviously higher than that of P, and the data in recent three years are all the same.

According to the company, although inventory management has been strengthened to control the stock size and keep the inventory at a reasonable level required for normal production and operation, it will adversely affect the operation if the market environment changes or competition intensifies in the future, resulting in backlog or impairment of inventory.

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< p > < strong > gross margin is much lower than that of peers < /strong > < /p >

< p > compared to A share < a href= "http://www.91se91.com/news/index_s.asp" > market < /a > Hot cultural plate high gross profit margin, the gross profit margin of manufacturing industry has declined sharply.

But for the red dragonfly, its gross profit margin is much lower than that of the same industry listed companies.

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< p > prospectus shows that in 2011~2013, the gross profit margin of main business of the company was 34.43%, 35.61% and 35.43% respectively, while the consolidated gross profit rate of the company was 34.05%, 35.49% and 35.13% respectively.

In 2013 1~6, the industry average gross margin level was 53.01%, while the Red Dragonfly's gross margin was only 36.11%. In 2011, the average gross profit margin of ~2012 was 53.73% and 52.59% respectively.

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< p > it is not hard to see that the profit margin of red dragonfly is much lower than that of peers in the margin of gross margin of nearly 20 percentage points.

In this regard, it explained that the company's consolidated gross margin is lower than other listed companies in the same industry because of the different channel structure of the company and other companies.

But the data found that even the AOKANG international, which is the same as the red dragonfly in the same way as the direct channel, is also higher than the red dragonfly, the overall gross interest rate of AOKANG international in the first half of 2013 is 41.22%, which is higher than the 5 percentage points of the Red Dragonfly shoe industry.

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< p > it is worth mentioning that the gross margin is lower than that of peers, and the asset liability ratio is much higher than that of peers.

Data show that in 2011, 2012 and the first half of 2013, the asset liability ratio of the "a href=" http://www.91se91.com/news/index_x.asp "Red Dragonfly < /a" footwear industry reached 58.31%, 52.98% and 46.02% respectively, while the average debt ratio of the industry in the same period was only 30.14%, 28.81% and 27.08%.

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