A Study On The Credit Risk Of The Debt Issuer In The Garment Industry

World clothing shoes and hats news

General statement:

Clothing demand is divided into two parts: domestic demand and external demand.

In recent years, domestic demand and external demand growth have declined significantly.

From the perspective of external demand, the growth rate of China's clothing exports has declined rapidly in the 2008 financial crisis, the European debt crisis in 2012, the rise in labor costs and the appreciation of the renminbi.

In 2015 and 2016, the annual growth rate of clothing and accessories export volume (US dollars) was significantly negative, and it was warmer in 2017, but the overall growth rate was still below 0.

Domestic demand is partly affected by many other factors, such as electricity supplier and other channels, and consumption promotion. Since 2012, the growth rate of clothing consumption in China has been declining year by year, and the annual growth rate of retail sales has dropped from 20% to below 10%.

In 2017, with the macro-economic recovery, the price of living goods rose, and the annual retail sales rebounded slightly compared with 2016 (up 1.2%, 8%), but it is still at the low growth rate since 2001.

In stock bonds, the main industry belongs to 48 clothing categories, with a balance of 31 billion 500 million, involving 12 issuers.

We focused on the credit risk of 10 issuers.

On the whole, we think that we need to focus on the four companies, such as birds of fortune, birds of love, Jia Linjie and the United States.

But now Jialin Jie's 14 outstanding debt is guaranteed by the Sino small and medium sized enterprise financing guarantee company. Even if the company has difficulty in paying bonds in 2019, bonds will still be paid by the SME financing guarantee company.

Text:

Domestic and foreign demand in garment industry has been sluggish and profit growth has been increasing for three consecutive years. This paper studies credit risk in garment industry.

1. Analysis of garment industry management

(1) summary of 2017 apparel industry performance Bulletin

As of March 8th, the number of Listed Companies in the apparel industry was 25, accounting for half of the total A apparel companies.

Among them, men's wear, women's wear, casual wear, other clothing and shoes and hats are 7, 1, 4, 11 and 2 companies respectively, and men's clothing and other garments that report their performance account for more than 60% of all the companies in the industry.

Detailed analysis shows that garment industry profits declined more in 2017.

Of the 25 listed apparel companies currently released, the net profit of 8 shareholders belonging to the parent company is negative.

At the same time, the total profit of 25 companies and the net profit attributable to shareholders of parent companies increased by -37.3% and -46.4, respectively.

List of companies whose profit forecasts decline in 2017

In addition, the list of companies whose profit forecast declined in 2017 is shown in Table 2.

Judging from the reasons for the announcement, there are stock price depreciation preparations, raw material prices, cost increases and changes in investment returns.

At present, the 8 A share listed companies that reported sharp decline in earnings are only 250 million of the US stocks.

(two) the apparel industry is showing a low growth trend.

Traditional clothing industry has been affected by many factors, such as fierce competition, electricity suppliers and other channels, and consumption upgrading. Since 2012, the growth rate of clothing consumption in China has been declining year by year, and the annual growth rate of retail sales has dropped from 20% to less than 10%.

In 2017, with the macro-economic recovery, the price of living goods rose, and the annual retail sales rebounded slightly compared with 2016 (up 1.2%, 8%), but it is still at the low growth rate since 2001.

From the perspective of external demand, the growth rate of China's clothing exports also declined rapidly in 2008, including the financial crisis, the debt crisis in 2012, the rise in labor costs and the appreciation of the renminbi.

In 2015 and 2016, the annual growth rate of clothing and accessories export volume (US dollars) was significantly negative, and it was warmer in 2017, but the overall growth rate was still below 0.

Two, credit risk comparison of issuers in clothing industry

In stock bonds, the main industry belongs to 48 clothing categories, with a balance of 31 billion 500 million, involving 12 issuers.

In the following sections, we focus on the credit risk of 10 Issuers (see Table 3).

(1) comparison of debt paying ability

On the whole, rich birds have a weak debt paying ability in the long term.

