After acquiring an Indonesian factory last year to enter Nike’s supply chain system, Korrun is once again planning to acquire Uniqlo’s core suppliers. The company’s 2B OEM business is expanding rapidly.
Recently, Korrun announced that it will spend 450 million yuan to acquire Shanghai through subsidiaries and equity funds. Jiale has 39.6% equity, becoming its largest shareholder. If Shanghai Jiale’s sales revenue to Uniqlo exceeds 1.1 billion yuan (total revenue last year was 1.325 billion yuan), it will increase equity acquisition funds by 35.8733 million yuan.
Previously, in 2019, the company acquired an Indonesian factory and entered Nike’s supply chain. After the integration, the Indonesian factory’s production capacity and orders The number continues to expand. Perhaps based on the confidence in the above-mentioned integration capabilities, as of the first quarter of this year, Shanghai Jiale’s net assets were 636 million yuan, and this merger gave it a valuation of 1.135 billion yuan. Regarding the goal of mergers and acquisitions, the company said that Shanghai Jiale is a core supplier of Uniqlo and will create synergy with the company.
The founding team of Korrun comes from well-known IT companies such as Lenovo Group and Hewlett-Packard. It started its business by manufacturing luggage and bags for ASUS, Lenovo, and Decathlon, and once accounted for nearly 80% of its revenue.
In recent years, the company has been continuously exploring new categories and new tracks with greater market space. Its business takes suitcases and bags as its core products, and has gradually extended to clothing, accessories, and various other products. Other travel equipment such as travel peripherals, etc., and the acquisition of well-known brand suppliers has become an important means of company expansion.
Judging from last year’s financial report, the sales revenue of the top five customers was 1.678 billion yuan, accounting for 62.27%, while the top two customers contributed 1 billion yuan in revenue, accounting for nearly 1 billion yuan of total revenue. Four percent.
Shanghai Jiale was founded in 1993. It mainly produces and sells various types of mid-to-high-end textile casual fashion and sports series products. Its official website shows that Shanghai Jiale has built vertically integrated production bases of “textile and apparel + fabrics” in Shanghai and Indonesia, and has a garment manufacturing factory in Anhui. Its official website shows that it has an annual output of 50 million meters of various types of knitted fabrics and 50 million meters of ready-made garments. pieces.
The company serves world-renowned customers such as Uniqlo, GU, Champion, VF Group, Point, etc. Last year, Shanghai Jiale’s revenue and net profit were 1.325 billion yuan and 105 million yuan respectively. In the first quarter of this year, its net profit loss was 8.2107 million yuan, and its net assets were 636 million yuan. In this transaction, the equity valuation of the target Shanghai Jiale was determined to be 1.135 billion yuan.
Shanghai Jiale began cooperating with Uniqlo as early as 2006 and has been for nearly 15 years. It is one of Uniqlo’s core suppliers of textiles and clothing and is an important factor in giving such a high valuation. reason.
This agreement stipulates that in any future fiscal year, Jiale Shares will generate annual operating income from direct sales of its important customer Fast Retailing Co., Ltd.’s brand UNIQLO (UNIQLO). If it reaches more than 1.1 billion yuan (excluding tax), the valuation of the underlying assets will be raised to 1.260 billion yuan, and the transferee will pay a total consideration of 35.8733 million yuan.
The company stated that this transaction will promote the product categories of the listed company’s OEM manufacturing business to extend from the luggage field to the textile, clothing and fabric production and manufacturing fields, providing new opportunities for the company’s future long-term development. categories and market space. Moreover, the global layout strategy and high-quality brand customer strategy of Shanghai Jiale and the listed company are highly synergistic, which helps to achieve mutual empowerment, mutual benefit and win-win results.
Entering the supply chain of world-renowned brands like Uniqlo has always been the goal of the company’s 2B strategy. However, world-renowned brand companies such as Nike, Decathlon, Dell, HP, Asus, etc. have strict qualification standards when selecting suppliers and will not change suppliers easily. Therefore, entering the supply chain of world-famous brands through mergers and acquisitions seems to have become an important means for companies to develop.
Korrun spent 156 million yuan to acquire 25.93% of Shanghai Runmi in 2017, and the shareholding ratio will increase to 76.93 %, Shanghai Runmi is the main carrier of the company’s B2C business. In February 2019, the company spent US$22.8 million to complete the acquisition of an Indonesian factory and launch a global layout of production capacity. Because of this acquisition, it entered the supply chain system of Nike, the world’s first-tier sports brand customer, and the company’s product categories entered the mainstream sports bag field.
At present, Korrun has passed certifications from world-renowned brand companies such as Nike, Decathlon, Dell, HP, and Asus. This time, Korrun has once again acquired Uniqlo’s supply chain company, further implementing the company’s strategy of expanding core suppliers around head customers in the 2B field.
In the past two years, almost all of the 326 million yuan raised by Korrun from its IPO was used to acquire Shanghai Runmi and Indonesian factories. After the acquisitions were completed, the company actively promoted business integration and increased production capacity. The scale and order quantity continue to expand. For example, after acquiring the Indonesian factory, the company spent 15.9 million yuan to purchase Indonesian land use rights to expand or build a new production base project. Last year, the net profit of the Indonesian factory reached 13.1401 million yuan.
At the same time, the company’s own brand business started in 2015.�It has grown rapidly since its start. In the past three years, it has won the first place in the luggage category in Tmall’s Double Eleven event.
The simultaneous advancement of private brands and OEMs has enabled the company’s sales to continue to grow. From 2017 to 2019, the company’s textile industry sales were 31.1723 million pieces, 47.0152 million pieces, and 64.4347 million pieces respectively. The operating income during the same period increased by 49.84%, 76.19%, and 31.58% respectively compared with the same period last year. Compared with the time when it was listed in 2016, the company’s sales in three years Sales volume increased by 1.92 times, and revenue also increased from 776 million yuan to 2.695 billion yuan, an increase of 2.47 times.
So the company has started its production expansion plan. On August 1, Korrun announced the fundraising plan (second revised draft), which will mainly use 674 million yuan to raise funds. The Indonesian luggage production base and Chuzhou Milun Technology Co., Ltd.’s fashionable women’s bag factory project will enable the company to increase the production capacity of 18.48 million bags and 2.48 million women’s bags. After reaching capacity, annual sales revenue will increase by 1.419 billion yuan and net profit after tax will be increased. An increase of 121 million yuan. If this production capacity target is achieved, both revenue and net profit will increase by more than 50% compared to last year. </p
