Luen Fat Shares Smashed 1 Billion 300 Million, With The Largest Garment Manufacturer In Indonesia To Build High-End Woven Fabrics.

The local dyed fabric leader, Jiangsu Lian FA textile Limited by Share Ltd (hereinafter referred to as "Lian FA share") issued a notice on outward investment in May 16th. In order to make full use of Indonesia's resources, labor and customer advantages, expand the local and international market of high-grade woven fabric and enhance the competitive advantage of the company in the field of high-grade woven fabric manufacturing, the joint venture intends to cooperate with Indonesia PTUngaranSariGarments (hereinafter referred to as "PTU") to invest in the construction of 60 thousand mm high grade woven fabric in Indonesia.

The total investment of the above projects is estimated at US $190 million (about 1 billion 306 million yuan, the first textile net note), with fixed assets investment of US $165 million 87 thousand and liquidity of US $24 million 956 thousand.

It will be divided into two phases. The first stage will form an annual production capacity of 30 thousand Beige weaving, and the second stage will form an annual output of 30 million meters of dyed and dyed fabrics.

It was reported that in April 4th, Luen Fat shares signed a memorandum of understanding with Indonesia PT.KawasanIndustriKendal (Kendall Industrial Park Limited, hereinafter referred to as "KIK") to purchase land for investment in textile and garment industry in the Indonesian Kendall Industrial Park.

The two sides have invested in the purchase of land in the Kendall Industrial Park for textile and garment industry, and KIK has provided cooperation intentions for the company to provide various infrastructure services, to win preferential policies for the company, to assist companies in handling various formalities, to ensure the conditions required for the production and operation of the company, and to plan exclusiveness in the park.

According to the agreement, the two sides began further discussions on land purchase in May 10, 2019.

The announcement issued today by the joint venture group shows that PTUngaranSariGarments was established in September 24, 1975 and has been in operation for more than 40 years. The company is currently one of the largest garment manufacturers in Indonesia, supplying men, blouses and skirts to the world's leading brands.

The company has more than 28700 employees, 9 production bases, 30 factories and 2 water washing plants, producing 50 million kinds of garments each year.

It is estimated that the annual income of the joint venture is expected to reach US $120 million, and the investment recovery period will be 8.2 years, with a total investment return rate of 11.6%.

Indonesia has a large population and a relatively well-developed garment industry. In 2017, the total export volume of textile and apparel reached 12 billion 537 million US dollars, mainly exported to Europe, America and Japan.

After long term investigation, local clothing companies have a high degree of recognition for their products, and they have an urgent need for improving fabric quality and shortening delivery time.

The construction of the project will make up for the gaps in the local textile industry chain, consolidate the core competitiveness of the company's products, shorten the delivery time, and meet the needs of the company's strategic customers.

Lian FA shares said that the global textile industry and trade pattern is undergoing more obvious changes, and speeding up the global layout of the company is of strategic importance.

The garment industry in Indonesia has a strong demand for high-grade woven fabrics, and has great market potential and space.

As a large local garment enterprise in Indonesia, PTU and its cooperation are conducive to speeding up the promotion of the project, better developing the local market, strengthening the joint efforts and benefiting jointly.

The joint venture believes that the project's investment and construction will help to extend the core competitiveness of the company in the field of high-grade woven fabrics, speed up the global layout of the company, adapt to the trend of the development of the textile industry, and have a positive impact on the company's future business revenue and company performance.

Public information shows that the joint venture stock has the production scale of 210 thousand spindles, the annual production capacity of 160 million meters, 0 tons of printing and dyeing cloth, 11 million garments, 0 tons of knitted yarn and knitted fabric dyeing. The company has garment factories in Kampuchea, and has subsidiaries or offices in the United States, Hongkong, Italy, Bangladesh and other countries and regions, and continues to seek opportunities to invest in the construction of textile printing and dyeing industrial parks in Indonesia and Ethiopia, so as to achieve the layout of the global production base, and make full use of the advantages of tariff and labor resources to enhance the global competitiveness of enterprises.

According to the financial report, in 2018, the joint stock company achieved 4 billion 168 million yuan of business income, an increase of 4.12% over the same period last year, and realized operating profit of 508 million yuan, up 11.4% compared to the same period last year. The net profit was 390 million 560 thousand yuan, up 9.71% over the same period last year.

During the reporting period, the company actively expanded the production capacity of the home textile industry, promoted the development of home textile plates, and utilized the advantages of Xinjiang's resources to expand the diversified layout of production bases.

The company has built a cotton processing plant and a spinning mill in Xinjiang. During the reporting period, it has passed the bill to build high-grade household textile grey cloth and matching yarn production project, and it is expected to achieve the production capacity of 28 million M / year home textile grey cloth.

After the completion of the project, the company will improve the home textile industry chain, enhance the competitiveness of the home textile products, and support the home textile industry to become bigger and stronger.

Although the status of the stock as the leader of the yarn dyed fabric industry is prominent in 2018, although the export environment is weak in the second half of the year, the fluctuation of external demand will bring some interruption to the company's purchase. But in the long run, the improvement of downstream brand customers (such as multiple batches, small batch, fast delivery time, R & D cooperation support, etc.) will help the leading companies to highlight their advantages and increase their concentration. In addition, there is no obvious increment in the short-term output of the joint stock company. The main products such as dyed fabric, printing and dyeing cloth and printed cloth are basically full production. In the future, the growth will be achieved mainly through the optimization of order structure, such as the spot fabric pattern of the dyed fabric product, the extension of the printing and dyeing fabric and the home textile fabric to the upper reaches (the 28 million mm project of Xinjiang home textile fabric is supported by the supporting fabric). Everbright Securities analyst Li Jie believes that the joint issue