Jian Sheng Group, Which Built 4 Factories In Vietnam, Will End Its Own Brand.

Zhejiang Jian Sheng group Limited by Share Ltd (hereinafter referred to as "Kin Sheng group") recently announced that, due to the project earlier than expected, intends to terminate the "Jian Sheng home clothing O2O marketing network construction project", the balance of 285 million yuan to raise funds for permanent replenishing liquidity.

The announcement shows that the total investment of the group's investment project ended by 310 million yuan, of which 180 million yuan invested in the construction of Direct stores, 80 million yuan invested in the construction of its own e-commerce platform and the three party platform, 20 million yuan for the construction of O2O information management platform, and 30 million yuan for brand promotion.

At the same time, at the early stage, 300 Direct stores are planned to be established, and through the e-commerce platform such as domestic electricity suppliers, cross-border electricity providers, and micro businesses, the marketing network system of seamless online and offline business is built.

As of December 31, 2018, Jian Sheng group has actually invested 20 million 874 thousand and 500 yuan in the project, accounting for 6.96% of the planned use of the funds raised. The funds already invested are used for leasing, decoration and advertising investment of Direct stores.

For this change, in the announcement, Jian Sheng group said that the project has not been able to achieve its expectations in recent years. If there is a plan to continue to raise funds to carry out the project, the corresponding return on investment will be more uncertain.

Jen Sheng group admitted that because the company's products belong to the daily use of personal clothing, with the characteristics of high replacement frequency, low unit value and strong privacy, it is difficult to give full play to the advantages of online shopping under the O2O mode. Under the current competitive environment of domestic clothing, the company has difficulty in entering the market development and promotion with its own brand, so it decides to change the project.

However, according to Shen Wenqi, a Southwest Securities analyst, although Jisheng group has a self financing mode of "healthy home", in recent years, the operation of jisen group has not been as effective as expected. In 2017, jn group closed 15 JasanHome stores. In the first half of 2018, the income of health home declined from 0.9% in 2017 to 0.9%, and the company only kept stores that barely kept balance, so as to maintain the awareness and understanding of market demand.

Shen Wenqi believes that compared with brand dealers, manufacturers lack of brand operation and retail experience, there is great difficulty in running proprietary mode, and it is not expected that the company will open more stores in the near future.

Considering the gross domestic product sales rate has been higher than the gross margin of overseas sales.

Therefore, the cooperation between Jen Sheng group and urban beauty is more like expanding domestic customers and increasing profit margins rather than selling management experience.

This reporter learned that in 2015, Jian Sheng group started the "JASONHOME" brand, and sold self-contained products and external clothing products such as cotton socks, underwear and other close clothing products. The brand was positioned as high quality parity products, and the project plan began to land in 2016.

At present, there are 43 stores, including 1 Direct stores and 42 franchised stores.

As for the influence of JSG on the permanent supplementary liquidity, Jian Sheng group explained in the announcement that this change will help to alleviate the demand for liquidity and increase the efficiency of capital use in the main business development of the company, which will help to reduce the financial cost and improve business efficiency.

According to public information, Jian Sheng group was established in September 2010 and listed in January 2015. It is a leading manufacturer of socks and underwear textiles in China. It mainly produces and exports high-quality male socks, socks, socks, tights and sports socks.

Its banner includes the self built clothing brand JASANHOME, founded in 2016, and the third largest seamless underwear manufacturer in the world in 2017.

Its main customers include Adidas, Nike, Andrew, Muji and other high quality clothing suppliers, and over 90% of their products are exported to Europe, Japan and North America.

Its current domestic and overseas capacity layout is clear, accounting for nearly 40% of Vietnam's capacity, will play an important role in the group's overseas market protection in the next few years.

Shen Wenqi introduced that Jian Sheng Group currently has five production bases: Hangzhou Jian Sheng, Jiangshan Yi Deng, Jiangshan Si Jin, Hangzhou Qiao Deng and Jiangshan knitting company. The company began to set up Vietnamese factories in 2013, and now has the Jinsheng Vietnam Haiphong factory, the spandex rubber factory and the Jian Sheng dyeing factory.

At present, the total capacity of the group is 1.6-1.7 billion, and Hangzhou has 40 million -5000 million pairs of capacity, about 120 million pairs of rivers and about 110 million pairs of Vietnam.

