Recently, Xinhe Co., Ltd.’s brand AIVEI has attracted attention due to the issue of advertising spokespersons, which in turn has caused the market to pay more attention to its current operating status. From a performance perspective, Xinhe Shares, which has been listed for more than three years, "changed" in the year it was listed, and its net profit has shown a negative growth of more than 20% in the last two years. After the "second-generation" chairman took office last year, profits did not improve after major changes were launched at the end of the same year, but worsened further, that is, the profit for the first half of this year was expected to drop by 90%. Judging from the stock price, in the past three years, the stock price of Xinhe Shares has been cut in half. Since the "second generation" took office as chairman, its stock price has also fallen by nearly 40%. Since this year, its stock price has fallen by more than 20%. %.
At present, Xinhe Shares has been experiencing obvious pains since it launched changes at the end of last year, which have been transmitted to its performance and stock price. In the future, it is worth paying attention to how effective this change will be and when the positive effects of the change will be transmitted to specific operating results.
The "second generation" underwent major changes and its performance plummeted after taking over
Instead of improving, it got worse.
Public data shows that in 2023, the growth rates of Xinhe’s revenue, net profit attributable to the parent company, and non-net profit attributable to the parent company were recorded at: 0.93%, -22.45%, and -21.36% respectively.
After the beginning of this year, Xinhe Shares’ performance showed no signs of improvement, and instead deteriorated further. Among them, the financial report for the first quarter of 2024 shows that the growth rates of Xinhe Shares’ revenue, net profit attributable to the parent company, and non-net profit attributable to the parent company were: -19.06%, -88.49%, and -8 respectively.9.73%.
In addition, the 2024 semi-annual performance forecast of Xinhe Shares shows that in the first half of this year, the net profit attributable to the parent company is expected to record 3.7 million-4.75 million yuan, a year-on-year decrease of 96.14%-95.04%; Non-net profit is expected to be recorded at: 1.25 million yuan - 1.6 million yuan, a year-on-year decrease of 98.61% - 98.21%.
Regarding the performance in the first half of this year, the reasons given by Xinhe Co., Ltd. focused on the changes and adjustments last year, that is, the company carried out strategic changes at the end of 2023, and the company's brands re-upgraded their brand positioning. , in the first quarter of 2024, the company made adjustments to the brand's product line, channel layout, membership system, and marketing plans, and continued to optimize and adjust these implementation measures in the second quarter.
“First, during the reporting period, the company accelerated the transformation and optimization of channels. Due to the shift of the strategic focus of two brands, the other three brand channels closed stores that were not in line with long-term positioning and had poor performance, resulting in Operating income will decline in the short term. In the future, we will focus on improving single store profitability and focusing on the development of high-quality stores in accordance with the channel expansion plan. "Second, during the reporting period, the company optimized its membership system based on brand positioning. The adjustment has resulted in a decrease in the per capita consumption of members, but the unit price has increased. In the future, the membership system will be improved, new customers will be recruited, old customers will repurchase, the number of member consumers will be increased, and the brand's positioning in the hearts of consumers will be maintained. , enhance brand value. "
"Thirdly, during the reporting period, the company replaced personnel, introduced better talents, and carried out talent iteration. In the process of organizational structure change, certain steps are needed. The cycle of integration and adaptation. We will further improve human efficiency and strengthen development through measures such as optimizing the company's organizational structure and improving talent levels." During the period of change, strategic implementation measures have not yet achieved significant operational results. In the second half of 2024, the company will focus on its core business, actively expand the market and increase revenue scale around the core needs of customers. At the same time, the company's management will continue to strengthen internal management and strictly control production costs and operating expenses.
In fact, behind the major changes launched by Xinhe Co., Ltd. at the end of last year was the change of chairman, that is, the "second generation" took over. On February 20, 2023, Xinhe Shares announced that the company's chairman and general manager Sun Ruihong applied to resign from the company's chairman and general manager due to personal reasons. After resignation, Sun Ruihong still served as the company's director, chairman of the strategy committee and member of the nomination committee. . At the same time, Sun Ruihong's 31-year-old son Sun Baihao was approved by the board of directors and was elected as the chairman and general manager of the company's fourth board of directors. His term will begin on February 20, 2023. At present, Sun Baihao is still the chairman of the new board of directors and the general manager of the company.
Public information shows that Sun Baihao, a Taiwanese national, graduated from the University of Birmingham in the United Kingdom. 2018Joined the company and served successively as special assistant to the chairman, director of big data management department, director of human resources management department, and currently serves as director and deputy general manager of the company. As of now, Sun Baihao does not directly hold shares in the company and is related to the Sun family, the actual controller of the company. Sun Ruihong and Sun Baihao are father and son, Sun Ma Baoyu and Sun Baihao are grandfather and grandson, and Sun Menghui and Sun Baihao are aunt and nephew.
