Why Is It Declining? Chinese Suppliers Say Why.

The main customer Under Armour Inc. (NYSE:UA) Andrew termination footwear cooperation, and the biggest purchase brand Victoria 's Secret Vitoria's Secret parent L Brands Inc. (NYSE:LB) continued to slump in performance, and one of the largest underwear manufacturers in the world is only a small increase in revenue and earnings.

By the end of the second half of September, Virginia revenue increased 2.1% to HK $3 billion 128 million 700 thousand, up from HK $3 billion 62 million 900 thousand in the same period last year, and net profit increased 5.8% from HK $133 million 700 thousand to HK $141 million 400 thousand.

Virginia plans to send 3.8 cents cents in mid terms, an increase of 5.6% from 3.6 Hong Kong dollars in the same period last year.

After the announcement, Virginia was sharply lowered by the two major banks.

The report released by Da Da pointed out that virgin's performance in the first half of the year was lower than the company's expectations and lowered its earnings per share forecast of 17-22% in fiscal year 2020-2022, thus reducing its target price from HK $5.9 to HK $5.5, with an amplitude 6.8%. However, the rating rose from "holding" to "winning the market".

The bank said that the gross profit margin of the three core sectors of Virginia rose during the period, making the gross margin of the company increase by 100 basis points to 22.5%, reflecting that the two factories of the company were close to being fully utilized and productive. Although the company is willing to give up some of its nonprofit customers, the order is still healthy. It will be full in June next year, and five factories in Vietnam have already been put into operation. It is believed that the revenue growth in the second half of this year will accelerate to the highest single digit.

Nomura maintained the "buy" rating of Virginia in the report, but reduced the target price of virgin Ni from HK $7.3 to HK $6.5, and lowered the 16-18% in the 2020-2022 fiscal year to reflect lower income growth.

Nomura said that the management of Virginia group said that the orders in the second half of the financial year were very strong, hoping to recruit 4000 employees to expand their production capacity, so the sales growth of the group in the second half of the fiscal year was expected to increase by 10%.

During the reporting period, the core bust and underwear products revenue was HK $2 billion 580 million 300 thousand, an increase of 8.7% from HK $2 billion 372 million 900 thousand in the same period last year, from 77.5% to 82.5%, gross profit of HK $590 million 300 thousand, an increase of 13.3% over the same period, and gross margin improvement of 90 basis points to 22.9%.

Virginia said that the group upgraded the classic underwear series for the long term cooperation brand with a strong market response to further consolidate its cooperative relationship. At the same time, the group has developed a series of highly praised underwear products by leading the trend of technology and technology, and has doubled the orders.

On the whole, as the public is paying more attention to healthy life, the underwear products with comfort and fashion become a major trend. The group has grasped the momentum with innovative technology and advanced technology, and has been developing several kinds of brand names for several internationally renowned brand partners during the period. new product The series has been successfully favored by consumers, especially in the absence of steel rings and fashionable underwear. The demand for Bra Top is particularly strong, which has led to significant growth in orders.

The report of Virginia's mid day newspaper reveals why Vitoria has always insisted on selling the steel ring plastic underwear.

The revenue of chest and other moulded products increased by 44% to HK $345 million 600 thousand per year, and the proportion of revenue increased from 8.4% to 11%. The gross margin of the business increased from HK $55 million 200 thousand to HK $74 million 700 thousand, and gross profit margin improved by 20 basis points 21.6%.

The revenue of functional sports products dropped sharply from HK $432 million to HK $202 million 800 thousand, mainly due to the termination of cooperation with Andrew's shoes. The proportion of revenue from division to income decreased from 14.1% to 6.5%, but the gross profit margin increased by 20 basis points to 19.1% per annualized rate, and the gross profit fell from HK $81 million 700 thousand to HK $38 million 700 thousand.

In the first half of fiscal year, virgin gross gross profit was HK $703 million 700 thousand, an increase of 6.9% from HK $658 million 100 thousand in the same period last year, and the gross profit margin increased from 21.5% to 22.5%.

The capacity and efficiency of Vietnamese factories continued to rise. EBITDA recorded an increase of 22.4% to HK $441 million 800 thousand, compared with HK $361 million 100 thousand in the same period last year, and EBITDA rose 230 basis points to 14.1%.

During the review period, Vietnam and Shenzhen accounted for 65% and 35% of the total production capacity. The proportion of Vietnam's capacity increased by 1200 basis points, which is expected to expand further. Among them, two of the five factories in Vietnam have matured and another one has been put into operation last year, and the remaining two have more automation facilities and put into operation this year. By the end of September, Virginia's factory in Vietnam had 34000 employees, of whom two of the first two factories had a skilled workforce of 68%, and about 9500 employees of the Shenzhen plant as research and development center and production base.

On Wednesday, Virginia shares rose 1.43% to HK $4.97, corresponding to the market value of HK $6 billion 85 million.