"Knitting Aircraft Carrier" Shenzhou International Investment 7 Billion 200 Million Expansion Of Advanced Capacity To Accelerate The Pace Of Manufacturing Upgrading In Ningbo

Recently, Shenzhou International (02313.HK) announced that the company entered into a framework agreement with the people's Government of Beilun District of Ningbo in July 27th.

According to the framework agreement, the partners should provide government support to the group on 18 major projects related to the garment industry in Beilun District of Ningbo.

In the process of acquisition and development, partners should provide support, including the promotion of land acquisition, planning and construction approval process and assistance in the construction of supporting facilities in Beilun district and other services and policy support.

The notice indicates that the Group intends to participate in or facilitate the participation of investors in such projects in 2019 and / or 2020. The maximum investment of the 18 projects is estimated at RMB 7 billion 200 million yuan.

The company said that because such projects could enable the two sides to use their respective advantages, resources and expertise to form a stable and mutually beneficial strategic relationship, a framework agreement would be beneficial to the company.

　　 Shenzhou International, headquartered in Beilun, is the world's largest vertically integrated knitting manufacturer. It was listed in Hongkong in 2005. In addition to Ningbo Beilun, Anhui Anqing, Zhejiang Quzhou, enterprises in Kampuchea, Vietnam and other Southeast Asian countries also have a production base, has 82 thousand employees, knitted apparel exports and export volume ranks first in the country.

Squeeze profits from technology with technology

Today, Shenzhou has 1 million 500 thousand garments every 24 hours, and 600 tons of fabrics are downloaded from its production line. Many of the famous brands such as Nike, Adidas, UNIQLO, Puma, Anta, Lining and so on are from Shenzhou.

In 2018, China's clothing and textile industry had a gross profit margin of 15.1%, a net profit margin of 5.89%, a gross profit margin of 31.6% of Shenzhou International and a net profit margin of 21.4%. The Tencent was the most profitable enterprise in China, and the gross profit margin of Tencent in 2018 was 30% and its net profit margin was 26%. It was said that Foxconn was the most successful foundry in the world, but the net interest rate of the Industrial Federation in 2018 was only 4%.

"I am a fool, so I only do one thing from a cotton thread to a piece of clothing, but I believe that with our team of more than 80 thousand people in Shenzhou, I will be able to do a good job of clothing and textile. This is the leading role of the fashion textile and garment industry in Ningbo's 246 trillion billion industries." Ma Jianrong, chairman of Shenzhou International Board of directors, said.

So how can a top generation factory like Shenzhou achieve a net interest rate of 21.6%? The answer is that technology has built up its own moat.

"What is high technology? What we do not understand is not high technology. High technology must be combined with our industrial production. It is necessary to combine with the needs of consumers in the market, combine technology with materials, and get better cost and higher value. " Ma Jianrong said.

Technological innovation drives enterprise development

In 1997, after taking Shen Zhou's "command" from his father, Ma Jianrong regarded technological innovation as the first priority to promote the development of enterprises.

In 1998, Ma Jianrong invested $2 million 800 thousand to buy equipment in a year's profit, though he was in a predicament and was on the verge of bankruptcy. After two years of hard work, tens of millions of orders are placed. Thanks to the advanced equipment, the accuracy of Shenzhou's printing and dyeing can reach 99%, and the highest level of its counterparts can only reach 70%. With the reduction of the defective rate, light will save 60 million yuan a year. This experience made Ma Jianrong more willing to spend money on production equipment.

Before 2000, almost 90% of Shenzhou's profits were devoted to technological improvements, such as tens of millions of millions of millions of dollars in the world's most advanced knitting machines.

In 2005, Shenzhou was successfully listed in Hongkong. Ma Jianrong upgraded all the more than 900 million Hong Kong dollars to upgrade to the most advanced level in the world.

"Shenzhou technological innovation should achieve three purposes: high efficiency, comfort and skills." Ma Jianrong said.

In the current round of investment of 7 billion 200 million yuan, Shen Zhou also invested a large part of its capital in technological R & D and upgrading of equipment in order to achieve better production capacity.

Grow together with world giants

The world giants such as Nike, Puma, Adidas and UNIQLO are "like glue" to Shenzhou. Shenzhou also has a pair of invisible wings: quality and service.

