The Local Retail Giant Has Sold 700 Million Of Its Products. In The First Half Of The Year, Its Sales Volume Exceeded 100 Million Yuan.

　　 Xi'an Qujiang cultural industry investment (Group) Co., Ltd. (hereinafter referred to as "Qujiang culture") has acquired the Limited by Share Ltd (hereinafter referred to as "*ST fun").

Today (October 9th) evening, *ST human music announced that the offer period was from September 26, 2019 (including the day) to October 25, 2019 (including the day). In accordance with the procedures of this tender offer, the shareholders of the last 3 trading days before the expiration of the tender offer, i.e., October 23, 2019, October 24, 2019 and October 25, 2019, shall not withdraw their acceptance of the offer.

　　 ? In September 24th, *ST's report on the offer of takeover revealed that the tender offer was due to the acquisition of a 20% stake in Qujiang listed by the controlling shareholder, Ho Ming Investment, through the agreement of the acquirer's Qujiang culture. At the same time, Ho Ming entrusted the voting rights of the remaining 22.86% of the listed companies to the exercise of the culture. The total amount of the voting rights of the listed company has exceeded 30%, so as to trigger the full offer obligation.

After comprehensive consideration, the acquirer confirmed that the price of the tender offer was in line with the transfer price of the 20% equity interest of the listed company of the transferee Ho Ming Investment, that is, 5.33 yuan / share. Based on the premise that the offer price is 5.33 yuan per share and the amount of acquisition is 134 million shares, the maximum amount of capital required for the tender offer is 724 million yuan.

The purpose of the acquisition of Qujiang culture is based on the recognition of the value of the listed companies and the confidence in the sustained and steady development of the future, the acquirer can help the listed companies to develop and utilize their relevant resources in the cultural, tourism and educational sector to help the listed companies improve their operating conditions, and further enhance the operating performance of the listed companies. At the same time, it is also conducive to the rich industrial layout of the acquirers, improving the allocation and operation efficiency of state-owned capital, and promoting the preservation and appreciation of state-owned assets.

Public information shows that *ST is one of the few domestic private supermarkets that have successfully implemented cross regional development in China. The main business of the company is commodity retail chain operation. At present, there are self built hypermarkets, boutique supermarkets Lesuper, community life supermarket Lelife, community fresh supermarket Lefresh, upgraded version of Renren, Department stores and shopping center entities, and all Tesco electronics providers. The development pattern of multi industry development is integrating online platform and APP.

In 2019, China's Chain Store Association released the list of China's top 100 list in 2018, ranking sixty-fourth in the list. In 2018, China ranked twenty-eighth in the list of top 100 list of China's fast moving consumer goods (supermarket / convenience store).

　　 As of the first half of 2019, *ST's business income reached 3 billion 990 million yuan, down 6.59% compared to the same period last year. Net profit attributable to shareholders of listed companies was -3852 million, down 257.52% compared to the same period last year. Basic earnings per share -0.0875 yuan. The company's latest distribution plan is not distributed without increase. As of June 30, 2019, the company has opened 140 self operated stores. As of the end of the reporting period, the company has 140 stores, and its network covers more than 30 cities in 8 provinces (autonomous regions / municipalities directly under the central government). Its business area is 1514157.97. Among them, there were 4 new stores and 2 stores closed during the reporting period.

Insiders said that as the main stores of *ST people's music were distributed in the competitive second tier cities, coupled with the slowdown in economic growth and the impact of online shopping shocks, the industry downturn was also prolonged.

Liu Chang, a securities analyst in Dongxing, talked about the fact that traditional supermarkets focus on providing fresh and daily necessities products. The products are homogenized, the degree of product service is weak, and the customers' stickiness is low. They often rely on discount promotions to attract customers. Alibaba, Jingdong and other electricity providers are pouring in low-cost, full category and convenient distribution services to meet the needs of consumers' products and diverse needs, and rapidly impact on the single supermarket business.

In addition, after 1995-2017 years of expansion, fierce competition in the industry, scarce resources in the high quality business circle, increased rental and property prices, and increased expansion of exhibition shops. As of 2017, the number of supermarkets in the country has reached 29881. At the same time, the average rent level of cities has increased from 26.58 yuan per day in 2010 to 71.62 yuan per square meter in 2018. Especially in the northern Guangzhou and Shenzhen first tier cities, the rent has increased rapidly in the past ten years, which has brought higher rent pressure to the expansion of stores in supermarkets. At the same time, China's per capita wage level has maintained a high growth rate, with a compound growth rate of 11.05% over the past 2010-2018 years. The scarcity of high quality commercial real estate and rising rents and labor costs have increased the cost of exhibition shops and slowed down the pace of exhibition shops.

According to Kayu consumer survey, 67.6% of the customers choose the electricity supplier channel because the electricity supplier provides door-to-door service, and 62.9% of the customers choose the electricity supplier because of the product discount. Besides, the online payment and comment function provided by the electricity supplier also constitutes its unique advantage from the traditional offline channels. In the past five years, the market share of traditional supermarkets and stores has been significantly eroded by e-commerce. In the Fast Retailing urban retail channel, the proportion of electricity supplier sales has increased rapidly since 2012. By 2017, the electricity business channel accounted for 9.8%, while the 2012-2017 year electricity supplier channel sales compound growth rate was 38.9%, while the sales growth of stores and supermarkets in the same period was only 6.7%. The traditional supermarket operation mode has been affected, and the growth of same store revenue has slowed down, which has restricted the rapid expansion of the industry.

Liu Chang believes that with the slow growth of GDP and the transformation of economic structure, the consumption of residents has also changed from volume to qualitative change. Consumers are no longer seeking the improvement of the total volume of consumer goods, but the improvement of quality and structure. At this stage, consumption is dominated by demand, and more emphasis is placed on the satisfaction of diversified needs. On the basis of meeting the basic needs of life, the proportion of enjoying consumption increases, and the quality of products is taken seriously, that is, consumption upgrading. The original supermarket format is difficult to meet the new requirements of consumption upgrading, and the difficulty of profitability is greatly improved. Changes in demand have forced changes in supermarket formats and demand driven changes in the industry.

At present, the new retail industry has changed the way of thinking of "field goods people" from the "field" to the "people's freight yard" transformation starting from "demand". Under the consideration of empathy, the process of re classifying products and reconstructing the scene of consumption has been restarted. Liu Chang believes that the supermarket as a consumer scenario of high-frequency goods, and consumers are most closely linked, the first insight into the upgrading of consumer products, concepts, habits change. It has also become a pioneer of new retail transformation, and will become a guideline for other stores, chains and other formats. Under the guidance of the consumer clock, the supermarket industry will start with a new round of retail Transformation -- "new retail", starting with the "Remodeling of the consumer's business and building a supply chain moat".