On July 3rd, the stock price of China’s down jacket manufacturing company, Bosideng, dropped by 15.93%. In just one trading day, the company’s total market value evaporated by 8.35 billion Hong Kong dollars. It is believed by many analysts that this significant decline is related to the controlling shareholder of the company cashing out 1.7 billion Hong Kong dollars.
In the morning of July 3rd, Bosideng announced that the group’s founder, chairman of the board, and controlling shareholder, Gao Dekang, had agreed to sell 400 million shares at a price of 4.31 Hong Kong dollars per share, accounting for approximately 3.64% of the total number of shares issued by the company. This transaction led to Gao Dekang cashing out a staggering amount of 1.724 billion Hong Kong dollars.
Following this announcement, Bosideng’s stock listed on the Hong Kong Stock Exchange plummeted to 4.01 Hong Kong dollars per share on July 3rd, marking a 15.93% decrease. This sharp decline caused the company’s total market value to shrink by 8.35 billion Hong Kong dollars in just one trading day. However, on July 4th, Bosideng’s stock price saw a small increase of 3.74%.
A commentary by mainland China’s official financial account, “Radar Finance,” on July 5th pointed out that the significant fluctuation in Bosideng’s stock price is closely related to the announcement of the controlling shareholder’s reduction of holdings.
Gao Dekang, the richest man in Changshu, Jiangsu Province, according to the 2022 Forbes China Rich List, holds approximately 67.57% of Bosideng’s shares through his family. After this recent reduction of holdings, the Gao Dekang family collectively holds about 64% of the shares.
Moreover, on September 1st, 2022, the holding company of Bosideng sold 230 million shares of Bosideng at a price of 3.94 Hong Kong dollars per share.
Bosideng has faced criticism in recent years for launching down jackets with prices comparable to luxury items. In 2019, Bosideng released its Peak series of down jackets with a maximum retail price of 11,800 Chinese yuan. Last year, a outdoor goose down jacket introduced by Bosideng’s official flagship store was priced at 6,799 Chinese yuan.
As a result, whenever the peak season for down jacket sales arrives, Bosideng always becomes a trending topic in mainland China due to its various “expensive” discussions.
According to Zhou Ting, the director of the Key Account Research Institute, the high-end branding should encompass various aspects such as brand, product, service, distribution, communication, and customer, instead of just focusing on making the prices “high-end”. There still exists a considerable gap between Bosideng and international luxury brands.
A Tencent user, t5lp1b5, expressed concerns, asking, “Will the 1.7 billion be transferred abroad?”
Another netizen, “Xuzhou Jinen (Keda-Qingquan) Water Treatment,” commented, “Yet another cash-out looking to run away.”