Source: Wechat official account "Wang Yayuan Hong Kong Stock Circle" author: Wang Yayuan
Today Monday, many men and women in Central will meet at vegetarian restaurants or order a special vegetarian Monday with the word GreenMonday in other restaurants. The founder of the Monday vegetarian movement that has swept Hong Kong in recent years is actually Yang Dawei, the eldest nephew of Mr. Yang Zhao, a major shareholder of the rising Sun Group.
Rising Sun Group started from a small jeans processing factory, gradually expanded, and then turned its clothing business into a rising sun enterprise.(0393.HK) listed in Hong Kong in 1996, mainly engaged in clothing retail, its main brands include Jeanswest, Quicksilver, Roxy and Mofeel, with stores in mainland China, Hong Kong, Macau, Australia and New Zealand.
In March, the company announced a rights issue of one share for every two shares, with a share price of 0.9 yuan, a discount of 11.76%. The net amount raised is 459 million yuan, half of which will be used to repay bank loans and the balance will be used for general operations. The 2016 interim report shows that the rising sun holds HK $550 million in cash and HK $660 million in investments held to maturity, which is not necessary if the rising sun raises funds only to repay the debt.
According to the company notice, most of the money from the rights issue has been used to invest in bonds. After the completion of the rights issue, the Yang family holds 69.47% of the rising sun. However, what is rather strange is that most of the directors with shareholdings have not followed suit. It is not known whether the directors do not agree with the idea of major shareholder transformation.
Then, in September, Asahi announced the sale of retail properties in Wuxi City, Jiangsu Province and Hengyang City, Hunan Province, for a total price of 138 million Hong Kong dollars and a profit of about 55.05 million yuan, to the Yang family.
Family background
Despite the fact that the rising sun enterprise has a market capitalization of more than NT $1 billion and its profits are retrogressive, it is thought that the major shareholder is an out-of-date tycoon, but in fact, the parent company, the rising sun group, is strong. Asahi Group, which operates both real estate and financial services, owns a number of industrial and commercial buildings in Hong Kong, such as No. 1 Peking Road, No. 1 Kowloon, etc. In 1998, the company invested HK $1.24 billion in No. 1 Peking Road and built a Class A commercial building. Eighteen years ago, the land price alone was 1.24 billion Hong Kong dollars, and it is estimated that the current valuation is definitely over 5 billion Hong Kong dollars. As for Kowloon No. 1, which is a classic of the Group, the site in Kowloon No. 1 was auctioned for the first time in October 1997. it was auctioned by Huang Yueying, who claimed to be a 'and Wong Director', at a high price of 890 million yuan, but because Huang Yueying failed to pay a deposit on the site, the site needs to be auctioned again. In March 1998, Asian FinanceUnder the influence of the storm, the land was finally bought by the rising Sun Group for 361 million yuan, which was more than half cheaper.
The rising sun is controlled by the Yang family. The chairman of the rising sun is the 'jeans king' Yang Zhao (real name Yang Zhenxin), while his brother Yang Xun (real name Yang Zhenxun) is the vice chairman, and their other two brothers, Yang Hong and Yang Hao, also worked for the rising sun, but died in 2009 and January 2016, respectively.
Yang Zhao and Yang Xun are 70 and 64 respectively, but there is no sign that the Yang family is training their heirs. According to the online data, Yang Zhao and his wife are childless, while Yang Xun's sons Yang Changye and Yang Hanye have only made announcements of customs-related transactions, and Yang Changye is the deputy chief executive of rising Sun.
Yang Dawei (whose real name is Yang Junye) mentioned in the first paragraph of the article was once regarded as the heir by the newspapers. After returning to Hong Kong from the United States in 2003, Yang Dawei joined the family company as an assistant to the chairman of the board. Because it had been widely rumored that Yang Zhao wanted to hand over the stick to his nephew Yang Dawei, he was accused of being the "successor to the King of trousers" at that time.
At that time, the rising sun was more closely related to I.(0999.HK) cooperate with each holding 50% of the shares, set up a joint venture company GSIT, enter the mainland, and set a goal of opening 300 stores in three years. Yang Dawei is in charge of the project. Finally, in 2007, due to the rapid expansion of GSIT's business and continued losses in its operation, Asahi sold the remaining 50 per cent of GSIT to I.T for HK $100m. Yang Dawei was also accused of returning without success, or even failed in inheritance. finally, he left the rising sun and became a major shareholder in Shine, a fashion store in his own name, specializing in European, American and Japanese fashion, and founded the culture of GreenMonday. Since Yang Dawei set up his own door, there has been no news about the heir to the rising sun.
