The "top stream" in the down jacket industry.$BOSIDENG (03998.HK)$An announcement this morning caused the stock price to collapse.
In the morning of July 3rd, Bosideng announced that a bulk trade agreement has been signed between the indirectly wholly-owned Yingxin International Investment Ltd., established by the founder, chairman of the board of directors, and controlling shareholder Gao Dekang's trust, and the placement agent. The placement agent has agreed to allocate 400 million shares of the company's stock at HKD 4.31 per share to the buyer. The sold shares account for approximately 3.64% of the total shares issued by the company.
As of now, Yingxin International now holds around 15.6% of Bosideng's shares. After the distribution is completed, the percentage of shares will drop to 11.96%, but Bosideng founder Gao Dekang will still be the company's controlling shareholder.
On July 2, Bosideng's stock price closed at HKD 4.77 per share. The HKD 4.31 price represents a discount compared to the previous trading day. The stock price of Bosideng fell sharply in early trading on July 3, dropping more than 17% at one point, and down 15% as of press time.
Gao Dekang's disposal of the company's shares through the trust placement is mainly to optimize the company's equity structure, release the market liquidity of the company's shares, and introduce more high-quality domestic and foreign investors. According to the announcement, the funds raised from the sale exceed HKD 1.7 billion. The proceeds of the distribution will mainly be used for the seller's funding needs and charity development.
In 1976, Bosideng founder Gao Dekang led 11 farmers to start a business with 8 sewing machines. Bosideng is now China's largest down jacket company, with core brands including Bosideng, Xuenufei, Kangbo, and Bingjie.
According to Bosideng's latest financial report data, in the 2023/24 fiscal year (April 1, 2023 to March 31, 2024), Bosideng achieved revenue of CNY 23.2 billion, a year-on-year increase of 38.4%. Among them, the revenue of branded down jacket business was CNY 19.5 billion, accounting for 84.1% of its total revenue, a year-on-year increase of 43.8%. The revenue of OEM management business was CNY 2.67 billion, and the revenue of women's clothing processing business was CNY 820 million.
In terms of brands, Bosideng's main brand had a revenue of CNY 16.79 billion during the fiscal year, accounting for 86% of the company's branded down jacket sales revenue. Next is the Xuenufei brand, accounting for 10.3%.
Gao Dekang, currently 72 years old, is the chairman of the board of directors and CEO of the company. Bosideng was listed on the main board of the Hong Kong Stock Exchange on October 11, 2007.
Due to the relatively concentrated shareholding ratio, Bosideng has always been regarded as a family business.
Previously, Gao Dekang and his wife Mei Dong held more than 70% of the shares. Through companies such as Yingxin International, Kangbo Investment, Haowei, and Kangbo Development, Gao Dekang and Mei Dong held more than 70% of Bosideng's equity. The company's equity was highly concentrated in the hands of the family.
In recent years, the shareholding ratio of the Gao family has gradually decreased. According to a previous announcement by Bosideng, on September 1, 2022, Yingxin International signed a bulk trade agreement with the placement agent to sell 230 million shares of Bosideng's stock at HKD 3.94 per share, accounting for 2.12% of the total shares issued by Bosideng. The proceeds from the sale, nearly HKD 900 million, will be used for redemption of preferred stock, payment of dividends, and related payments.
According to Founder Securities research report, as of the end of the third quarter of 2023, the Gao family's shareholding ratio in Bosideng reached 68.13%, and the company's management team members were mainly promoted from within the company.
In addition to the founder Gao Dekang, Mei Dong, his wife who has rich experience in the down jacket industry, currently serves as Bosideng Group's executive director and CEO and is responsible for the overall operation and management of the group. Gao Xiaodong, Gao Dekang's son, currently serves as executive director and vice president, responsible for Bosideng Group's diversified clothing business.
Bosideng has implemented multiple rounds of stock-based incentives, granting part of the company's shares to the management team and employees. The most recent was on November 28, 2023, when the board of directors of Bosideng granted 78.4 million shares of incentive shares to 9 directors, executives, and core employees in accordance with the Share Incentive Plan. Authorized employees only need to pay HKD 1.62 per share, which is equivalent to 50% of the stock price at that time.
At the same time, Bosideng plans to grant 511 million share options to 170 directors, executives, and core employees, equivalent to 4.69% of the total shares issued by the company at that time. The company also stated that the sale of shares this time is mainly to optimize the company's equity structure and release the market liquidity of the company's shares.
Editor/new