Weixing Shares: A One-Stop Garment Accessories Business That Attaches Importance To Brand Building

Button business: non - standard makes scale effect an important threshold, button faucet alone.

1, the button industry has obvious characteristics of small batch and multiple varieties. As the largest button enterprise in the country and even the world, the company has an unparalleled scale advantage.

Button is a typical non-standard product, personalized demand is very strong, style changes with the fabric texture, color and clothing design and so on, the delivery time is very fast.

These characteristics determine that it is easy to produce a button, but producing a large number of buttons of the same requirement and quality, and producing multiple buttons in a short time is not an easy task, so that the scale advantage becomes an important threshold.

As the largest button enterprise in the whole country and even the world, the company occupies 17% of the market share in the middle and high grade fields, while other domestic button manufacturers are very small, and the varieties are mostly single types. There is a big gap with Weixing.

2, the company has certain pricing power, emphasizing win-win.

The delivery time of buttons is generally only 3~15 days, the price per unit can reflect the change of raw materials, and the proportion of buttons in the cost of garments is very small. As a leading company, the company has the ability to increase the pmission cost; however, the star who knows well the characteristics of the button operation industry emphasizes the win-win situation, and the company is interdependent with the customers. The company will not emphasize the strong pricing power. The garment factories usually have supporting plants around them, and generally do not rely entirely on an excipient enterprise.

Therefore, when the company has certain pricing power, it hopes to win with customers and is conducive to the long-term development of the company.

3, technological innovation and improving resource utilization are the main driving force for the growth of the company's button business.

There are two main driving factors for the development of the company's future button business: first, technological innovation, constantly introducing new products, structural adjustment and value-added products, and relying on brands to obtain excess profits.

The two is to improve the utilization ratio and labor efficiency of production equipment through optimizing the allocation of internal resources.

Under the premise of the development speed of the button industry 10-15%, the company can guarantee the growth of more than 15%, and at the same time, the product price will increase faster than the volume growth rate.

The goal of the company's gross profit margin is to continuously develop new products so as to maintain relative high margins.

4, why the company does not raise the market share by M & A: the button industry is very dispersed, of which the resin button is the most mechanized, but the gross profit margin is the lowest, while the buttons of many other materials are still many, many of which are self-employed workshops or only individual types of buttons.

From the point of view of mergers and acquisitions, it is purposeful, and no matter whether the brand, technology or network are purchased, there is no significance for mergers and acquisitions.

It is also necessary to see that M & A is not the only way to increase market concentration. After setting up a brand, a company can turn other small businesses into its own processing points, which can increase market share on the premise of reducing the expansion cost.

Zipper business: zipper tap has its own development, dress zipper strong Heng Qiang.

1, the overall development of the industry is more rapid, leading enterprises have their own development.

In addition to clothing, zippers are also widely used in bags, shoes, tents and other industries, national defense and other fields, and the market capacity is larger than buttons.

In the coming years, with the rapid development of clothing, bags, shoes and sporting goods, the zipper sales in the global market will continue to grow at a rate of about 15% to 20% per year.

With the rapid development of the whole industry, the zipper enterprises with a certain scale advantage will develop to different degrees, and the scale can expand rapidly. However, before the domestic enterprises fail to achieve a technological breakthrough that can obviously compete with YKK, it is very difficult for enterprises to obtain the monopoly position of the company in the fastener industry.

From this, the situation will be formed. In the case of rising costs, small businesses will experience the cruel test of survival of the fittest, and enterprises with scale advantage can improve market share in this process.

2, dress zipper domain is king, network and customer resources are unique barriers.

The company's zipper business started relatively late, but its development was very fast, mainly because the company fully relied on customers and network resources of button business.

According to the 2006 survey of China clothing, SAB zipper has the reputation of third in the world and the first in the same industry in China.

We believe that the zipper business of the company is not as good as that of Xun Xing, but the zipper field has its own characteristics. The network and customer resources are unique barriers. The company's apparel customers are ready-made, relying on one-stop strategy, which has natural advantages in this field, and will achieve strong development in the future.

3, capacity expansion is still the main theme of zipper business growth.

Relying on the rapid growth of the zipper industry, the company's future growth in zipper business relies mainly on expanding production capacity and upgrading equipment. At the same time, it improves the per capita labor efficiency, reduces management costs and raises gross margin through management.

Under the premise of the development speed of the industry 15-20%, with the expansion of capacity, it is expected that the growth rate of the zipper business in the next few years can be guaranteed to be over 30%, and gross margin can be improved through the advantages of scale and structural adjustment.

Investment rating and suggestions: through the above analysis, as a one-stop garment accessories brand enterprise with a sound sales network and strong brand awareness, and has a leading business mode, the future development space is huge, and it is an ideal variety for long-term investment to obtain stable returns.

We expect the company's 2007-2009 year EPS to be 0.85 yuan / share, 1.14 yuan / share and 1.51 yuan / share respectively, the net profit growth rate is 82%, 43% and 32% respectively, and the 07-09 P / E ratios are 30 times, 22 times and 17 times respectively.

In the "V valuation method", we gave Weixing higher valuation than other production enterprises, which is also higher than Xun Xing, which we think is reasonable and reasonable.

The valuation line will move up and down according to the market valuation level, but it fully reflects our recognition of the company.

At present, the market valuation level is still unstable, but we feel that giving the company 08 times EPS25-30 times PE is very reasonable. The company's reasonable valuation range is 28.5-34.2 yuan, maintaining the "highly recommended" investment rating, which is more attractive when the market risk is large.