Shenda Shares Main Textile Industry Downturn &Nbsp; Replacement Assets To Enter The Real Estate Industry

In January 13th, Shenda shares were released.

Land sales thickening performance

Shenda's main business includes textiles.

Shanghai Shenda shares announced in January 13th that public auction of Yuyao Road 55 real estate related issues have been completed.

It is worth noting that the price of the paction was 110 million yuan, the first price was 20 million yuan, and the remaining price was received in December 29, 2009.

The announcement shows that

According to the reporter, the Yuyao Road No. 55 in the announcement is currently used for the leisure and entertainment center of the Pan Yang resort.

Luo Qionglin, a representative of Shenda securities, said in an interview with reporters: "this is a deal with a lease.

The auction also includes this part of the lease auction.

She told reporters: "this part of the sale of land was originally planned for this year, and the real estate business is actually done two years ago."

As early as 2002, Shenda group has jointly established a item company with Shanghai western enterprise groups. Shanghai Hyatt investment development company develops Changshou Road Street 26 square 5/1 Qiu massif, and builds middle and high grade residential quarters and public facilities.

The item company now has a registered capital of 280 million yuan, of which Shenda has invested 98 million yuan, accounting for 35%.

Repulse Bay is located in the east of Jiangning Road, north of Macao Road, south of Yichang Road, west of the riverside besieged city, next to Suzhou river. It is only one way from Shanghai's largest living water park, "dream garden". It is a rare and scarce scenic spot along Suzhou River in Shanghai.

It is understood that in June 2009, Kai Yue city in Repulse Bay has opened, the first phase of the 157 suites source sales amounted to 6 hundred million.

Luo Qionglin told reporters: "the first phase and the two phase of the residential area of Kai Yue city in the Repulse Bay have basically been sold out, and the three phase is now being sold, and the public construction matching has also started."

Stop production liquidation, large amount of impairment allowance ready to battle.

When the financial crisis hit the world, foreign trade was greatly reduced by external demand, resulting in a net profit decline in the first three quarters of 2009, compared with the same period last year.

At the same time, the loss of textile enterprises is gradually aggravating. In 2008 alone, the company's a / b (Changshu) spinning and dyeing company and Shanghai thirty-sixth cotton knitted garment factory altogether lost 12 million 120 thousand yuan.

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In May 2008, Shen Da shares had to stop production and liquidation of a / b (Changshu) to avoid further losses.

In 2009, the Shanghai auto Carpet General Factory was estimated.

"A / b (Changshu) has been discontinued for the first two years, the remaining equipment is disposed of, and the land workshop is temporarily shelved.

The automobile carpet factory has increased more than 6 million worth of preparations this year, mainly considering the heavy historical burden. After the replacement of traditional enterprises, the burden is relatively reduced. The key is to see how the macro situation will improve if it does not change much this year.

Luo Qionglin told reporters.

However, looking at Shenda shares annual report, the main business has been making little profit, and its performance is still supported by investment income to a large extent.

In 2007, Shenda investment income accounted for 84.35% of the total profit.

In 2008, Shenda realized net profit of 100 million, down 40% from 2007, while operating profit dropped by 38.78% over the same period, mainly due to a 82.82% decrease in investment income.

In 2009, the three quarterly report of Shenda shares showed that the cash flow generated by business activities was 5876 yuan, 53.36% less than that of the same period last year, and 174% of the under construction projects. Meanwhile, the real estate industry needs a lot of capital.

Insiders pointed out: "the financial crisis in 2009, the main business weakened investment is not ideal, Shenda shares sell land to protect profits from the snow before the door."

"Housing is mainly rented, designed to increase cash flow. The cost of plant leasing is relatively low in traditional enterprises, and the opportunity is appropriate and it is possible to make real estate development depending on the market."

Luo Qionglin said, "but this year, the relative cost of car carpet factories is relatively high. Although the net profit of land sales is included in the annual report, the relative annual report performance has not changed much over the previous year."

Replacement of traditional baggage industry to enter real estate to make up for cash flow

As the new year approaches, the majority shareholder Shenda group has offered a helping hand at its difficulty, instead of replacing a number of deficit assets, it has placed two pieces of land that only generate small profits by leasing.

In December 7, 2009, Shen Da and the controlling shareholder Shen Da group signed an asset swap agreement.

A number of assets were set up, including thirty-sixth stake in Shanghai cotton spinning 100% and 50% equity in Shanghai seven cotton association yarn Co., Ltd., 20% equity of Shanghai Association Shenda line Co., Ltd. and 18% equity interest of Zhejiang union flywheel line Co., Ltd.

The total value of the assets and assets is about 265 million yuan and 254 million yuan respectively. The difference is 11 million 320 thousand yuan, which is paid by Shen Da group to Shenda's shares.

Luo Qionglin told reporters: "the replacement, related materials have been reported, waiting for the SASAC to reply."

It is worth noting that the four enterprises in Shenda group's traditional textile business are in a state of continuous loss.

The two assets are two plots located in Shanghai.

After the divestiture of Shanghai Sixth cotton mill and Shanghai second printing and dyeing mill, the main asset is the 834 real estate located in Putuo District Changshou Road, where the land area is 11383 square meters and the area is 48204 square meters.

The announcement shows that as of October 31, 2009, the net assets of the two target enterprises were -4919 yuan respectively, and the operating income in 2009 was 10 million 430 thousand yuan, the net profit was 5 million 880 thousand yuan, and 15 million 810 thousand yuan in 2009, the operating profit in 2009 was -178 yuan, and the net profit was -217 million yuan.

"Traditional textile has been heavily loaded in Shanghai for many years. This time, with the support of major shareholders, the loss assets are replaced."

Luo Qionglin said, "the two plots currently in operation only have some fixed assets such as housing, land and so on. After the divestiture, there will be no loss after operation. The land will only collect rents, and there will be little profit."

"One is leasing a lease to Carrefour for 25 years, and the second printing and dyeing factory in Shanghai has initially planned to do real estate. It has not been put on the agenda yet. There is no specific plan yet to be discussed by the board of directors."

Luo Qionglin said.

Shenda shares also announced that after the completion of the paction, it will completely withdraw from the traditional textile business and replace it with strong liquidity and quick cash property, forming four major business segments, such as textile foreign trade, new textile materials, automobile supporting textiles and real estate property.

Luo Qionglin said: "real estate leasing has little impact on the company's performance. At present, textile foreign trade accounts for the majority. From the strategic planning point of view, the company focuses on the development of new textile materials. In the next few years, after the total burden of traditional enterprises is completely thrown away, the development of new materials will be intensified."

She told reporters: "the main textile business will not change, the current textile trade accounted for 70% of the proportion of clothing, to enter the real estate is considered from the cash flow, the supplement to the performance."