HTC: From Textile To Medical

Located in Haining, Zhejiang Province, China's famous warp knitting City, Hongda Hi Tech Co., Ltd. was founded in 1985. After more than 20 years of innovation and development, Hongda Hi Tech Co., Ltd. ranks among the top 500 competitive enterprises in China's textile industry.

For many years, HTC has been a leading enterprise in the field of automobile roof fabric in China, and its products are mainly supplied to the first-class suppliers of domestic automobile manufacturers. The company's leading product, automotive interior fabric, has passed the acceptance of the national Torch Program project and has been listed as a national key new product. The market share of automobile ceiling interior fabric products ranks the first in the same industry. It has provided a complete set of models for Shanghai Volkswagen, Shanghai GM, FAW Volkswagen and other large automobile manufacturing enterprises, and has been exported to foreign countries.

For HTC, 2010 is another new starting point in its development process. In June this year, the company planned to acquire 100% equity of Shenzhen weld Medical Electronics Co., Ltd., which was released by the CSRC. It is understood that Shenzhen Verde is one of the important manufacturers of B-ultrasound equipment in China. It is mainly committed to the R & D, production and sales of handheld, portable and trolley type B ultrasound equipment. After the completion of the acquisition, the company will have two main industries: textile and medical equipment.

After being approved by the stock exchange of Hongda, the stock exchange of Hongda is still changed from "Shenzhen Stock Exchange" to "stock holding code of Shenzhen Hongda" on November 8. This means that the main industry and medical equipment will develop together in the future.

Recently, on the occasion of the shareholders' meeting held by HTC, the reporter went to the company's headquarters in Haizhou West Road, Haining, and had a face-to-face communication with Zeng Yong, Secretary of the board, to understand the future development plan of HTC.

Auto interior business continues to grow rapidly

As a leader in warp knitting industry, HTC was listed on the small and medium board of Shenzhen Stock Exchange in August 2007, becoming the first listed company in domestic warp knitting industry.

For many years, HTC has been a leading enterprise in the field of automobile roof fabric in China, and its products are mainly supplied to the first-class suppliers of domestic automobile manufacturers. Automotive interior fabric can be divided into roof fabric, curtain, seat fabric, etc.

With the growth of domestic automobile consumption demand in recent years, HTC's automotive interior fabric business has become the main driving force for the company's growth. According to the 2010 semi annual report of HTC, during the reporting period, the company realized a business income of 160 million yuan, and the net profit attributable to shareholders of listed companies was 16.8837 million yuan, with a year-on-year increase of 325.62%. Among them, the operating income of automobile interior fabric series was 49.1189 million yuan, an increase of 95.12% over the same period of last year, and the gross profit rate was 28.46%, with a year-on-year increase of 3.40%.

"The market share of the company in the field of car types, car roof fabrics is about 20%. At present, the company is still developing textile products such as car seats and car curtains, which will further expand the market share of the company's products in the future," Zeng Yong, director of HTC, told reporters

In addition to automobile interior decoration business, underwear and swimsuit fabric business is HTC's second largest profit source, and its main customers are downstream underwear and swimsuit fabric users and distributors. In the first half of the year, the business realized 57.4696 million yuan, with a year-on-year increase of 75.17%, and the gross profit rate was 20.18%, with a year-on-year increase of 5.32%.

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Although Mr. Dong longed for the steady growth of high-end underwear products, Mr. Dong longed for the growth of high-end underwear.

In the first half of this year, the demand for underwear and swimsuit fabrics of HTC increased significantly, but the market space of underwear and swimsuit fabric business was large and the supply was relatively scattered. Data shows that at present, HTC's market share of this business is only about 4%. "In the future, the company intends to make high-quality products in this business, and increase the content of technology and technology, such as sports clothes, diving suits, swimsuits and high-end bra products with moisture absorption, perspiration and antibacterial." Zeng Yong told reporters: "now the company's energy conservation and emission reduction task is heavy, for low profit orders, the company will gradually reduce."

Raw materials continue to rise or will affect the gross profit level in the second half of the year

As a manufacturer of high-end fabrics, the raw materials of HTC products are spandex, nylon, polyester, sponge, dyes and auxiliaries, which are mainly purchased from domestic and foreign manufacturers and distributors through the company's supply department. Some raw silk and auxiliary materials need to be imported. The company imports about 500 tons of raw silk every year. Since 2006, all raw materials have been imported independently, thus effectively saving the import cost.

from HTC high tech In the semi annual report of 2010, the reporter found that the company needed the part in the first half of the year Auxiliary raw materials Among them, the average unit price of raw silk increased by 27.74%, fuel coal by 31.66%, sponge by 6.79%, and non-woven fabric by 6.79%.