In terms of long-term solvency, we compare two indicators of asset liability ratio and total debt capitalization ratio.

The top three of asset liability ratio is Ruyi technology, red bean group and fortune bird, and the top three of all debt capitalization ratio is three.

In terms of short-term solvency, the financial data of the first half of 2016 and the first half of 2017 showed that there was a relatively large proportion of the debt of the wedding birds, the United States and the United States, and the search for special debt in the short term. Because of the loss, the ratio of EBITDA/ interest expense in 2016 was negative; in the first half of 2017, the red bean group, the wedding bird,

And Jialin Jie speed ratio is less than 1.

(two) Profitability Comparison

As the main business of Jihua Group, Hong Kong Group, seven wolves group, Ruyi group and search five companies, besides clothing and large volume of trade, real estate, textile and supply chain management business, compared with other brand clothing issuers, the gross profit margin is low.

At the same time, Jialin Jie business is more fabric supply, so the added value is lower than the brand clothing issuer.

In the first half of 2017, the first half of the first half of the year, the birds of the year, the states of the United States, the birds of fortune and Jialin Jie lost money.

Then, according to the latest 2017 performance bulletin, good luck bird made a profit in 2017, Jialin Jie's annual profit was positive, and the annual loss of American state clothing.

On the whole, we believe that the above bond issuers need to pay attention to the four companies, such as birds of fortune, birds of love, American bond and Jia Linjie.

But now Jialin Jie's 14 outstanding debt is guaranteed by the Sino small and medium sized enterprise financing guarantee company. Even if the company has difficulty in paying bonds in 2019, bonds will still be paid by the SME financing guarantee company.

Three, credit risk analysis of key issuers in clothing industry

Analysis of credit risk of wedding birds

On the whole, as a result of the loss of the company in 2016, the Solvency Index of the company is generally shown.

Basic situation: the company mainly engaged in the production and sale of "happy birds" brand suits, shirts and other men's clothing products.

In the first half of 2017, the tops accounted for 23%, 19% of trousers, 18% of shirts, 12% of T-shirts, 7% of windbreaks, 5.3% of jacket, 3.5% of sweaters, 2.5% of leather shoes, and 0.5% of ties.

In the first half of 2017, the gross clothing accounted for 23.6%, the trousers 20.2%, the shirt 21.2%, the T-shirt 12%, the windbreaker 8.5%, the jacket 3.3%, the sweater 6.5%, the leather shoes 1.6%, and the tie 0.6%.

The company's share is dispersed and there is no actual controller.

In January 2017, joint credit put the company on the watch list.

Profitability: in 2016, it was affected by factors such as loss of large assets impairment, main brand terminal retail slump and high period cost. The company's business revenue declined and realized annual loss.

In 2016, the company achieved operating income of 2 billion 8 million yuan, a year-on-year decrease of 10.4%, and the main business consolidated gross margin of 53%, down 6.25% from 2015 and net profit of -3.87 billion, resulting in a loss.

In 2017, the company strengthened

Operation and management, efforts to optimize the dot structure, the main brands of birds, hazzys, treasure birds and other income growth, while the assets impairment is less than 2016, the company's performance report in 2017 has turned to profitability.

Cash flow: in 2016, the net cash flow generated by the company's operating activities was 278 million yuan, which was 9.7% lower than last year due to the terminal sales slump.

In the first three quarters of 2017, net cash flow in business improved slightly compared with the first three quarters of 2016.

Debt paying ability: in terms of long-term solvency, the company EBITDA was -1.82 billion in 2016, and the total debt ratio of the company EBITDA fell to -0.20 times from 0.39 times in 2015 to the total profit of the company, and the EBITDA interest multiplier dropped from 6.72 times to -3.46 times.

Because the company EBITDA can not guarantee all debts and interest, the company has long-term solvency.

In 2017, as the company's business performance improved, solvency increased.

