Jian Sheng Group: Issue The 2020-2022 Planning Outline And Move Towards High Quality Development.

Last night, the Zhejiang health group Limited by Share Ltd (hereinafter referred to as "Kin Sheng group") announced that the company issued a 2020-2022 year development strategy plan outline, guided by the development of high quality, guided by "technology, fashion and green", with "three products strategy" as the starting point to achieve "three high one low": high efficiency, high quality, high responsibility and low cost.

To this end, Fangyi Fang Feng Yi team studied and analyzed:

First, publish the 2020-2022 planning outline and move towards high quality development.

(1) "three high and one low" continuously strengthen the leading position in the industry.

(1) high efficiency: promote intelligent manufacturing, integrate information and manufacturing technology to supply energy chain, and enhance overall efficiency. High quality: promote the systematic development of product development, continue to invest in research, enhance the supply of products and services, and realize the transformation from OEM to ODM. High responsibility: enhance the contribution to stakeholders and social and ecological development of the group. Low cost: optimize the global layout of production capacity, improve input and output structure, strengthen integrated supply chain, focus on sports apparel, and pay attention to domestic and foreign markets, and provide high-quality, low-cost and quick response products.

2. Planning Objective: form the core competitiveness from two aspects of scale and technology, so that Jian Sheng group can become the leader of the global knitted sportswear manufacture.

(2) to increase production capacity, improve internal construction and develop its own sports brand:

(1) capacity layout: in the next three years, we plan to invest 500 million yuan in 2000 new hosiery machines in Vietnam's Qinghua plant, and 330 new seamless looms in Vietnam's Xingan factory.

Product research and development: increase the number of R & D team and optimize the professional structure of personnel, set up creative R & D center and adapt to ODM's product R & D workflow, and set up product label system related product database.

(3) Intelligent Manufacturing: introducing automatic packaging, exploring machine vision instead of manual inspection, weaving machine interconnection to achieve production control, and docking with ERP system to achieve automatic order production.

(4) domestic market: appropriately increase the proportion of service to the domestic market, develop the JSC of self owned sportswear brand (positioning senior women sports brand), extend the service provided to customers, expand the cooperation with domestic brands, and cooperate with customers in China's regional and international brand channels.

Internal management: Based on automation and intellectualization, we should establish a unified standard data layer, implement data driven management, streamline the group planning department level under the support of automatic production scheduling system, adjust the organizational structure, add design and development director, information director, private brand vice president, etc.

6. Social responsibility: pay attention to employee rights, fulfill human responsibilities, research and development of wastewater reuse technology, fulfill social responsibilities, carry out innovation in all aspects of the company, carry out sustainable development and fulfill market responsibilities.
 
Two, outlook: segmentation of single industry leading, full capacity, with Vietnam's Qinghua (cotton socks) and Xingan (seamless underwear) capacity release, performance is still expected to maintain high growth.

(1) high performance and rapid Q3 performance. 2016-2018, revenue growth and net profit growth were 54.1% and 40.7%, respectively. In 2017, the sales performance was speeded up, and the 2018 and 2019 performance continued to grow rapidly. 2019Q1-Q3 revenue, net profit to the parent reached 13.12 (+14.6%), 2.28 (+31.0%) billion yuan, 2019Q3 revenue, net profit to 485 million yuan (+25.0%), 83 million 702 thousand and 700 yuan (+32.7%), Q2 production capacity after the end of the Q3 performance accelerated.

(2) short term production capacity is expected to increase rapidly. Jiangshan Jiangsheng Industrial Park No. 5 plant has been completed by the end of May this year; Vietnam Xingan has added 18 million new seamless underwear projects, the civil construction has been completed in the first half of the year, the indoor matching works have been started, the equipment procurement and personnel training work has been started; Vietnam's annual production of 90 million pairs of cotton socks project has started construction, and the steel structure has been installed. It is expected that the production capacity of Qinghua (cotton socks) and Xingan (seamless underwear) will be solved at the end of the year or at the beginning of next year.

(3) the advantage of long-term capacity layout is obvious. 2018 cotton socks production capacity of 300 million pairs (190 million pairs of domestic, Vietnam 110 million pairs), in 2019, Vietnam's production capacity is expected to increase to 150 million pairs, in 2022, Vietnam's capacity increased to 250 million pairs (domestic capacity will be reduced to a certain extent). In 2018, there were about 23 million production capacity of seamless underwear. In 2019, the production capacity increased to about 28 million units, and increased to 48 million in 2022, including 18 million in Vietnam. The company's Vietnam Haiphong and Xingan income tax preferential policies are "4 exemption and 9 halves" (no tax collection in the first four years, second years in 2019), and the preferential tax policy for Qinghua income tax is "2 exemption from 3 halves". (the first 2 years do not collect taxes, because the 2019 production capacity has not been completed, and it is estimated that 2020 is the first year). Tax incentives are expected to drive the company's net interest rate to rise continuously in the past three years.

(4) the proportion of high ROE seamless underwear and Jian Sheng Vietnam's profits has been continuously improved, and the ROE of the company continues to improve. In 2018, the percentage of seamless underwear revenue was only about 1/3, but net profit accounted for 51%, ROE was as high as 33%. In addition, it accounted for 37% of the profits of Vietnam (87% of total profit from seamless underwear), and ROE reached 17%. But because of the relatively low ROE of domestic business, the ROE of 2018 companies is only 7.6%. It is expected that the ROE of the company will still have room for improvement with the improvement of the performance of JN and seamless underwear.

It is understood that Jian Sheng group was founded in 1993, mainly stocking industry for more than 20 years, has accumulated rich experience in production, has advanced equipment scale advantages, rich brand customer resources and strong and solid market advantages. The company mainly adopts the production mode of ODM and OEM to provide the manufacturing and OEM services of the hosiery industry for the world famous brands and retailers own brands. It went public in January 2015, and bought the leading seamless underwear enterprise in China in 2017.

Author: Fang Yi Fang Feng Yi team