Today's clothing market is a market dominated by "fast moving consumer goods". For example, UNIQLO is the brand of fast selling (FASTRETAILING). In March 2017, it announced plans to reduce the time period from design to shipment to 13 days, or even to catch up with ZARA.

Therefore, for Shen Zhou, providing efficient services can create greater value.

Ma Jianrong said, "we can make 5 million orders, and we can also make 500 orders, each order has different requirements, how to respond quickly, how to arrange the bill reasonably, and how to make the workers skilled in operation? The integration of big data and the Internet of things will enable us to do that.

Shen Zhou's fabric R & D capability also makes it stand out in the competition of peers.

According to the survey conducted by USFIA (American Apparel Association), in recent years, brand names tend to choose "fabric + OEM" integrated suppliers, and the willingness to choose from 37% to 59%. And the development of fabric is Shenzhou's masterpiece.

Shen Zhou's obsession with fabric is almost crazy. To what extent? Ma Jianrong gave an example.

"In order to develop a waterproof fabric for everyday leisure, our R & D personnel have entered the American living environment to test the average time that he may be exposed to the outdoors when he goes out to the supermarket and goes to work, so as to design and develop a waterproof fabric for 15 minutes. Why only 15 minutes? Because outdoor waterproof fabric is not breathable, and is not suitable for daily life, and its cost and cost performance are not high. And 15 minutes of water resistance, not only to meet the needs of leisure, but also to prevent unnecessary needs, because he went to the supermarket, work may get caught in the rain for an average of 15 minutes.

Shen Zhou is also well versed in Chinese business intelligence. As we all know, Nike and Adidas are the two big rival giants in the sporting goods industry. In order to protect the trade secrets of both sides and avoid the production of homogeneous products, Shenzhou International has set up exclusive factories for Nike and Adidas in 2006 and 2007 respectively.

Considering the competition between the oligarchs, such a close move for the construction of exclusive factories has also deepened the binding of downstream clients.

Market demand exceeds supply. Shenzhou International capacity is expanding. The investment is also aimed at further improving production capacity.

Using cutting-edge technology to achieve "2025 zero emissions"

In the 14 years since its listing in Hongkong in 2005, Shenzhou has realized the leap growth of output value 9.3 times, sales revenue 7.5 times, tax contribution 12.3 times, pre tax profit 13 times, and export earning 4.2 times.

Local feelings and international vision make Shenzhou condense with surging power.

"Ningbo is my eyesight, the best business environment in the world, the highest efficiency of government, and the simplest relationship between government and business. So though I am not a native of Ningbo, I have long been determined to take root in Ningbo. Ma Jianrong said.

At present, Shenzhou's design, R & D, purchase orders and 65% capacity are all located in Ningbo. With the current 7 billion 200 million yuan investment and construction start up, Ningbo's central position in Shenzhou's globalization process is more prominent.

Because of choosing Ningbo as hometown, Shen Zhou cares about every landscape at his feet. He always uses the most green technology to produce and protect Ningbo's green hills and green hills.

Boiler heat energy reuse, printing and dyeing water reuse, resources can be reused, Shen Zhou will not waste. Shenzhou has set up a academician workstation at its International Textile Research Institute, employing two academicians as consultants, and a fellow academician focusing on the development and application of new fabrics and new materials. Another academician mainly studies how to reduce resource ownership, study environmental governance and green environmental printing and dyeing technology, and reach the "2025 zero emission" plan set by Shenzhou with sophisticated technology.

In the process of internationalization, Shenzhou has been committed to creating a reserve pool of resources suitable for multinational companies. In addition to actively introducing professional talents, Shenzhou also decided to spend 3 to 5 years to build a "core management talent pool".

Shen Zhou also has Shenzhou Management College, so that employees entering Shenzhou have the opportunity to receive training and education, so that ordinary grass-roots workers have the opportunity to get promoted and create greater value. Every year, Shenzhou has invested hundreds of millions of dollars in improving the living environment of employees.

"Decent work, dignity life" is Shen Zhou's corporate culture. Ma Jianrong said that this is not a slogan to show off on the corporate wall, but should be a warning for corporate executives at all times.

The ROC starts up ninety thousand miles a day with the wind.

"I believe that as long as we keep calm and concentrate on one thing, stick to our main business, and remember our original intention, we will be able to do one thing well. Shenzhou must be a leading actor in Ningbo's fashion textile and garment industry. " Ma Jianrong said.