How long can Younger Li Rucheng and Kaishi Chen Jiwu cooperate?

How long can Younger Li Rucheng and Kaishi Chen Jiwu cooperate?

Youngor's investment myth began to decline from the peak, and Li Rucheng’s troika strategy failed in the middle.
At 11:45 on August 15th, the hot sun was over. The 2nd Shandong Donglu Road, Bund, Kaishi Building.

Chen Jiwu hurried downstairs from the 4th floor and headed straight to the taxi next to the road. He quickly opened the door and sat down. It took less than a minute before and after.

“The statement that Youngor withdrew from Caishi was completely untrue. Kaiser is just making equity adjustments!” Chen Jiwu, who got into a taxi, immediately contacted the Money Weekly reporter. There was some excitement between the words.

The Money Weekly reporter waited for an hour and a half after the Kaishi Building and the relevant officer informed Chen Jiwu that he was not in the company until the reporter saw him walk out of the building in the middle of noon and saw his back in a hurry, but missed the opportunity.

An insider approaching Youngor was a little different from Chen Jiwu's statement. "They're both overturned." More than one private-equity fund executive said exactly the same thing. "Yes, Youngor and Cathy have already separated."

Youngor's investment myth began to decline from the peak, and Li Rucheng’s troika strategy failed in the middle.

Li Rucheng's strategic setback

2009 and 2010 were the peak moments of Youngor's investment. Its financial investment business achieved net profits of 1.625 billion and 1.245 billion respectively. In the past two years, Youngor has mainly entrusted Shanghai Kaishi Investment Management Co., Ltd. (hereinafter referred to as “Kaishi Investment”) as the asset investment management consulting agency, achieving the growth of fixed-income and PE investment. Youngor and Cathy have thus become famous in the capital market.

In 2011, the bad market conditions were unexpected. This year, Youngor's financial investment net profit fell to 487 million instantly. In 2009 and 2010, there was no loss in its investment projects; in the 2011 annual report, the situation reversed and loss projects began to appear. At the same time, unlike the previous two years, Youngor did not mention that he was commissioned by Kaiser to serve as an asset investment management consultancy.

Clothing, real estate, and investment as Youngor's troika had brought handsome profits to Youngor, especially non-prime real estate and investment, and now Youngor’s income structure has quietly changed.

"Although there is no loss in real estate, it is not as high as it used to be, and investment has been lost," said the analyst.

Younger Chairman Li Rucheng repeatedly expressed that he would return to the main business of clothing, and he would use strategy of making big clothes, fine real estate, and regular investment business. The road is long and arduous and it is difficult to get approval from the market in the short term.

“Li Rucheng mentioned at this year’s Youngor shareholders’ meeting that he was trying to separate the three businesses in order to facilitate the financing of the apparel industry. Some of my analyst friends said that Youngor’s three businesses are together and are not very good valuations.” A large brokerage firm According to sources.

"Today it fell to 7.94 yuan. I have a good friend. After some public fundraiser friends went in more than 8 blocks, they are all now being ensnared." According to his knowledge, some analysts will consider lowering their earnings forecasts when they report for Youngor.

Youngor Kaishi separation incident

Not long ago, the Money Weekly reporter learned that there has been some change in Case Stone and Youngor.

More than one person in the industry disclosed to the Money Weekly reporter that the controlling shareholder of Youngstone Investment Younger and the treasurer Chen Jiwu had already split their families because of investment losses and Youngor could not stand it. According to another source, Li Wenzhong, the investment director of Kaishi Investment, was originally a follower of the original Chen Jiwu who brought out his venture from the Fuguo Fund.

