Hong Kong Group Will Improve The Layout Of The Industrial Chain

The red bean group and its unanimous action people and the management group of red beans have increased their shareholdings by 154 million shares since the end of 2012 through the two increase holdings plan, a fixed increase and a management level increase. The shareholding ratio will be increased from 48.14% to 59.66%. The cost is estimated to be close to 800 million, and the average price of the increase is about 5.2 yuan. This series of actions highlights the important strategic position of Hong Dun group as a group apparel business platform, as well as the strong confidence of the company's actual controller and senior management level for the prospect of the pformation of the joint stock company and group garment business.

In the past 15-16 years, the pformation of men's clothing business in red bean company has been worth looking forward to. In the past few years, the turning point of pformation has been worth looking forward to: the company has focused on the construction of the terminal store operation standard system in the past few years, and on the basis of this, direct cooperation with franchisees such as store trusteeship and so on to enhance the terminal operation capability of the red bean men's clothing, and foreshadows the overall core competitiveness of the terminal marketing in the future. At the same time, the company insists on the overall product planning in the product side, and rebuilds the supply chain with reference to the Hai Lan home mode, and stimulates the supplier to enhance the product supply capability through the redistribution of interests, so as to achieve the effect of improving the product cost performance under the premise of maintaining the overall style of the red bean men's clothing.

We believe that this pformation is in line with the development trend of upgrading the terminal retail capacity + improving the product cost performance. In the 14 year after the completion of the pformation framework, the supplier fully adopted the consignment mode, the franchised store 90% trusteeship, and the terminal retail management are still improving. After 15-16 years of comprehensive promotion, the turning point of business is worth looking forward to.

On the other hand, the group's household clothing, underwear, women's wear, children's clothing and other businesses will also follow such a pformation mode. After the pformation shows the effect gradually, the company's category clothing business is expected to form a synergy effect, so as to thoroughly realize the development strategy of "full range marketing", and further implement the strategy of "whole network business marketing" with the technology advancement and practice, and finally create the company.

The core competitiveness.

At the group level, after many years of storage, it has formed several major business segments, such as clothing, tyre, biopharmaceutical and real estate, supplemented by financial services, investment and other ancillary businesses. Among them, tire business and biopharmaceutical business are based on General Technology (declared IPO, audit), and red bean spruce bio Polytron Technologies Inc (linked by new three boards) as the core operation platform. The real estate business of joint venture between group and Hong Kong Group is currently in the state of recycling investment. We expect that the red bean share level will gradually withdraw from the real estate business or the real estate business will be returned to the group.

Judging from the situation of the red bean group's clothing business segment, the company is in

The layout of the chain is relatively perfect, with men's (red bean), household clothes, underwear, women's wear, children's wear, down clothing and so on. The total number of more than 3000 stores (including men's wear 1000+) has a considerable profit scale (estimated according to general science and technology prospectus disclosure, and the clothing sector's profit scale is nearly 500 million).

In addition, the company also has the first domestic company.

The construction of platform has at least two levels of long-term significance: first, the textile material industry has huge space, and the annual output of yarn and cloth is 70 billion meters. The annual output value of textile enterprises above the scale is also close to 4 trillion. The company is expected to accumulate new profit growth points through its trading center platform through the trading center platform, and create new profit growth points. The layout of the financial sector also provides convenience for this step. At present, there are more than 2800 registered enterprises in the trading center, nearly 400 trading companies, and 8 billion 476 million pactions. Secondly, for the pformation and upgrading of the garment plate, with the help of the trading center to control the upstream resources, there will be greater synergy effects on improving the efficiency of the supply chain and improving the product cost performance. Trading platform -- China textile material trading center, this B2B

At the end of 14, the red bean group received the fourth batch of mobile communication resale business approval issued by the Ministry of industry and information technology, and put forward the concept of "smart clothing" (through video surveillance, cloud terminal and Internet of things), providing support for clothing industry O2O, store management, supply chain management, big data analysis and other applications.

The red bean group hopes that through the development of mobile resale business and the construction of group information platform, the networked customer access mode, digital expansion mode and intelligent cross selling capability can be realized, and on this basis, the scale effect can be formed, effectively integrate and expand the information business of the upstream and downstream industry chain enterprises, integrate the Chinese textile material trading platform and the red bean shopping mall, build a B2B2C integration platform for intelligent equipment manufacturers, and make industrial applications for traditional enterprises, and promote the full participation of enterprises and individual customers in the apparel textile industry chain, and create the value of the industrial chain's upper and lower travel and intermediate links.

In summary, based on the strong confidence of the company's actual controller and management through the increase of the company's prospects for the development of the joint-stock company and the turning point of the initial pformation of the company's apparel business pformation, coupled with the industrial chain layout of the group's clothing sector and the reasonable asset integration expectation of the important strategic position of the joint-stock company as the core operation platform of the group clothing plate business, we believe that the company has a larger investment value in the current price (market value of 4 billion 35 million), and continues to recommend it.