Lining Brand Remodeling Will Promote Sustained Growth Of Business Performance

Merrill Lynch published research report Lining The brand remolding scheme will promote the sustained growth of the company's long term performance in the long run. At present, the 17 times price earnings ratio valuation is particularly attractive, which is the best time to enter, thus giving the stock a "buy" rating with a target price of 38 yuan to reflect the 2011 forecast earnings ratio of 22.8 times.

The Merrill Lynch report indicates that Lining is the preferred consumer of similar brands, and the adverse effects on overseas brand competition have been exaggerated. The bank expects Lining to maintain about 20% growth in the next few years.

Merrill Lynch refers to the brand remodeling that Lining started in May 2007. The purpose is to cultivate high-end market for the advantage of intermediate price products. At present, the proportion of high-end products of footwear and clothing accounts for less than 10% and 20% respectively. The average selling price of products has also increased due to the rapid growth of high priced products and the improvement of product quality and design.

The bank refers to Lining throughout China. Sportswear The industry ranked second, while sportswear ranked first in all levels of cities, and less than Nike and Adidas for sports shoes. The bank believes that with the improvement of technology level, reshaping the brand is the key factor for Lining to gradually narrow the gap with overseas famous brand prices.

The bank said that although the average selling price of products increased, the gross profit margin of Lining would remain between 47% and 48%. Merrill Lynch indicated that orders for Lining increased by about 2 in the second half of the year. market The demand for new trademark products.

Merrill Lynch predicted Lining's earnings per share from 2010 to 2012 were 1.092 yuan, 1.373 yuan and 1.671 yuan respectively.

Supplement:

Fujian shoe enterprises dedicated to industrial transformation and upgrading have further strengthened their position as the global footwear production base by reducing production energy consumption, reducing production costs, and constantly increasing technological innovation. Data from the Fujian entry exit inspection and Quarantine Bureau showed that the value of footwear exported to the region was 3 billion 35 million US dollars in the first half of this year, an increase of 20.9% over the same period last year, an increase of 14% compared with the same period in 2008, creating the highest level of footwear exports.

At present, with the increase of labor and land production costs and RMB appreciation, China's shoe exports no longer have the price advantage. Some developing countries have developed the shoemaking industry as an important industry and developed rapidly by virtue of their labor costs and industrial policy advantages. In recent years, multinational giants such as Nike and Adidas have seen that these countries have the comparative advantage of footwear production, increased investment and factory strength in the area, and reduced procurement plans in China, turning orders to the new shoe making areas.

Against this background, our shoe manufacturers accelerate the transformation and upgrading of the footwear industry by means of technological innovation, increasing efficiency, reducing energy consumption and enhancing the core value of the brand. First is the import of advanced equipment. Jinjiang's more than 600 shoemaking enterprises imported more than 3000 sets of automatic shoe making assembly lines, 250 shoe materials enterprises have more than 500 sets of EVA shoe sole molding machines, and a large number of high-tech equipment such as stereoscopic scanners, CNC cutting board machines and so on. When the imported equipment is in place, the overall production efficiency is increased by more than 30%, and some new production lines can even increase efficiency by 50%-60%.

The second is to increase investment in scientific research. More than 5 shoe manufacturers in Jinjiang have established product R & D institutions and laboratories. Among them, Anta (China) research and development center has been recognized as a national technology center, and the R & D center of the footwear enterprises has been recognized as the provincial technology center. The footwear industry in the city relies on independent research and development to master more than 2000 core technologies of footwear production, with 189 patents.

The third is to change the "low carbon line". PEAK and other leading enterprises have put into practice in low carbon and environmental protection, replacing traditional leather with cloth, grass and other raw materials, and the selling price of products has dropped by 20%-30%.

The fourth is to import lean production. Companies such as Guo Hui, Jordan, and Starling began to import lean production mode, so as to increase their output by 30%-50%. After actuarial, the lean production of 1 yuan can create a value of 6.7 yuan.

Through scientific and technological innovation, we will undoubtedly inject new vitality into our export footwear enterprises, and speed up the transformation and upgrading of the footwear industry. At present, the footwear export of our province shows three gratifying changes. First, the export proportion of leading enterprises has increased. In the first half of this year, a total of 59 footwear enterprises exported over 10 million dollars, of which two exceeded 50 million dollars. The export value of these 59 footwear enterprises accounted for 38.2% of the total export value, an increase of 9.1 percentage points over the same period in 2009. Two, the ability of product research and development is stronger. Gradually highlight the plastic shoes, beach shoes in Fuzhou and Putian and Quanzhou sports shoes in the two major producing areas, forming a regional footwear export cluster in coastal areas. In addition to introducing new styles in traditional footwear styles, enterprises have also intensified their research and development efforts, and constantly developed new varieties such as nanoscale shoes and ecological shoes, which have greatly promoted export growth. The three is the higher average export unit price. The average export price of footwear has risen from 2.597 US dollars / double in 2008 to 2.725 US dollars / double in 2009, rising to 2.983 US dollars / double in the first half of this year. This also reflects the development of footwear products in Fujian in the direction of high quality and high value added.