In this regard, the Financial Weekly reporter had contacted Chen Jiwu several times before, and his emotion on the phone was slightly agitated:

“If there is such a report, we will issue an announcement to clarify. Youngor did not completely withdraw funds. Kaiser is only making equity adjustments. The research team has not changed much. It is because the business structure needs to be adjusted and some staff positions will be adjusted next. ”

Kaishi Investment was established in October 2008 with a registered capital of 1 billion yuan. At the beginning of its establishment, Youngor Group held 70% of shares, and Cascade Management held 30% of shares. In 2010, the ownership structure was fine-tuned, Youngor Group's shareholding fell to 60%, and Caesar's management increased to 40%.

At the beginning of the establishment, the general manager of Kaishi Investment was Chen Jiwu, vice president Hu Dezhong, Li Chunyi and Li Han poor, Li Wenzhong served as investment director, and Xu Xiang and Xu Yousheng both served as vice directors of investment.

It is reported that a total of five fund managers under Cascade Investments are Cheng Junhao, Xu Yousheng, Yin Wei, Bai Yanhong and Li Wenzhong. The Kaishi Investment Research Team has 17 employees, 6 stock investment managers, 1 bond investment manager, and 11 industry researchers. It basically covers all A shares in all industries and Hong Kong stocks, and has 2 trading supervisors.

Chen Jiwu said, "The research team now has about 14 people. There aren't many people who are away."

“Kaishi established the PE department at the end of last year, and the money for other LPs is not Youngor's. We have invested in one and a half markets and secondary markets, have external asset management, and are relatively independent. This time, the equity adjustment may be introduced. Some strategic investors. Finally, Youngor's shareholding ratio may be reduced.” He continued.

The reason for adjusting the stock rights, Chen Jiwu said that mainly to solve the management problem, increase the proportion of the team holdings.

In his view, there are many disadvantages to the public fund, and the management team's shareholding has always been a problem, and the current management's 40% shareholding ratio is not enough.

“The goal is to make Kaiser a normative asset management company that combines industrial capital and professionals in a wider range of areas. My shareholding ratio will decrease and Youngor’s shareholding ratio will decrease. This round is not the end The shareholding structure."

Dispute with Case Stone

What happened between Youngor and Caesar?

They once worked hand-in-hand in the capital market, but they are getting farther and farther. The cooperation between Youngor and Caesars dates back to the end of 2008.

Kaishi Investment was incorporated in October 2008. On December 2 of that year, Youngor issued an announcement and hired Kaishi Investment as its investment advisor. However, the capital relationship between Youngor's investment and Chess Investment has so far been different.

The 2010 Youngor Annual Report mentioned that Kaishi Investment is a holding subsidiary of Ningbo Shengda Development, accounting for 70% of the shares, and Li Rucheng holds 19.31% of the shares of Ningbo Shengda. Ningbo Shengda 100% holds Ningbo Fusheng Investment, 100% holds Ningbo Youngor Holdings, 100% holds Ningbo Yinzhou Youth Employee Investment Center, while Youngor Holdings is the largest shareholder of Youngor's listed company. Li Rucheng directly and indirectly 9% The shares control Youngor listed companies.

In addition, public information shows that the largest shareholder of Keystone Investment is the Youngor Group, and Youngor’s secretary-general said on the phone that the assets belong to the controlling shareholder and Youngor’s controlling shareholder is Youngor Holdings.

From the information disclosure of listed companies, the relationship between Youngor Group and Cascade Investment is mainly engaged in the appointment of Cascade as an investment consultant to participate in the increase. However, it is understood that the cooperation is far more than this, according to industry sources, Youngor has repeatedly participated in the Caesar products directly, that is, Youngor as a whole, that is, the controlling party of Cascade, but also its advisory clients, or LP.

From 2009 to 2011, Youngor participated in private placement of 9, 12, and 13, respectively, and PE, and other investment projects were 8, 10, and 1, respectively, with a total investment of 3.54 billion, 5.334 billion, and 2.95 billion yuan respectively; Youngor's financial investment business achieved net profit of 1.625 billion, 1.245 billion and 487 million, respectively.

