Textile Business Becomes The Adjustment Target Of Shenzhen Textile Quilt

Shenzhen spin (Group) Co., Ltd. (000045. SZ, hereinafter referred to as "Shenzhen Textile") has recently issued several announcements, constantly selling its assets related to textile business, with an increasingly obvious intention of changing careers.

"In recent years, the assets held in connection with textile business have basically been gradually divested, and this direction is very clear." Li Jiang, secretary of the board of directors of Shenzhen Textile, told the First Financial Daily that only Shenzhen Meibainian has left its textile business clothing Ltd. (hereinafter referred to as "Meibainian"), other textile and clothing businesses held directly or indirectly, are all planning to sell, "integrating assets to focus on developing polarizer business," Li Jiang said.

According to the 2012 annual report data of Shenzhen Textile, the company realized an operating revenue of 845.1145 million yuan, of which the manufacturing revenue was 300 million yuan, down 0.46% over the same period last year, mainly because the subsidiary Shenzhen Jinlan Decoration Co., Ltd. (hereinafter referred to as "Jinlan Company") ended its clothing processing business; Polarizer revenue increased by 13.12% over the same period last year, mainly due to the mass production of Polarizer Phase I Project in the fourth quarter. At the same time, the Board of Directors of Shenzhen Textile said that it would continue to invest in the polarizer project for TFT-LCD, optimize and integrate resources, divest non main business assets, and promote the realization of the company's strategic transformation.

In the first half of 2013, the company's textile business income was 10.15 million yuan, a year-on-year decrease of 54.22%; The polarizer business income reached 290 million yuan, an increase of 194.36% year on year.

Deep textile or "non-woven"

"It was probably from 2008 to 2009 that Shenzhen Textile began to determine its transformation." According to an insider familiar with Shenzhen Textile, by 2009, Shenzhen Textile's polarizer business had developed into three production lines, and its business advantages were gradually emerging. Its previous main business, trade, textile and clothing, had gradually become marginal.

The scope of main business introduced in the financial report of Shenzhen Textile in the first half of 2013 was also changed to: the company's current main business is high-tech industry represented by the R&D, production and marketing of polarizers for LCD display, as well as property management business mainly located in Shenzhen's prosperous business district and reserved high-end textile and clothing business, The textile and clothing business has been put to the end.

Correspondingly, Shenzhen Textile has frequently stripped off industries related to textile and clothing in the past two years.

On October 23, Shenzhen Textile held the third meeting of the sixth board of directors. At the meeting, the Proposal on Confirming the Transfer of Equity Price of Shenzhen Jinlan Decoration Products Industrial Co., Ltd. was unanimously passed, and it was agreed to transfer 100% of the equity of Jinlan Company held by the company through public transaction at a price not less than the assessed value of 78071600 yuan.

According to the data, Jinlan Company, founded in 1985, mainly produces textile products related to infants, such as baby bed covers, crib mosquito nets, travel sleeping bags, etc.

If divided by business category, Jinlan Company is a typical textile company under Shenzhen Textile.

"In recent years, the textile business has shrunk." The internal staff of Shenzhen Textile said that after the sale of Jinlan Company, the proportion of its textile business will further decline.

Coincidentally, on July 6 this year, SZTE announced that it planned to transfer 2.8694% of the equity of Hualian Development Group Co., Ltd. held by the company through public bidding. According to the data, the industries of Hualian Development Group involve textile and clothing, new petrochemical materials, etc.

In addition to selling subsidiaries related to textile business and changing jobs for its subsidiaries related to textile business, it is also one of the ways of Shenzhen Textile to spin off its textile business.

Shenzhen Lishi Knitting Co., Ltd., a subsidiary of Shenzhen Textile, which mainly produces silk socks, has changed its business scope to property leasing and management, and its name has also changed to Shenzhen Lishi Industrial Development Co., Ltd.

In addition, in terms of investment strategy, Shenzhen Textile is also accelerating its withdrawal from the textile business invested.

A typical example is the sale of Shenzhen Zhongguan Textile Printing and Dyeing Co., Ltd. (000018.SZ, hereinafter referred to as "Shenzhen Zhongguan"), whose main business is textile dyeing and printing, for several consecutive years.

In fact, Shenzhen Textile is one of the initiators of Shenzhen Zhongguan. At the beginning of the listing of Shenzhen Zhongguan, Shenzhen Textile ranked the third largest shareholder.

Since 2007, SZTE has sold SZTE's shares in succession. As of the third quarter of 2013, SZTE's shareholding in SZTE fell to 2.21%.

"The selling of Shenzhen Zhongguan's shares is due to the influence of the company's focus on polarizer business, which gathers all the capital to develop its main business; on the other hand, Shenzhen Zhongguan's main business is dyeing and printing. There is certain social pressure on environmental protection, and its performance in recent years is also on the decline." According to the insiders familiar with Shenzhen Textile, "In the future, some textile industry related assets invested will gradually be sold off."

