YOUNGOR Improper "Stock God" Began To Overweight The Property Market

In the evening of October 30th, YOUNGOR released the three quarterly report, showing that both the company's revenue and net profit grew, and one of the important reasons was that the real estate business revenue of the company increased significantly.

Chinese New Jingwei reporter found that this year, YOUNGOR in the purchase amount, new construction area, construction area and other real estate business input data, has exceeded the previous years, the company is constantly upgrading the real estate business.

It is worth mentioning that in April this year, YOUNGOR has just announced that it will divest the company's investment business and focus on the strategic adjustment of the main garment industry. Now, YOUNGOR, who is preparing to wash its hands from the stock market, begins to increase the property market.

In the industry view, YOUNGOR entered the real estate market earlier, the company has a mature team in this field, and in the context of the downward pressure on market consumption, the company also needs to maintain its performance through real estate investment, so the action of increasing the real estate business can be understood.

The real estate revenue has increased sharply, and the purchase amount has exceeded last year.

In the evening of October 30th, YOUNGOR released the three quarterly report. In the first three quarters of 2019, the company achieved operating income of 6 billion 868 million yuan, an increase of 45.14% over the same period last year, achieving a net profit of 3 billion 77 million yuan, up 31.43% over the same period last year.

For the reasons for the growth of revenue and net profit, YOUNGOR explained that it was mainly due to the substantial increase in real estate business revenue and net profit in the first three quarters of the company. Three quarterly report shows that during the reporting period, YOUNGOR Real Estate Board completed the delivery of Yamin flower garden, Haiyan government and big Yue garden, and realized business income of 2 billion 634 million yuan, an increase of 173.23% over the same period last year, achieving net profit of 910 million yuan, an increase of 182.01% over the same period last year.

Founded in 1979, YOUNGOR started its textile and garment business. The company entered the real estate market in 1992 and began its investment business in 1999. In 2007, YOUNGOR first put forward the development strategy of "three carriages" for clothing, real estate and investment.

In April 30th this year, YOUNGOR announced that the company was going to make a major adjustment to the development strategy. In the future, it will further focus on the development of the main garment industry. Besides strategic investment and continued investment commitments, the company will no longer carry out financial equity investment in the non principal sectors, and choose to deal with existing financial equity investment projects.

But interestingly, when YOUNGOR proposed to divestiture investment business and focus on the main garment industry, the company's real estate business took the lead in achieving a substantial growth. In 2017 and 2018, the revenue and net profit of YOUNGOR's real estate sector slipped. The decline in operating income was 53.70% and 17.79% respectively, while the net profit fell by 18.64% and 14.51% respectively.

In fact, with the increase in real estate business income this year, there is also YOUNGOR's investment in the real estate business. Three quarterly report shows that as of the end of the reporting period, YOUNGOR land reserve 7, compared with the beginning of the year, the new cooperation project Changfeng YZ13-02 block in Ningbo, the JD08 block in Jiangnan highway area, and the five river mouth block.

In July 31st, when YOUNGOR competed for five Jiangkou plots at a price of 3 billion 997 million yuan, the amount spent by the company on the purchase of land had reached 4 billion 839 million yuan this year. In the past two years, the company had no more than 4 billion yuan for the land. In addition, as of the end of September this year, the development of YOUNGOR real estate development area is 734 thousand and 800 square meters, and the construction area is 1 million 546 thousand square meters. As a contrast, the new construction area of YOUNGOR is 480 thousand and 400 square meters at the end of 2018, and its construction area is 1 million 104 thousand and 800 square meters.

In the 2019 semi annual report, YOUNGOR said that in order to maintain the sustainable development of the real estate business, the company is also consolidating and upgrading the existing real estate development business while actively exploring the development and profit model of the new related industries.

Guo Yiming, the director of investment and marketing, pointed out to the Sino Singapore Jingwei client that although YOUNGOR is an old brand of traditional clothing, it is also one of the absolute representatives of Ningbo real estate. The company entered the real estate market earlier and had certain investment experience. Under the background of downward pressure on market consumption, the transformation of garment business was also faced with uncertainty. YOUNGOR continued to invest in real estate business, or there were also considerations to support and boost its performance.

"Stock god" gold basin wash hands, investment profits still account for more than 40% of net profit.

In fact, before this year, YOUNGOR has always had the title of "stock god" in the capital market.

