Shandong Ruyi released 2016 performance report, net profit increased by 15.03%

Shandong Ruyi level since the market realized that the textile and garment industry profits are mainly concentrated in the clothing manufacturing downstream, so the company has planned to extend downstream.

Shandong Jining Ruyi Wool Textile Co., Ltd. (hereinafter referred to as “Shandong Ruyi”) issued a performance report on February 27th. In 2016, Shandong Ruyi realized operating income of 1.065 billion yuan, down 17.79% year-on-year; realized operating profit of 43.9916 million yuan, year-on-year. The decrease was 31.69%; the total profit was 76.205 million yuan, up 3.12% year-on-year; the net profit attributable to shareholders of listed companies was 50.358 million yuan, up 15.03% year-on-year.

At the end of the reporting period, Shandong Ruyi's total assets amounted to 4.522 billion yuan, an increase of 28.38% from the beginning of the period. The owner's equity attributable to shareholders of listed companies was 2.603 billion yuan, an increase of 130.13% from the beginning of the period, and the net assets per share attributable to shareholders of listed companies was 9.95 yuan. , an increase of 40.74% compared with the beginning of the period.

The reporter learned that the industry believes that with the slowdown in the growth of the textile industry and the decline in performance, Shandong Ruyi's revenue growth has been slow in recent years, but the company still has a competitive advantage compared to other peer companies. First of all, the company's gross profit margin is still at a high level in the industry; secondly, with the company's new fabric research and development and technological innovation, the company's performance has strong support.

According to Zhang Yu, an analyst at Haitong Securities, Shandong Ruyi’s main business income has been very stable since its listing. The annual main business income from 2011 to 2015 has remained at around 600 million, and the main business income is in total operating income. The proportion in the middle has remained at around 95%. At the same time, due to the decline in the performance of the entire textile industry, the company's main business income growth is slow, the growth rate of operating income in 2015 was 2%. Since the beginning of 2011 mainly due to export orders severely affected, sales growth is blocked; to maintain sales mainly rely on domestic demand, while demand in the domestic market, slow growth, together resulted in revenue growth slowed.

From the financial report, the upstream industry in Shandong Ruyi is animal husbandry, and the downstream industry is garment manufacturing. The cost of raw materials in production costs accounts for more than 60%. Therefore, due to the increase in the price of raw Australian wool, the company's gross profit margin has dropped significantly since 2011. At the same time, due to the increase in corporate borrowings, financial expenses have risen sharply, resulting in a serious decline in the company's net interest rate since 2011. However, with the improvement of the company's debt structure in the future, Shandong Ruyi's net interest rate will increase.

Shandong Ruyi Dingzeng was announced on August 12, 2016. The company raised 1.838 billion yuan from non-public offerings, the issue price was 18.07 yuan/share, and the number of issued shares was about 100 million shares. The company will use funds to purchase high-quality assets in downstream apparel. Specifically, first of all, Ruyi Technology's clothing assets, Tai'an Ruyi and Wenzhou Zhuangji's main business are suits and professional wear manufacturing, and Shandong Ruyi's fine imitation woolen manufacturing contact Closely, the acquisition will closely link with the industry chain and reduce costs. Secondly, Ruyi Technology's clothing assets and Wenzhou Zhuangji have accumulated a large number of high-quality customers. The main customers of Ruyi Technology are mainly European and American famous brand customers and domestic large and medium-sized enterprises, Wenzhou Zhuangji's main Customers are concentrated in large-scale enterprises and institutions in China. With the further expansion of sales channels in the future, revenue will increase rapidly.

Zhang Yu believes that with the injection of clothing assets, Shandong Ruyi's income scale, gross profit margin and net interest rate are facing a substantial increase. At present, among domestic listed companies, the gross profit margin of suit manufacturing is 20%-50%. The average gross profit margin of Wenzhou Zhuangji, which has been operating smoothly, is 40%, which is much higher than the company's original textile industry. With the gradual production of Taian Ruyi Garment Manufacturing Line And the expansion of sales channels, the company's revenue growth in the future can be expected.

Shandong Ruyi executives have realized since the listing that the profits of the textile and garment industry are mainly concentrated in the downstream garment manufacturing field, so the company has been planning to extend downstream. For many years, Ruyi Technology Group has developed rapidly in the field of garment manufacturing. In February 2014, the company implemented a management buyout. The actual controller of the company was changed from Oriental Asset Management Company to Chairman Qiu Yafu. Through the equity change, Ruyi Technology indirectly holds the shares of Shandong Ruyi through the Wool Textile Group, which is conducive to the integration of the textile and garment industry chain and play a synergistic effect.

In recent years, Ruyi Technology Group has continuously expanded its overseas layout and opened up the entire industrial chain while transforming its strategic brand operation company. The overseas acquisition of Ruyi Technology Group includes overseas high-quality wool and cotton resources in the upstream of the industrial chain, and overseas leading enterprises in the textile industry. Downstream overseas high-end clothing brands. It has realized the transformation of the Group into a fashion brand operation enterprise, and has provided rich experience in building its own fashion brand in the future, opening up the growth space of future listed companies.