&Nbsp Will Gain More Profits Than Its Peers.

According to the SFC arrangement, Li Rui will formally meet in April 22nd.

For the labor-intensive textile and garment industry, labor costs continue to rise.

However, as a small scale garment exporters in China, the gross profit and net interest rates of the Shanghai Li Rui dress Limited by Share Ltd are higher than those of Jin Feida (002239, closing price of 10.37 yuan), Jiangsu three friends (002044, closing price 17.60 yuan) and other listed companies, and their sales net interest rates have reached or even exceeded the profit margins of some brands, so they have been questioned.

According to the prospectus,

Profit margins higher than peers listed companies

Prospectus shows that in terms of business, Li Rui always adheres to differentiated competitive strategies. With its unique business model, the company has achieved good results even in the event of fluctuations in the industry.

In the OEM and ODM clothing production enterprises, there are two listed companies: Jiangsu Feida and three friends in Jiangsu. According to the annual report of 2009, the export ratio of the two companies reached 97.65% and 82.90% respectively.

It is worth mentioning that from the export market, the export market of Kim Feida mainly concentrated in the United States, more than 90% of its products are sold to the US market, and the export markets of Jiangsu three friends are mainly concentrated in Japan, while the main export markets of Li Rui include the United States, the European Union and Japan.

Prospectus shows that in 2010, 2009 and 2008, the proportion of export sales of Li Rui in the three consecutive years was 93.21%, 92.22% and 86.54% respectively.

However, according to the gross profit margin of sales for three consecutive years in 1~9, 2009 and 2008 in 2010, Jin Fei amounted to 13.95%, 17.12% and 15.30% respectively. In the same period, Jiangsu's three friends were 13.19%, 13.78% and 11.60% respectively, and the two companies were relatively close.

During the period, sales of gross profit were 33.26%, 35.80% and 32.15% respectively, two times more than the previous two counterparts.

Another comparable indicator sales net interest rate shows that in 2010 1~9, 2009 and 2008, the net sales rate of net profit was 4.75%, 7.17% and 6.01% respectively in the month of 2010, 2009 and 2008, while the figures for the three friends in the same period were 4.50%, 3.72% and 3.17%, respectively, and two were relatively close.

And Li Rui is 12.92%, 13.96% and 12.25% respectively, two or three times or nearly four times of the previous two counterparts.

The gross margin and net interest rate of the company are much higher than the industry average level and the situation of the listed companies in the same industry. Li Rui explained in the prospectus that the company has broken away from the low end mode of operation and the dependence on customers, which is prevalent in the industry, such as high volume, low added value and low price, and the profit margin of the order has always been maintained at a high level.

The prospectus also said: "the company has a reasonable export market distribution (the EU, the United States, Japan market is more balanced, can be adjusted in time according to market demand changes), complete business processes (from fabric development, plate making, production to distribution one-stop service) and high quality customer base (most of the customers are world famous brand costumes) and other advantages, the company has strong pricing and bargaining power in the industry."

{page_break}

Profitability is outstanding. Industry ranks behind.

Then what is the status of Li Rui, a company with such outstanding profitability?

According to the industry rankings disclosed in the prospectus, in the 2009 clothing export enterprises ranking, Li Rui ranked 64 million 260 thousand in the 100 place, while in 2009, China ranked fifty-first in the Japanese textile and garment export enterprises ranking, with 33 million 10 thousand US dollars in fifty-first place. At the same time, in 2009, China ranked 15 million 640 thousand in the US textile and garment export enterprises ranking 100, only 100th of 28 million 790 thousand dollars. In 2009, China's EU textile and garment export enterprises also showed that the profits of the company were only 9 million 74 thousand, and the gap between the export volume of the US and the US dollar was very large.

In this regard, Li Rui explained that from the industry data, the industry's extreme dispersion is an important feature of China's clothing industry, and this trend will remain in the next period of time.

The size of market share is not the only criterion to measure the strength of an enterprise.

An unnamed textile and garment industry analyst said that the current domestic textile and garment industry has its own brand and marketing channels, the gross margin level is relatively higher than that of manufacturing enterprises; if not,