In 2009, Youngor participated in the growth of seven companies, including Rongxin, First Capital, Antai Group, Zhongtian Technology, Suning Appliance, Shanghai Pudong Development Bank and Dongfang Electric. According to Youngor's 2010 annual report, seven company shares have been sold and total profit reached 374 million yuan.

During 2010, Youngor invested a total of 11 projects, namely Zoomlion, Chuanhua, Dongli Transmission, Foton Motors, Xugong Machinery, Air China, Golden Seed Wine, Lingyun, Shanghai Automotive, and Hua Lu Hengsheng. With Wuyuan Power, the total investment cost was 4.366 billion yuan; at the same time, two new PE projects, China UnionPay Commerce Co., Ltd. and Zhejiang Xiangyang Fishing Port Co., Ltd., had a total investment cost of 170 million yuan.

During 2011, Youngor has invested RMB 27.25 to participate in Guangbai, Haizheng Pharmaceutical, Haley De, Xingrong Investment, Shengyi Technology, Jinggong Technology, Shengnong Development, Yuntianhua, Oriental Zirconium, and Xinjiang Zhonghe. , China Gold Gold, Huaxin Cement and Shanmei International, etc. 13 listed companies issued additional shares.

With Kaiser, Youngor repeatedly attacked the capital market, and even overtook Youngor’s clothing business. Unfortunately, no one is a constant winner.

In 2009 and 2010, the shares of listed companies sold and sold all became profitable, but in 2011 it did not go so smoothly. According to the 2011 annual report, Dongli Transmission, Air China and Foton Motor all suffered losses. Among them, Dongli Transmission and Foton Motor all sold out, losing a total of RMB 437,000 and RMB 36,288,800 respectively. During the period of Air China, it had bought 50,000 while also selling 48.3 million, which was a loss of 217 million during the period.

After the semi-annual report was released in 2011, the issuance market no longer saw Youngor's presence.

The bleak market has directly affected the cooperation mode between the two parties. According to public information, Youngor initially paid a certain percentage of the total amount of investment in consulting expenses. In March 2010, it changed the consulting services fee to Kaishi at 15% of the realized investment income. In August, it was changed to recommended by Kaishi. The project will only pay for the cost. Obviously, the two sides continue to divide the line in front of their interests, and they will be sparse.

The Money Weekly reporter observed that Youngor’s annual report since 2009 found a subtle difference. In the 2009 and 2010 annual reports, Youngor mentioned that he had commissioned the related party Kaishi Investment as the company’s asset investment management consulting agency to realize the growth of fixed income and PE investment; while in the 2011 interim report, Youngor only stated its investment status and did not mention it. And Kaishi Investment. This detail is subtly conveyed, and the cooperation between Youngor and Chisker has started since last year.

In addition to collecting Youngor's consulting service fees, Kaishi Investment's main business is to initiate the establishment of its own products. According to industry sources, the main sources of funds for these products are Youngor itself and the customers of ICBC's private banking. This has exacerbated the deterioration of the situation.

Especially the secondary market products, it is reported that, due to the market downturn, Chen Jiwu's products had heavy Cangmei appliances and led to larger losses.

The market is forced to return to the main business

The investment is in a quagmire. It has even affected Younger's overall strategy to some extent.

Li Rucheng has repeatedly expressed on certain occasions that he must pay more attention to the development of the main clothing industry. The media interpreted this as "returning to the main business." However, Young Xinyu, the secretary of Youngor's secretaries, believes that this statement is not accurate. “Younger’s main business is clothing.”

The statement of “returning to the main business” is more because the younger people are more like a diversified business. The troika of clothing, real estate and investment have gradually become quagmire.

From 2009 to 2011, Youngor's operating income was 12.279 billion, 14.514 billion, and 11.539 billion, followed by net profit of 494 million, 2.934 billion, and 2.059 billion; net investment income was 1.797 billion, 2.058 billion, and 1.443 billion. It can be seen from the above that 2010 was a period of rapid development of Youngor, and it has obviously declined in 2011.

