With the blessing of huge financing, Five years after the delisting of Hong Kong stocks, Peak Sports is one step closer to the dream of listing? On September 26, the sports brand Peak Sports announced that it had obtained nearly 1.5 billion yuan in financing, and at the same time, the news that Peak Sports would submit an A-share listing application in 2022 was also reported again. In this regard, the relevant person in charge of Peak Sports told the Beijing Business Daily reporter, "At present, Peak Sports does have plans to sprint A shares, but the specific planning cannot be informed for the time being."
It is no accident that Peak Sports was rumored to be IPO. As early as 2020, Xu Jingnan, chairman of Peak Sports, publicly stated that he intends to successfully list in A-shares in three years. However, in the eyes of industry insiders, in the current competition in the domestic sports shoes and apparel market, the Peak Sports brand has been greatly impacted by brands such as Anta, Li Ning, and Xtep, coupled with the strict trend of IPO review, it is still difficult to say how far Peak Sports is from the A-share listing.
Raised nearly 1.5 billion yuan
Borrowing the domestic sports brand Dongfeng, Peak Sports has been injected by a number of institutions.
On September 26, the official website of Peak Sports released the news that Peak Sports has received strategic investment from a number of state-owned fund companies and a number of market-oriented investment companies such as China Resources National Adjustment Xiamen Consumer Fund, Jianxin Trust and its subsidiary Jianxin (Beijing) Investment, with a financing amount of nearly 1.5 billion yuan.
For the purpose of this financing, Xu Zhihua, CEO of Peak Sports, said, "Peak Sports regards investment institutions such as China Resources National Adjustment Xiamen Consumer Fund and Jianxin Trust as strategic investors, and with the help of all parties, the company will go further in the optimization of equity structure, channel upgrading and brand technology research and development strength."
Investment institutions choose to inject capital into Peak Sports in fact, they value its development potential as a domestic sports brand. Chen Quan, co-general manager of Jianxin (Beijing) Investment, said, "Jianxin Trust is deeply optimistic about the new growth opportunities of the national tide consumer goods in the new era, especially the domestic product sports brands that empower life with science and technology."
"State-owned capital to help the development of domestic brands is a win-win move for both sides." Wang Xin, general manager of China Resources State Adjustment Xiamen Consumer Fund, believes that on the one hand, the fund can provide resource channel empowerment for the development of Peak in the national and even international markets, help Peak achieve steady expansion of scale, and consolidate Peak's leading position in the sports industry market; on the other hand, through close cooperation with Peak, state-owned capital is also deeply involved in the national planning for the construction of a sports power.
"Peak Sports is still a traditional manufacturing industry, the potential growth pressure is large, the demand for capital turnover is high, and local state-owned assets need to take the lead in transfusing blood to stabilize production." Shen Meng, director of Chanson Capital, said in an interview with Beijing Business Daily reporter.
Founded in 1989 in Quanzhou, Fujian Province, Peak Sports is mainly engaged in the design, development, manufacture, distribution and promotion of "PEAK Peak" brand sports products, including sports footwear, clothing and accessories. By the end of 2018, Peak had more than 5,000 retail outlets in China.
Paving the way for a go public?
With the settlement of the 1.5 billion yuan financing, the news that Peak Sports may submit an A-share listing application in 2022 has also been reported again.
This isn't the first time Peak Sports has been rumored to be in the news of a sprint IPO. As early as 2020, Xu Jingnan, chairman of Peak Sports, publicly stated that Peak was undergoing restructuring and actively preparing to return to A shares, intending to successfully list on A shares in three years. In January 2021, it was reported that Peak Sports would consider an A-share IPO as early as 2022, and Peak Sports would work with advisors on financing prior to the IPO.
For the A-share listing plan, the relevant person in charge of Peak Sports told the Beijing Business Daily reporter, "At present, Peak Sports does have a plan to sprint A shares, but the specific plan cannot be informed for the time being."
In fact, Peak Sports' sprint for A-shares also begins with its withdrawal from the Hong Kong stock market five years ago. Public information shows that Peak Sports was founded in Quanzhou, Fujian Province in 1989. In 2009, Peak Sports landed on the main board of the Hong Kong Stock Exchange. However, in the eighth year of the listing, Peak Sports issued a suspension announcement in May 2016, a formal privatization announcement in July of that year, and a formal withdrawal of its listing status on the Hong Kong Stock Exchange in November.
At that time, the industry analyzed that peak sports delisting or forced performance pressure and dissatisfaction with the low valuation. On the eve of delisting, peak sports released the 2016 interim results report shows that as of July 30, 2016, peak sports group operating income fell by 6% year-on-year to 1.298 billion yuan, and net profit attributable to shareholders fell by 3.8% year-on-year to 169 million yuan. Its market capitalization once reached HK$6.1 billion, the lowest among mainland sports Stocks.
In the view of Cheng Weixiong, a brand management expert in the footwear industry and general manager of Shanghai Liangqi Brand Management Co., Ltd., Peak Sports's delisting from the privatization of H shares is in the hope of winning a greater IPO premium ability in the domestic A-share listing.
Surrounded by strong enemies
Today is different from the past, returning to the capital market, the competitive pressure facing Peak Sports can not be underestimated.
In the industry's view, this financing is one of peak's sprint IPO moves. However, in recent years, the domestic footwear and apparel market competition has been fierce, the new and old brands have been strongly opposed, and the IPO review trend has been determined, and there are still many uncertainties between Peak Sports and A-share listing transactions.
In recent years, the rise of the national tide, domestic sports brands pressed the fast forward button, Li Ning, Anta and other brands through channel upgrades, product upgrades, has become a leading enterprise in the domestic sports footwear industry. The data shows that in the first half of 2021, ANTA and Li Ning achieved revenue of 22.81 billion yuan and 10.197 billion yuan respectively. In five years, Li Ning and ANTA have been 7.9 times and 17.6 times the revenue of 1.298 billion yuan in the first half of 2016, respectively.
In addition, Peak Sports is not found on the market share list of sports brands. Euromonitor statistics show that in the market share of sports brands in 2020, Nike ranked first with 25.6% of the data, Adidas followed by 17.4%, domestic brand ANTA ranked third with a market share of 15.4%, Li Ning, Xtep and 361 degrees were 6.7%, 4.7% and 2.6% respectively.
In this regard, Cheng Weixiong analyzed that in recent years, peak sports that lack capital assistance have indeed missed the window of opportunities for the national tide, and at present, Peak sports belongs to the second group army in local sports brands, and there is still a big gap between the head brand in terms of performance scale, market share, brand reputation, channel coverage, multi-brand layout, etc.
In Shen Meng's view, in addition to facing the squeeze of the above-mentioned domestic and foreign sports shoes and apparel brands, the current IPO review is determined by the strict trend, which will also increase the difficulty of Peak Sports sprinting A shares.
"For Peak Sports, if it can speed up the pace of listing after financing, it can indeed further narrow the gap with the head brands Li Ning, ANTA, Xtep, etc., but the competitive advantage and market pattern of such brands have been formed, and Peak needs to further consolidate the sinking market while accelerating the layout of channels in the first- and second-tier markets and the improvement of online business, while increasing the improvement of product research and development capabilities." Cheng Weixiong said.
Beijing Business Daily reporter Guo Xiujuan Wang Xiao intern reporter Zhang Han
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