Tao Po Tried Through HK Stock Exchange: Raising $1 Billion

According to IPO, as early as the news, Tao Bo International Holdings Limited (hereinafter referred to as "Tao Bo sports") on Thursday passed the listing hearing, and updated its prospectus on the Hong Kong Stock Exchange in the evening of September 8th. The IPO is expected to raise $1 billion, and the Bank of America and Morgan Stanley will be co sponsors.

Tao Po sports is the largest footwear retailer in China, and is also the largest sports shoe clothing retailer in the world under BELLE international. According to Sullivan, the market share of retail sales in 2018 is 15.9%.

At the same time, it is the highest average sales volume of every five stores in 2018, with an average sales volume of 3 million 700 thousand yuan and over second as many as 10%.

The updated prospectus emphasizes that direct stores are the core assets of the company, including single brand stores and multi brand stores. As of May 31, 2019, the number of direct outlets in China was 8361.

Among them, a single brand store accounts for 99% of the total number of Direct stores, reaching 8281, which is the brand name of the sports shoes and clothing sold, and can help the brand to provide a powerful medium for establishing the market and brand image in China.

The remaining 80 multi brand stores refer to brand names such as "TopSports" and "Foss", which are owned by store brands, and distribution agencies such as Nike, Adidas, Puma and CONVERSE. Most of these stores are run by the Chung Po sports, while the rest are operated by independent third parties. It will collect fixed or floating pool fees calculated by sales percentages for stores run by third parties.

It is worth noting that in order to expand the depth and breadth of the entire store network, it is also closing down inefficient stores every year, but the number of new stores opened annually is larger than the number of closed stores. Specifically, as of the end of February 28, 2019 and the quarter ended May 51, 2019, there were 1374 stores and 268 stores respectively.

In addition, it also expands the scale of stores by leasing the stores next to the existing stores next to the stores with high sales potential, supplemented by interior decoration and display to increase the attractiveness of consumers. As of 2017, 2018 and February 28, 2019, the number of stores with more than 300 sq m was 2.6%, 3.1% and 5% respectively. As of May 31, 2019, there were 489 stores with more than 300 sq m.

From the financial data, as of 2017, 2018 and February 28, 2019, the total revenue of talpaca sports was 21 billion 690 million, 26 billion 550 million and 32 billion 560 million yuan respectively, with gross profit of 9 billion 380 million, 11 billion 40 million and 13 billion 610 million yuan respectively, and the adjusted annual profits were 1 billion 540 million, 1 billion 810 million and 2 billion 240 million yuan respectively.

During the period from March 1, 2019 to May 31st, the revenue of Tao Po sports was 8 billion 940 million yuan, an increase of 13.2% compared with the same period in 2018. The gross profit and adjusted profit were 3 billion 880 million yuan and 780 million yuan respectively, up 13.1% and 30% compared with the same period last year.

In the proportion of the brand income, Tao Bo sports has a great reliance on the sales revenue of the two main brands of Nike and Adidas. As of 2017, 2018 and February 28, 2019, and the 3 months ended May 31, 2019, sales from the two main brands accounted for 90%, 89.4%, 87.4% and 88.8% of the total sales respectively.

Of course, it has also become the main strategic partner of Nike and Adidas. The cooperation time with the former and the latter is 20 and 15 years respectively. Specifically, it is Nike's second largest retail partner and customer in the world, and Adidas's largest retail partner and customer in the world. In addition, as of May 31, 2019, in addition to the main brands, Tao Po sports is also a retail partner of 9 other international sports shoes and clothing brands such as Puma and CONVERSE.

In view of the fact that the source of income is too single, it has been trying to acquire new users through new services in recent years.

First of all, in May 2018, TopFans launched a revised "TopFans" membership plan. Up to the last practicable date, in May 31, 2019, it had about 20 million 300 thousand registered members.

The re launch of the membership plan has also contributed greatly to the growth of the income of the movement. As of August 31, 2018, November 30th and February 28, 2019 and May 31st, the members contributed 36.6%, 41.5%, 52.3% and 70.8% of the total retail sales (including VAT) respectively.

Second, in order to occupy the core audience of sports retail, that is, the minds of young people, Tao Bo sports also established the electronic competition club in 2017, and has won the permanent seat of the high level competition, such as the League of Champions League, the Royal glory professional league, and so on. In terms of monthly visits, the micro-blog account of Tao Po Electronic Sports Club ranked the top 30 of micro-blog E-sports content account in the first 5 months of 2019.

With the massive influx of Hongkong brand into mainland production and sales, BELLE international has established the leading position in the domestic retail industry with the rapid growth of women's shoes business.

But before and after 2013, the overall female shoe industry slump, and in the face of the impact of more e-commerce brands and fast fashion brands, BELLE International's performance began to decline sharply, and with it came the downward trend of share prices. Finally, in 2017, the consortium of high leverage capital invested in CDH investment and the executive director of BELLE international, Wu and the rich group, completed the privatization of BELLE international with us $6 billion 800 million (HK $53 billion 100 million).

Today, the sports and clothing business is in a continuous rising stage. The new consortium naturally hopes to return to the capital market at this suitable time node and regain its glory through the sports market.