Retail business declines
The company issues shares and sells assets, which naturally makes people think of whether the company will have plans to sell stocks or transform itself. Let's take a look at the company's own business. 85 per cent of the company's revenue comes from the retail business. This year's report showed that the total turnover of the company's retail business totaled about HK $1.416 billion, a sharp drop of 30 per cent from the same period last year. The number of stores in the company's two major brands, Jarvis and Quicksilver, has fallen sharply in recent years. In Jeanvis, for example, there were more than 3200 in 2011, but only 2000 remained in June this year, down nearly 40 per cent. As for Quicksilver, Quicksilver, which listed in the US last September, declared bankruptcy, and Asahi's Quicksilver business is run as a joint venture company. Although Asahi said at the time that it would buy back the other half of Quicksilver's stake in the joint venture company, it has not yet been completed. When the head office of the United States went bankrupt, the brand promotion strategy naturally lost its planning. as a result, even though sports culture has sprung up in recent years, according to the rising Sun's report, the revenue and profit margins of Quicksilver in the mainland and Hong Kong have declined compared with the same period last year, while the number of stores has also declined.
Just transform the financial investment business?
Combining the above points, there is more reason to believe that there is a possibility for the company to give up retail or shift its focus from retail to other areas. As for the transfer to what category? As a matter of fact, the company has already stated its position in the newspaper.
"as the parent company of the Company has been engaged in financial investment business since 2005 and has achieved good results, the management is of the view that its successful experience should be introduced into the Group to develop the Group's business. At the end of 2015, the Board decided to include financial investment as one of the new businesses of the Group. At this stage, the financial investment direction of the Group
It is still dominated by the bond market. Investments are still limited to bonds issued by companies with a sound style, good profit quality and a deep understanding of their management. In the first half of the year, the Group's investments focused on high-interest corporate bonds with a duration of three to five years. The investment quota is about HK $1.3 billion. "
In fact, there are many listed companies in transition, so why should we pay attention to the rising sun? The author thinks that there are the following main points:
The company has a large market capitalization, up to 1.7 billion, coupled with factories and properties, and so on, can not be called a good shell. In addition, the major shareholders have a lot of unlisted assets, such as No. 1 Peking Road and No. 1 Kowloon. Major shareholders are so strong that they do not need to earn money to sell their shells. But the advantage is that the partners found by the major shareholders must also have a strong background, increasing the imagination of the company's future prospects.
Yang Zhao, a major shareholder, is the president of the Chinese General Chamber of Commerce in Hong Kong. Basically, every time he gives a speech abroad, he will mention the opportunities encountered by Hong Kong under China's' Belt and Road Initiative'. Under the policy of "Belt and Road Initiative", the obvious role of Hong Kong is related to finance. And the rising sun just announced its intention to develop financial business. If Hong Kong has really become a major financing centre for Belt and Road Initiative, given Yang Zhao's position in the business sector and his relationship with the Hong Kong Government, it will not be difficult to find a foothold among the many business opportunities.
The financial adviser for the recent sale of the property by the rising sun is Yu Ming Investment.Management Co., Ltd., and the financial adviser of the previous rights issue is the financial adviser of Simpson. The Internet shows that Yuming Investment has a lot of cooperative relationship with Sheng Baili, which can be regarded as a company of the same department. Yuming Investment has done a lot of sensational transactions in the Hong Kong stock market, both the understanding of the capital market and the interpersonal relationship in the industry are of great help to the rising sun.
The current price is not far from the cost of increasing the holdings of major shareholders. After the rights issue, the major shareholders have been increasing their holdings in the market, with an average price of around 1 yuan. Last Friday, the closing price was 1.14 yuan, and the current price is only more than ten percent higher than that of major shareholders. The company's net asset value per share is nearly 1.5 yuan, of which nearly 1 yuan is net current assets, so there is a certain margin of safety.
The author's view is that the transformation of the company is imperative, and the generous direction can also be seen from the shadow of the company's participation in other businesses, which is inseparable from the role of finance and Hong Kong in Belt and Road Initiative. The future depends on whether the company will cooperate with other investors, and who he will find will determine the imagination of the capital market for the development of the company.
Wang Yayuan is a licensee and does not hold the above shares.