In 1999, YOUNGOR began to enter the capital market. The first investment was invested in the establishment of CITIC Securities with 320 million yuan investment, and obtained 9.61% of CITIC Securities. After that, CITIC Securities was successfully listed, and the market value of YOUNGOR's holdings also increased rapidly.

From 1999 to 2005, apart from CITIC Securities, YOUNGOR also invested in extensive shares, yeco Technology (later renamed the hemp industry, LIAN Electronics), Ningbo bank and other companies. In 2005, the capital market entered a period of rapid development. The market value of financial assets held by YOUNGOR was over 20 billion yuan.

At the shareholders' meeting held at 10 in May this year, YOUNGOR chairman Li Rucheng also explained the main reasons for giving up the investment sector: first, the securities and Futures Commission restricted the withdrawal of equity investment, and it became more and more difficult to withdraw. This gave YOUNGOR a lot of pressure. Two, because of the implementation of the new accounting standards, the profit and loss of investment business was greatly affected by the fluctuation of stock assets held by financial assets. Three, it is difficult for the investment team to do cash supervision in the form of.

From the three quarterly data, YOUNGOR has begun to gradually divest its investment business. By the end of September this year, the net cash flow generated by YOUNGOR's investment activities increased by 318.99% over the same period last year. The company explained that the growth was mainly due to the implementation of the "no longer new and quickening disposal of financial equity investment scheme" in the reporting period, and the cash paid for investment was reduced by 8 billion 319 million yuan over the same period last year.

But what needs to be pointed out is that although YOUNGOR has begun to divest its investment business, investment income is still the main source of income for YOUNGOR. In the first three quarters, the net profit of YOUNGOR's investment business was 1 billion 392 million yuan, accounting for 45.24% of the total net profit of the company.

The company has repeatedly proposed to return to the main garment industry.

After putting forward the focus of the clothing industry, YOUNGOR announced the goal of becoming a world-class fashion group at the 40th anniversary celebration of the company's establishment, and indicated that the goal should be completed in three steps in the next 30 years. The first step is to develop 5-10 self owned brands; the second step is to purchase 5-10 international brands; third steps to build a marketing platform for online and offline integration, and create a fashion empire.

This is not the first time YOUNGOR has emphasized the return of clothing industry. In July 2012, Li Ru's achievements have publicly stated that the company will strictly control the investment in real estate, adjust the scale of investment, concentrate resources on brand clothing and return to the main garment industry. In 2016, Li Rucheng made a high-profile announcement to build the top brands in the domestic market and rebuild YOUNGOR in five years.

"YOUNGOR has been shouting for many years, and there is no need to get entangled in the company's expression. The key is to see the company's actions," he said. Ma Gang, a clothing industry expert, said to the Sino Singapore Jingwei client.

This year, YOUNGOR has indeed increased its investment in garment business. In the first three quarters of 2019, YOUNGOR's R & D cost was 77 million 941 thousand yuan, an increase of 347.90% over the same period last year. YOUNGOR said that during the reporting period, the company increased R & D investment and enhanced the development of DP ironing and washing processes in garment manufacturing, while promoting smart marketing and intelligent manufacturing.

In addition, as of the end of September this year, YOUNGOR's marketing outlets also increased to 2352, an increase of 94 compared with the beginning of this year. Increased investment, YOUNGOR clothing business in the first three quarters of this year's revenue and net profit growth has also been greatly improved compared with last year.

Guo Yiming pointed out that YOUNGOR's achievements in the apparel business since the three quarter have great relations with the company's return to its main business, increasing investment in R & D, and repositioning and creating new manufacturing and marketing modes. The promotion of intelligent manufacturing, smart marketing and ecological technology shows that YOUNGOR will take digitalization as an important step in the restructuring of the garment industry. Under the new retail trend, the organic combination of online and offline will bring solid impetus to YOUNGOR's clothing business and boost its effect.

Song Qinghui, a famous economist, said that although YOUNGOR's achievements in clothing business still have bright spots, it is not easy to continue to maintain this trend and achieve the goal of bigger and stronger clothing business.

"Although the emergence and evolution of the new retail mode really brings new opportunities for the development of the garment industry, at present, the market concentration of China's men's wear market is relatively low, and the competition is fierce. YOUNGOR is still facing the problem of brand aging. There is a lot of pressure on the company to maintain the rapid growth of clothing business." Ma Gang said.