In terms of short-term solvency, the company turnover ratio and the quick ratio were 1.24 and 0.64, respectively, which were lower than those at the end of 2015. The cash short-term debt ratio of the company increased slightly from 0.43 times in 2015 to 0.45 times in 2016, and cash class assets had a general coverage of short-term debt.

Data in the first three quarters of 2017 showed a slight improvement in short-term solvency.

Generally speaking, the company's short-term debt paying ability is weak.

Corporate Governance: as of May 4, 2017, the incentive target of the company's restricted stock equity incentive plan for the first time was granted in 2017, and the total share capital was 76 million 856 thousand and 300 shares, and the total share capital of the company increased to 1 billion 249 million yuan.

From December 2017 to January 2018, management and shareholders continued to increase their holdings.

Credit risk analysis of American Apparel

Although the company made a profit in 2016, the company lost again in 2017.

On the whole, the short-term debt repayment pressure of the company is relatively large.

Basic situation: the company's revenue mainly comes from casual wear.

In the first half of 2017, men's clothing accounted for 60% and women's clothing was 33%.

In the first half of 2017, men's clothing accounted for 61% and women's clothing was 33%.

The company's products are manufactured by garment manufacturers.

2016, the annual sales revenue of Mei Bang clothing reached 6 billion 520 million yuan, up 3.6%.

In 2017 1-9, the company's operating income was 4 billion 440 million yuan, down 5.7% compared with the same period last year.

The company is a listed company controlled by natural persons, and Zhou Chengjian is the actual controller of the company.

Profitability: in 2016, the gross profit of the company was 28.5 billion yuan, an increase of 2.9% over the same period last year, and the consolidated gross profit margin was 43.7%, down 0.3 percentage points over the same period last year.

Vertically speaking, the gross profit margin of the company has been relatively stable in recent years, and it has also increased slightly in the first half of 2017.

However, due to fierce competition in the industry, the company has invested heavily in sales, and the proportion of sales expenses has increased significantly in recent years. Sales expenses accounted for 41.6% of the total revenue in the first three quarters of 2017, compared with 33% in 2014.

In 2017, according to the performance bulletin, although the company's channel adjustment has made breakthroughs, its direct retail sales have continued to grow. However, due to the lag in the operation of franchise channels, the wholesale income has declined to a certain extent, and the overall performance of the company has been losing money.

Cash flow: net cash flow from operating activities in 2016 was better than in 2015, but data in the first three quarters of 2017 deteriorated again.

In 2016, the net cash flow of the company's activities was 328 million yuan, compared with -1.85 billion in 2015.

Net cash flow from business activities in the first three quarters of 2017 amounted to -3.91 billion, compared with 24 million in 2016.

Debt paying ability: in terms of long-term solvency, the total debt /EBITDA, EBITDA interest rate and total debt capitalization ratio of the company in 2016 were 2.6, 4.5 and 29.8% respectively, and the long-term debt paying ability has picked up.

In 2017, the company's business performance did not improve significantly and lost again.

In terms of short-term solvency, Monetary Fund / short-term debt, current ratio and quick ratio in 2016 were 2.8, 1.31 and 0.65 times respectively. The short-term debt paying ability did not change much at the end of 2015, and the debt repayment pressure was relatively large.

At the end of 9 2017, the company's Monetary Fund / short-term debt, liquidity ratio and quick ratio were 0.4, 1.21 and 0.52 times, respectively, and the pressure of short-term debt repayment was further increased.

Corporate Governance: since 2016, the number of controlling shareholders has been stable.

Main financial data of Smith Barney apparel

Credit risk analysis of rich birds

Overall, in recent two years, the company's operating conditions have declined more frequently. Meanwhile, the investors' right to sell back options for the company's surviving bonds are all in 2018. We estimate that the concentration of the company's liquidity in 2018 will be high.

Basic situation: the company's revenue mainly comes from shoes and shoes.

Sales revenue in 2016 accounted for 88.9% of footwear revenue and men's clothing accounted for 10.1%.

Due to the intensification of industry competition and the negative impact of online sales on offline sales, the company's revenue scale continued to decline over the past 2016 years.

