After Being Hit By Short Selling Agencies, Bosideng Has Climbed Back To Share Price And Lost More Than 60%.

03998-HK continues to snipe. After Bonitas issued two short selling reports in June 24th and 26th, Bosideng also responded quickly, and issued a Clarification Announcement on 25 and 27 days to refute each other's attack points one by one. Bosideng's share price has been fired for 3 days in Bosideng, and Ceng Pan has lost more than 60%.

The latest refutation arguments are as follows:

1. there is a big gap between Bosideng's financial information and financial information reflected in China's credit report. The announcement pointed out that the Affiliated Companies, which was disclosed by the group's annual reports in the past three years, mainly includes the three tier Affiliated Companies of the group, reflecting the main assets and liabilities of the group and the majority of the group's performance. Some of the group's domestic Affiliated Companies (about 40 companies) are mainly engaged in the sale of feather clothing products and provide other services, which are not included in the group's main Affiliated Companies disclosure. In addition, the group has a comprehensive range of about 20 overseas companies. The financial information of these overseas companies and Chinese companies is not included in the short selling reports. The consolidated financial statements of the company in the past three years have been compiled in accordance with applicable laws and IFRS and audited by KPMG.

2., it is fictitious for alleging Jesse's income after the acquisition. Notice refers to Shenzhen Jesse Garments Co., Ltd., in the joint annual inspection report of foreign invested enterprises, the income and net profit in 2012 are 266 million yuan (RMB. Same below) and 53 million yuan respectively. According to the annual report of the 2011/12 financial year, the contribution of "Jesse" to income and net profit is about 170 million yuan and 4 million yuan, respectively, from the acquisition of "Jesse" for five months (from November 4, 2011 to March 31, 2012). The difference is due to the discrepancy in reporting period, and the discrepancy between the international financial reporting and the mainland accounting standards report, the difference between the right to use trademark and the design cost.

3. the founder of Jesse is not the accusation of Zhou Mei He. The announcement is inconsistent with the facts. The women's fashion brand "Jesse" was launched in 1998 by Shenzhen MEBO and Garment Co., Ltd. (Zhou Mei and founded company), which was subsequently carried out by Shenzhen Jesse. Mr. Zhou did not hold any equity stake in Shenzhen Jesse until 2008. When Shenzhen Jesse was established in 2001, if Mr. Zhou became a shareholder of Shenzhen Jesse as a resident of Hongkong, Jesse could not enjoy tax exemption provided to domestic enterprises only.

4. the seller is not an independent third party in connection with the "bang Bao" transaction. The announcement is that in 2013, it was purchased from the Taiwanese trillion Ning Global Industrial Co., Ltd., which acquired 30% rights and interests of the holding company of "bang Bao" brand. In July 2016, the 70% interest of the acquisition of bang Bao International Holdings Limited from Dr. Kong's Jin Feng Investment Development Co. Ltd. Dr Kong is no longer the company's stakeholders at crucial time, because he has resigned as executive director of the company since May 15, 2014. The notice reiterates that the group has engaged internationally renowned and professional auditors, legal advisers, valuers and / or other consultants to conduct due diligence review and valuation of each purchase of women's fashion brands so as to ensure that all members of the board are informed of all necessary information in order to consider whether the terms and conditions of the acquisition are fair and reasonable and in line with the overall interests of the group and its shareholders.

In June 27th, Boston management held a performance press conference to further explain the situation to the outside world. The press conference is as follows:

Q:'s share price suffered a setback on Tuesday because of the short selling report. Did Bosideng or chairman Gao Dekang buy the company's stock in the market?

A (chief financial officer and vice president Zhu Gaofeng): since 2007, the chairman has only increased the shares of the company and has not reduced its holdings. At present, the chairman holds about 70% of the company's rights and interests. In this case, he did not spend money on maintaining the share price in the market. It is necessary to quarrel with the other person, so long as we do it well, we can quickly clarify it.

Q: would you please explain further the difference between the company's financial accounts and the China credit report, and whether the acquisition is carried out with the independent third party?

A (Zhu Gaofeng): this morning, the company has issued a clarification announcement to explain in detail. The company has responded to its speed and has done its job well. And the other side did not contact the company before it published the short selling report.

A: (Chairman and chairman Gao Dekang): the Group reserves the right to initiate legal proceedings against the other party.

Q: can Bosideng become an international brand such as Canada goose?

A (Gao Dekang): the group target market is the world's 5 billion 700 million population consumer group; the group is integrating global resources, selling products at a reasonable price, and the stores are also decorated to the international image, and can create an international brand image, which will be evaluated by consumers.

Q: Bosideng development plan?

A (Zhu Gaofeng): the group had diversified development in the early years to develop men's wear and children's market. Zhu Gaofeng said that now the group has returned to the main core down garment development, and the gross profit margin of the main brand is as high as 60%. In addition, women's clothing business continues to develop, focusing on the development of high-end market, the gross profit margin of the market can reach up to 70% level. Because the women's clothing brand business is still internally integrated, more patience is needed before the synergy effect is brought into play.

Gao Dekang, chairman and chief executive of Bosideng, is optimistic about the prospects of business development. He said that China's down jacket Market is expected to reach 160 billion yuan by 2020, and the market size of the global down garment market will reach 1 trillion and 400 billion yuan in 2021. The market space of the future group is still very large. The group made the first step of transformation in 2018, focusing on the main brand, the core down garment product, integrating the global quality resources, upgrading in fashion, brand and function.

Despite the trade frictions between China and the United States, the income of group OEM management business increased by 46.1% over the same period last year. Zhu Gaofeng explained that the group had stable cooperative relations with customers, stable supply chain, in-depth cooperation with OEM customers, and participated in product development; extended from OEM to design service, and deepened strategic cooperative relationship. The group is also committed to channel adjustment to improve channel quality. Now the group will be able to quickly launch the market demand products in two weeks, and the goods will be mobilized faster and more efficiently. In 2018, the group took 3 years to carry out the transformation of the national stores, and opened up a large shop to improve the quality of the shops.

One of the reasons for Boston's performance in March 2019 was a sharp rise of 59.4% to 980 million yuan in profit attributable to shareholders, which resulted in a marked increase of 6.7 percentage points to 53.1% in the period. Zhu Gaofeng explained that the proportion of high-end feather clothing sales increased continuously from 5% to 25%, and the price of each high-end product of up to 1200 yuan reflects the rise of Chinese brands.

After this operation, Bosideng's stock price is still tough, but on the first day of the first short selling report on the 24 day, the stock price plunge 24.8% or HK $0.57 to HK $1.73, which was more than 3 months low. Then the 3 day has gradually climbed back to the lost territory. At 15:00 on the 27 th, the share price has been quoted at HK $2.08, which has recovered 20.2% or 0.35 Hong Kong dollars. However, there is still a gap of HK $between the HK dollar and the Hong Kong dollar before being attacked.

From the analysis of Bosideng's short selling activities, the sale of the short selling disk in the first half of 27 days was reduced to 572 thousand shares or 1 million 161 thousand Hong Kong dollars, compared with the 26 day's 8 million 380 thousand shares and 16 million 776 thousand Hong Kong dollars, less than yesterday's 7%. It seems that the selling time of the short selling organization has passed.