Shanghai La Chapelle Fashion Co Ltd  06116

Summary (from latest annual and quarterly report)

• Total stockholders' equity : 522 million USD
• Market Cap is 652 million USD (5.1 billion HKD),  the last price of the stock is 9.33 HKD
• Shanghai La Chapelle Fashion Co., Ltd. is principally engaged in the design, marketing and sale of apparel products with a focus on mass-market ladies' casual wear in China
•  Total stockholders' equity has increased from 498 million USD in 2016 to 522 million in 2017
• Company has 96 million USD in cash on account (from latest quarterly report)
• Total equity – cash on account = 522 million USD – 96 million USD = 426 million USD
• In 2017 company has 130 million USD short-term debt, long-term debt is zero (In 2016 total debt was 45 million USD)
• Company's revenue increased in 2016 to 1.54 billion USD from 1.37 billion in 2015
• Net income in 2016 was 80 million USD, Net income in 2015 was 92.8 million USD
• In 2016 company paid 58 million USD dividend to its shareholders

Opinion about the company

Fundamentally it is a very good company and in the future, we can expect its growth (Total debt is 130 million USD, the company has 96 million USD in cash on account, ROE is around 15%).

Shanghai La Chapelle Fashion Co., Ltd. is principally engaged in the design, marketing and sale of apparel products with a focus on mass-market ladies' casual wear in China. The Company strives to offer customers fashions through apparel products under nine brands, including La Chapelle, Puella, UlifeStyle, 7.Modifier, Candie's, La Babite, Vougeek, Pote and La Chapelle Kids. The company was incorporated in the People’s Republic of China (the “PRC”) as a joint stock company on 23 May 2011 converting from its predecessor, Shanghai Xuhui La Chapelle Fashion Limited that was founded in 1998. The Company and its subsidiaries (the “Group”) sells apparel products directly to retail customers through both physical retail points and online platforms, 100% of which are directly controlled and operated by the Group (save as those retail points under the investing brands). As at 31 December 2016, the Group’s extensive nationwide retail network comprised 8,907 retail points located in approximately 2,709 department stores and shopping malls across all 31 provinces, autonomous regions and municipalities in Mainland China.

In 2016, the Group’s revenue and operating profit reached RMB10,232.6 million (1.54 billion USD) and RMB752.4 million (113.5 million USD) respectively, representing an increase of 12.5% in the Group’s revenue and a decrease of 9.2% in operating profit as compared with that of 2015.

• Concessionaire counters represent 65.7% of total revenues
• Standalone retail outlets represent 27.6% of total revenues
• Online platform represents 6.5% of total revenues
• Franchise/Associate represents 0.2% of total revenues

The revenue from La Chapelle and Puella brands represent 60% of total revenues. In 2016, the Group launched a new brand, namely Siastella, which is a brand owned by Guangzhou Xichen. Despite the Group has strategically reduced the proportion of revenue from department stores, sales from concessionaire counters currently remains the key source of their revenue. In spite of a series of measures on sales channel management and stores operation taken by the Group, the same store sales of the Group in 2016 decreased by 6.4% as compared to that in 2015. The Group has three warehouse logistic centers located in Taicang, Chengdu and Tianjin, attaining nationwide goods allocation.

Standalone subsidiaries and acquisitions:

• La Chapelle and Puella subsidiaries represent 60% of total revenues, this segment is worth around 500 million USD
• The remaining subsidiaries are worth 300 million USD
• On 13 February 2015, the Company acquired 45% equity interest from the existing shareholders of Hangzhou Anshe at the consideration of RMB135,000,000 (20 million USD)
• On 28 May 2015, the Company  acquired 69.12% equity interest of Jack Walk worth 15 million USD

Total = 835 million USD

• The company will continue to intensify the establishment of sales areas, increasing the nurturing and development of internal talents.
• For the year ended 31 December 2015, 10,478,000 shares of a nominal value of RMB10,478,000 were bought back at total consideration of HK$149,794,000 (equivalent to RMB120,046,000)