Privatization Returns To PEAK'S Challenge Of Capitalizing Again.

Domestic sports brand PEAK sports officially announced the plan to return to A shares after its privatization and withdrawal from the Hong Kong stock market in November 2016.

PEAK's return to A shares in the long run is due to the higher share price of sports stocks in the A share market than the Hong Kong stock market.

But it is worth mentioning that poor performance and low valuation are the main reasons for PEAK's withdrawal from the Hong Kong stock market. However, its unsatisfactory performance in recent years has also disturbed the stock price trend.

It is understood that PEAK's medium-term earnings and net profit in 2016 have dropped, and the domestic market share has been squeezed.

Insiders pointed out that the A share market is very harsh on backdoor regulation and IPO supervision. PEAK, which is privatized, wants to capitalization again, which has certain challenges.

Recently, PEAK has held a return to the A share development forum and a thank you dinner. It is only 3 months from the privatization to the announcement of the IPO attack. PEAK has shown its confidence and determination to return to the Chinese market with action.

In this process, multi party capital was injected into PEAK, and the investment amount was as high as 2 billion 500 million yuan.

At the dinner, PEAK chairman Xu Jingnan made it clear that Hongkong

It's hard for PEAK to create an international brand.

PEAK has been deeply cultivated for many years in sports industry, but its investment value has been underestimated for a long time. It is very difficult for the company to make effective use of capital platform and affect its business development.

Therefore, it is imperative for PEAK to implement privatization and return to A shares.

It is understood that PEAK listed in Hong Kong in 2009, but after that, its performance and share price performance for a long time is hard to reach. Its market value is HK $6 billion 100 million, but it is still counting down in mainland sports Hong Kong stocks.

In November 2016, PEAK issued a joint announcement officially announcing its withdrawal from Hong Kong stocks and privatization.

It is worth mentioning that although Hongkong's capital market has become a stumbling block for PEAK's international development, PEAK's long-term weak performance is also one of the factors that affect the stock price trend.

Insiders pointed out that with the introduction of the national document on speeding up the development of sports industry, the sports industry has come to the golden age. The domestic sports concept stocks and even the pan sports concept stocks are all favored by investors.

But compared with A shares, the Hong Kong stock market is undervalued, and no strong fund is heavily held, so it is difficult to maintain a high share price.

At the same time, Hong Kong stocks are affected by the economic downturn at home and abroad and undervalued group prices. More than 30 Hong Kong stock companies have begun to seek private ownership.

Since the launch of PEAK sports in September 2009, there has been a big fluctuation in operating income, net profit and number of stores.

After 2011, PEAK's net profit fell for three consecutive years.

Among them, in 2012, PEAK's net profit was only between 200 million -4 billion yuan, down 60% last year, relying on a large number of stores to maintain.

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Although 2014-2015 years of revenue rebounded, but still difficult to show the peak of past performance.

According to PEAK's interim results in 2016, as of July 30, 2016, PEAK Sports Group's operating income fell 6% to 1 billion 298 million yuan, down 5.6% to 494 million yuan compared with the same period last year, and net profit attributable to shareholders decreased by 3.8% to 169 million yuan.

Insiders pointed out that at present, PEAK and Lining, Anta, 361 degrees and other brands in the domestic sports consumption market to form the first camp.

After the revival of the sports industry, local brands are in the process of killing the Red Sea. At the same time, some foreign sports brands occupy the high-end sports consumption market on the basis of the channel to sink, and further seize the share of the domestic low-end sports consumption market share.

But in the internal and external troubles, PEAK has neither been dominant in the local sports brand nor has enough brands and product advantages to resist the erosion of foreign sports brands.

After less than 3 months of privatization, PEAK plans to return to the Chinese market.

This "Golden Stone" is not easy to open.

Financial experts pointed out that there are two ways for PEAK sports to attack IPO, such as normal queuing and backdoor listing.

The first way not only has strict requirements for the performance of enterprises, but also needs queuing for 3-5 years.

Although the second way is the first choice for many "dystocia" enterprises, the A share market is very strict in the supervision of backdoor listing.

It is difficult for PEAK to return to A shares.

It is understood that PEAK based on the extension of the industrial chain and product line, to make plans for the development direction after the return of A shares.

In the future, PEAK will implement multi brand strategy through strategic investment and mergers and acquisitions.

At the same time, PEAK will set foot in the fields of sports IP competition, sports training, sports big data, sports information and so on.

This shows that PEAK's return is intended to build the whole sports industry ecosystem.

Shoes and clothing critic Ma Gang believes that whether or not to return is not a challenge for PEAK. After the return of A shares, whether PEAK's brand value can be recognized by the market is the core.

For enterprises, brand value should be recognized, and investors should be given the imagination of enterprise performance.

But at present, the "single" PEAK performance does not rise, and there is no active capital action, can not boost investor confidence.

Therefore, let more investors recognize the brand value, PEAK is currently need to consider and solve the problem, otherwise, the return of A shares is just "changing the soup without changing the dressing" is meaningless.

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