Tianhong Textile Revenue In 2018 Amounted To 19 Billion 160 Million Yuan, And The Customers Who Had Been Doing Business For Over Five Years Were Ten.

One of the world's largest cotton textile manufacturers, Tianhong Textile Group Limited (hereinafter referred to as "Tianhong textile"), reported in March 7th that, as of the financial year December 31, 2018, Tianhong textile realized 19 billion 160 million yuan of revenue, an increase of 17.5% over the same period last year, a gross profit of 3 billion 146 million yuan, an increase of 28.93% over the same period last year, a profit of 1 billion 163 million 100 thousand yuan for shareholders, an increase of 1% over the same period last year, a profit of 1.27 yuan per share, and a final dividend of HK $0.20 per share.

According to the financial report, the business income of Tianhong textile includes yarn, grey cloth, fabric and jeans sales.

Yarn sales accounted for 81.2% of the group's total revenue this year, reaching 15 billion 500 million yuan, an increase of 6.7% over last year. The growth was mainly driven by the rebound in product sales prices.

After the cultivation of other middle and lower reaches in the past period of time, sales revenue of RMB 3 billion 600 million yuan has been achieved in 2018, compared with the increase of over 1 times in 2017, mainly due to the increase in sales of dyed fabrics.

Hong Tianzhu, chairman and chief executive officer of Tianhong textile company, said that through two or three years of vertical integration, the process was very hard, mainly because some garment factories in the early stage were not the best ones in the industry, but the gross profit margin of some businesses in 2019 is still worth looking forward to. For example, the vertical integration of Vietnam's cloth factories and cotton mills has raised the gross profit margin to 14.8%. In the future, it will further integrate the business through the establishment of a joint venture with Hongkong Qing industry. The company is a leading enterprise in the woven dyed fabric industry, and owns a higher gross margin of 20%-25%. It is expected that the gross margin will continue to improve in 2019.

In 2019, Tianhong textile will continue to expand global production capacity of 720 thousand tons of yarn, 80 million meters of grey cloth sales, 120 million meters of woven and dyed fabrics, 18 thousand tons of knitted dyed fabrics, and turning jeans into profits.

Reporters learned that Tianhong textile was founded in 1997, and was listed in Hongkong, China in 2004. It is currently one of China's largest cotton textile manufacturers and a global leader in elastic core spun yarn.

The main business of the company is to manufacture and sell high quality yarns, grey fabrics, fabrics and garments, especially focusing on producing high added value cotton core yarn.

At present, the company has production bases in China (Jiangsu, Shandong, Xinjiang, Zhejiang, Guangdong, etc.) and overseas (Vietnam, Kampuchea and Nicaragua), has 3 million 300 thousand spindles and 1400 air-jet looms, and has more than 3000 domestic and foreign customers, of which China is the main market, accounting for 79.9%.

Tianhong textile mainly produces and sells yarn products, and sales of grey fabrics, fabrics and garments have increased.

Although the performance of the group yarn main industry has fluctuated in recent years, it has always maintained a positive growth; the grey fabric business has benefited from the trial production in Vietnam, and its sales volume has increased substantially. The first half of 2018 has achieved positive growth. The rapid growth of the fabric and clothing business in recent years has been mainly attributed to the company's recent expansion of downstream garment business and the improvement of the production capacity of the fabric and garment products.

Judging from the change of proportion, the proportion of fabric and garment business income of Tianhong textile in 2018 has been greatly improved. It mainly consists of the acquisition of denim business in Vietnam and Kampuchea in Taiwan, China, and the weaving and dyeing factory in Nicaragua, and the joint venture with Hua Lida (the core clothing supplier of UNIQLO) to build a garment factory in Vietnam, which has improved the production capacity of the garment business of the company.

From the perspective of customer structure, the main customers of Tianhong textile are relatively stable, and the customer structure is diversified.

By comparing the company's top ten --2018H1 customers in 2015, the company's customer structure is relatively stable, and the list of the top ten customers varies little every year.

At present, Dongli international company has become the first largest customer of the company in the first half of 18 years. The main company is expanding the yarn business to the denim garment business, strengthening its cooperation with Dongli, Japan, while the main customer of Dongli is UNIQLO. At the same time, the downstream business has reached a cooperative relationship with the US hawk and other fast selling brands, and will cooperate with GAP in the future. The company can reach a long-term cooperative relationship with the downstream brand partners, which is conducive to the steady growth of the downstream business.

At present, Tianhong textile has more than 3000 customers at home and abroad, and its structure is more diversified. In recent years, the proportion of 10 major customers in total revenue has stabilized at around 15%, 18H1 has reached 17.9%, and there has been no reliance on single customers, and most customers have been doing business with the group for more than 5 years.

Reporters today learned from the earnings report that the Chinese textile market is the main market of Tianhong textile, accounting for 73.5% of the total sales of Tianhong textile in 2018. Below is the ten largest customer of Tianhong textile in 2018.

Tianhong textile said that as the company focused on the production of differentiated products and the company did not rely on orders from single customers, the ten largest customers accounted for only 17% of the company's total sales as of December 31, 2018. The above ten major customers and the group had more than five years of business contacts.

As of December 31, 2018, Tianhong textile company had 38076 employees, compared to 38024 in the same period last year, of which 18211 employees are located in the sales headquarters and production plants in mainland China.

The remaining 19865 employees are stationed outside the mainland of China, including Vietnam, Kampuchea, Nicaragua, North America, Hongkong and Macao.

New recruits meet the company's expansion during the reporting period.

Tianhong textile said, for China's real estate area, the company will continue to develop in a depth oriented way, do well in the professionalization and differentiation of products, create product competitiveness, maintain the leading position of the core spun yarn of traditional superior products of the company, and for overseas, the company hopes to form an overseas cluster with Vietnam as its main base, realize vertical and vertical integration development, and create a seamless industrial chain from spinning, weaving to terminal textiles.

This will make the enterprises in the park produce low cost effect and high output efficiency.

However, analysts believe that in the current context of industrial pfer, Tianhong textile hopes to form a collective force base and platform overseas, and build an international and specialized textile industrial park.

What we want to explain here is that companies do not develop all the links of the industrial chain themselves, but will rely on the industrial parks in Vietnam to absorb enterprises from all sectors of the industrial chain such as spinning, weaving and dyeing to knitting, home textiles, clothing and so on, and jointly build a large industrial alliance, and join the enterprises in the park to realize the system pattern of similar partners, so as to achieve resource sharing, complementary advantages and mutual help and win-win results.