In 2016, fortune birds achieved 1 billion 490 million yuan in business revenue, down 26.6% from the same period last year.

In 2017 1-6, the company's operating income was 412 million yuan, a sharp decrease of 48.1% compared to the same period last year.

In February 2018, Dongfang Jincheng lowered its main credit rating to CC and the rating outlook was negative.

The company is a listed company controlled by natural persons. Lin Ping, Lin and lion, Lin Guoqiang and Lin Rong he are the actual controllers of the company.

Profitability: in 2016, the gross profit of the company was 574 million yuan, down 29.8% from the same period last year, and the consolidated gross profit margin was 38.5%, down 1.8 percentage points compared with the same period last year.

In the past two years, the number of retail outlets has been greatly reduced, and the sales volume, average price and gross profit margin of major products have continued to decline.

In the first half of 2016 and the first half of 2017, the total revenues and profits of the company decreased significantly, and the cost of the period increased rapidly.

In the first half of 2017, the total profit of the company was -846.8 yuan, and there was a loss.

Cash flow: in 2016, the net cash flow of the company's business activities was negative, from 184 million yuan in 2015 to -5.00 billion yuan.

According to the 2017 tracking rating report, in 2016, the cash inflow of the company's operating activities was 1 billion 306 million yuan, down 20.54% from the same period last year, mainly due to the decline in operating performance and the decrease in cash received from the sale of goods and services provided by some customers.

In the same period, the cash income ratio of the company was 84.5%, and the ability to earn cash was significantly reduced by 19.3 percentage points.

Debt paying ability: in terms of long-term solvency, the total debt /EBITDA, EBITDA interest rate and total debt capitalization ratio of the company in 2016 were 8.6, 2.8 and 54.1% respectively, and the long-term debt paying ability declined more.

In terms of short-term solvency, Monetary Fund / short-term debt, liquidity ratio and quick ratio in 2016 were 2.5, 4.49 and 4.2 times respectively, and the main short-term debt paying ability increased from the end of 2015.

At the end of 6 2017, the company's Monetary Fund / short-term debt, liquidity ratio and quick ratio were 2.3, 6.2 and 5.8 times respectively.

Considering the company's remaining bonds "14

"And" 16 riches and 01 "investors in the right to choose the right to sell back in 2018, if investors choose to exercise power, the company will be very pressure on capital.

Corporate Governance: since 2016, the number of controlling shareholders has been stable.

However, according to the announcement of the rating report, the company has a large number of unauthorized large amount of illegal guarantee which has not been disclosed before.

Four, summary

Clothing demand is divided into two parts: domestic demand and external demand.

In recent years, domestic demand and external demand growth have declined significantly.

From the perspective of external demand, the growth rate of China's clothing exports has declined rapidly in the 2008 financial crisis, the European debt crisis in 2012, the rise in labor costs and the appreciation of the renminbi.

In 2015 and 2016, the annual growth rate of clothing and accessories export volume (US dollars) was significantly negative, and it was warmer in 2017, but the overall growth rate was still below 0.

Domestic demand is partly affected by many other factors, such as electricity supplier and other channels, and consumption promotion. Since 2012, the growth rate of clothing consumption in China has been declining year by year, and the annual growth rate of retail sales has dropped from 20% to below 10%.

In 2017, with the macro-economic recovery, the price of living goods rose, and the annual retail sales rebounded slightly compared with 2016 (up 1.2%, 8%), but it is still at the low growth rate since 2001.

In stock bonds, the main industry belongs to 48 clothing categories, with a balance of 31 billion 500 million, involving 12 issuers.

We focused on the credit risk of 10 issuers.

On the whole, we think that we need to focus on the four companies, such as birds of fortune, birds of love, Jia Linjie and the United States.

But now Jialin Jie's 14 outstanding debt is guaranteed by the Sino small and medium sized enterprise financing guarantee company. Even if the company has difficulty in paying bonds in 2019, bonds will still be paid by the SME financing guarantee company.

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