After an eight-month increase, the Hang Seng Index entered an adjustment period in September. Although the Hang Seng Index ended with a 0.48% gain on the last trading day, the HSI closed down 1.49% in September.
Similar to the pace of the HSI, some of the sectors or stocks that had a large increase in the previous period also began to adjust. However, Zhitong Finance APP noted that since September, one stock has risen slowly, then stepped on the throttle at the end of the month, accelerating the climb - the cumulative increase in the last three trading days in September reached 12.96%, the overall increase in September Up to 25.34%, hit a new high since the listing. This stock is Nanxun Holdings (01982).
From the news point of view, Nanxun Holdings's increase at the end of September may be related to an acquisition. On the evening of September 28, the group issued a notice stating that its wholly-owned subsidiary, Nanxuan Group, intends to acquire 100% equity of the knitted shoe manufacturer, Baolixin, from the chairman and main shareholder of the company, Wang Tingcong, at a consideration of HK$550 million.
Of these, HK$344 million will be settled by the issue of the Consideration Shares by Nanxun Holdings. The issue price is HK$1.72 on September 28, and the consideration shares of 200 million shares is equivalent to approximately 9.6% of the issued share capital. The issued share capital is approximately 8.8%. The remaining amount is paid in cash.
Pursuant to the Transfer Agreement, the Vendor warrants that the comprehensive net profit of the Polyplastic Group for the year ended March 31, 2018 will be no less than HK$66 million. If the above profit is not achieved, the seller will pay compensation to Nanxun Holdings before September 30, 2018, which is equivalent to 8.33 times the difference.
The P/E ratio of this promised profit is also 8.33 times. Although it is lower than the current static price-earnings ratio of 11.44 times of Nanxun Holdings, if it is placed in the textile industry, this valuation is not low.
What does Nanxun Holdings bring to the chairman of the non-listed business, what can it bring to the company? After the acquisition, is there any interest in Nanxun Holdings?
"fly woven" upper manufacturer
Nanxun Holdings said in the announcement that the business of the Poly Group is a suitable diversified development path for the Group's existing knitwear business. On the one hand, because shoes are fashion goods, there is a strong demand all year round, especially in the past few years, knitted shoes have become a new fashion trend, and the demand for such shoes is expected to grow. On the other hand, because of the technology used in the shoe business, Production resources are similar to those used in the Group's main business and can bring synergies.
The acquisition will allow the Group's products to be more diversified, reduce the impact of seasonal fluctuations in the apparel business, and help them collaborate with customers on a wider range of products to strengthen customer loyalty.
According to APP Finance Zhitong understand, Polychrome Polychrome letter Group Letter to Hong Kong holding company's main business is manufacturing knit uppers (ie knitted fabrics and knitted footwear shoe surface. Polychrome Polychrome holding the letter in Hong Kong and Huizhou letter The entire issued share capital of Polyphoto Vietnam. Polytech Huizhou and Polynesia Vietnam leased factories and dormitories in Huizhou and Vietnam respectively. In terms of performance, the company lost a loss of HK$20.206 million in the 2016 fiscal year ending March 31. Realized a profit of HK$32.9 million in FY2017.
The move by Nanxun Holdings to acquire Quan Lixin also received a positive response in the capital market. On the trading day after the announcement of the relevant announcement, on 29th, its share price once rose to 1.97 Hong Kong dollars, an increase of 14.5%. The turnover on the day also increased to HK$55.329 million, the highest record since the beginning of this year.
The capital market is not optimistic about the acquisition. Among the products of the company, one is a flying woven upper. The technology of “flying weaving†is a popular shoe upper process in recent years. Its popularity is mainly due to NIKE. In 2012, NIKE launched the new Flyknit series of sports shoes, with its unique flying woven upper technology stunning sports brand industry.
"Flying weaving" technology allows the upper and the foot to fit perfectly and is lighter and more breathable. After the launch of NIKE's products, the domestic shoe fulfillment industry also regards the flying woven upper as an innovation of the upper material after the materials such as cloth and leather. With the maturity of related technologies, domestic sportswear brands have successively launched the “flying weaving†concept related products.
Public information, one of the products Polychrome Polychrome letter Group's letter (Huizhou) Co., Ltd. is a woven fabric fly flying shoes and woven uppers, products are mainly exported to Europe and the Asia-Pacific region. The company has about 1,200 employees, with an annual production of 60 million pairs of flying woven uppers and 300,000 pairs of flying woven shoes. The V.Success brand is independently developed.
From the development prospects of flying woven shoes, as the relevant industrial chains begin to mature in China, the types of products they use will no longer be constrained by sports shoes, and will become more and more abundant; The comfort and lightness of the shoes will continue to expand the market for flying woven products. In the future, this technology and products will still have great growth prospects. And because this technology can weave production through computer programming, it can also help companies reduce labor costs and improve profitability.
Zhitong Finance APP learned from public reports that the products of Polytech Huizhou are now exported to brands such as Hummer and Brother. If Nanxun Holdings can help to strengthen its scale and business, it will strive to cooperate with more large sportswear brands, or it can improve the situation of Nanxun Holdings customers. Performance brings gains.
More than half of the income comes from Uniqlo
Why do you say this? This is to talk from Nanxun Holdings itself.
Nanxun Holdings is one of the famous domestic knitwear manufacturers, providing customers with one-stop internal solutions, including design ideas, raw material procurement, sample development, etc. Knitwear products include women's wear, men's wear, children's wear, scarves, hats and so on. The group landed on the main board of the Hong Kong Stock Exchange in April 2016.
