Hit: Listed Male Enterprises Entering The Overall Promotion Period

In March, the textile and garment sector slightly outperformed the market, and the textile performance was stronger than that of clothing. Recently, the valuation of brand clothing enterprises has returned to a low level of 25 times, a quarterly growth is relatively fast and orders will be expected to become the catalyst for the two quarter garment home textile industry rebound. From son industry Look, the organization is more optimistic about the high-end business casual men's and home textiles, which are strong in price increase, high in unit price, and insensitive to customers in price.

In 2010, for the Chinese men's wear industry, it was the start of the N entrepreneurship. At the end of March China International Clothing and Accessories Fair With the transformation of industrial background and market environment, there are some new trends in men's clothing industry: industrial capital flows to large enterprises. Large enterprises take the form of industrial resources reorganization, brand innovation, channel diversification, expanding financing, exploring industrial chain cooperation, brand cooperation and other ways to enhance competitiveness; and the brand concentration of domestic market is further improved.

From the recent acquisition of Hangzhou Kenna by seven wolves, it has been involved in the luxury brand. The news birds have invested in some garment companies, indirectly engaged in international brand agents, and YOUNGOR has re established the six major brands of the category.

　　 Seven wolves Luxury goods market

During the CHIC period of March this year, the seven wolves bought a 100% stake in Hangzhou Kenna Garments Co., Ltd. at a price of 70 million yuan to enter the luxury market. At present, Hangzhou Kenna has set up 15 Canali brand outlets nationwide, and 4 Versace outlets. The main business areas are concentrated in Northeast and East China. It is understood that Hangzhou Kenna has been playing an important role in the international luxury brand business in China in recent years, and has gradually become an important platform for international brand development in China. In a short span of two or three years, Kenna apparel achieved a business income of 66 million 370 thousand yuan and a net profit of 7 million 840 thousand yuan. After purchasing Kenna Hangzhou, the seven wolves will retain the original Kenna Hangzhou Kenna team with international brand operation experience. With the full support of seven wolves, the development of Kenna in Hangzhou will speed up, and it is expected to seize the commanding heights of the international brand market in China in the short term. The acquisition reflects the strategic thinking of seven wolves on the upgrading and subdivision of China's domestic consumer market in the future. The huge consumption potential of China's luxury goods market is an important factor for the seven wolves to buy Hangzhou Kenna.

In April 2011, the seven wolves announced the annual report in 2010: basic earnings per share of 1 yuan, diluted earnings per share of 1 yuan, basic earnings per share (deduction) of 0.97 yuan, net assets of 5.65 yuan per share, diluted assets yield 17.7115%, weighted net assets yield 19.12%, operating income 2 billion 197 million 756 thousand and 600 yuan, attributable to 283 million 156 thousand and 900 yuan of net profit of parent company owners, net profit of 275 million 612 thousand and 200 yuan after deducting non recurring gains and losses, belonging to 1 billion 598 million 717 thousand and 400 yuan of shareholders' equity of parent company.

The seven wolves are leading enterprises in men's casual wear in China, and have maintained steady development. During the reporting period, the company achieved operating income of 2 billion 197 million 756 thousand and 600 yuan, an increase of 10.59% over the same period. The sales growth of the company in the past two years is obviously slower than the previous two years. The main reason is that the company has entered the transition period. The company centered around the strategic goal of "wholesale" to "retail", taking the terminal consumer demand as the core starting point, and guided the company's optimization in the management mode and supply chain mode.

After three years of transformation from 2008 to 2010, the seven wolves have been constantly innovating in channel construction and other aspects. Zhou Shaoxiong, chairman of the company, believes that the overall upgrading of the market and channels is more robust and important than blind expansion of other products. He positioned 2011 as the "image integration and upgrading year" of the seven wolves, hoping to create new opportunities in terminal management and channel transformation.

At present, there are more than 3000 terminal outlets of the seven wolves, and the three logistics and information centers in Fujian, Beijing and Shanghai are set up nationwide. More than 20 provincial logistics and information departments, through the information network system, provide timely logistics distribution services and information exchange services to the sales outlets, and finally pass the products and values to the end customers through the terminal network. In the existing sales terminals of the seven wolves, the proportion of Direct stores is 20%, and most of the others belong to franchisees.

Zhou Shaoxiong hopes that from 2011, the parallel growth of the seven wolves will be changed to the vertical growth mode of single store sales, so as to cope with the pressure of rising labor costs, rising store rents and increasingly fierce competition in the industry.

In 2011, seven wolves will invest a lot of money in the transformation of channels. In the future, it will maintain the growth of 10%~20% shops, but more funds and energy will be used for shop renovation, including increasing single store area and improving services.

Zhou Shaoxiong is optimistic about the seven wolves' e-commerce channels. In 2009, the sales revenue of the seven wolves was only 3 million 900 thousand yuan, but e-commerce sales revenue in 2010 was expected to reach about 100 million yuan, while the 2011 e-commerce sales revenue target accounted for 10% of the total revenue.

In May last year, the e-commerce project launched by the seven wolves and IBM officially launched the first business cloud platform solution in the industry. Zhou Shaoxiong revealed that the second stage of the "business cloud platform" of the seven wolves is "independent mall construction" - creating an own e-commerce platform. This is better than the previous Taobao platform to reflect the brand concept, commodity concept and service concept of the seven wolves, which is expected to be completed in the year. {page_break}

YOUNGOR is developing well in many directions.

