the time may come to decide whether La Chapelle will bid farewell to the A-share market
On March 30, La Chapelle disclosed the 2021 annual report. Data show that La Chapelle achieved an operating revenue of 430 million yuan last year, a year-on-year decrease of 76.36%; The net profit was -821 million yuan, which was significantly lower than that in 2020. In this annual report, La Chapelle also posted an open letter at the beginning, admitting that based on the policies, regulations and applicable standards of the capital market, the company’s A-share shares may face delisting.
That evening, La Chapelle also issued the corresponding announcement on receiving the notice on the proposed termination of Xinjiang La Chapelle Fashion Co.Ltd(603157) stock listing of Shanghai Stock Exchange and the supervision letter of Shanghai Stock Exchange. It is said that the exchange will convene the Listing Committee for deliberation within 15 trading days after La Chapelle’s disclosure of the annual report, and make a corresponding decision to terminate the listing according to the review opinions of the listing committee.
However, the reporter of the international finance news noted that La Chapelle seems to be more calm about delisting at present. “Even if the company’s A-share delisting, the company still firmly believes that A-share is a market with great vitality and growth potential. When spring comes, the company hopes to be listed again and enter the A-share market again…” he also said in his internal letter.
2021 loss significantly reduced
Investors have been waiting for La Chapelle’s annual report for a long time.
La Chapelle previously said many times in the prompt announcement disclosed that after preliminary accounting by the company’s financial department, the net assets attributable to shareholders of listed companies are expected to be – 1.2 billion yuan to – 1.6 billion yuan by the end of 2021. If the audited net assets of the company are still negative at the end of 2021, the listing of A-Shares of the company may be terminated according to the relevant provisions of the stock listing rules of Shanghai Stock Exchange.
In the 2021 annual report released yesterday, La Chapelle said that affected by the covid-19 pneumonia epidemic, the company’s closure of offline channel business outlets, the reduction of goods procurement and the transformation of online business model, the company realized an operating revenue of 430 million yuan in 2021, a decrease of 1.389 billion yuan compared with 1.819 billion yuan in the same period of last year, a year-on-year decrease of 76.36%.
In addition, in 2021, the company realized a net profit attributable to shareholders of listed companies of about -821 million yuan. For the main reasons for the loss, La Chapelle listed five points. It is reported that due to the external epidemic and the tight cash flow of the company, the company continues to close offline loss making stores. Due to the operating losses of closed stores and the one-time confirmation of decoration amortization and cabinet removal expenses, the company has an operating loss of about 60 million yuan. In addition, the company faced high overdue debts during the reporting period, resulting in a loss of about 290 million yuan due to debt interest, overdue penalty interest, litigation costs, etc. In addition, at the end of last year, due to the increase of inventory age, La Chapelle made a corresponding provision for inventory falling price loss of about 150 million yuan. During the reporting period, it also accrued about 190 million yuan of credit impairment loss of accounts receivable. After the company tested the goodwill, long-term assets and other assets with signs of impairment at the end of the period, La Chapelle accrued about 160 million yuan of asset impairment loss accordingly.
As a former women’s clothing giant, La Chapelle has suffered losses for many years. In 2020, its loss reached 1.84 billion yuan. However, in comparison, in 2021, La Chapelle has reduced its loss by 1.02 billion yuan compared with the previous year.
\u3000\u3000 “Since the second half of 2018, due to the failure to make a correct judgment on the external industry environment, improper internal strategy, rapid expansion and unbalanced cost structure, combined with the impact of covid-19 pneumonia since 2020, the company’s financing channels have been closed, the capital chain has been broken, the due debts are unable to be repaid, litigation and asset freezing and seizure have also followed, facing greater cash flow pressure and the risk of centralized payment of debts, which has a negative impact on the company Production and operation have a certain adverse impact. ” In the annual report released this time, La Chapelle said so.
According to the reporter, in this context, in addition to maintaining production and operation, La Chapelle also spent some energy on dealing with litigation matters, promoting the settlement of historical debt problems and stabilizing the core management and staff.
La Chapelle also made a prospect. “In 2022, ‘change’ will still be the main theme of the company.” La Chapelle pointed out that in order to promote the company to return to the growth track, it plans to take a number of measures, including promoting the clearing of historical problems, improving the store efficiency, floor efficiency and profitability of offline business outlets, continuing to plan solutions to debt problems and reducing the burden of business development. It is said that at present, the number of offline channel outlets of La Chapelle has basically reached the bottom, and its channel strategy will be changed to “open new stores and good stores” in the future, so as to reasonably expand the business scale of the company.
delisting or countdown
For La Chapelle, the outside world has been concerned about whether it will be delisted.
In the past, La Chapelle was once the representative of civilian fashion in the garment industry. On October 9, 2014, La Chapelle, then known as the “Chinese version of Zara”, was listed on the main board of the Hong Kong stock exchange. In September 2017, after repeatedly breaking through a shares, La Chapelle finally landed on the Shanghai Stock Exchange.
It is worth mentioning that La Chapelle has fallen into continuous losses since then. After becoming China’s first a + H-share listed clothing company, La Chapelle’s profits entered a state of decline. According to the financial report, in 2017, La Chapelle realized a net profit attributable to shareholders of listed companies of 499 million yuan, a year-on-year decrease of 6.29%. In 2018, the operating revenue was 10.176 billion yuan, a year-on-year decrease of 2.58%; The net profit was – 160 million yuan, a year-on-year decrease of 132%, which was the first loss since La Chapelle’s listing.
La Chapelle once admitted to reporters that from 2011 to 2017, in combination with the needs of the company to continuously launch new brands, the company adopted the business development strategy of “multi brand and direct marketing”, so as to realize the continuous growth of sales scale, and played an important role in meeting the needs of more different consumer groups and enhancing the negotiation and bargaining ability of the company with shopping malls and property groups. However, at the same time, the business model of “multi brand and direct marketing” has also brought greater and greater challenges to La Chapelle, including the need to invest new and more business resources in expanding new brands; New brands will suffer losses in the cultivation period, which will drag down the current profits of the company.
The problem of delisting is unavoidable for La Chapelle, who continues to lose money.
In the announcement released yesterday, La Chapelle pointed out that due to the negative audited net assets in 2020, the delisting risk warning of the company’s A-share shares has been implemented by the Shanghai Stock Exchange and has not been eliminated. The audited net assets in the financial accounting report of 2021 are still negative, and the audit report with qualified opinion is issued by Dahua Certified Public Accountants (special general partnership). According to article 9.3.11 (1) of the Listing Rules of Shanghai Stock Exchange, the listing of A-Shares of the company may be terminated.
“The company’s A-share listing may be terminated based on the policies, regulations and applicable standards of the capital market. I believe this is the result that all shareholders, especially the A-share shareholders, do not want to see. However, the company wants to sincerely pay tribute to all shareholders. The delisting of A-share will not have a direct impact on the listing status of H-share, and the company still has a capital market window at this stage.” In an open letter in the performance report, La Chapelle pointed out.
On March 30, La Chapelle also received the supervision letter on matters related to Xinjiang La Chapelle Fashion Co.Ltd(603157) termination of listing issued by Shanghai Stock Exchange. The exchange pointed out that according to the 2021 annual report disclosed by La Chapelle, the company’s shares touch the conditions for termination of listing specified in article 9.3.11 of the stock listing rules of the exchange and should be terminated. The trading of La Chapelle shares has been suspended since the opening of the market on March 31. The exchange will convene the Listing Committee for deliberation within 15 trading days after the company discloses the annual report, and make the corresponding decision to terminate the listing according to the review opinions of the listing committee.
