Ocean King listed on the acquisition of high margin dependent direct sales

Scheduled to determine the issue price in October 22, 2014, 24 issue of the purchase of the ocean king, conducted an online roadshow in October 21st.

The company did not arrange the release of the site to promote. Ocean King secretaries Chen Hui said.

According to the prospectus, the ocean King initial public offering of 50 million shares, accounting for the proportion of the total share capital of 400 million shares after the release of 12.5% of its equity investment projects for the production of R & D center construction projects and domestic marketing center expansion line construction project, a total investment of 550 million yuan, plans to invest 399 million yuan fund-raising.

"If the actual fund-raising project can not meet the investment needs of the funding gap in part by the company to solve its own funds or through other means of financing, if the actual fund-raising has a surplus will be used for other main business-related working capital. Ocean King director, chief financial officer Li Caifen said.

According to the said, the ocean King industry electrical machinery and equipment manufacturing industry, as of October 17th, the industry in the last 1 months, 3 months, 6 months and 1 years, the average price earnings ratio was 27.58 times, 26.18 times, 26.18 times, 24.47 times and 25.87 times, while the ocean king in 2011 the first half of this year, the non deduction of earnings per share, respectively 0.5007 yuan, 0.4116 yuan, 0.4434 yuan and 0.0743 yuan.

At present, the domestic special environment lighting industry concentration is low, in addition to PHILPS and other international well-known lighting companies, larger enterprises less. Zhou Mingjie, chairman and general manager, said, in the future when the time is ripe, the company will fully consider their own conditions on the basis of the implementation of foreign investment and mergers and acquisitions activities. "

The implementation of the company's established development goals, requires a lot of money in the fund-raising in place, the shortage of funds is the biggest constraint on the future development of the company. Director of China Merchants Securities Investment Bank headquarters, sponsor representative Gao Chuanfu said.

The fact that the Shanghai foreign king engaged in the special environment lighting equipment industry has been facing increasingly fierce market competition. However, Zhou Mingjie said that the size of the king's sales in the domestic marine enterprises in the leading position, nurturing a large customer base, more than 90% of customers for old customers. The company established a nationwide sales network, by two thousand grassroots single sales staff. Zhou Mingjie said.

Direct skip the middleman, save the cost of the channel to bring high margin. Prospectus shows that from 2011 to 2013, ocean King's gross margin was 70.48%, 71.77% and 71.84%, while the average gross profit margin of Listed Companies in the same industry were 27.52%, 26.62% and 25.86%.

But direct sales model and marketing network requires a larger fixed labor, rent, water and electricity and travel expenses, resulting in significant impact on operating performance. Prospectus shows that from 2011 to 2013, the ocean King's sales rate was 42.35%, respectively, and 39.54%, while the same period in the same period, the cost of sales of Listed Companies in the industry is only about $6.69%, 7.47% and 7.28%.

The company mainly adopts direct selling mode for the end user sales, more than 65% of employees for sales staff, the number and proportion of Listed Companies in the same industry are relatively high, so the travel expenses, marketing expenses, communication expenses and other high. Li Caifen believes that the 139 service centers and more than 780 service department office premises and staff quarters for rental properties, resulting in higher rental costs. "

In addition, the management of the marine king also showed an increasing trend year by year, the first half of 2011 to the first half of this year, the proportion of operating expenses accounted for 11.34% of revenue, respectively, 13.68%, and 15.67%.

However, the higher the gross profit margin for the company. Prospectus shows that the king of the sea from 2011 to 2013 net interest rates were 13.25%, 13.12% and 13.72%, but the same period in the same industry listed companies net profit margin of 13.91%, 10.87%, 9.22% year on year decline.

In addition, it is worth noting that the prospectus, the IPO, the ocean King actual controller Zhou Mingjie, Xu Su couple "dominance" situation has not changed, before IPO, two of the total stake to 83.62%, the first drop after 73.17%.

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