Also in March CHIC, YOUNGOR presented its 6 largest brands to the men's wear hall. YOUNGOR chairman Li Rucheng gave a positive response to YOUNGOR's multi-directional development. "Since the 2008 financial crisis, YOUNGOR began to consider the development of multi brands," Li said. YOUNGOR first started from OEM and did not start its own brand until the early 90s of last century. In the 10 years since then, high-speed growth has been realized, and profits doubled every year. In 2009, we put forward the creation and promotion of brand value as a brand development strategy. On this basis, a series of new brands have been launched. These brands have different positioning, such as MAYOR's main business men's wear, CEO's main business men's clothing, and GY is the main young fashion market. YOUNGOR is famous for its clothing, but it is being questioned about its real estate. Li Rucheng said that YOUNGOR's policy of making big clothing and real estate will remain unchanged for at least 20 years. At the same time, he believes that every enterprise is evolving, and YOUNGOR has nothing to do with investing in real estate based on the money it earns. "What is the main business? The main industry can not be expressed in terms of profit." Li Rucheng thinks that financial investment is the core of modern economy, and the upgrading of YOUNGOR's industrial structure must be put into the core. YOUNGOR started from clothing, and now has three major industries: clothing manufacturing, financial investment and real estate. Clothing and real estate are YOUNGOR's core businesses.

YOUNGOR released the 2010 annual report in April 19th. The company reported operating income of 14 billion 500 million yuan during the reporting period, an increase of 18.2% over the same period. The net profit attributable to shareholders of listed companies was 2 billion 670 million yuan, down 18% compared with the same period last year, and the basic earnings per share were 1.2 yuan. It is worth mentioning that during the reporting period, the net profit of YOUNGOR's financial investment business reached 1 billion 245 million yuan, and the company took part in more than 10 listed companies' private placement.

The apparel industry, one of the main businesses of YOUNGOR during the reporting period, achieved a revenue of 6 billion 100 million yuan, an increase of 9% over the same period, a rise in gross margin and a net profit of 705 million yuan, while the real estate business achieved 6 billion 850 million yuan, up 32% over the same period last year. However, due to the implementation of the land value-added tax liquidation and the increase of land appreciation tax 502 million 371 thousand and 300 yuan during the reporting period, the net profit of the business decreased by 43% compared with the same period last year, resulting in a decline in both the company's operating profit and net profit.

During the reporting period, the company took an active part in private placement and PE investment. The total realized investment income amounted to 2 billion 60 million yuan, and the disposal of the sale of financial assets amounted to 1 billion 865 million yuan, accounting for a considerable proportion of profits. {page_break}

In 2010, the company took part in the private placement of more than 10 companies such as Shanghai motor, ZOOMLION, China National Aviation, Xugong machinery and so on. As at the end of the term, the books showed floating profits. Preliminary calculation shows that the total investment cost of the company in 2010 is about 4 billion 400 million yuan, of which the single investment of more than 1 billion yuan is Shanghai automobile and Xugong machinery, which are all around 1 billion 200 million yuan. These companies had a market capitalization of about 6 billion 300 million yuan at the end of the year, and the book investment income was 43%.

In addition, the company is actively involved in PE investment. In 2010, YOUNGOR invested a total of nearly 170 million yuan to participate in the joint stock transfer of China UnionPay Business Co., Ltd. and the Xiangyang fishing port Limited by Share Ltd in Zhejiang. As of the end of 2010, the company held 10 PE and other investment projects, with a total investment of 950 million yuan. Among them, Hainan rubber landed on the Shanghai Stock Exchange in January 7th this year. The company holds 20 million shares of the company and the investment cost is 60 million 950 thousand yuan, and according to the current closing price, the market value is 263 million yuan.

During the reporting period, the company sold shares of 18 listed companies such as orient electric, communications bank, Haitong Securities, Bailian shares, Shanghai nine hundred, Shuanghui development, etc. at the end of the year, it still held 16 shares of listed companies.

Small commentary

In 2011, domestic textile and garment demand will continue to recover, but the process is tortuous. The appreciation of RMB, pressure of raw materials and labor cost will seriously affect the average profit level of the industry.

The rising price of cotton makes the price of all links in the textile and garment industry chain (yarn, grey cloth, fabric, clothing and textiles) all rising, but the price increase in each link is basically the same as that of the cost increase. Therefore, in the case of raw material price fluctuating, the profit of medium and small enterprises with low raw material inventory is bound to be greatly affected, and profit margins are low. Therefore, the phenomenon of limiting production and stopping production is common in small and medium-sized enterprises. Industry adjustment has made "order to large enterprises", which has improved the right of speaking of large leading enterprises and the right to choose high-quality orders.

In this year's CPI may continue to rise in the background, due to the rise in cost driven product prices, the overall sales of clothing retail terminal growth will not be great. From the perspective of thin molecule industry, the driving factors of profit growth and the competition pattern of different industries are different. The price of sportswear and casual wear is lower and the volume of growth depends mainly on foreign brands. Currently, competition is in the "Red Sea" area. The price of commercial casual men's clothing and high-end high-end home textiles is higher, and the cost pressure and gross profit rate can be increased by raising prices. Brands are also more competitive in China, and the competition pattern is in the "blue ocean" area.

In 2010, clothing and home textile income grew more and more. In 2011, a large part of the increase in clothing and home textile income was due to price increases. In the lower period of CPI, sportswear and casual wear can rely on the rapid growth of sales volume to make the profitability stronger. In the CPI period, the business casual men's clothing and high-end high-end home textiles will have stronger profitability.