YOUNGOR: No Longer Carry Out Financial Equity Investment In Non Main Sectors

Clothing, real estate and investment were YOUNGOR's (600177) "three carriages".

However, the company intends to make major adjustments to the development strategy on the occasion of the 21st anniversary listing.

In the evening of April 29th, YOUNGOR announced that the company intends to make a major adjustment to the development strategy, and will further focus on the development of the main garment industry in the future. In addition to strategic investment and continuing investment commitments, the company will no longer carry out financial equity investment in the non principal sectors, and choose to deal with existing financial equity investment projects.

As a participant in the A share market, YOUNGOR once was a big fan in the capital market and was once ridiculed as the "stock god" who was delayed by the garment industry.

The first time that YOUNGOR set foot in financial investment can be traced back to 1999, when there were both policy reasons and Considerations about industrial development and diversification strategy.

In the past 1999-2005 years, YOUNGOR has invested in CITIC Securities, Guang Bo shares, yeco Technology (later renamed the hemp industry, LIAN Electronics) and Ningbo bank.

In 2005, the split share structure reform was completely rolled out, and the capital market entered a rapid development period. The market value of financial assets held by YOUNGOR increased rapidly, which once exceeded 20 billion yuan.

The announcement pointed out that in the following 10 years, YOUNGOR witnessed the rapid development of the capital market, and experienced the ups and downs of the investment return, which brought complexity to the investors' valuation and uncertainty in the future.

Based on the capital market value system, diversified companies are usually given lower valuations.

Therefore, in order to achieve the goal of maximizing the value of the company, the company intends to make the above adjustment on the occasion of YOUNGOR 40th anniversary.

By the end of 3 2019, YOUNGOR had invested 39 projects, with an investment cost of 30 billion 455 million yuan and a final face value of 32 billion 20 million yuan.

Among them, the listed companies include CITIC Securities, American real estate, Jin Zhengda, venture Hui Kang, LIAN electronics and Ningbo port, with a shareholding ratio of 4.45%, 10%, 4.26%, 3.96%, 5.28% and 15.25% respectively.

The announcement shows that YOUNGOR intends to invest in the stock item of financial equity investment. In addition to fulfilling its original investment commitments, according to different investment characteristics, it adopts two different strategies, such as market reduction, agreement pfer, withdrawal after expiration, exit after listing, and so on.

As for the impact of this strategic adjustment, YOUNGOR said that the company has implemented the new accounting standards since January 1, 2019. It has designated financial assets other than long-term equity investments as "financial assets measured in fair value and whose changes are included in other comprehensive income". The fluctuation and disposal of their value will not affect the current profits and losses. Only the dividend income can be included in the current investment income, thereby affecting the current profits and losses. In addition, the Bank of Ningbo, as a strategic investment project held by the company for a long time, will provide a stable return for the company.

At the same time, YOUNGOR also pointed out that, based on the strategic thinking that the company has clearly focused on the main garment industry, in order to reduce the impact of capital market volatility on the uncertainty of the company, investors and capital markets have a clearer and clearer understanding of the company, and the company intends to no longer add financial equity investments in the non principal sectors, and choose to deal with existing financial equity investment projects, concentrate resources and tap the potential, and strive to promote YOUNGOR's clothing industry to a new level.

The 2018 annual report released on the same day showed that YOUNGOR realized operating income of 9 billion 635 million yuan in 2018, a decrease of 2.07% over the same period last year, and a net profit of 3 billion 677 million yuan attributable to shareholders of listed companies, an increase of 1139.14% over the same period last year. Net profit after deducting non profits was 3 billion 99 million yuan, and basic earnings per share were 1.03 yuan / share.

The first quarter of 2019 showed that YOUNGOR's operating income in the first quarter of this year was 2 billion 578 million yuan, an increase of 53.31% over the same period last year. The net profit attributable to shareholders of listed companies was 754 million yuan, an increase of 48.02% over the previous year, a net profit of 692 million yuan, and a basic earnings per share of 0.21 yuan.

The annual report shows that YOUNGOR intends to send 10 yuan to 4 yuan for 5 yuan, with a total cash dividend of 1 billion 790 million yuan.

Data show that in the past 20 years, YOUNGOR has raised 7 billion 100 million from the capital market, accumulative dividends of 15 billion, and the company paid 25 billion of the tax revenue; the net assets of enterprises increased from 1 billion to nearly 30 billion.

In addition, YOUNGOR disclosed the proposed buy back plan, the repurchase amount of 2 billion 500 million yuan -50 billion, and the repurchase price does not exceed 10 yuan / share.

The two class market showed that as of April 29th, YOUNGOR's closing price was 9.18 yuan / share.