Shenzhen Textile A (000045): Intends To Divest Two Company Assets And Focus On Developing Polarizer Industry.

In recent years, deep textile A (000045), which focuses on developing polarizing industry, intends to divest surplus assets.

Divestiture of two company assets

On the evening of October 17th, the Shenzhen textile A announcement said that the twenty-second meeting of the seventh board of directors of the company agreed that the company should not lower than the value of the assessment value of 307 million yuan. In the joint property rights transaction of Shenzhen, the 50.16% share of Shenzhen Guan Hua printing and dyeing Co., Ltd. (hereinafter referred to as "Guan Hua company") was transferred publicly.

The announcement disclosed that Guan Hua company was founded in April 1989 with a registered capital of 10 million yuan. In recent years, Guan Hua shares are in a state of continuous loss. In 2018, the company's audited net profit was -3.5 million, and its operating income from January 2019 to 8 was 46 thousand and 700 yuan, with a loss of 3 million 783 thousand and 300 yuan.

Shenzhen textile A owns a 50.16% stake in Guan Hua company. According to the assessment, the value of all rights and interests of the shareholders of Kuan Hua company is 611 million yuan. Accordingly, the calculated value of the 50.16% stake held by Guan Hua company is 307 million yuan. As of September 30, 2019, the company held 50.16% stake in Guan Hua investment cost of 131 million yuan.

On the evening of 17, Shenzhen textile A announced at the same time that the company intends to use the price of not less than the assessed value of 58 million 342 thousand and 700 yuan in the joint property rights transaction in Shenzhen. Therefore, the public listing method transfers the 50% equity interest of Shenzhen good property leasing Co., Ltd. (hereinafter referred to as "good property"), and ultimately the price tag is not lower than the assessment result approved by the state-owned assets management department.

Good property company formerly known as Shenzhen trademark factory Co., Ltd. was changed to Shenzhen good property leasing company in June 30, 2011. It is a Sino Hong Kong joint venture incorporated by Shenzhen textile A and Hongkong Zhijian Enterprise Co invested in July 7, 1983. The registered capital of the good property company is 10 million Hong Kong dollars. Shenzhen textile A and Hongkong Zhijian company have 50% of the equity of the good property company, and the scope of operation is the lease of their own property.

In 2018, a good property was audited with an operating income of 2 million 682 thousand yuan and a net profit of 1 million 705 thousand and 100 yuan. In 2019 1-7, the company's audit revenue was 1 million 743 thousand and 800 yuan, and its net profit was 1 million 80 thousand and 900 yuan.

It is assessed that the value of all rights and interests of the shareholders of a good property company is 117 million yuan. Accordingly, the calculated value of the company's 50% stake in a good property company is 58 million 342 thousand and 700 yuan. As of September 30, 2019, the book investment cost of 50% of the equity held by the company was 4 million 355 thousand and 500 yuan.

Focus on developing polarizer industry

According to public information, Shenzhen textile A, founded in 1984, is a state-controlled listed company controlled by Shenzhen Investment Holdings Company Limited. It is mainly engaged in the production and import and export trade of textiles, clothing and related products, and is also engaged in property leasing, warehousing, real estate development, hotels and other industries. The important business of the company is the high-tech industries represented by LCD polarizer, the textile and garment industry represented by overseas garment processing and high-grade seamless underwear, and the property leasing industry represented by the Shenzhen textile building located in the prosperous business district of Shenzhen Huaqiang North.

For this stripping of the assets of the two companies, Shenzhen textile A said that it is to further revitalize the company's stock assets and concentrate resources to develop the main business of polarizer. After the sale of the shares is completed, it will not affect the scope of the company's listing. There will be no equity investment relationship between the company and the enterprises being sold. After the completion of the transaction, it is expected to have a positive impact on the company's 2019 annual performance.

Against this background, the deep textile A, which was lost in 2018, is expected to make profits in 2019.

In 2018, the company achieved operating income of 1 billion 272 million yuan, down 13.77% compared to the same period last year, and net profit loss of 22 million 980 thousand and 600 yuan, down 143.54% compared with the same period last year.

In October 15th, Shenzhen textile A disclosed the results of the first three quarters of 2018. It is expected that the company will achieve a profit of 17 million 766 thousand and 400 yuan from January 2019 to September, an increase of 44.81% over the same period last year. The third quarter of 2019 is expected to achieve a profit of 9 million 934 thousand and 100 yuan, an increase of 278.9% over the same period last year.

Shenzhen textile A said that during the reporting period, the company's net profit increased a bit from the same period last year, mainly due to the increase in non recurring gains and losses. The company expects the impact amount to be about 28 million 984 thousand and 100 yuan, mainly for government subsidy income and non current assets disposal income.

In addition, during the reporting period, the company's operating income increased considerably over the same period last year. The main reason is that 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, and sales increased year-on-year; two, the import trade business that had been prepaid in 2018 was completed in the current reporting period, and the bulk trade income increased from the same period last year. However, the price of Polaroid products has been running low after the sharp decline in 2018. The main product order structure adjustment has not reached the expected level. In addition, the price of TN/STN products has been greatly reduced due to the shrinking of the market sales, and the increase of the purchasing cost and the increase of exchange losses caused by the depreciation of the RMB exchange rate have offset the contribution of its sales increase to net profit.