According to Youngor's annual report, in 2009-2011, Youngor's textile and apparel operating revenues were 6.905 billion yuan, 6.099 billion yuan and 6.197 billion yuan, respectively, an increase of -4.33%, 9.05%, and 1.61% over the same period last year; net profit was 445 million yuan, 705 million yuan and 691 million yuan, an increase of 8.52%, 93.36% and 2% over the same period of last year. In 2011, Youngor's apparel business entered a phase of slowing growth.

In real estate business, real estate operating income from 2009 to 2011 was 5.195 billion yuan, 6.853 billion yuan and 3.636 billion yuan, an increase of 49.88%, 31.9%, and -46.94% over the same period of last year; net profit was 1.191 billion yuan, 679 million yuan, and 572 million yuan respectively. The growth rate was 53.16%, -42.99% and -15.86% respectively over the same period of last year.

Since 2010, Youngor's real estate business has experienced negative growth. In 2011, Youngor did not even acquire land.

Of the three businesses, only garments can bring stable profits. This also means that Younger’s return to the main business is more of a forcing market.

“Younger’s investment is about 9 billion in size this year, of which 1 billion to 2 billion is in the primary market. At least some projects were listed in the past few years, and now there is almost no. The first-tier market does not have too much. Secondary market, Many quilts have been issued and real estate and investment business valuations have been under pressure,” said an apparel industry analyst.

Is it keeping up with the rhythm?

A key question is whether Youngor's return to the main business can keep up with the rhythm.

According to the Flushing Data, the net profit for 2011 of Meibang Garments, Youngor, Summa Garments, Jiumuwang, Septwolves and Zhongxin are 1.206 billion, 2.059 billion, 1.23 billion, 518 million, 415 million and 359 million respectively, corresponding to August 16, 2012. At the close, the total market value was 20.552 billion, 17.677 billion, 15.11.5 billion, 14.05 billion, 12.599 billion, and 7.316 billion. The forecasted price-earnings ratios for the next 12 months on August 16 were 11.6, 10.9, 7.3, 17.9, 18.7, and 12.6 times respectively. .

Youngor’s total market capitalization of RMB 2,059 million in 2011 was approximately 17.7 billion, which also included profits from real estate and investment. Net profit from garments was RMB 691 million. The clothing profit of Jiumuwang and Seven wolves is less than Youngor, but the market value is not far from Youngor. This means that Youngor’s market valuation of the real estate and equity investment business is obviously low.

An analyst lamented that Youngor was too cheap. Youngor only experienced a wave of upswings in January-March this year, and then entered a downward slide from April. The rise at the beginning of the year is not natural to some industry players.

“The acquisition of minority shareholders’ equity, the withdrawal of low gross profit foundry business, and claims that real estate will have tens of billions of funds settled this year. These are positive and many investors are optimistic about its development this year. Unexpectedly, the market is not good, and the market does not recognize its apparel. Valuation, the valuation of mixed operations is generally given relatively low."

In April, Youngor performed even worse. "Real estate rose, it does not rise. Real estate fell, it fell more." According to the Money Weekly reporter, Youngor's investment projects have gradually lifted the ban, but the secondary market conditions unsatisfactory.

"The overall valuation does not go up, the recent valuation is lower, in fact, it is still a certain degree of difficulty to define it as a garment stock, I do not have the heart to look again." Shanghai Securities analyst has said.

Another analyst analyzed with reporters that Youngor’s inability to refinance due to restrictions on real estate business and the expansion of his own funds was very slow, and that most of his equity investment funds came from borrowing, but the cash flow was stable but not sufficient. .

A researcher from Youngor said, “There are fewer young people in the stores, and Youngor’s brands are aging compared with Baoxiu, Jiumuwang and Senma. Once weakened, it is difficult to establish a new brand. Now stocks are 1/3 cheaper. , the stock price is difficult to rise."

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