Shares of Bosideng International, China’s largest home-grown down jacket maker, plummeted by more than 15% on the Hong Kong Stock Exchange following an announcement that billionaire chairman Gao Dekang would be reducing his stake in the company. Gao has agreed to sell 400 million shares at a price of HK$4.31 in a block trade with J.P. Morgan Securities (Asia Pacific), raising approximately HK$1.7 billion. This move will reduce Gao’s holdings in the company by 3.6% and represents around 5% of shares held by him and his family. Gao currently has a fortune worth $4.8 billion, according to Forbes.
The sale of shares by Gao is aimed at optimizing the shareholder structure of the company, releasing market liquidity for the company’s shares, and attracting high-quality domestic and foreign investors, as per Bosideng’s statement. The proceeds from the sale will also be used for the company’s capital needs and the development of charity work. The transaction is expected to be completed by July 5. This news came after the company reported a significant increase in sales and profits for the year ending March 31, with sales rising by 38% to 23.2 billion yuan and profit increasing by 43% to 3.1 billion yuan.
Following the positive earnings report, Bosideng’s stock reached a near two-year high of HK$4.87 on June 28 but closed at HK$4.01 in Hong Kong on the day of the announcement. Over the past 12 months, Bosideng’s shares have gained 16%, in contrast to the decline of 7.4% in the Hang Seng Index due to mainland China and Hong Kong growth concerns. Additionally, shares of Canadian rival Canada Goose have dropped by 29.5% at the New York Stock Exchange during the same period. The increase in Bosideng’s sales is attributed to rising domestic demand and the revitalization of the domestic market in China.
Bosideng’s own brand, which has benefited from consumer preference for local products, saw a significant increase in sales during the last financial year, with the down apparel business rising by 42.7% to 16.8 billion yuan. The company also experienced a rise in online sales, with a 40.6% increase to 6.9 billion yuan for all of its brands. Looking ahead, Bosideng aims to capitalize on opportunities arising from technological innovation, accelerate digital transformation, and promote green development. Gao Dekang, the chairman of Bosideng, started his first apparel business in 1975 in Jiangsu Province, China and has built a successful enterprise since then.
The company’s success in the past year is attributed to China’s economic rebound, steady growth, and economic restructuring, which have provided a solid foundation for sustainable development and boosted confidence among enterprises. Bosideng highlights the growing cultural confidence in China, which has fueled the development of domestic brands. The company’s future strategy includes focusing on technological innovation and digital transformation to stay competitive in the market. Gao’s decision to sell a portion of his stake in Bosideng reflects his confidence in the company’s ability to attract high-quality investors and further expand its business operations.
