In the announcement on April 18, there was a rare clearance reduction of a shares. The Shanghai Aiyingshi Co.Ltd(603214) announcement that the second largest shareholder of the company plans to sell up to 2400124 million shares it holds. As soon as the news came out, the Shanghai Aiyingshi Co.Ltd(603214) stock bar also “fried the pot” in an instant. They didn’t understand “why they reduced their holdings so much”. At the same time, some people were worried that the company’s share price would fall sharply the next day and said “no sleep tonight”.
the second largest shareholder intends to liquidate and reduce its holdings
On April 18, Shanghai Aiyingshi Co.Ltd(603214) issued an announcement on the share reduction plan of shareholders holding more than 5%, indicating that the shareholders of the company intend to reduce their holdings of no more than 24012400 shares of the company through centralized bidding, block trading and / or agreement transfer, that is, no more than 16.97% of the total share capital of the company.
Among them, if the shares are reduced through centralized bidding, it will be carried out within 6 months after 15 trading days from the date of announcement of the reduction plan. The shares of the company reduced by centralized bidding shall not exceed 2830117 shares (i.e. not more than 2% of the total share capital of the company), and the total number of shares reduced through centralized bidding shall not exceed 1% of the total number of shares of the company within any continuous 90 natural days; If the shares are reduced through block trading, it will be carried out within 6 months after 3 trading days from the date of announcement of the reduction plan. The shares of the company reduced by block trading shall not exceed 5660235 shares (i.e. not more than 4% of the total share capital of the company), and the total number of shares reduced through block trading shall not exceed 2% of the total shares of the company in any continuous 90 natural days; If the shares are reduced by means of agreement transfer, it will be carried out within 6 months after 3 trading days from the date of announcement of the reduction plan. The shares of the company shall be reduced by means of agreement transfer by no more than 24012404 shares (i.e. no more than 16.97% of the total share capital of the company), and the transfer proportion of a single transferee shall not be less than 5% of the total shares of the company (if the company has changes in shares such as share bonus and capital reserve conversion to share capital during this period, the number shall be handled accordingly). The above reduction methods shall be implemented by united investment according to the actual situation, and the reduction price will be determined according to the market price and relevant regulations when the reduction is implemented.
As for the reduction subjects, as of the disclosure date of the announcement, united investment held 2400124 million Shanghai Aiyingshi Co.Ltd(603214) non tradable shares, accounting for 16.97% of the total share capital of the company and belonging to the shareholders holding more than 5% of the listed company. It can be seen that the reduction of Hezhong investment is a clearance reduction.
It is worth noting that this is not the first time that united investment has reduced its stake in the company. Tianyancha app shows that Hezhong investment was established in Hong Kong on September 4, 2015 and belongs to a private company limited by shares. According to the 2018 Shanghai Aiyingshi Co.Ltd(603214) interim report, Hezhong investment became a new shareholder of the company, and its shareholding accounted for 19.19% of the total share capital at that time; According to the third quarterly report of Shanghai Aiyingshi Co.Ltd(603214) in 2020, Hezhong investment reduced its holdings of 2.8577 million shares of the company, reducing its shareholding ratio by 2%. According to the 2021 Shanghai Aiyingshi Co.Ltd(603214) annual report, united investment ranks the second largest shareholder of Shanghai Aiyingshi Co.Ltd(603214) with a shareholding ratio of 16.97%.
2021 revenue increase without profit increase
Official website tiktok shows that Shanghai Aiyingshi Co.Ltd(603214) was founded in 1997, and has now developed into a business of selling and related services based on mother and infant products. It is a marketing channel with the core of member marketing, Direct stores, APP, micro shopping mall, home applet, Tmall flagship store, Jingdong flagship store, flagship store, and many flagship stores. A professional chain retailer that provides high-quality mother and baby products and related services for families of infants from pre pregnancy to 6 years old. Its products include infant dairy products, paper products, feeding products, toiletries, cotton textiles, toys, lathes and other categories.
Source: Shanghai Aiyingshi Co.Ltd(603214) official website
The company is headquartered in Shanghai and has opened direct stores in economically developed provinces and cities such as Shanghai, Jiangsu, Zhejiang, Fujian, Guangdong, Chongqing, Hunan, Hubei, Jiangxi and Sichuan. As of October 31, 2021, the company has opened more than 500 Direct stores. The number of members exceeds 11 million and the number of cooperative brands exceeds 700.
On March 30, 2018, Shanghai Aiyingshi Co.Ltd(603214) successfully landed on the main board of Shanghai Stock Exchange and was listed. The total amount of funds raised in the initial offering was 499 million yuan, and the issue price was 19.95 yuan / share. It was called “the first share of maternal and infant retail” by the media.
From the company’s performance data, the performance of Shanghai Aiyingshi Co.Ltd(603214) in recent two years has a downward trend.
According to the annual report data of 2021, the company achieved an operating revenue of 2.65 billion yuan in 2021, a year-on-year increase of 17.55%; The net profit attributable to the listed company was 73.478 million yuan, a year-on-year decrease of 36.97%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 28.97 million yuan, a year-on-year decrease of 64.97%.
