Why Does Semir Buy ISE Market In Korea? Why Not Buy It Now?

Semir's acquisition of South Korea's electricity supplier ISE, and the acquisition is Semir's "Internet +" comprehensive pformation of the important push forward, the company's cross-border e-commerce platform business is worth looking forward to.

Semir is expanding the online sales channel through acquisitions, while the Korean wave star is using marketing differentiation to explore the sales potential of homogeneous products.

Over the past few years, traditional clothing enterprises have been seeking frequent industrial innovation stories.

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After announcing the participation of ISE in South Korea's electricity supplier, the company recently announced that it had invested 20 million euros to acquire Spanish football economic company "BOY".

Signed strategic cooperation with "harmony and Thailand", to jointly develop and produce intelligent bedroom products; search for the 324 million yuan own capital strategy to buy shares of Amoy brand Mei Mei clothing, holding 25.2% of the total capital of SinoAmerican apparel.

Turning to the changes in garment industry in recent years, the industry said, "the first stage of the development of Chinese garment enterprises is from 90s to 2010 of this century. At this stage, the garment industry shows the demand driven background, the market is in short supply, and many brands have emerged. The second stage from 2010 to 2014, many industries are entering the industry because of the earlier boom of the industry, and the traditional clothing consumption channel has also evolved from the street shops and shopping malls to the business platform and shopping center format, which is an era of intensified competition.

Small and local brands will gradually withdraw from the competition, and the garment industry will enter the era of centralization and individuation.

Last July 17th, the capital market was suspended for more than 3 months.

Resumption, announced that it intends to buy 1 billion yuan wholly-owned cross-border e-commerce global easy to buy, expand online business.

After the resumption of trading, the 100 round pants industry shares went up in a row and seized 7 trading restrictions in one fell swoop.

On the contrary, Semir clothing has resumed its discounting so far, and the A share index has continued to hit a new high.

What's the difference between Semir clothing and 100 round pants industry?

First of all, look at the investment background.

Before the acquisition of Tesco globally, the net profit of 100 round pants decreased by 23.78% and 40% respectively in 2012 and 2013.

The hundred round pants industry at that time clearly stated that the acquisition was aimed at finding new profit growth points, and the acquisition of global Tesco helped to create a three-dimensional Garment Retailing ecosystem with online and offline resource linkage, digital marketing and supply chain optimization, and domestic cross border collaboration.

Before announcing the investment, Semir's operating performance was 8 billion 147 million yuan in 2014, an increase of 11.70% over the same period last year, and net profit of 1 billion 92 million yuan, an increase of 21.09% over the same period last year.

At the same time, the company retained cash in fiscal year 2014 to about 4 billion yuan.

Let's look at the amount of investment.

Semir apparel invested 115 million yuan to share ISE, even if it counted hundreds of millions of dollars invested in the establishment of a joint venture company in the future, compared with the liquidity on the company's accounts, the investment was only a drop in the bucket.

While the 100 round pants industry is in the stage of net profit acceleration before buying the 100% stake in Tesco, for the 1 billion yuan investment, there were many voices in the market that questioned the high premium.

Finally, look at the effect of investment.

In October 2014, the 100 round pants industry completed the acquisition of Tesco, which was affected by the ~12 monthly report of the combined global ease purchase in November.

In 2014, global purchase overall sales maintained a high growth rate and fulfilled the performance commitments made at the time of the acquisition.

In response to the participation of ISE, Semir said in its announcement that compared with the company's current operating scale, profits and net assets, ISE and its subsidiaries have smaller business scale and lower profitability. This external investment has no significant impact on Semir's business performance this year.

In this way, the acquisition of Semir clothing is not comparable to that of the 100 round pants industry.

And it is not hard to find that Semir clothing has been the first line of Korean pop celebrities to make brand endorsements. In recent times, Lee Min Ho, Kim Su Hyon, Li Zhongshuo and Jin Yubin have been hired as brand endorsements, including the four male gods in Korea, which have high popularity.

There is a joint venture under the company, focusing on the operation of Korean women's clothing.

In addition, Semir's current policy environment is different from previous garment enterprises. In 2015, there were two new wind vane "Internet +" and "cross-border electricity supplier".

For Semir shares ISE, garment industry independent commentator Ma Gang told reporters that now the whole industry is more popular mergers and acquisitions.

Semir is expanding the online sales channel through acquisitions, while the Korean wave star is using marketing differentiation to explore the sales potential of homogeneous products.

CITIC Securities Research Report shows that the acquisition is an important step forward for Semir to take full advantage of the "Internet +" pformation. The company's cross-border e-commerce platform business is worth looking forward to.

The company will use the idea of "Internet +" in the future to accelerate the operation of the three major brands of clothing, including multi brand, infant industry and the Internet.

Orient Securities believes that Semir's investment will promote the business property from brand to brand + cross border electricity supplier, which will also have a far-reaching impact on the company's long-term development and valuation level.

The most important significance of this investment is the establishment of a joint venture between China and the mainland to jointly expand the demand for foreign brands of consumer goods in the huge Chinese market, especially the docking of Chinese consumers' demand for Korean costumes, cosmetics and other cost-effective products.