Another 14 Companies &Nbsp; YOUNGOR Rooted In Clothing Industry.

In June of this year, Youngor (peel off and hold it for 4 years without giving it). list The company brought obvious revenue to the new Malaysia clothing; 5 months later, in November 7th, it paid 886 million Hong Kong dollars (equivalent to 754 million yuan), and took Xin Ma international as the main body. It intends to withdraw 14 equity shares of Ningbo YOUNGOR shirts Co., Ltd. from the related party Zou's International Limited.

Li Rucheng, chairman of YOUNGOR, described the above measures as capital. market It is proved that although YOUNGOR's real estate and financial investment is booming, the strategic framework of its own brand clothing industry has never wavered. YOUNGOR's clothing planning has been constantly adjusted and perfected with the trial and error.

Industry analysts pointed out that after the 14 listed holding companies become a wholly owned subsidiary of YOUNGOR, the market value of listed companies will be increased by 6 billion yuan, while the overall market value of YOUNGOR listed companies will also be close to 50 billion yuan.

Overseas mergers and acquisitions

At the end of 2007, YOUNGOR spent $120 million on the 100% equity of Singapore and Malaysia, including the purchase of new Malaysia costumes for $70 million, and the acquisition of Singapore Malaysia International for $50 million. This is an overseas acquisition case involving the largest amount of money in the history of Chinese clothing industry.

At that time, YOUNGOR's move was not optimistic about the market. It was said that in a series of macro factors, the textile and garment industry is not a highly preferential industry in terms of the direction of the national industrial policy. Besides, in the YOUNGOR diversified investment, the profits of real estate and financial investment are more.

Overseas mergers and acquisitions in 2007 allowed YOUNGOR to get 14 production bases in Guangdong and Southeast Asia, and more than 20 international brand ODM processing businesses such as POLO and CK. Although this part of the business contributed some small profits to the listed companies in 2008, it lost 100 million yuan in 2009 because of its inventory and continued losses in 2010.

In June this year, YOUNGOR transferred the stock price of the subsidiary to US $80 million to Shengzhou Sheng Tai yarn weaving technology Co., Ltd. YOUNGOR believes that the sale of new horse clothing is for strategic transformation needs. Because of the acquisition of new Malaysia, YOUNGOR has also seen the disadvantages of OEM. YOUNGOR has 65% gross margin in the domestic clothing brand, but the gross margin of OEM export OEM is only 10%. Besides, overseas factories are also worth the sharp increase of YOUNGOR labor cost, and the appreciation of domestic RMB has further affected the gross profit margin of related businesses.

In fact, although the acquisition of new Malaysia to acquire 14 garment companies in 2007, YOUNGOR did not have a large capital operation in the clothing sector, but YOUNGOR did not govern the resources of its clothing industry.

As early as 1998, Li Rucheng began to purchase property in the core business circle of the provincial capitals and key cities in the country, as a large flagship store of YOUNGOR, than to develop self owned stores and shopping malls, and improve the layout of marketing outlets. The latest data obtained by reporters from YOUNGOR securities department is that YOUNGOR now has 185 proprietary property stores, of which 100 are completed before 2003.

In 2009, YOUNGOR began multi brand strategy to deal with increasingly fractionable market. According to the introduction, compared with the past general positioning of YOUNGOR brands in 25~55 year old male consumers, the 6 brands of YOUNGOR now have their own different positioning.

Li Rucheng's calculations are: "YOUNGOR will gradually reduce the OEM export share with low gross margin and more resources. The brand clothing assets of the company will be further optimized, and the marginal benefits of clothing will be further highlighted." {page_break}

　　 Market value or thickening of 6 billion yuan

After selling new Malaysia clothing, YOUNGOR took the wholly-owned subsidiary of Singapore and Malaysia as the main body and purchased 25% of the 14 subsidiaries owned by YOUNGOR in Zou's International Holdings, and the purchase price was 754 million yuan. YOUNGOR officials see the move as a continuation of the company's further integration of the clothing sector's equity and resources.

Public financial data showed that 12 of the 14 companies acquired were profitable in 2010, and 14 companies achieved a total net profit of 937 million yuan in 2010.

A long term tracking of YOUNGOR's clothing industry researcher told the newspaper that Ningbo YOUNGOR shirts Co., Ltd. and other 14 companies are listed companies clothing sales and profits to achieve the main body. After the completion of the acquisition, the 14 companies will become a wholly owned subsidiary of the listed companies. The net profit from the brand clothing sector will no longer eliminate minority shareholders' profits and losses, thereby improving the overall profitability of the company.

In 2010, the net profit of YOUNGOR brand clothing plate belonging to the parent company was 705 million yuan, contributing 0.3167 yuan per share. If the profit and loss of minority shareholders were not deducted by 232 million yuan, the earnings per share contributed 0.4209 yuan. Based on YOUNGOR's 2010 performance, the researcher estimated that the acquisition could contribute to the performance of listed companies by 232 million yuan, even if the value of the brand clothing is 25 times PE, the market value of the company will increase by 6 billion yuan.

In 2010, YOUNGOR brand clothing attributable to the parent company net profit increased by 93.36% over the same period, excluding the non recurring profit and loss compensation, the increase is still 67.56%. In the first three quarters of this year, the company realized a net profit of 463 million yuan for its parent company, which still increased 28.23% compared with the same period of the previous year. The gross profit margin of domestic sales reached 65%, which achieved the level of international first-line brand (gross profit margin of LV in 2010 was 64.6%, Burberry was 62.8%).

Before YOUNGOR's three quarter results were released, Guo Haiyan, a researcher at CICC, believed that the company's "asset value was undervalued", on the grounds that YOUNGOR's brand clothing business maintained more than 20% sustainable growth, and currently only corresponds to its apparel business's earnings per share of 0.40 yuan in 2011 and earnings ratio of 24 times. "It can be said that the other two assets are almost bought and sent to two."

Therefore, if we calculate the 6 billion yuan market value of the 14 companies after the completion of the equity purchase, the market value of the YOUNGOR brand clothing plate will be close to 24 billion yuan, and the market value of the listed company is approaching 50 billion yuan, even if the net liabilities are deducted, it can also reach 40 billion yuan. Even giving the 20% multiple discount is still equivalent to about 14.5 yuan per share, with the price of $11 during the week when YOUNGOR hovered last week, the stock still has a premium of 30%.