In terms of capacity design and planning, jn Group operates on different customer needs: Hangzhou factory is mainly for Japanese customers; Jiangshan factory is mainly for European and Oceania customers, and Jiangshan knitted fabrics are also used for production of auxiliary materials for other production bases. Vietnam factories mainly face North American market, reducing production costs and trade friction risks.

As early as 2013, Jian Sheng group began planning overseas capacity expansion, and formally began production in 2015, with planned capacity accounting for 50% of the total capacity of the company.

The first half of 2018, the company completed the Vietnam base Haiphong second, third project fully put into operation, is expected to produce 2018 billion 1.1-1.2 double.

In addition, the company also pays attention to the expansion and construction of upstream matching in Vietnam. In April 2018, the spandex rubber factory in Haiphong city expanded again, and the production of 980 tons of covered yarn is expected to be completed in the year. The dyeing plant in Xingan expects to finish 4000 tons of dyed products in the year.

The upstream industry chain superposition and superposition of downstream capacity expansion can effectively ensure the improvement of Vietnam's production efficiency.

At the same time, Haiphong fourth plant is under construction. In the future, Vietnam will add two new projects. One is to build 18 million seamless knitted sportswear items in Xingan, Vietnam. It is expected to invest 250 million yuan RMB. Two is to build 90 million pairs of high-grade cotton socks production line in Vietnam, and it is expected to invest 200 million yuan. Shen Wenqi expects that the overall capacity expansion of Jian Sheng group will be 15%-20% in the future.

Shen Wenqi judged that the Vietnamese factories of Junsheng group will take advantage of labor cost advantages and tax policy advantages to achieve a leap in productivity in reducing trade friction and reducing the cost of customer import duties, and also to improve the company's profit margin, while helping companies expand more overseas customers. In addition, although the group has been expanding its new customers in recent years, it has been more than 10 years for jn and some customers to cooperate.

In order to further stabilize the relationship with quality customers, the company has made the following plans:

1, in order to solve the different needs of customers, set up factories for important customers. At present, Jiangshan Jiangsheng Industrial Park has completed the modular setup of customers.

For example, in 2019, it is expected to open a factory for production by UNIQLO.

2, we plan to set up specialized R & D sales subsidiaries in the location of our customers to help and assist customers in completing product design, research and development and sales.

At present, Jenson group has registered a subsidiary in Japan, hoping to provide customers with more diversified services.

According to the financial report, in the past 2012-2017 years, the growth rate of the business income of Jian Sheng group was over 10%.

2017 and 2018Q3, due to the influence of Qiao Ting Ting and table factors, the company's revenue growth reached 71.4% and 50.4% respectively, and the net profit growth after deducting the net income reached 56.7% and 67.6% respectively.

Excluding the acquisition of seamless underwear business, the 2017 company's revenue growth reached 39.2%, after deducting the net profit growth of about 10.6%.

From the point of view of sub business income structure, before 2017, the main income of Jian Sheng group came from the cotton socks business, which accounted for over 98% of the total revenue.

In August 2017, after the exhibition of Qiao Er Ting, seamless underwear business became another source of income for the company.

In 2017, the company's cotton socks business accounted for 81.23% of the total, seamless underwear business accounted for 16.50%.

From the perspective of regional income structure, the company's main revenue comes from export.

In 2017, foreign trade sales revenue was 931 million yuan, accounting for 82.14% of the total revenue.

According to official website, China's subsidiaries of foreign customers account for more than 90% of the company's domestic sales revenue.

Shen Wenqi analysis, because of the loss of Decathlon's large orders in 2016, the rapid adjustment of customer management strategy after 2017, the expansion of customer resources, and the addition of Qiao Ting Ting, led to a rapid growth in 2017/18 revenue over the same time.

On the other hand, taking into account the investment in Vietnam's capacity construction over the past 15 years, its net profit growth in recent years has also been satisfactory. The net profit growth in 2017 has increased by 57%. In the three quarter 18 years ago, the growth rate was 51%, higher than that of the same industry.

Initially, the 2018-2020 year revenue of JN group will reach 1 billion 590 million yuan, 2 billion yuan and 2 billion 400 million yuan respectively, and the net profit attributable to the parent company will reach 200 million yuan, 260 million yuan and 300 million yuan respectively.