Of the 5,000 stores opened back then, 3,000 have now been closed. The domestic products that were once popular across the country are no longer the “unstoppable” noble birds.
Recently, Guirenniao announced that the company received a “Collection Notice” from Huishang Bank on November 20. In 2019, the company was a related party Hubei Jiezhixing Sports Industry Development Co., Ltd. as a borrower to Baoshang Bank. The company applied for a comprehensive credit line of no more than RMB 100 million to provide guarantee. Jiezhixing failed to fulfill its repayment and interest obligations as agreed and breached the agreement. As of November 4, the date of issuance of the “Collection Notice”, Jiezhixing was in default in the loan contract. The debts under the item include a principal of RMB 88 million and an interest of RMB 993,600 temporarily accrued until September 30, 2021. Huishang Bank requires Guireniao to perform its guarantee obligations in a timely manner.
It is reported that Guirenniao has previously released a major asset sale plan. The company plans to transfer the land and above-ground buildings located in the Yangguang Village factory area of Dongyuan Town, Quanzhou Taiwanese Investment Zone. Among them, the building area totals 167,600.92 square meters and the land area is 85,863.23 square meters. The transaction amount is 210 million yuan.
To put it simply, Guirenniao is reducing cash flow pressure by selling properties. The author believes that it not only reduces the pressure on the capital chain but also pays off debts.
Guirenniao, which donated 30 million yuan in supplies to Henan, has actually suffered performance losses for three consecutive years and has even been listed as ST, facing the risk of delisting at any time.
Public data shows that as of March 31, 2021, Guirenniao’s monetary funds were only 22.68 million yuan, but its total liabilities were as high as 3.526 billion yuan.
The announcement shows that before this transaction, Guirenniao entered judicial reorganization in December 2020, passed the company’s reorganization plan in April 2021, and completed the implementation at the end of June 2021. According to the company’s reorganization plan, the portion of the property-secured claims that are paid first within the appraised value range of the secured property will be retained as debt. The claims that exceed the appraised value range of the secured property will be repaid according to the repayment plan for ordinary claims. The total amount of debt retained this time is 660 million yuan, which must be paid off in three installments within three years. The company will still face huge debt repayment pressure in the next three years.
In addition, affected by the external environment, Guirenniao’s business development faces challenges, which are reflected in the weak profitability of its main business, the growth rate of operating income has not yet recovered significantly, and it faces certain operating risks. On the one hand, the company’s debt crisis has caused great harm to the Guirenniao brand. It will take a certain amount of time and a lot of investment to restore the company’s brand; on the other hand, it will also take a certain amount of time to repair the company’s credit. It will be difficult to obtain funds from banks in the short term, and the repayment of 660 million yuan of retained debt can only be done. Rely on its own “hematopoietic” function.
Therefore, Guirenniao has sorted out its original business operations and plans to dispose of some idle assets and use the proceeds to repay the company’s retained debts during the reorganization period, while strengthening brand operations to ensure the smooth implementation of the company’s future development strategy.
The development path of Guirenniao
Guirenniao Company is a brand founded by Mr. Lin Tianfu in 1987 and has a history of more than 30 years. Initially, Guirenniao Company did not have its own brand, but only manufactured products for some international brands such as Adidas and Nike.
However, inspired by the regional brand division strategy, Lin Tianfu began to realize the importance of his own brand, so he founded the Guirenniao brand.
In order to quickly seize the sports industry market and build the Guirenniao brand, Lin Tianfu also invited Andy Lau, Cecilia Cheung, Lin Chiling and many other well-known celebrities to be the spokespersons of Guirenniao. In addition, he has also enhanced the popularity of the Guireniao brand through sports sponsorship and advertising. Guireniao has sponsored programs such as “Happy Boys”.
After the establishment of Guirenniao, it has developed smoothly. Especially after the 2008 Beijing Olympics, China launched a nationwide sports craze and the demand for sporting goods increased significantly. Riding on the momentum of the Olympic Games, Guirenniao also became famous in one fell swoop and became the first choice for many consumers at that time when buying sports products.
At the peak of its development, there were even more than 5,000 stores in China. With the increase in stores, Guirenniao’s operating income has naturally soared. By 2012, Guirenniao’s annual operating income reached 2.86 billion yuan. In addition, Guireniao was successfully listed in 2014. After its listing, it was also known as “the first A-share sports brand”. At that time, Guirenniao’s market value was as high as more than 41.7 billion. As the market value increases, the value of Lin Tianfu, the founder of Guirenniao, naturally also increases. He once became the richest man in Quanzhou with a net worth of 19 billion yuan.
However, affected by multiple factors such as market competition, liquidity crisis and the impact of the epidemic, Guireniao’s profitability has continued to be negative in the past three years. The net profit attributable to shareholders of the parent company in 2018, 2019 and 2020 each lost 685.8792 million yuan. , a loss of 1,095.8262 million yuan and a loss of 382.2079 million yuan. Although Guirenniao’s net profit attributable to shareholders of the parent company has turned a profit from January to September 2021, it still faces greater pressure to repay retained debt. The latest quarterly financial report shows that in the first three quarters of 2021, Guirenniao achieved operating income of approximately 345 million. yuan, a year-on-year increase of 17.2%. The net profit attributable to shareholders of the listed company was approximately 15.61 million yuan. Achieve basic earnings per share of 0.01 yuan.
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