According to the data of the 2020 annual report, the company’s revenue in 2020 was about 2.256 billion yuan, a year-on-year decrease of 8.29%; The net profit attributable to the listed company was about 117 million yuan, a year-on-year decrease of 24.43%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 82.69 million yuan, a year-on-year decrease of 33.71%.
In terms of share price, since listing, the share price reached a high of 56.39 yuan in May 2018, and then began to fluctuate all the way. As of the closing on April 18, it was reported at 19.08 yuan per share, almost back to the level when it was just listed, and the market value was only 2.7 billion yuan.
mother and baby consumption track competition intensifies
With the implementation of the three child policy, the mother and child consumption track has also ushered in positive results, and the industry is generally optimistic about industry opportunities.
AVIC Securities said that with the implementation of the three child policy and the release of some fertility supporting measures, the population fertility rate may rise slightly in the future, and the market scale of the mother and child industry is expected to continue to rise. It is expected that the market scale will increase to 7546 billion yuan by 2024. In terms of users, the post-80s and post-90s, as the main force of current mother and baby consumption, generally have a “debt mentality” from pregnancy to childbirth, from education to life. The concept of elite parenting is sought after. The new generation of nursing fathers and mothers have continuously improved their requirements for the quality of mother and baby products, the mother and baby industry chain continues to upgrade, and the professional and high-end market will usher in growth opportunities.
According to iResearch’s 2022 Research Report on China’s maternal and infant industry, the consumption scale of China’s maternal and infant industry will reach 3459.1 billion yuan in 2021. It is expected that China’s maternal and infant market will maintain a stable growth trend in the future, and the scale of China’s maternal and infant market will reach 4679.7 billion yuan by 2025.
In this context, Shanghai Aiyingshi Co.Ltd(603214) has also attracted the attention of institutions. Wind shows that since April, eight institutions have issued research reports, of which one has given a “neutral” rating, two have given a “buy” rating, three have given an “overweight” rating, one has given a “superior than the city” rating, and one has given a “recommended” rating.
But at the same time, horizontal competition is also intensifying. The industry also often compares Shanghai Aiyingshi Co.Ltd(603214) with another well-known mother, baby and child retail brand Kidswant Children Products Co.Ltd(301078) .
Public information shows that Kidswant Children Products Co.Ltd(301078) was founded in 2009. It is an innovative new family service platform driven by data and based on user relations. It specializes in providing omni-channel one-stop commodity solutions, parenting growth and social interaction services for expectant mothers and children aged 0-14. Before listing, it was invested by well-known institutions such as Hillhouse capital, Warburg Pincus investment, CICC and Wanda Group, and was listed on the gem on October 14, 2021. The total amount of funds raised was 627 million yuan and the issue price was 5.77 yuan / share. As of April 18, the closing price of each share was 15.19 yuan, which was not much different from the stock price of Shanghai Aiyingshi Co.Ltd(603214) .
In terms of market layout, according to Kidswant Children Products Co.Ltd(301078) previous plans, 300 new stores will be built in 22 provinces (cities) in the next three years, so as to further improve the network layout of retail terminals Shanghai Aiyingshi Co.Ltd(603214) announced in October last year that it would spend 200 million yuan to acquire 100% equity of Beibei bear, the first mother and baby chain brand in Central China, and become the sole shareholder of Beibei bear. It is reported that by the end of 2021, Beibei bear had more than 200 stores across the country and more than 2000 employees, including more than 400 certified nursery teacher teams. However, in this regard, a recent research report pointed out that the integration effect of the acquisition was less than expected.
It is worth noting that Liu Sheng, the company’s second largest shareholder and resident director, had voted against the acquisition of Beibei bear.
According to the announcement of Shanghai Aiyingshi Co.Ltd(603214) last August, at the 8th meeting of the 4th board of directors of the company, there were 7 directors who should vote and 7 directors who actually voted on the proposal on the acquisition of 100% equity of Beibei bear pregnancy and baby Chain Commerce Co., Ltd. The voting results showed that a total of 6 votes agreed, and the director Liu Sheng voted against, and the proposal was passed.
Liu Sheng, the director, objected on the basis of technical concerns. He believed that if the company successfully acquired 100% equity of beibeibeixiong pregnancy and baby business chain Co., Ltd., it was expected that the book value of the company would generate high goodwill, and there might be a risk of impairment in the later stage.
On April 18, after the disclosure of the second largest shareholder’s clearing reduction, the Shanghai Aiyingshi Co.Ltd(603214) stock bar also “blew the pot” instantly. Some said they “saw the clearing sale for the first time”, some wondered why “there are so many reductions”, some speculated that shareholders may have different opinions and choose to leave, and some investors were worried that “tomorrow will fall by the limit” and said “no sleep tonight”
According to the data, as of April 8, 2022, Shanghai Aiyingshi Co.Ltd(603214) shareholders numbered 240100, a decrease of 695 or 2.81% compared with the previous period (March 31, 2022).
