Children's clothing manufacturer Yilala Group Co., Ltd. ("Yilala" for short) recently submitted an application for listing on the Shanghai Stock Exchange's main board. CITIC Securities is the company's lead underwriter.
The prospectus of domestic children's clothing manufacturer
shows that Yilala was established in 2017 and is an independent brand cotton children's clothing company. It owns "Yilala", "Mao En·Mao Ai", "Ankami" and "Hello" .Dr" four major cotton children's clothing brands. The product line covers all categories of infant and child MINI clothing, children's home clothing, underwear, outing clothing and other children's clothing, matching the diverse needs and style preferences of infants and young children aged 0-18 years old and teenagers.
(Picture source: Company prospectus)
In terms of business model, Yilala is basically not directly engaged in the processing and production of ready-made garments. It mainly realizes product processing and manufacturing through outsourcing processing and labor outsourcing. The company has established a professional children's clothing design team and launches an average of nearly 6,000 children's clothing style designs every year.
Children's clothing generally refers to all clothing worn by people from birth to 14 years old. According to the physical characteristics of children at different ages and their design needs for clothing, children's clothing products can be further divided into infant clothing from 0 to 1 years old, toddler clothing from 1 to 3 years old, small children's clothing from 4 to 6 years old, and middle-aged clothing from 7 to 9 years old. Children's clothing, older children's clothing for 10 to 12 years old and junior clothing for 13 to 14 years old. Children's clothing is mainly divided into woven products and knitted products according to the production type of fabric. According to the use function, it can be divided into jackets, cotton-padded clothes, tops, pants, T-shirts, skirts, underwear, pajamas and other varieties.
With the development of the men's and women's clothing markets becoming saturated, the sportswear and children's clothing sub-sectors are highly prosperous and are the highlights of the development of the domestic clothing industry at this stage.
(Picture source: Company prospectus)
In terms of industry competition, the current overall level of brand concentration in the domestic children's clothing market is low. According to Euromonitor data, the combined share of the top ten companies in my country's children's clothing industry (CR10) has increased from 11.2% in 2015 to 15.8% in 2020. However, it is still relatively concentrated compared with international mature markets. There is a big gap. In 2020, Japan and the United States CR10 reached 31.9% and 36.9% respectively. In terms of
market share, according to Euromonitor data, from 2015 to 2020, the " barabala " brand under Semir continued to maintain the first place in the children's clothing market share, with its share increasing from 4.1% in 2015 to 7.5% in 2020. %, the share is much higher than the second place, showing a strong leading advantage . The market share of other major brands is about 1% or even less than 1%, showing a high degree of dispersion. The long tail effect of is obvious for .
revenue continues to decline preparations for inventory price declines has also increased year after year
In terms of finance, in the first six months of 2018-2021, Yilala achieved operating income of 756 million yuan, 749 million yuan, 674 million yuan and 289 million yuan respectively; Net profits attributable to parent companies during the same period were 141 million yuan, 162 million yuan, 157 million yuan and 62 million yuan respectively.
(Picture source: Company prospectus)
Regarding the reasons for the year-on-year decline in revenue, Yilala said that it was mainly affected by changes in the company's product structure, the new coronavirus pneumonia epidemic and other factors.
In terms of product segmentation, Yilala's revenue is highly dependent on infant and child MINI clothing. Last year, related revenue accounted for nearly 50%; however, the absolute sales amount of related categories has shown a declining trend.
(Picture source: Company prospectus)
In terms of gross profit margin, during the reporting period, the gross profit margin of Yilala's main business was 37.84%, 38.09%, 40.88% and 39.52% respectively, showing an upward trend year by year. , but the relevant data is lower than the industry average and its main competitor Semir.
(Picture source: Company prospectus)
Yilala said that the company’s gross profit margin is lower than the average of comparable companies in the same industry, which is mainly due to the fact that the company’s products are mainly concentrated in cotton children’s clothing, and the difference with the children’s clothing segment of comparable companies: Among them, Semir Clothing 's "Bala Bala" children's clothing brand's main business is mainly children's outdoor clothing, Anaier 's main business is mainly children's outer clothing, pants and tops, etc., and the main business of Blonde Rabbi is infants. Children's clothing, cotton products (mainly outdoor clothing) and infant products are the main products. The main business of starting stock is children's shoes, children's clothing and children's accessories, among which children's shoes account for the highest proportion of sales.
In terms of sales channels, Yilala is highly dependent on dealer channels. In each reporting period, the company's revenue achieved through the distribution model accounted for 81.45%, 80.08%, 83.11% and 83.41% of its main business revenue respectively.
(Picture source: Company prospectus)
However, it is worth noting that the expense rate level during Yilala was lower than that of comparable companies in the same industry.
Yi Lala said that this is mainly due to the differences in sales models between companies: the company mainly adopts a distribution-based sales model, and comparable companies in the same industry have a larger number of direct sales or franchise stores, so the company sales expenses The rate is lower than that of comparable companies in the same industry; at the same time, the company adopts an asset-light operating model, has a small number of management personnel and high management efficiency, making the management expense rate lower than that of comparable companies in the same industry.
(Picture source: Company prospectus)
Yilala's net profit level is relatively high, and the company's net profit margin is three times that of Semir, its largest competitor in the industry.
(Picture source: Company prospectus)
In terms of inventory, Yilala not only has a high inventory level, but its inventory price reduction provisions have also increased year after year.. During the reporting period, the company's net inventory book amounts were 207 million yuan, 188 million yuan, 209 million yuan, and 308 million yuan respectively, accounting for 39.32%, 38.22%, 25.31%, and 35.16% of the company's total assets respectively. accrued The inventory depreciation provisions are 8.868 million yuan, 9.3992 million yuan, 10.0045 million yuan and 11.1532 million yuan respectively, accounting for 4.10%, 4.76%, 4.55% and 3.49% of the company's inventory book balance respectively,
(picture source: company prospectus Book)
In terms of equity, Yilala is a typical "mom and pop shop". The actual controllers of the company are Yu Yongmei and Fan Weihong. The two directly and indirectly hold a total of 89.94% of the company's shares, control a total of 91.76% of the company's shares, and are the actual controllers of the company. Moutai 's private equity investment fund Moutai Jianxin is the company's second largest shareholder, with a shareholding ratio of approximately 2.5%.
(Picture source: Company prospectus)
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