The Overall Profitability Of China'S Textile Industry Has Increased Significantly.

At present in China

Overall profitability of textile increased significantly

Since 2010, China's textile industry

In the textile industry, we propose to focus on the rapid development of home textile sub sectors.

China's home textile is growing in a scale driven way. American experience shows that home textile consumption is in a period of rapid growth when the disposable income per capita is 1000~5000 dollars.

Over the past ten years, China's home textile industry's gross output value has been growing at an average annual rate of nearly 20%. In the coming years, with the continuous progress of China's urbanization process and the increase of wedding age couples, the domestic textile market will continue to grow, and the industry leading enterprises will have double opportunities to expand the market share and increase share.

Home textiles leading development opportunities

With comprehensive analysis of capital strength, brand influence, operation management and design and research, we believe that the market share of leading enterprises will gradually improve, and the market concentration of home textile industry will continue to improve.

It is estimated that the growth rate of the home textile industry will remain at around 17% in the next 5~10 years. The leading enterprises such as Luo Lai home textiles, fuanna and Meng Jie home textiles will have an opportunity to develop. They are expected to grow faster than the growth rate of the industry. The development of these enterprises will be the focus of development in the future by speeding up the development in depth and developing the blank market.

Roley home textiles: leading domestic textile industry

The company entered the franchise mode earlier, and is in the leading position in the number of outlets and the national regional layout.

The company's marketing strategy is flexible, and the brand matrix of multi-level and multi-channel is established through authorization and agency brand. It is the forerunner of the home textile strategy.

While adhering to the "role" as the core brand, it began to build multi brand matrix quickly from the beginning of 2004 through the operation of agent brand and authorized brand.

Targeted marketing strategies should be targeted at differences in product positioning, price and target consumer groups, which will help to cover various retail terminal channels and maximize market share.

It is predicted that there are 437 new stores, 469 and 532 new stores in 2010~2012 respectively, representing an increase of 24%, 21% and 20% respectively.

The company will focus on direct channel development in the next three years, and gradually increase its direct business revenue contribution from 16% in 2009 to 20%. The long-term goal is direct channel revenue to 30%.

In addition, a wholly owned subsidiary of e-commerce has been set up in the first half of this year to explore new channels through network direct selling and mail order catalogues.

{page_break}

Fuanna: clear strategy for regional leaders

The company takes art home textiles as its brand positioning, and its core brand "fuanna" is rich in color and distinctive in product characteristics.

In 2009, the main brand "fuanna" gross profit margin reached 45%, and its profitability was higher than the 40.5% of the "brand" and 32% of "Meng Jie brand".

The company adheres to the marketing mode of "direct operation and affiliate", and the proportion of direct business revenue will remain at around 40%, so as to ensure the company's control over the terminal network and the stability of the marketing network.

With the expansion of the chain network, the company is in line with the "Yangtze River Delta Strategy" and the "Pearl River Delta Strategy". It aims to consolidate the two most important sales areas in Southern China and East China, while radiating the surrounding areas and strengthening the blank market coverage in North China and central China.

It is estimated that there are 470, 465 and 460 new outlets in 2010~2012, representing an increase of 54%, 35% and 26% in total outlets.

Dream home textile: profit margin is worth looking forward to.

The company adheres to the central China region as the focus of development and enjoys the leading edge in the core area.

In the next three years, the company will further increase the coverage of its affiliate network while increasing its direct network construction.

In 2010~2012, the company will go through the period of rapid development of network construction, and plans to add about 400 outlets every year.

According to the historical average single store area, it is equivalent to the increase of 31%, 22% and 18% of the dot area.

In the three companies, the dream of home textile production capacity expansion plan is the first place.

The new 300 thousand and 800 thousand core capacity projects in July 2010 have been put into operation. The shortage of capacity will lead to an effective solution.

At present, the combined gross profit margin of the company is slightly lower than that of Luo Lai home textile and fuanna. In the future, the gross profit margin will be promoted steadily through the adjustment of the new product pricing strategy and the optimization of product structure. It is estimated that the compound growth rate of the company's operating income and net profit will reach 31% and 40% respectively in 2009~2012.