At present, Shenzhen Textile only retains Meibainian seamless underwear in its textile business.

According to Shenzhen Textile, the national standard for seamless underwear is formulated by Shenzhen Textile, which still has certain advantages. However, in the future, the development direction of Shenzhen Textile is to gradually peel off its textile business.

Previously, Meibainian seamless underwear was developed by building the "Zorzee" brand and establishing a franchise store. In recent years, with the transfer of business, Meibainian franchise store has been closed and developed only by taking orders.

In addition, Shenzhen Shenfang Import and Export Co., Ltd., a subsidiary of Shenzhen Textile, which is engaged in import and export of textile industry, will gradually be stripped of its business.

At that time, the business field of Shenzhen Textile will be completely changed, becoming a textile listed company with "non-woven" business.

"Previously, the main business was textile and clothing. With the development of the textile industry becoming more and more difficult, it is not uncommon for enterprises to abandon the textile and clothing business and turn to other businesses with more development prospects." Industry insiders said that some enterprises had seen the ceiling of the development of the textile and clothing industry in the early 1990s, and had made preparations for the development of sidelines long ago, However, some enterprises began to seek business transformation only when the general environment was depressed in 2008 and the textile and clothing industry faced the dual pressure of declining exports and rising costs.

Textile business becomes the adjusted target

The textile industry is a labor-intensive industry, the threshold is not very high, and compared with high-tech industries, there is not much core competitiveness.

"We are not optimistic about the textile industry. In contrast, we are more optimistic about the company's prospects and position in the flat plate polarizer." Li Jiang said that Shenzhen Textile had already had the polarizer business at the beginning of the company's listing. Later, driven by some factors, the polarizer business became the company's main business smoothly.

In 2008, under multiple pressures such as the accelerated appreciation of RMB, the reduction of export tax rebate rate, the rapid rise of labor costs, the rise of pollution control costs caused by environmental pressure, and the rise of raw material prices, China's textile industry experienced a cold winter of development.

After more than ten years of accumulation, in 2009, Shenzhen Textile officially identified the polarizer business as the company's main business. Erdos (600295. SH), a wool textile enterprise, has transformed from the traditional cashmere clothing industry to the energy, metallurgy and chemical industry.

At present, the main business of Ordos is divided into clothing industry and energy, metallurgy and chemical industry. However, from the perspective of income composition, the energy, metallurgy and chemical industry contributed most of the company's performance.

In 2012, the operating revenue of Ordos electric smelting sector was 10.57 billion yuan, up 1.96% year on year; The operating income of cashmere sector was only 2.629 billion yuan, down 9.85% year on year.

In the first half of this year, affected by the recovery of the textile industry, although the operating income of the clothing sector rose, the income of the electro metallurgical sector still accounted for the majority. In the first half of the year, the operating revenue of the Ordos electrometallurgical plate was 5.455 billion yuan, while that of the clothing plate was 1.049 billion yuan.

"Since then, the textile industry has begun to adjust itself collectively. Some have upgraded their industries, while others have developed directly across industries." Some insiders said that since 2009, some textile and clothing trade businesses have suffered losses or meager profits due to intensified industrial competition.

In 2012, the export orders of textile and clothing production declined significantly, while the rising labor costs and the weakness of terminal consumption aggravated the survival situation of textile and clothing enterprises, and the financial reports of most listed companies showed a decline in performance.

According to the data released in the 2012 annual report of Ordos, in 2012, the main business sales revenue of Ordos cashmere sector was 2.629 billion yuan, down 9.85% year on year. The main reason for the decline was that the sales revenue of cashmere products decreased due to the decrease of export orders. Among them, the main business sales revenue of export products was 97 million yuan, down 29.83% year on year.

Like the textile industry, textile clothing and Clothes & Accessories The development of the auxiliary material industry has also encountered bottlenecks.

In 2012, Zhejiang Weixing Industrial Development Co., Ltd. (002003.SZ, hereinafter referred to as "Weixing Shares") realized an operating revenue of 1.856 billion yuan, a decrease of 4.03% over the same period of the previous year; Among them, the net profit attributable to shareholders of the listed company was 169 million yuan, down 13.84% over the same period last year.

Weixing said that the poor performance was due to the continued downturn in demand in major international clothing consumption markets and the slowing growth in domestic clothing consumption demand. With the continuous rise in the cost of various domestic production factors, market competition further intensified.

The textile and clothing industry chain is also accelerating its transfer to Southeast Asia and other countries and regions with lower costs.

The management of Ordos said in the 2012 annual report that the company's medium and long-term development strategy is to develop multiple industries simultaneously, further improve the energy, metallurgy and chemical industry cycle industrial chain, and transform from extensional growth to connotative growth.

Compared with the development strategy of Erdos, the development path of Shenzhen Textile is to concentrate all the resources of the enterprise and develop the polarizer business.