Hillhouse hit on Xtep this time.

Xtep International (hereinafter referred to as "Xtep") issued a notice on June 15, 2021, saying that the company entered into a subscription agreement with investors on June 15, 2021. Accordingly, the investor has conditionally agreed to subscribe and the Company has conditionally agreed to issue convertible bonds with a total principal of HK $500 million. The initial conversion price is HK $10.244 per conversion share, a premium of about 15.4 per cent to the closing price of HK $8.88 on June 11.

This investor is Hillhouse.

At the same time, Hillhouse will strategically invest US $65 million (HK $506 million) in the global operations of Xtep Global's "Galaxy" and "Paladin" brands. This means that Hillhouse has sold a total of about 1 billion Hong Kong dollars (824 million yuan) to Xtep and his companies.

On the news, Xtep's share price soared, rising more than 30% in intraday trading to HK $11.58, an all-time high. As of press time, Xtep's market capitalization reached HK $26.429 billion. Some netizens shouted, "it can only be said that it is really an unusual feeling!" "

HK $1 billion, Hillhouse "assists" Xtep

Xtep was founded in 1987, Xtep brand was officially established in 2001, mainly engaged in sports shoes, clothing and accessories design, development, manufacturing and sales. Xtep was listed on the Hong Kong Stock Exchange in June 2008.

At the beginning of the brand establishment, that is, in 2001, Xtep invited Nicholas Tse as the spokesman of the brand image. With the way of entertainment marketing, coupled with the easy-to-understand slogan "unusual feeling", Xtep could be said to be a household name at that time. It is reported that the "Wind and Fire Generation" sneakers, designed by Nicholas Tse, have sold 1.2 million pairs, setting a single sneaker sales record that no one can break so far.

It should be pointed out that Nicholas Tse is not only the brand spokesman of Xtep, but also bought a stake in Xtep and became a shareholder of the latter.

However, with foreign sports brands gradually entering the Chinese market, the market volume of some domestic brands began to decline and entered a low ebb of development. In 2017, Xtep's revenue and profits declined compared with the same period last year, which is known as the "labor pains period".

Due to the long-term cost-effective label, Xtep was also put on the "low-end" and "earthy" hat for a time. A typical example is a news report in 2018 that a senior R & D engineer of BABA was refused a blind date because he wore special shoes and was criticized by the girl as not exquisite.

In order to resonate with young people and gain a sense of identity among young people, Xtep began to broaden the pace of transformation. On the one hand, in terms of brand operation, Xtep launched a multi-brand and international strategy; on the other hand, Xtep ploughed deeply into the field of running, creating a "running ecosystem", focusing on marathon and running events to improve his awareness in the runner circle.

In March 2019, Xtep established a joint venture with Wolverine to jointly develop, market and distribute footwear, clothing and accessories under the brands of Saucony (Soconi) and Merrell (Mayer) in mainland China, Hong Kong and Macau. In August 2019, Xtep completed the acquisition of "K-Swiss" and "Palladium" (Paladin) brands.

According to public information, Gaswell is a traditional sports shoes brand founded in California in 1966, dedicated to providing high-performance tennis shoes, leisure and fitness footwear products to meet the high-performance needs of world-class athletes and trend leaders. Today, Galaxy has become a brand authority in the tennis world, almost synonymous with global tennis shoes. Paladin, whose birthplace is Lyon, France, is now one of the most well-known military boot brands in the world.

This entry of Hillhouse is bound to bring strong incremental assists for Xtep. As we all know, under the power of Hillhouse, Belle once wrote a story of "counterattack". After the acquisition of Belle, Hillhouse not only used the power of digital and technology to help Belle transform, but also participated in the operation to spin off its sports business segment Topsports International Holdings Limited International.

Although Belle is a phenomenal case of merger and acquisition of Hillhouse Holdings, it is undoubtedly a typical sample of empowering physical retail enterprises after precise investment.

Xtep mentioned in the announcement that the board believes that the additional financial capital provided by Hillhouse is a valuable opportunity for Xtep to further enhance the brand network and develop business plans to enhance the awareness of the two brands. Apart from the improvement in financial aspects, the Board also attaches importance to Hillhouse's rich operating resources and professional knowledge in the retail industry in the Greater China market.

The Board believes that Hillhouse's deep vertical knowledge of the consumer industry, as well as its extensive online and offline networks and capabilities, will bring innovative elements to the business operations of Galaxy and Paladin, and the competitive position and profitability of the brand will be further enhanced. "

It is reported that in the growth and maturity of enterprises, Hillhouse pays more attention to the core of the enterprise, that is, the "dynamic moat", and whether there is room for further innovation and improvement with the help of new technologies, new models, and new methods on the basis of existing business. For all physical industries, technological innovation and industrial upgrading are not 'shock therapy', but engine changes in flight, which must directly bring increments to the business and create value for the industry. Hillhouse has said.

Six months to sell more than 100 billion, "Hillhouse speed" is still continuing

In fact, in the category of sports shoes and clothing, Hillhouse has not only sold Belle in the past.

BURTON, the first snowboarding brand in the world, On Running, Federer's favorite running shoes, and PARTICLE FEVER, the first designer high-end sports brand in China, have all won Hillhouse investment.

Both Hillhouse and its independent VC brand GL Ventures, which was officially launched in 2020, have maintained an ultra-high investment pace since 2020. Hillhouse, in particular, has made four consecutive shots in seven days. Now entering Xtep, Hillhouse is still copying the "Hillhouse effect" of trading as soon as it is shot.

In 2021, Hillhouse has not slowed down its investment speed at all.

According to CVSource hit data, Hillhouse Capital has sold 26 times so far in 2021, with a total of 94.443 billion yuan. Among them, the largest amount of investment was made in the field of health care, with a total of 8 times, and the largest amount of money was sold in the manufacturing industry, reaching 49.769 billion yuan.

During the same period, Hillhouse Venture Capital made a total of 73 shots, with an investment of 9.93 billion yuan. Similarly, Hillhouse Ventures also sold the most in the field of health care, with a total of 26 shots, with a total amount of 5.48 billion yuan, compared with other areas. In the field of IT and information technology, Hillhouse made 14 moves with an amount of 1.9 billion yuan.

In 2020, Hillhouse Ventures invested in 200 projects, an average of one in less than two days.

Of course, such frequent shots are inseparable from the abundance of bullets in hand. On February 24, 2021, the first anniversary of Hillhouse Ventures, Hillhouse Ventures announced that it had completed more than $10 billion of independent fund-raising in US dollars and RMB.

In May 2021, it was reported that Hillhouse was on the verge of completing its latest round of fundraising, worth about $18 billion, exceeding the $13 billion target planned for 2020. However, Hillhouse declined to comment on the news. According to a previous Bloomberg report, Hillhouse launched a new fund-raising of up to $13 billion to seize new opportunities in the economy under the epidemic, which also broke Hillhouse's own fund-raising record. Hillhouse did not respond to the news at the time, but Chinanews.com learned that a new round of US dollar fundraising was true.

In the capital market, Hillhouse always emphasizes long-term capital and post-investment empowerment. Zhang Lei, founder and CEO of Hillhouse, once told Touzhong that unlike ordinary post-investment services, Hillhouse's DVC is Deep Value Creation and will send an established team to the front line of the enterprise to help enterprises carry out scientific and technological empowerment and digital transformation. "We can say that we are Sanchu Pansha, and our role is to help heroes achieve great things. "