Virgin Giant, The Underwear Giant, Earned More Than HK $6 Billion 200 Million Last Year.

2199.HK, one of the largest underwear manufacturers in the world, grew by 6.7% to HK $6 billion 263 million 300 thousand last year. Shenzhen's company said revenue growth would mainly benefit from optimizing brand and product mix.

Core bust and underwear products revenue was HK $4 billion 874 million 600 thousand, an increase of 3.1% compared with HK $4 billion 718 million 600 thousand in 2017, accounting for 77.8% of the total revenue. The gross profit margin increased by 6.1% to HK $1 billion 70 million 300 thousand, and the gross profit margin increased by 70 basis points to 22%.

The revenue of chest and other moulded products increased by 1.2% to HK $530 million 900 thousand per year. As a result of maintaining the strategy of retaining most chest cups for the cost of chest circumference in Vietnam, sales of chest cups and other moulded products to group brand partners remained stable. Gross profit margin of the business segment remained 21% in 2019, and gross profit slightly increased by 1.2% to HK $111 million 600 thousand.

In recent years, the rapid expansion of functional sports products revenue last year, HK $857 million 800 thousand, rose 39.5%, accounting for 13.7% of the group's income. Gross profit margin of HK $160 million 100 thousand was also 39.5%, gross margin 18.7% unchanged. Virginia said last year that it won a sales growth in a new US casual shoe partner, which partly offset the cancellation of orders during the year's termination of business relationship with another customer. As for sportswear, the Group recorded strong double-digit growth through the use of unique seamless bonding technology.

During the reporting period, the gross profit margin of the group increased from 8.8% to HK $1 billion 341 million 900 thousand, with gross margin of 21.4% at an annual rate of 40 basis points.

After a reasonable balance between business development and profit optimization, Virginia's net profit increased by 17.6%, from HK $240 million 200 thousand to HK $282 million 400 thousand, and earnings per share increased from 19.6 cents to 23.1 Hong Kong cents. The company therefore intends to slightly increase the 5.3% final interest rate from 3.8 cents to 4 Hong Kong cents, with a total dividend payment of 7.6 Hong Kong cents in the whole year, an increase of 20.6% over the same period.

In view of the current global environment, Virginia said that some brand partners should adjust their procurement strategy in response to the changing trade situation. At the end of the year, the group made every effort to make corresponding adjustments between the two producing areas in Shenzhen and Vietnam to slow down the potential impact of the changing situation.

The Shenzhen company said that the existing and upcoming production facilities are enough to drive the steady growth of production capacity in the next two or three years. There is no plan to invest in additional production facilities in the next two years, but only through technological breakthroughs and innovations to enhance competitiveness, and paved the way for improving automation and production efficiency.

Virginia said that the company is located in two of the three factories in the Vietnam Singapore Industrial Park. The operation has matured in the past two or three years, the proportion of skilled workers has been expanding, production efficiency has been gradually emerging, and the production capacity of another factory has gradually increased, which has led to the overall production scale growth. At present, the Vietnamese factory has a total of about 30000 employees, and its capacity accounts for 60% of the group's revenue, an increase of about 40% over the same period last year. The other two factories with higher automation are expected to go into operation in June and September this year. The Xingan County workshop, which will be commissioned in the second half of 2020 and the base of seamless knitting machines, will further improve the capacity of Vietnam.

As for the Shenzhen plant, as a group R & D center and production base, it will continue to play the role of promoting the company's innovation, developing and producing high-tech products and cross industry products. In addition, in order to cooperate with brand partners in developing China's market development strategy, Shenzhen workshop will also focus on selling domestic products for these brands. As of the end of March, there will be about 10000 factories in Shenzhen.

After the report, Nomura published a substantial increase in the target price of Victoria Jeanne 15.9%, from HK $6.3 to HK $7.3, while the rating was raised from "neutral" to "buy", and the target price of Victoria was raised from HK $5.5 to HK $5.9 and the "holding" rating was maintained.

Nomura pointed out that due to the strong performance of functional sports products, last year, Virginia's income was in line with expectations, but gross profit and net profit were not expected. Group management expects Vietnam's capacity income to rise further to 80% this year, trade friction factors have little effect, and gross profit margin is expected to increase, so it is optimistic about the future and expects to reach 24% in fiscal year 2022.

On Tuesday, Virginia shares fell 2.11% to HK $6.02, almost unchanged from the beginning of the year. Author: Hua Fei