In order to cope with the rising prices of raw materials in the upstream and the gradual recovery in the textile market, HTC has increased the sales prices of its main products. Zeng Yong predicted that the prices of raw materials would rise in the second half of the year, which may lead to a decline in the gross profit ratio of HTC products in the second half of the year.

In addition to the rise in raw materials in the first half of the year, the rapid appreciation of RMB in the near future will also have a negative impact on HTC's trading business. At present, the trade business of HTC is mainly carried out through Jiaxing Hongda Import and export company, and leather products account for 50% of the company's trade business. In the first half of the year, the company's trading business revenue was 35.6 million yuan, a year-on-year decrease of 49.93%, and a year-on-year decrease in gross profit rate of 0.07%.

Zeng Yong believes that it is difficult to improve the trade business in the second half of the year. At present, the overall situation of domestic import and export companies is not very good. "The trade business of the company's subordinate company is mainly acting as an agent with a low profit margin. Now a slightly larger enterprise will have its own import and export business."

From the operating situation of the main business areas, the external sales amount of HTC in the first half of the year was 52.3609 million yuan, a year-on-year decrease of 30.90%. The main reason for the decline was that the import and export business of the subsidiary Hongda declined year on year. When asked about the impact of RMB appreciation on the company's product export in the second half of the year, Zeng Yong said, "the RMB appreciation in the second half of the year will not have a great impact on the company's business, and the products sold overseas account for a small proportion of the main business. At present, the quality of the company's products is generally recognized by foreign users, and the sales volume will not decline after the corresponding price adjustment. "

Successful March medical apparatus and instruments industry

Due to the cyclical nature of the company's textile industry, in order to disperse the risks, HTC has been planning to enter the "medical device industry" since June 2009 to seek diversified operation.

According to the public information, on June 4, 2009, the board of directors of HTC passed the proposal that the company intends to issue shares to purchase Shenzhen Verde Medical Electronics Co., Ltd., however, on November 20, 2009, the company received the decision of CSRC not to approve the restructuring plan. Although it will be rejected for the first time, the company did not give up entering the medical machinery industry, but firmly determined and chose the opportunity to start again. On February 24, 2010, the reorganization was approved by the CSRC conditionally.

According to the restructuring plan, the company issued non-public shares to Li Hong and other six people at the issue price of 8.17 yuan per share, and purchased 100% shares of Shenzhen welde Medical Electronics Co., Ltd. held by the six natural persons. The number of shares issued was 44 million shares, accounting for 29.07% of the total share capital after the issuance, and the transaction price was 359 million yuan.

The acquisition object of HTC, Wilde, is in the industry of ultrasonic diagnostic equipment in imaging diagnostic instruments. The company is mainly engaged in the R & D and production of handheld, portable and trolley type B ultrasound instruments, with an annual capacity of 12000 units. It is understood that the business situation in the first half of the year is normal. Verde promises to complete a profit of 37 million yuan this year, with a 50% increase compared with the same period last year. At present, the sales revenue of sled type B ultrasonic instrument accounts for 17.8%; the sales revenue of portable B-ultrasonic instrument accounts for 38.9%; and the sales revenue of handheld B-ultrasonic instrument accounts for 37%. From the perspective of gross profit rate, from 2006 to 2008, the average annual gross profit rate of handheld B-ultrasound was the highest, more than 68%, accounting for 60% of the domestic output of similar products.

Before 2009, Shenzhen Verde's products were all black and white supermarkets. In 2009, the revenue was 89.97 million yuan, and the net profit was 24.05 million yuan, up 28% and 32% respectively year-on-year. Zeng Yong told reporters that in the next few years, driven by the government's increased investment in primary medical institutions, and with the improvement of export situation, the company's black-and-white super products can still maintain a growth rate of more than 20%.

At the end of 2009, Shenzhen Wilde has obtained the production approval documents of portable color Doppler ultrasound and trolley color Doppler ultrasound. The price of the company's color Doppler ultrasound is about 150000 yuan. The introduction of color Doppler ultrasound will greatly improve the company's profitability and make Verde enter a period of rapid growth. Zeng Weiyong will gradually become the main business of caichao

In the new medical reform plan, the government also proposed that the central government should focus on supporting the construction of about 2000 county-level hospitals (including traditional Chinese medicine hospitals) within three years. According to the analysis and prediction of hending consulting, the market scale of ultrasound diagnosis will reach 8.085 billion yuan by 2012. In this process, the investment in basic medical equipment accounts for a large part, and B-ultrasound and color ultrasound in Verde products are the main additional medical equipment for township health centers and county hospitals supported by the state.

Regarding the development plan of HTC in the medical device industry, Zeng Yong said: "the company's plan for the future of medical devices is to be bigger and stronger, constantly push the old and bring forth new ideas in the products. At present, the positioning of Verde B-ultrasound products is mainly in the low-end market, and will develop in the direction of medium and high-end in the future."