YOUNGOR Capital Chain Tension Will Return To The Main Garment Industry

"Investment in 2008 is indeed a mistake. We need to reflect on it."

A few days ago, Li Rucheng, YOUNGOR's chairman, resigned from the post of CITIC Securities director, admits that after experiencing many successful investments, YOUNGOR did have a lot of trouble last year.

Financial assets and stock market value have shrunk dramatically; investment in Haitong Securities has seen a huge loss; Ningbo and Hangzhou have frequently called the "King" and deep quilt.

For a time, rumors of YOUNGOR's capital chain were endless.

At this time, Li Rucheng lowered his holdings of CITIC Securities in a low way, and even lost his "fade out" board of CITIC Securities for nearly ten years, which attracted the attention of the industry to YOUNGOR group's financial difficulties.

Last week, 3 billion weeks later, CITIC Securities announced that Li Ru was busy with the cause and submitted his resignation to the board of directors.

But everyone knows that Li Rucheng faded this time because YOUNGOR continued to reduce CITIC Securities.

Previously, CITIC Securities announced that as of February 4th, YOUNGOR had sold 175 million shares of CITIC Securities, of which 45 million 60 thousand shares were reduced before CITIC Securities was converted into capital stock, and 130 million shares were reduced after citic securities were converted into capital stock, which has accumulated more than 3% of the total share capital of CITIC Securities.

Therefore, after the reduction of 3% of the total share capital of CITIC Securities, Li Rucheng's request to make the resignation is merely a procedural issue.

In fact, YOUNGOR, as the founder shareholder of CITIC Securities, ranked fourth among the ten largest shareholders of CITIC Securities.

But before that, CITIC Securities had been sold frequently.

YOUNGOR's previous reduction announcement was issued in November 13, 2008, and as of November 11, 2008, it has sold 100 million shares of CITIC Securities.

From November 12th to February 4th this year, YOUNGOR sold 69 million 874 thousand and 591 shares of CITIC Securities, about 1 billion 430 million yuan, and nearly 3 billion yuan in two times.

At present, there is news that YOUNGOR's next target of reduction is Haitong Securities that have been covered.

Financial assets have shrunk by billions of dollars. The first impression of Zhejiang people on YOUNGOR started from clothing. However, in the past two years, it has rapidly gained popularity in the field of securities and finance because of its successful investment.

For a time, YOUNGOR became a model for domestic private enterprises to set foot in the field of financial investment.

However, with the sudden change of stock market, YOUNGOR's financial assets have shrunk from 20 billion yuan to 10 billion yuan at the highest level.

The market value of YOUNGOR's stock was evaporated by 38 billion 565 million yuan in 2008, ranking first among Listed Companies in Zhejiang.

"Except for the initial investment in CITIC Securities and Bank of Ningbo, the income of YOUNGOR bank has been greatly reduced. Last year's financial investment was basically a failure."

A securities personage said, in fact, YOUNGOR did not get rid of many private enterprises "stock speculation" mentality.

YOUNGOR's third quarter quarterly report shows that before November 2008, YOUNGOR held 200 million shares of Haitong Securities, and the bid price was 17.94 yuan. At present, Haitong Securities's stock price is only about 13 yuan, so that YOUNGOR has already lost 800 million yuan. In addition, the investment in Jinma shares also has nearly 70 million yuan deficit.

In fact, financial investment has been frustrated not only by these two super projects, but also by YOUNGOR's investment in Shuanghe pharmaceutical industry, China railway construction, Daqin Railway and Pangang steel vanadium. Only CITIC Securities and Bank of Ningbo are still profitable because of the earlier cost of holding shares.

The answer will have to wait until YOUNGOR's 2008 annual report can be completely uncovered.

The reduction of the low position or the reduction of the property market under such a market is a real frustration for Li Rucheng.

The securities industry has revealed that YOUNGOR's "three carriages" property is now hungry for capital.

"Therefore, the previous reduction should be aimed at helping the real estate tide over the difficulties."

At the end of last year, the news of YOUNGOR's retreat in Hangzhou was also heard in Hangzhou.

However, Li Rucheng told reporters that YOUNGOR real estate capital chain is no problem.

They will start 9 projects in 2009, including the Hangzhou Institute of Commerce block will start in the summer.

However, since last year, the real estate business, which has contributed more than 50% of profits to YOUNGOR, is facing a crisis.

In the past two years, YOUNGOR has repeatedly taken the crown of the "land king" repeatedly. However, it has been deeply locked up in today's deteriorating economic environment. Most of these plots are in a state of desolation.

"At that time, several pieces of land in Hangzhou and Ningbo were indeed quite high."

Yesterday, YOUNGOR securities representative told reporters, "but these accounts for a small proportion, and in the past there are also accumulated profits in real estate, there is no problem with funds at present."

A securities insider in the industry also expects that although YOUNGOR's real estate capital chain is very tight, it is not a big problem to pass the difficulty through selling stocks and issuing bonds.

It is different from the financial and real estate fields that YOUNGOR has returned to its main garment industry.

Data show that in 2008, domestic sales of YOUNGOR clothing business increased by about 20%, foreign trade sales increased by 60%, and profits also increased by 30%.

Though affected by the economic crisis, Li Rugang, chairman of YOUNGOR apparel, said that in 2009, the sales target of the company's clothing industry increased by 20% over the same period.

By the end of 2007, YOUNGOR acquired 100% equity and Smart100% stake in KellwoodCompany, which was the largest cross-border acquisition in the domestic textile and garment industry. It was interpreted as a substantive step towards YOUNGOR's internationalization strategy.

In the second half of 2008, YOUNGOR signed a long-term agency contract with HSM for 20 years, introducing its flagship brand HartSchaffn-erMarx into the Chinese market, and plans to open more than 100 stores in the year, which is the first time YOUNGOR has acted as an agent for foreign brands.

YOUNGOR didn't put all its treasure on HSM. It also hoped to cultivate its leisure brand with the help of new Ma's design ability.

Li Rucheng believes that the new horse has a strong driving effect on YOUNGOR's clothing industry.

"We have acquired an international platform through the new Malaysia, and we can directly sell new products to the US market, which is an inevitable way for YOUNGOR to turn from an introverted enterprise to internationalize."

He said.

But Li Rucheng's main business is also very difficult for many people.

An industry insider said: "the brand of agent abroad has a nurturing period. As for the length of cultivation, it depends on how well the consumer group accepts the brand.

The general situation is fast, one year, slow is two or three years.

Wang Xiaonan: editor in charge