Child King's listing fundraising volume shrank by 1.8 billion yuan, revenue growth rate fell by less than 5% net interest rate

China's network technology on October 28 (reporter Su Chang) after the end of the new three board listing tour in 2018, mother and baby retail company Child King Children's Products Co., Ltd. (301078. SZ, hereinafter referred to as "Kid King") recently landed on the secondary market again, and was officially listed on the Growth Enterprise Market of the Shenzhen Stock Exchange on October 18.

The amount of child Wang's fundraising has shrunk by 1.8 billion yuan, only 26% of the expected fundraising amount of the prospectus, and the company's stock price has fallen all the way from the first day of listing. In the past three years, the growth rate of the child king's revenue has continued to decline, and the net profit margin has remained low, can the 12-year-old child king continue to enjoy the new dividends of the mother and baby market?

A quarter of the actual fundraising, shrinking by 1.8 billion yuan

Founded in Nanjing in 2009, Baby King is mainly engaged in retailing and value-added services for mothers, babies and children, providing one-stop shopping and all-round growth services for expectant mothers and babies aged 0-14.

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%.

According to the prospectus, the funds raised by Ziwang in this listing plan to invest in the construction project of omni-channel retail terminals, the construction of omni-channel digital platform, the construction of omni-channel logistics center and supplementary working capital, with a total investment of 2.449 billion yuan. According to the plan, The Child King will build 300 new stores in 22 provinces and cities such as Jiangsu, Anhui, Sichuan, Guangdong and Chongqing in the next three years.

In the view of Zhang Yi, CEO of Ai Media Consulting, the performance of Child King is relatively poor in many listed companies. He believes that the main reason for the lack of fundraising is that investors are not particularly optimistic about the use of funds raised by The Boy King to expand the scale of offline stores. At present, some mother and baby e-commerce and comprehensive mother and baby e-commerce have developed rapidly and grown very well, but the online business of Child King does not have obvious advantages. In addition, it is also related to the low threshold of the company and the lack of technicality.

The first day of the listing of the child king soared, closing at 23.3 yuan / share, the stock price rose by 303.81%, after which the trend weakened, as of October 27, the stock price closed at 17.18 yuan / share, the total market value of 18.692 billion yuan. The company expects operating income of 6.3 billion yuan to 7 billion yuan in the first nine months of 2021, an increase of 8.19% to 20.21% from the same period last year, and net profit is expected to be 220 million yuan to 270 million yuan.

Revenue growth slowed and net profit margins remained below 5%.

In recent years, the revenue growth rate of Child King has been declining, and the average revenue and ping efficiency of core operating data stores have continued to decline.

Between 2018 and 2020, the revenue of Kid King was 6.67 billion yuan, 8.24 billion yuan and 8.36 billion yuan, respectively, and the revenue growth rate was 27.4%, 23.6% and 1.4% respectively, and the growth rate was much lower than the level in 2015 and 2016.

According to the prospectus, the company's maternal and infant products are mainly high-end brands, and the revenue from 2018 to 2020 accounts for 93%, 91% and 89% respectively. As a drainage product, the gross profit margin of maternal and infant products is not high, and once declined, 26%, 24% and 23% respectively.

The Company's net profit was RMB280 million, RMB380 million and RMB390 million, respectively, and net profit attributable to the Company's common shareholders after deducting non-recurring gains and losses was RMB240 million, RMB320 million and RMB310 million, respectively. Since the turnaround in 2017, The Net Profit Margin of Kid King has remained low within 5%.

As of 2020, Kid King has opened 434 stores across the country, and in 2018, 2019 and 2020, the number of stores increased by 45, 94 and 82, respectively.

The increase in the number of stores has not brought about a significant scale effect. During the reporting period, the average revenue of the Child King store fell from 24.15 million yuan to 17.32 million yuan, and the income of Pingxiao fell from 7855 yuan / square meter to 6879 yuan / square meter.

Zhang Yi said that the collection of brand sales of 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. But relying on offline stores also has disadvantages. When the epidemic broke out last year, the child king was under the pressure of low gross profit and high cost, and the ability to resist risks was relatively weak.

More importantly, the new generation of consumers are more accustomed to and dependent on online shopping, and are very dependent on online comprehensive platforms such as Tmall and JD.com. With the post-90s and even post-00s gradually becoming the mainstream consumers of marriage and childbirth, whether the child king can adapt to new user consumption preferences and cope with online consumption trends in the future is a relatively big challenge.

Online development is slow, and the future needs to adapt to new consumer demand

In terms of online channels, Kid King has laid out mobile APP, WeChat public account, Mini Program, Micro Mall, etc. But online sales account for less than 10%. According to the prospectus, from 2017 to 2020, the sales of Kid King Online 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.

Correspondingly, the R&D investment of the child king has been less. In the past three years, the R&D expenditure was 41.22 million yuan, 100 million yuan and 87.05 million yuan respectively, accounting for 0.62%, 1.27% and 1.04% of the operating income in the same period.

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.

From the perspective of the overall maternal and infant market, the scale is also expanding. According to the data of Mob Data, in 2018, the size of China's maternal and infant market reached about 3.02 trillion yuan, an increase of 202% over 1 trillion yuan in 2010, with an average annual compound growth rate of 14.82%. In the past few years, head companies such as Honey Bud, Beibei.com, and BabyTree have been born in the vertical pregnancy, baby and child e-commerce and vertical mother and baby communities, while integrated e-commerce mother and baby channels such as Tmall, JD.com and Suning have also seized part of the market share.

According to Roland Berger's calculations, the consumption scale of China's maternal and infant industry will reach 3.58 trillion yuan in 2020. Zhang Yi analyzed that the development space of the maternal and infant market is very large, and the future growth is worth looking forward to. On the one hand, the growth momentum of the market comes from the increasing quality of life of Chinese families, especially the cultivation of the next generation at all costs. On the other hand, with the full opening of the three-child policy, it has a certain stimulating effect on increasing the birth volume and birth rate of the population.

Zhang Yi said that in the past, maternal and infant retail enterprises often used information differences to liquidate by acting as agents. Today' information is highly transparent, and this approach no longer works. In the future, if you want to eat more market dividends, you need to adapt to the consumption needs and behavior habits of the new mainstream groups after 95 and 00, in addition, value-added services, self-developed products and supply chain construction are also profit growth points. In Zhang Yi's view, the layout of the supply chain of mother and baby enterprises is a crucial step for quickly controlling the market and quickly adapting to consumer habits.

This article originated from China Net Technology