It is noteworthy that this knitwear manufacturer started in Huizhou, Guangdong, and the famous Japanese clothing brand Uniqlo (UNIQLO) has a 21-year history of cooperation. Uniqlo is the largest customer of Nanxun Holdings. In recent years, its contribution has accounted for more than 50% of the total annual revenue. In addition to Uniqlo, internationally renowned brands such as Tommy Hilfiger and Land's End are also major customers of Nanxun Holdings.
Nanxun Holdings relies more on its customers than on Uniqlo. As of March 31, 2015 to 2017, the Group's sales revenue from the top five customers accounted for 92.3%, 93.4% and 89.5% of the total revenue, respectively. The risk of over-reliance on major customers is well known – once a partnership with a major customer changes or the sales performance of a major customer is poor, it will have a serious impact on the group's performance.
In fact, in the past two years, the days of Uniqlo are not so good. For the fiscal year ended August 31, the UNIQLO parent company's fast-selling revenue was 1.79 trillion yen, up 6.2% year-on-year, much lower than the 21.7% year-on-year increase in the previous fiscal year; profit attributable to owners of the company It was 48.05 billion yen, a year-on-year decrease of 56.3%.
At the same time, UNIQLO's revenue in Greater China also slowed significantly, with a year-on-year increase of only 9.3% in FY2016. You know, in the last fiscal year, the income of UNIQLO in Greater China increased by 46.3%.
In the first half of FY2017, Uniqlo's revenue was about 1 trillion yuan, and the growth slowed further, basically the same as last year.
The dilemma of UNIQLO's growth is also reflected in the performance of Nanxun Holdings. In 2017, Nanxun Holdings' revenue was approximately HK$2.797 billion, up only 0.8% year-on-year; the profit attributable to owners of the company was approximately HK$328 million, an increase of 41.5% year-on-year. The increase in net profit was mainly attributable to cost control measures and streamlining the production process of the production base and the continued depreciation of the RMB, resulting in an increase in gross profit margin. However, the growth rate of Nanxun Holdings' revenue is much slower than that of FY2016 and FY2015.
Future performance also depends on UNIQLO
Although the management of Nanxun Holdings has stated that it will actively explore new potential customers in the future. However, from the current situation, the status of its "Lifeline Uniqlo" cannot be changed in one day or two. At present, it seems that if you want to discuss its future performance, you can't help but look at the sales of Uniqlo.
Judging from the financial report of the Fast Retailing Group in the third quarter of fiscal 2017, there has not been any outstanding performance. Although Fast Retailing has made the profit growth look good by cutting expenses, its sales have not seen any obvious signs of improvement.
As of May 31, the third quarter of fiscal 2017, fast-moving revenue increased by 8.9% year-on-year, and operating profit increased by 7.5% year-on-year. In the first three quarters of 2017, the total revenue of Fast Retailing was 1,477.9 billion yen, up 3% year-on-year; operating profit reached 180.6 billion yen, up 23.9% year-on-year.
In addition, UNIQLO's sales data released in Japan showed that Uniqlo's same-store sales in Japan recorded a 3.4% decline in August, the largest decline in the past eight months, and sales fell 3.5% year-on-year.
Of course, not only Uniqlo, the fast fashion brand's fiscal year 2016 is not good, although the performance is still rising, but either the pace of growth is slowing down, or the profitability is declining.
Uniqlo is also trying to improve sales by increasing marketing efforts, entering new markets, technological innovations in existing stores, and new retail models that combine online and offline. How to look at the performance of Uniqlo in the next year or two.
In addition, in order to reduce labor costs and expand production capacity, Nanxun Holdings has already transferred its production line to Vietnam. In the second half of FY2017, the Group's second-phase plant in Vietnam has been put into production and began to enter the commercial production stage. In addition, the production capacity of the first phase of the plant has gradually increased, and the Group's production capacity will be greatly improved.
At present, Nanxun Holdings' PE (TTM) is 11.58 times, which is not too high compared with the industry average price-earnings ratio. And after the acquisition of the company, it can bring a new source of income to the group, and can expand its product categories and customers in sports brands. As mentioned above, if the future of the company is going well, it will also help it get rid of the excessive dependence on Uniqlo.
However, it should be noted that the shares of Nanxuan Holdings are relatively concentrated. As of October 2, its chairman Wang Tingcong and others held a total of 72.36% of the shares of the group.
Because of the relatively concentrated equity, the transaction of Nanxuan Holdings has been relatively quiet. Whether it can be further broken afterwards, whether its liquidity can be improved is also a very important factor.
Ningshing Trading Group Inc. is a large-scale trading group with a background of greater than two decades, established in 1988. It is also a large clothing export company.
Our Clothing Dept. is separated right into three teams, primarily Mens Woven Shirts, Knitted Sportswear as well as Women Gym Wear.
We have more than 10 years of OEM solution experience, with an experienced administration team, service technicians and also several cooperative Clothing and Fabric factories, with strong sample advancement capabilities, we can create according to customers' certain designs and also demands.
Our factories are fully outfitted with contemporary makers for the production of practically intricate products.
You can choose designs from our items as well as add your very own logos and also tags, you can likewise generate as your own styles to us as well as follow your specs. Such as the Knitted Sport Clothes products, reducing, stitching, embroidery, printing, ironing to end up products as well as delivery.
Please indicate the kind of Apparel and Textile you need through the consultation center of the website, as well as we will certainly get in touch with the corresponding clothing group to call you as soon as possible.
Looking forward to dealing with you!
yoga shorts women, yoga pants for women, womens sports bra
Ningbo Ningshing Trading Group Inc. , https://www.ningshingglobal.com