In the first half of 2020, Caibai’s revenue and net profit reached 3.148 billion yuan and 166 million yuan respectively, which is less than half of the same index in 2019, and its gross profit rate in the same period is lower than that of comparable companies in the same industry < / P > < p > at present, Caibai has submitted its IPO prospectus to the CSRC and plans to apply for listing in the Shanghai Stock Exchange. In this IPO, Caibai intends to raise 1.25 billion yuan to invest in marketing network construction projects, information platform upgrading construction projects, etc., of which 950 million yuan will be used to expand direct stores. According to the company’s prospectus, the researcher of investment times noticed that Caibai’s business situation in recent years is not ideal, the chain reaction caused by the high proportion of income in North China, the decline of gross profit rate and the rising cost is becoming more and more intense, and the progress of network channel widening is also worth careful consideration of Caibai. The predecessor of Caibai is Caishikou department store, Xuanwu District, Beijing, which was established in 1956. It is a department store of Xuanwu District, mainly engaged in the operation of general merchandise. < p > < p > in 1985, the state liberalized the retail of domestic gold jewelry, and Caishikou department store in Xuanwu District began to enter the gold jewelry industry. In 2000, Caibai completed its transformation and introduced diversified social capital. In 2010, Caibai company, which has been working in the gold industry for many years, became a professional gold jewelry company. < / P > < p > at present, Caibai’s head office is located in Beijing, with 38 direct chain stores in North China and offline sales network in banking channels. At the same time, Caibai also has an online e-commerce sales network covering the national market. < / P > < p > according to the data, at present, the controlling shareholder of Caibai shares is Jinzheng company, with a shareholding ratio of 27.3%. Jinzheng company is a wholly-owned subsidiary of Financial Street capital operation center. < / P > < p > in terms of senior management shareholding, Zhao Zhiliang, chairman of Caibai, and Wang Chunli, general manager, respectively hold 24.9959 million shares and 16.045 million shares of the company. According to the company’s plan to issue no more than 77.7778 million shares and the total amount of raised funds of 1.25 billion yuan, the issue price of Caibai shares is about 16.07 yuan / share. The book value of the company’s shares directly held by Zhao Zhiliang and Wang Chunli will reach about 402 million yuan and 257 million yuan respectively. < / P > < p > in addition, more than 100 employees of Caibai also hold shares directly. Caibai Co., Ltd., the predecessor of Caibai Co., Ltd., was founded by Caibai shopping mall, Baiguang Road shopping mall, Bank of China and 387 employees. Up to now, 750 employees hold shares. According to the prospectus, the total shareholding ratio of 750 employees is 12.88%, and there are 35 couples of shareholders in the employee stock ownership. At present, Caibai’s sales area is mainly concentrated in North China, and the sales proportion of Beijing head office is relatively high. However, it has opened related chain stores in Hebei, Tianjin and Inner Mongolia, and expanded its sales area through e-commerce channels. < / P > < p > according to the information in the prospectus, Caibai’s online direct chain stores and branches cover Beijing, Tianjin, Hebei and other regions, and all of them are direct stores, without dealers and franchise stores. Its Beijing head office is a leading retail store in the domestic gold and jewelry industry, with a business area of 8800 square meters, providing Museum style appreciation, popularization of professional knowledge, experiential shopping and personalized customization. < / P > < p > in terms of e-commerce sales, Caibai’s online subsidiary has cooperated with third-party platforms such as tmall and jd.com, but its online sales have not been specifically disclosed in the prospectus. The researcher of investment times noticed that the number of followers of its own flagship store in Jingdong was more than 30000, with only a few hundred comments under each product. Meanwhile, only two or three hundred people ordered the highest selling products on display in its tmall flagship store. It seems that to attract more consumers, Caibai shares still need more consideration. In the prospectus, Caibai shares said that the total amount of funds raised this time totaled 1.250 billion yuan, of which 950 million yuan was used to invest in marketing network construction projects, 121 million yuan was used to invest in information platform upgrading construction projects, 118 million yuan was used to invest in smart logistics construction projects, and 60.5525 million yuan was used to invest in customization and design center projects. < / P > < p > it is reported that the smart logistics construction project of the company is the new Beijing Logistics sub center and Shenzhen smart logistics center, but its offline brand influence is still mainly concentrated in North China. How to solve the limited brand influence to face the competition of peers will be one of the difficult problems. < / P > < p > in terms of business scale, Caibai is a leading gold jewelry enterprise in Beijing market in terms of revenue scale, and also occupies a leading position in the whole domestic industry, but in terms of profitability, it is far lower than its peers. < / P > < p > according to the data of the prospectus, during the reporting period, the operating income of Caibai was RMB 7.991 billion, RMB 8.612 billion, RMB 8.400 billion and RMB 3.148 billion respectively, and the net profit during the same period was RMB 329 million, RMB 371 million, RMB 404 million and RMB 166 million respectively. Comparatively speaking, from 2017 to 2019, Caibai’s overall operating revenue fluctuated slightly and its net profit showed an upward trend. However, in the first half of 2020 or affected by the epidemic, its operating revenue and net profit were less than half of the same index in 2019. < / P > < p > at present, the main competitors of Caibai share include Zhou Dafu, Lao Fengxiang, etc., but the performance of Caibai share is far inferior to the above companies. From 2017 to 2019, Zhou Dafu’s operating revenue was 47.548 billion yuan, 57.304 billion yuan and 52.020 billion yuan respectively, while Lao Fengxiang’s operating revenue in the above three years was 39.810 billion yuan, 43.784 billion yuan and 49.629 billion yuan respectively, and his net profit was 1.470 billion yuan, 1.564 billion yuan and 1.830 billion yuan respectively. < / P > < p > from 2017 to 2019, Zhou Dafu’s overall gross profit margin is 32.38%, 34.00% and 35.98%, and Lao Fengxiang’s overall gross profit margin is 8.35%, 8.24% and 8.47%. Among the comparable companies in the same industry listed by Caibai, the average gross profit rates of companies including Chow Tai Fook, Lao Feng Xiang, Ming Pai jewelry, chaohongji, Cuihua jewelry, etc. are 19.50%, 20.03% and 22.25%. Caibai’s gross profit rate in the above three years is higher than Lao Fengxiang’s, but far lower than the industry average. < / P > < p > it is also worth noting that the company’s largest supplier during the reporting period was Shanghai gold exchange, and its gold raw materials were mainly purchased through Shanghai gold exchange, accounting for about 50%. In recent years, the gold price of Shanghai Gold Exchange has shown a fluctuating upward trend. During the reporting period, the raw material costs of Caibai’s main business costs were 4.003 billion yuan, 5.335 billion yuan, 5.468 billion yuan and 2.496 billion yuan respectively, accounting for 57.48%, 70.79%, 75.35% and 91.98% of the main business costs, showing an upward trend year by year. < / P > < p > with the decline of profitability and the difficulty in controlling the rising costs, Caibai shares may be in urgent need of going public to replenish blood. Some professionals say that in recent years, the continuous rise in the cost of labor and store rents has led to an increase in the comprehensive operating costs of the retail industry. At the same time, the purchase of gold jewellery under the line is “experiential” consumption, and its profit level is easily affected by the special events such as COVID-19. Therefore, the retail industry of gold and jewelry needs to play with the marketing mode to reduce the operating costs, at the same time, it also needs to minimize the negative impact of special events, and continue to enhance its attractiveness. In this regard, Caibai needs to work harder. < p > < p > the purpose of this article is to convey more information, and it does not represent the views and positions of our website. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk.