The company's operating income, net profit attributable to shareholders of listed companies, net cash flow from operating activities and EPS in the first half of 2016 were 262 million, 13.3815 million, 7.0949 million,-85.605 million yuan and 0.08 yuan per share, respectively, with increases of-7.65%, 13.19%,-13.28%,-151.09% and 14.29%, respectively. In August 2016, the company completed a non-public offering, and Wenzhou Zhuangji, science and technology clothing assets and Taian were included in the scope of the consolidated statements. due to the consolidation effect, the net profit attributed to shareholders of listed companies from January to September 2016 is expected to change by 80%. 120%.
The company focuses on the main development of worsted wool, and the leading product "Ruyi" brand worsted wool has more than 1000 varieties and nearly ten thousand colors, aiming at the high-end wool textile product market. At the same time, implement the settlement system in line with international standards, through the establishment of direct sales network, reduce sales intermediate links, achieve rapid response to orders and optimize services; the company has a large number of terminal customer base of international first-class brands, the products are sold to Japan, South Korea, the United States, Italy, France, Britain, Germany, Hong Kong, Taiwan and other more than 20 countries and regions.
In order to improve the company's asset structure, expand the production scale of high-end products, enhance the ability of product research and development, speed up the industrialization of Ruyi textile technology, and enhance the sustainable profitability of the main business, in 2015, the company took part of the accounts receivable and the inventory of Shandong Jining Ruyi Zhangjiagang Free Trade Zone International Trading Co., Ltd. as purchased assets. Shandong Ruyi Technology Group Co., Ltd., a related party of the company, has invested assets in the construction of Ruyi high-grade worsted fabric project and scientific research center project.
In order to further extend the company's industrial chain and implement the replacement of supporting assets, the company's non-public offering is used to acquire clothing assets owned by related enterprises Ruyi Technology, 100% equity held by affiliated enterprises Ruyi Technology Fashion Industry Co., Ltd., and 51% equity in Wenzhou Zhuangji clothing Co., Ltd. Through the acquisition of downstream clothing high-quality assets and new projects owned by the target enterprises, the company extends its business scope to the production, processing and sales of wool textile clothing, forming a complete industrial chain from wool textile R & D and design, fabrics to clothing finished products, and realize the integration of wool textile fabric and clothing integration business. After the completion of this private offering, the company will give full play to the synergistic effect of upstream textile raw materials and downstream clothing production.
As the core technology textile advantage, expand the high-end manufacturing scale of fabric and clothing integration.
The company takes high-grade wool textile products as the key development area and extends the industrial chain; through previous joint ventures and acquisitions, the group has rich domestic and overseas fabric and clothing brand resources, along with the injection of clothing assets. it is expected to greatly improve the overall performance of the company. It is estimated that in 2016-18, the net profits attributed to the parent company will be 79.18 million yuan, 115 million yuan and 158 million yuan respectively, an increase of 362.57%, 45.08% and 37.17%, respectively, corresponding to 0.30,0.44,0.60 yuan for EPS. Refer to the relevant textile and clothing enterprises in the 17-year PE range in 26x-77x, give the company 2017 50xPE, corresponding to the target price of 21.95 yuan, increase the rating.
Major uncertainties: raw material price fluctuations, exchange rate fluctuations, overseas recovery is not as expected, domestic demand continues to deteriorate, and so on.
