Shenzhou International: Theme Investment Opportunities For A Share Listed Companies

The technology bubble of 2000 still remembers most investors. The technological boom in the other side of the ocean quickly ignited the passion of the mainland stock market. Today, with more profound globalization, consumers and producers have broken the barriers of national boundaries. For investors, this means that while we are concerned about China's own economy, we need to take a broader view of the world and reexamine China's possible investment opportunities from an international perspective. From Google to Baidu, from Priceline to Ctrip, the story of growth stocks in the international market can provide clues for us to look for growth stocks from bottom to top. From cloud computing to precious metals, the international market's views on related industries and themes can provide new perspectives for us to explore themes from top to bottom. A series of reports on "westward eastward" will take stock markets in different countries as research objects to explore the bottom-up stock selection of A share listed companies and the top-down theme investment opportunities.

This period continues to focus on the Hongkong market. Shenzhou International (Trade Code: 2313) is a vertically integrated knitting manufacturer, which covers all the knitted garments, including sportswear, casual wear, underwear, pajamas and so on. The stock market has risen more than 5 times since its listing in 05 years. Recently, the stock price has reached a record high, and its market value is close to HK $20 billion. The company's rapid growth can be summarized as follows: the previous business is focused on OEM OEM, taking the customer centered strategy, improving the added value of products, enabling the interests of customers and companies to be unified, so as to achieve common growth with quality customers. The latter part of the business transformation is the combination of OEM and self created brand. At the same time, the technology level is continuously improved to control the production cost and the profitability of the company is significantly improved.

Comparing A shares with similar companies: comparing A shares, we found that ocean creation and Jia Linjie and Shenzhou International have adopted the strategy of gradually changing from foundry to private brand. Judging from Shenzhou International experience, this strategy is entirely correct. But at the same time, we also noted that the steady growth of foreign trade business, technological upgrading and strict cost control are the prerequisites for its smooth transition. According to his experience, foreign trade is still the most important source of income until now. Therefore, we must be more patient and wait for the brand to be built up, and this process is likely to last for more than ten years. Through market value comparison, we found that Shenzhou international market value is much higher than similar A share listed companies, which shows that the relevant listed companies still have room for growth. On the negative side, Shenzhou International price earnings ratio is lower than that of A shares. At the same time, its profitability is higher than similar A share listed companies.