Is The Clothing Industry Too Hard To Drag? Taizhou, The World'S Largest Sewing Machine Operator, Dropped To 3 Billion Last Year.

The R & D, production and sale of local sewing machinery, Jack sewing machine Limited by Share Ltd (hereinafter referred to as "Jack shares") issued the 2019 annual report. During the reporting period, the company achieved 3 billion 610 million operating income, down 13.1% compared to the same period last year. The net profit attributable to the owners of the parent company was 300 million, down 33.6% compared with the same period last year, and the earnings per share were 0.68 yuan. During the reporting period, the gross profit margin of the company was 29.1%, an increase of 1 percentage points over the previous year, and the net interest rate was 8.5%, down 2.5 percentage points from the previous year.

During the reporting period, the operating cost of Jack shares was 2 billion 560 million, down 14.3% from the same period last year, higher than the 13.1% decline in operating income, and the gross profit margin increased by 1%. The cost of the period was 18.2%, up 2.7% from the previous year, which was a drag on the company's performance. Operating cash flow increased from -2082.5 million to 250 million, up 1307.1% over the same period last year. The company's R & D investment was 200 million, down 0.5% compared to the same period. R & D investment is totally cost oriented without capitalization.

From the perspective of the business structure, the industrial sector of the sewing industry has a downward trend. Jack's industrial sewing machine income is 2 billion 953 million yuan, down 16.46% from the same period last year, a big decline compared to the same period last year. The income of the tailoring and distributing machine was 489 million yuan, a decrease of 2.19% compared with the same period last year. The income of the automatic sewing and installation section of shirts and denim reached 1.6. Billion yuan, an increase of 40.65% over the same period, the main part of the Italy is being incorporated into the scope of the merger to increase production and sales.

Taking into account Jack's 2019 integration of sewing machines, bed cutting and intelligent sewing three major industries, promoting mutual penetration of customer groups, and gradually realizing the end of the middle end, expanding the high-end market planning, the industry expects that the trend of Jack share income will decline correspondingly.

According to the insiders, Jack shares are the most powerful industrial sewing machines manufacturers in the world with the largest production capacity and expansion capacity in the future. In 2018, the output of domestic industrial sewing machines was 8 million 400 thousand, and the market share of the company was 24%. It is estimated that the global market share will be around 19%, and will continue to rise in the future. At the same time, the company reserves beds, cloth machine, smart shirt sewing equipment, smart cowboy sewing equipment, with the gradual upgrading of the garment industry automation level, the product potential market space is huge.

Southwest Securities analyst Ni Zhengyang believes that the downward pressure on the macro environment, sewing equipment sales since the second half of 2018 weakened. The epidemic has a great impact on downstream textile and clothing, and exacerbates the impact on equipment sales. According to research, sewing equipment enterprises are facing multiple pressures such as profit and cash flow, and the industry is expected to accelerate the reshuffle. On the other hand, sales volume in 2019 is expected to decline from 20%~25% to 630~680 million, lower than the historical average. In the first quarter of 2020, the industry is expected to decline by more than 30%. It is expected that the industry sewing machine will be restored after experiencing the industry downturn and reshuffle in the past two years.

According to public information, Jack stock was founded in 2003 in Taizhou, Zhejiang, China's sewing equipment manufacturing center. For many years, it has been focused on the research, production and sales of industrial sewing machines. Main sewing machine, cutting bed, motor business, the existing industrial layout includes Taizhou, Shanghai, and Germany (Galla) and Italy (MICA). In 2008, through the shares of Zhejiang States, gradually achieved self control of electrical control of raw materials; in 2009, through the acquisition of German galloping horse, the company involved in the business.

Since 2015, Jack shares have maintained a growth rate higher than the industry, continuing to exceed the leap, standard and ZOJE, and the market share has increased by 2 to 3 percentage points annually. In 2018, Jack shares reached 4 billion 152 million yuan in revenue, sales and sales exceeded Japan's heavy machinery, and became the world's largest sewing equipment manufacturer.

Since its launch, the company's capacity expansion has been mainly made up of three parts: investment projects, equipment manufacturing bases in Taizhou, and external capacity of mergers and acquisitions. The maximum capacity of the sewing machine disclosed by Jack shares was about 870 thousand units. As of the end of 2018, Jack's share raising fund to expand production of 1 million sewing machine projects completed 92.38%.

Jack shares is also the only equipment manufacturer in the world with the front end and the middle end. Through the acquisition of Micah and VBM, the company continuously improves its product layout and builds an integrated garment intelligent manufacturing solution provider.

At present, the number of patents inventions per year of Jack shares exceeds that of peers, ranking first in the industry for five consecutive years. The total number of R & D patents exceeds that of Japanese heavy machinery companies, brothers companies and Japanese Pegasus, and has become the largest number of invention patents in the world in 2 consecutive years. By the end of 2018, the company had 1147 effective patents, including 309 invention patents, 65 utility model patents, 188 design patents, and 124 software copyrights.