The Amount Of YOUNGOR Involved In Litigation Is As High As 800 Million, Investment Business Is Dragging Down, Net Profit Is Down By 91%.

YOUNGOR issued a lawsuit notice about the company and its wholly-owned subsidiary. The amount involved amounted to 800 million, triggering a heated debate in the capital market.

On the night of June 19, 2018, YOUNGOR (600177.SH) issued a lawsuit notice about the company and its wholly-owned subsidiary. The amount involved amounted to 800 million, triggering a heated debate in the capital market.

The announcement shows that Beijing Purple Jade Villa Real Estate Development Co., Ltd. (hereinafter referred to as "Purple Jade villa") has complained to the Beijing Higher People's Court of YOUNGOR and its wholly owned subsidiary, Ningbo YOUNGOR new town real estate Co., Ltd. (hereinafter referred to as "Xincheng real estate") and Suzhou YOUNGOR North City Industrial Co., Ltd. because of the dispute over the right to exclusive use of registered trademarks.

Recently, YOUNGOR received a notice from Beijing Higher People's Court (2018) No. 86 and No. 87 of the Beijing People's court for responding to civil cases.

As of this announcement, the case has not yet been heard.

It is reported that YOUNGOR's wholly owned subsidiary of new town real estate development project in Ningbo, "Purple Jade Garden" real estate projects, record name, publicity name and purple jade villa "Purple Jade", "PJV Purple Jade villa PURPLEJADEVILLAS" registered trademark is similar, purple jade villa said it violated its exclusive rights to register trademark, YOUNGOR and its wholly owned subsidiary litigation.

In this regard, YOUNGOR said that the relevant cases have not yet been formally heard, for the time being, it is impossible to judge the impact on the company's current and post profits. The company will continue to pay attention to the progress of related cases and fulfill the obligation of information disclosure in a timely manner.

YOUNGOR's response to the dispute over the right to exclusive use of registered trademarks is slightly less than the "bottom line", which is not related to the downturn in business performance in recent years.

In April 28, 2018, YOUNGOR published its annual report in 2017, operating income of about 9 billion 840 million yuan, down 33.94% compared with the same period last year. Net profit attributable to shareholders of listed companies is about 297 million yuan, compared with 3 billion 685 million yuan in 2016, a drop of 91.95%.

It is particularly noteworthy that YOUNGOR's net profit attributable to shareholders of Listed Companies in 2015 was close to 4 billion 372 million yuan, which means that its net profit has been declining for two consecutive years.

Public information shows that YOUNGOR's main business includes three aspects: brand clothing, real estate development and investment business, and the main business mode has not been adjusted.

Data show that in 2017, YOUNGOR garment sector revenue was about 4 billion 885 million yuan, an increase of 9.46% over the same period (of which the brand clothing completed business income of about 4 billion 819 million yuan, an increase of 12.74% over the same period last year), and the net profit attributable to shareholders of listed companies was about 760 million yuan, an increase of 38.75% over the same period last year.

The operating income of real estate sector was about 4 billion 855 million yuan, down 52.70% compared to the same period (the real estate development business completed about 4 billion 588 million yuan, 53.57% lower than the same period last year), and the net profit attributable to shareholders of listed companies was about 1 billion 227 million yuan, down 18.64% from the same period last year.

At the same time, net profit attributable to shareholders of listed companies is about -16.89 billion yuan, down 201.95% compared to the same period last year.

From the above, we can see that in 2017, YOUNGOR real estate sector revenue decline, investment business losses dragged down its overall performance in 2017, making it a downward trend.

In this regard, YOUNGOR's revenue decline will be attributed to the impact of cyclical factors in real estate development projects.

Data show that in 2017, YOUNGOR real estate project delivery area decreased by 450 thousand and 600 square meters compared with the same period last year, and the carry over revenue decreased by about 5 billion 264 million yuan compared with the same period last year.

"The decline in operating profit is due to the company's provision for the impairment of CITIC equity assets this year, with the difference between the face value and the investment cost at the end of 2017, confirming the impairment loss, affecting the amount of 3 billion 308 million yuan," YOUNGOR said.

In recent years, YOUNGOR, which once dominated the brand clothing industry, has frequently followed up real estate development and investment business. These two "sideline businesses" have gradually expanded their overall revenue share, and at the same time, they have become an important factor in YOUNGOR's overall performance.

Although real estate development projects are affected by cyclical factors, their performance is sluggish, but YOUNGOR is still investing heavily in real estate development.

In July 2017, YOUNGOR announced that it plans to jointly invest 2 billion with the wholly owned subsidiary YOUNGOR real estate holdings limited to set up Shanghai YOUNGOR Real Estate Development Co., Ltd.

In November 2017, YOUNGOR announced 999 million of its investment and set up Hongyi equity investment with Hongyi capital to invest in new strategic investment industries including financial services, as well as real estate mergers and acquisitions.

At the beginning of April this year, YOUNGOR's wholly owned subsidiary, Suzhou Lang Yi Da Business Management Co., Ltd. also invested 1 billion, and successfully bid for the Tianjin billion high building through online bidding.

In this regard, YOUNGOR said that in order to seize the development opportunities of the national real estate industry, it was only through mergers and acquisitions to search for high-quality projects and plots, to expand and strengthen the company's real estate business, and to cultivate new profit growth points.

But YOUNGOR's real estate industry

It seems that the road is not easy to develop. Now, it has disputes with the purple jade villa on the exclusive right to register the trademark, which brings a grey layer to its future road of real estate development.

Data show that in 2017, YOUNGOR real estate development business completed the two phase of Ming Zhou and the centralized delivery of the Suzhou Purple Jade Garden project, with a carrying area of 256 thousand and 600 square meters and a business income of 4 billion 588 million yuan, representing a decrease of 63.72% and 53.57% over the same period last year.

"Purple Jade Garden real estate development project itself is poor in performance, and now it is a lawsuit, it will inevitably waste company's energy and financial resources, and will have a certain degree of negative impact on its future business development and brand image," the industry insider told Wang Yiyu, a special and exclusive contributor to Finance and economics.

While the performance of the real estate sector is declining, the clothing sector is showing an upward trend.

In this regard, YOUNGOR is also considering returning to the main garment industry.

Li Rucheng, chairman of YOUNGOR, said that in the future, we should invest 10 billion in strengthening the fabric, craft and brand, and enhance the sales channels.

"The fundamental reason for the return of clothing industry is that the big environment is changing. If YOUNGOR really wants to be bigger and stronger, clothing is our core.

The real estate industry is constantly adjusting and controlling. It is not very clear. This road is hard for YOUNGOR to go through, and the opportunity for investment is relatively large. Before that, we did not have a very strong and professional team.

YOUNGOR has been investing in it for more than 30 years.

Although compared to the real estate at 500 million yuan or 1 billion yuan, clothes earn money by selling clothes one by one, but money is slow enough, but it is robust enough.

Li Rucheng said.