The author | lightning lazy
Edit | Duke
The source | Titanium Finance
Not long ago (October 14), as the head player of the mother and baby retail track, The Child King once again rang the bell to go public. On the first day of listing, the stock price rose by nearly 300%, with a market value of more than 25 billion yuan, becoming the "king of market value" of A-share maternal and infant retail brands.
However, after touching the highest point of 25.2 yuan, it fell all the way, and the market value once evaporated by more than 10 billion. As of the close of trading on November 9, The Boy King closed at 16.15 yuan, down more than 35% compared to the highest point on the first day of listing.
In fact, the stock price trend reflects the weak performance of the child king to a certain extent, and why is the track hot, but the child king cannot get the continuous favor of the capital market?
The secondary listing is still not ideal
It is understood that this is not the first time that Child King has been listed.
As early as December 2016, The Child King was listed on the New Third Board, but was delisted less than two years after listing, due to unsatisfactory fundraising and other factors.
Today, three years later, it has landed on the capital market again, but the fundraising situation is still far from expectations.
The IPO price of Zi Wang was set at 5.77 yuan, and about 109 million shares were issued, accounting for 10.01% of the total share capital after the issuance, and the total amount of funds raised was about 628 million yuan, which was 1.8 billion yuan less than the planned fundraising amount of 2.449 billion yuan, a drop of 74%.
Some industry insiders believe that a major reason why the child king's fundraising has not been as desired is affected by the performance of 2021.
According to its financial report, the revenue of Child King in the third quarter of 2021 was 2.159 billion yuan, an increase of 9.21% year-on-year; the net profit was 77.05 million yuan, down 17.2% year-on-year; and the net profit after deducting non-profit was 58.49 million yuan, down 23.4% year-on-year. The revenue of Ziwang in the first three quarters of 2021 was 6.597 billion yuan, an increase of 13.29% year-on-year; the net profit was 237 million yuan, down 8.55% year-on-year; and the net profit after deducting non-profit was 17,400 yuan, down 15.82% year-on-year.
Officials said the decline was mainly due to the company's implementation of the new leasing standard from January 1, 2021. Excluding the impact of the new leasing standard, the company's net profit for January-September 2021 increased by 17.8151 million yuan, an increase of 6.88%, and the net profit of non-profit increased by 7.189 million yuan, an increase of 3.47%, over the same period of the previous year.
The slowdown in the speed of this net profit actually has early warnings. From 2017 to 2019, Child King achieved rapid growth, according to the prospectus information disclosure, from 2017 to 2020, child King's operating income was 5.235 billion yuan, 6.671 billion yuan and 8.243 billion yuan, and net profit was 93.79 million yuan, 276 million yuan and 377 million yuan, respectively. However, since the beginning of 2020, the growth rate of revenue and net profit of Child King has slowed down significantly compared with the previous three years. In 2020, the revenue was 8.355 billion yuan, the growth rate was only 1.4%, the net profit was 391 million yuan, the growth rate was 3.7%, and the two-way growth rate was a new low in recent years.
Crazy to open a store without making money
Different from the traditional mother and baby store "mom-and-pop store" small store form, the biggest feature of the child king store is undoubtedly - large.
According to public information, the first Kid King store opened in Nanjing Hexi Wanda Plaza covers an area of an astonishing 6,000 square meters, equivalent to only 16% smaller than the standard football field, in addition to providing traditional maternal and infant products, it also provides amusement, photography, haircuts and even infant swimming and other businesses.
In recent years, the number and operating area of Child King's offline direct stores have continued to increase. As of 2020, the company has 434 directly operated stores, and the company plans to use the funds raised in the next three years to build 300 new stores in 22 provinces (cities) such as Jiangsu, Anhui, Sichuan, Guangdong and Chongqing.
It is undeniable that the big store model has enabled the child king to successfully bundle with large commercial entities such as Wanda, and has also taken advantage of the trend to break into the post-80s consumer group, but the big store model has brought traffic while also increasing cost pressure.
From 2018 to 2020, the rental expenses of the Child King store were 482 million, 546 million and 592 million, respectively, rising year by year, and this expenditure is also the second largest expenditure of the Child King (the first is salary).
Compared with the rising rent cost year by year, the single store revenue of the child king has declined year by year, from 24.1492 million in 2018 to 17.3281 million in 2020, and the decline in the efficiency of the store revenue is more intuitive, from 7855.05 yuan / ㎡ in 2018 to 6878.73 yuan / ㎡ in 2020.
Since the expansion of the store requires a lot of financial support, the asset-liability ratio of the child king has always been around 60%. Although the company's asset-liability ratio once decreased below 60% at the end of 2020, this value reached 68.37% again in the third quarter of this year.
Some insiders believe that the collection of brand sales by maternal and infant retail enterprises can allow consumers to see more physical goods and be more down-to-earth, which is conducive to the company's development of members and membership stratification. However, there are also disadvantages in relying on offline stores, and when the epidemic broke out last year, the child king was relatively weak in anti-risk ability under the pressure of low gross profit and high cost.
Increased competition requires transformation
Data show that in 2009, China's maternal and infant market size is less than 800 billion, by 2019, the market size has reached 3 trillion, by 2021, there are well-known analysis agencies predicted that it will reach 500 million yuan, stimulated by the national "three children" and "double reduction" policies, the maternal and infant market will usher in further growth.
According to the data of Tianyancha, there are 296,500 existing children's products-related enterprises in China, which have grown at a rate of more than 10,000 enterprises in the past three years. So many small and medium-sized brands influx, the future competition will only be more intense, although the current child king is in the first echelon, but the intensification of competition will not affect the child king's industry position.
According to ai media consulting data, in the past two years, the online market share of the maternal and infant category has gradually increased, with an average monthly compound growth rate of 1.46%, an average annual compound growth rate of 17%, and the overall online sales share has shown a trend of increasing year by year. In the mother and baby track, integrated e-commerce companies such as Tmall and Vipshop won the largest proportion of GMV, and the other type is the vertical mother and baby e-commerce platform represented by Beibei Network and Honey Bud. The former tends to pay more attention to the consumption link, the latter pays more attention to ecology, and the mother and baby e-commerce business is exactly what the child king lacks.
For online channels, although Kid King has laid out channels such as mobile APP, WeChat public account, Mini Program, and Micro Mall, online sales account for less than 10%. According to the prospectus, from 2017 to 2020, the online sales of Child King were 258 million yuan, 362 million yuan, 549 million yuan and 750 million yuan, accounting for 4.98%, 5.47%, 6.73% and 9.06% of the revenue respectively.
In addition, the child king is more like a "department store", its products have their own self-operated stores, APP or third-party e-commerce platforms, etc., consumers do not need to buy products that can be purchased in the self-operated store through the "middleman", unless the "middleman" child king can give a special preferential price.
At present, although the scale of revenue is considerable, the net interest rate is not high, and the road of low price cannot be passed, unless the child king can do the same as "Watsons", the brand is really played out, in order to enjoy the bargaining power.
It can be seen that in order to obtain long-term competitiveness, The Child King urgently needs to transform - from the original collection store to the development of its own brand, and constantly strengthen and expand the proportion of its own brand on the shelves in the store, improve the profit margin, in order to stabilize its position and maintain growth.
All in all, for the child king, relying on the big store model to rush into A shares is just the beginning, after the listing, how to use limited funds to improve the efficiency of single stores and online digital capabilities is something that needs to be prioritized, and it is also what investors want to see.