Deep Textile A (000045): Net Profit Decreased 18.81% To 7 Million 832 Thousand And 300 Yuan In The First Half Year.

Shenzhen textile A (000045.SZ) issued its semi annual report in 2019, operating income of about 1 billion 9 million yuan, an increase of 112.72% over the same period last year. Net profit attributable to shareholders of listed companies was about 7 million 832 thousand and 300 yuan, down 18.81% compared to the same period last year. Net loss of non recurring gains and losses attributable to shareholders of listed companies was about 10 million 548 thousand and 600 yuan, and basic earnings per share were 0.0153 yuan.

In the first half of 2019, the company persisted in the development of the Polaroid industry, focused on the improvement of the main industry, continued to improve the profitability, accelerated the construction of the 7 line of the Polaroid line, and further deepened the reform of the mixed ownership system. First, we should continue to enhance the production and operation capabilities of polarizing products by improving product quality, optimizing product mix, actively exploring the market, and exploring raw material substitution. At the same time, we should closely focus on the main industry's target of reducing losses and increasing profits, and promote various measures to optimize management. Two, in order to grasp the development opportunities of domestic super large scale polarizer business, we will strive to build super large scale polarizer industrialization projects (line 7). Three, we should strive to improve the predicament of textile and clothing business, and actively promote the introduction of strategic investors by the subsidiary company of Shenzhen meizen Garments Co., Ltd.; four, we will finish the capital increase and public rental of Guan Hua company, and realize the rental income. At the same time, improve the level of property services, property leasing steadily rising; the five is to implement the main responsibility of safety production, so that the company's security development.

During the reporting period, the company's operating income increased considerably over the same period last year. The main reasons were: first, the TFT-LCD two phase 6 line was put into operation in the second half of 2018, the capacity was released in the current year, the sales volume increased year-on-year; two, the import trade business that had been prepaid equipment in 2018 was completed in the current reporting period, while the trade volume was less in the same period last year. During the reporting period, net profit attributable to shareholders of listed companies declined slightly compared with the same period last year, because the price of major Polaroid products had been running low after the sharp decline in 2018, and the average selling price decreased compared with the same period last year, which offset the contribution of the increase in sales to net profit.

During the reporting period, the company continued to optimize the production process and improve the quality of products. It continued to increase production capacity and reduce wastage through measures such as equipment modification of line 4 and speed improvement of line 6. After the relocation of line 1-3, equipment assembly, linkage trial run and fine adjustment work were rapidly completed. At present, all production lines basically returned to normal production level; two, the product structure was optimized and the product market was actively explored. In order to enhance overall profitability, the company continuously adjusts its product mix, reduces the order of negative gross profit products, gives priority to the supply of high margin orders, speeds up market development and product introduction, and actively promotes key customers such as LGD, Hui Ke, BOE and SHARP. Three, we continue to do research and development work well and explore alternative imports of raw materials. During the reporting period, the company continued to develop new products, enhance product performance improvement, carry out new material evaluation and introduction, focusing on the price reduction of major raw materials.

At the same time, the research and development of independent intellectual property rights increased. During the reporting period, the company applied for 3 patents (Inventions), and 7 patents received the notice of authorization. The company has studied and formulated two national standards "polarizing optical compensation value" and "testing method for adhesion of optical film coatings on polarizing plates". Relying on the two technology platforms of "Shenzhen polarizing materials and Technology Engineering Laboratory" and "Municipal Research and development center", the company has focused on the research and industrialization of the core production technology of polarizer for LCD, the development and industrialization of new polarizer products for OLED, and the localization of raw materials for polarizing production.

Line 7 project has entered the stage of comprehensive construction. At present, all kinds of licenses required for construction are now obtained. The company's project construction team has arranged the construction time node, and strive to complete the work on schedule. The company will further strengthen the monitoring and management of the budget, schedule and quality in the process of project construction. At the same time, it will actively promote technical exchanges with the East China Electric Company and Kunshan's Chi Mei, and promote the research and development of raw materials for line 7 project. The company leaders led the team to visit the main raw material manufacturers in Japan, and consulted with the manufacturers of raw materials to discuss cooperation. The supply sources of the main raw materials were basically determined, and the supply of raw materials matching the polarizer production line 7 on 2020 was solved.

During the reporting period, despite the adverse effects of industry slump, raw materials and labor costs rising, the number of customer orders in traditional textile and garment business has rebounded. The company has actively promoted the introduction of strategic investors by its subsidiary Shenzhen Mei hundred years Garments Co., Ltd.

During the reporting period, in order to improve the obligations of the shareholders of both the company and the overseas Chinese Industrial Co., Ltd., the company made a capital increase in proportion to the real assets of Guan Hua company, and increased the registered capital of the company from the original 10 million yuan to 109 million 551 thousand and 700 yuan. In June, Guan Hua completed the overall external rental of Guan Hua building, and received the rental margin and the first quarter rent of the lessee for a total of 10 million 203 thousand and 200 yuan. In addition, other property companies increased management efforts to improve the quality of property and hotel services, and actively overcome the pressure on property leasing caused by the downturn of the real economy. The rental situation is stable, showing a steady and rising trend.