After Sun Baihao "took over" the position of chairman, Xinhe Co., Ltd. carried out major changes at the end of that year. According to the investor relations management file of Xinhe Co., Ltd., the company will adjust its brand strategic positioning at the end of 2023, sort out the five major brands, and carry out strategic changes corresponding to each brand's product planning, channel layout, marketing planning. First of all, Hanfu is divided into four major tracks based on the scene, workplace commuting, leisure life, exquisite life, and trend front. According to price, it is divided into high luxury, light luxury, mid-to-high-end, and mass. Currently, JORYA is in the mid-to-high-end track of exquisite life. ΛNMΛNI and CAROLINE are on the high-end track for workplace commuting, while AIVEI and JORYA weekend are on the high-end track for leisure life. At the same time, the company's organizational structure has been reorganized and divided into three business clusters: exquisite fashion business group, commuter fashion business group, and new retail business group.
Xinhe shares stated that in recent years, the industry economy has shown a trend of slowing down, and the company has encountered periodic consolidation in terms of operating income and profits. In order to improve the quality of operations and open up a new strategic situation, in 2023, the company will promote strategic upgrades and development changes, and carry out major changes and reorganizations in the organizational structure, brand positioning, responsibility system, marketing strategies, etc., to effectively enhance the development pattern and comprehensively upgrade the mission and vision. , values and strategic goals.
However, judging from the latest performance forecast, Xinhe Shares is currently facing the double pain of the above-mentioned plunge in performance and a sharp decline in stock price. In the future, the effectiveness of the above-mentioned changes and adjustments can only be tested by subsequent performance.
“Drifting away” from many listed companies in the same industry
Behind Xinhe Shares’ massive reforms last year, in fact, if we look at it over a long period of time, Xinhe Shares and many listed companies The performance of several peer companies can be said to be gradually drifting away, and there is an urgent need to find new growth points for performance.
From the perspective of revenue, as shown in the figure below, from 2012 to 2023, Xinhe's overall revenue not only did not grow, but declined. The other five peer companies in the picture below all showed substantial revenue growth during the period, among which Winner Fashion increased by more than 13 times during the period.
From the profit side, as shown in the figure above, from 2012 to 2023, Xinhe Co., Ltd.'s net profit attributable to the parent company fell from 455 million yuan to 100 million yuan, an overall decline of 78.02%. During the same period, two peer companies showed substantial growth, among which Winner Fashion increased from 28 million yuan to 838 million yuan, an overall increase of more than 28 times.
In addition, judging from this year's 618, according to the 2014 618 "Review of Mid-to-High-end Hanfu E-commerce Data" report released by Zhiyi Technology, the overall market share of mid-to-high-end Hanfu in 2024 will increase, year-on-year. Last year's growth was 26.5%, which shows that consumer demand for higher quality products continues to grow. The sales market share of stores with an average price of 600-1,300 yuan was 61%, and sales increased by 12.69% year-on-year; the sales market share of stores with an average price of 1,300-2,000 yuan was 20%, and sales increased by 33.94% year-on-year; both The sales market share of stores with prices above 2,000 yuan was 19%, and sales increased by 89.56% year-on-year, which was the highest price segment for this 618 growth. Compared with the decline in the market share of the mid-price segment last year, the high-price segment has grown as a result. Currently, higher-quality fabrics and exquisite designs are the trends that consumers are pursuing.
However, as the core brand of Xinhe Co., Ltd. and also a high-end brand, JORYA. The main product price range of this brand is 2,000-60,000, but it does not appear in the above report as "store sales with an average price of more than 2,000" "List" of the 24-year 618 best-selling list TOP10.
Regarding the layout of e-commerce, in the 2023 annual report, Xinhe Co., Ltd. mentioned that the company’s main sales models are self-operation, distribution and e-commerce models. In addition, it has gradually expanded its e-commerce business since 2017, which has played a role in improving the company's offline marketing network.
And peer winner fashion started the e-commerce model earlier. According to public reports, 2023 will be the twelfth year that Winner Fashion has entered Tmall. Based on this calculation, Winner Fashion started its e-commerce model as early as 2011.
With such a gap, in the era of mobile Internet, major social software and platforms are emerging. How can Xinhe Shares catch up with peers on the e-commerce track and reverse the current plummeting performance?
Regarding the future e-commerce layout, Xinhe shares said that the company will continue to maintain a stable strategic cooperative relationship with leading e-commerce platforms such as Tmall and Vipshop, while stabilizing the existing e-commerce platform. On the basis of performance contribution, we will continue to optimize and expand emerging online channels, and use the traffic of emerging online channels to convert sales. At the same time, the company will focus on increasing the business proportion of Douyin's main position and actively develop Douyin channels. Douyin Mall, as an e-commerce platform for the public, also has a group of customers with high unit prices, and it is easier to serve as an "interest e-commerce" To stimulate customers' potential shopping interest, the company will use Douyin self-broadcast to strengthen the brand image and user mentality, absorb more public domain traffic, and improve the company's performance.
(Data and picture sources: wind, Zhiyi Technology, etc.)
