IPO, The World'S Largest Worsted Fabric Manufacturer. Fundraising 690 Million Upgrade Clothing Intelligent Manufacturing And Other Projects

One of the few large scale worsted compact spinning production bases in the world, Shandong Nanshan Zhi Shang Polytron Technologies Inc (hereinafter referred to as "Nanshan Zhi Shang") recently disclosed the IPO and the prospectus on the GEM Listing (Draft). The company intends to issue 90 million shares of the prospectus and raise 690 million yuan for the fund-raising. The intelligent upgrading project of spinning wool production line, the upgrading project of garment intelligent manufacturing and the upgrading project of R & D center:

Among them:

1. Intelligent upgrading project of worsted wool production line.

The main purpose of the project is to professionally integrate and upgrade the existing worsted fabric business, and to realize process reengineering and intelligent manufacturing by means of equipment renewal, process improvement, intelligent upgrading, individual plant renovation and reconstruction, so as to optimize and adjust the existing and potential resources of worsted fabrics, and build more specialized, standardized and intensive production management and organization. Framework to achieve brand enhancement and intelligent manufacturing. After the completion of the project, the product structure has been optimized, and the production capacity of worsted fabric has increased by 1 million 500 thousand meters per year.

The total investment of the project is 537 million 367 thousand and 300 yuan, including 464 million 827 thousand yuan of construction investment and 72 million 540 thousand and 300 yuan of new working capital, and the project will be calculated for 12 years (including 2 years of construction). After the project was completed, the average annual new business income was 251 million 715 thousand and 600 yuan, the average annual net profit increased by 103 million 100 thousand and 600 yuan, the financial internal rate of return after tax was 20.92%, and the investment recovery period was 6.65 years (including construction period 2 years).

2. Garment smart manufacturing upgrade project

The scope of the project upgrading includes boutique factory, shirt factory, intelligent storage and upgrading of company informatization. The project plans to add automatic suspension system and automatic sewing equipment to the sewing workshop of the boutique factory and the shirt factory, and build a new automatic three-dimensional intelligent warehouse, and build a new information system based on the original information system, realize the information linkage of the whole plant, build a digital workshop, realize the intelligent production system with MES as the core, and establish the information management and control process and management standard. Meet the business needs of quick response of customized orders to achieve intelligent and flexible production.

The total investment of the project is 84 million 819 thousand and 700 yuan, all of which are construction investment and no additional working capital. The project will be calculated for 12 years (including construction period of 2 years). After the project was completed, the average annual new business income was 38 million 598 thousand and 500 yuan, the average annual net profit increased by 17 million 606 thousand and 500 yuan, the financial internal rate of return after tax was 22.05%, and the investment recovery period was 5.95 years (including construction period 2 years).

After the upgrading of the boutique, the output increased from 176 thousand to 180 thousand sets, and the output of the tailored suit suits increased by 30% annually. Finally, it reached 87 thousand sets of advanced suit suits, 48.3% of the total suits, and 93 thousand suits of suits and suits, accounting for 51.7% of the total output of suits.

After the upgrade of the shirt factory, the output increased from 457 thousand and 400 to 500 thousand, including 350 thousand shirts. The production of advanced custom shirts is increased by 30% in proportion to the proportion of high-quality suits and suit suits. The annual production of 241 thousand advanced shirts, 48.2% of the total shirts and 259 thousand of professional shirts, account for 51.8% of the total shirts output.

Upgrading and upgrading the existing finished goods warehouse, using the existing brand logistics warehouse and the location of the shirt factory to rebuild and build three storewise intelligent warehouses. Smart warehousing builds a suit suit, ironing center and box storage area. Intelligent storage two layers of automatic sorting center, connect automatic three-dimensional hanging warehouse and a box of storage area, the highest can simultaneously pick 400 suits. Intelligent storage two storey and three storey building unmanned automatic three-dimensional hanging warehouse, the company's information system throughout the deployment. After the completion of the project, the total storage capacity of the warehouse can reach 60 thousand (including one box storage area).

The newly built product transport flyover is connected with the two level sewing process and intelligent storage of a boutique factory. Based on the existing information system of the company, we build the basic information platform to meet the current business needs, including two parts: intelligent production system and intelligent cloud platform. The intelligent production system will be built on the basis of MES production execution system, SCM supply chain system and WMS warehouse logistics system. It will centrally manage the basic information resources of enterprises, including purchasing, production, warehouses, customers, terminals, databases, and so on, so as to realize the digitization of basic business processes. The intelligent cloud platform takes the way of school enterprise cooperation based on the company, and jointly develops and builds an enterprise independent platform, docking all the platforms of the enterprise, forming an enterprise data transfer center, so that the company has comprehensive data sovereignty. And in the process of cooperation, the company can develop its own technology team and greatly reduce its dependence on software suppliers.

3. R & D center upgrade project.

The project further improves the configuration of hardware and software facilities of the R & D center, and forms comprehensive functions such as fabric sample analysis, design list making, effect simulation and design sample display. It improves product development to achieve effective order rate, strengthens the technological innovation system, further improves the original design level of products, promotes the transformation and upgrading of enterprises to innovation driven and technology brand driven, and strengthens the external environment. We should cooperate to realize the branding and internationalization of enterprises, and promote the diversification of product development.

The total investment of the project is 67 million 500 thousand yuan, and the planning and construction period is 24 months.

Nanshan Zhi said that the fund raising investment project is mainly based on the existing main business of the company to carry out intelligent manufacturing upgrading, and realize the intelligent production and management of worsted fabrics and advanced customized garments. After the implementation of the intelligent upgrading project of worsted wool production line, the output of low value-added products can be reduced, the output of high value-added products such as wool and fine wool can be increased, the product variety will be further enriched, and the upgrading of product structure can be realized. After the implementation of the "clothing intelligent manufacturing upgrading project", the production of advanced customized garments can be gradually increased to meet the growing demand for advanced customized garments. At the same time, through automation and intelligent upgrading, we will comprehensively enhance the company's production efficiency and management level, further optimize the production and management process, alleviate labor demand, improve product quality, enhance core technological superiority and market competitiveness, and promote sustained and rapid development of the company. The implementation of "R & D center upgrading and construction project" will help promote the continuous improvement of the core technology of the company, further consolidate the industry position and market competitive advantage of the company in the field of worsted and professional wear subdivision, and lay a solid foundation for the company's long-term and long-term development.

According to the prospectus, Nanshan Zhi Shang, formerly known as Nanshan textile (Longkou City East China Sea Textile Co., Ltd.), was founded in April 29, 2007, and was changed into a joint stock company in December 2017. Nanshan Zhi Shang's controlling shareholder is Nanshan Group, which owns 90% of Nanshan Zhi Shang. Nanshan Group owns 51% of the Nanshan village committee and 49% of song's composition. At the same time, song's composition is the legal representative of Nanshan village committee. Nanshan Group has a listed company Nanshan aluminum industry. If Nanshan Zhi Shang sprint is successful, Nanshan Group will own two listed companies.

Nanshan Zhi Shang's main business is the development, design, production and sale of worsted and formal garments, and the company has been running the worsted fabric brand such as Nanshan and DinoFilarte, as well as the clothing brands such as "Erma" and "weave". The company has a perfect woollen apparel industry chain, which covers fabric development, top processing, dyeing, spinning, weaving, and so on. The worsted fabric business system is integrated into one, and the garment business system is integrated into R & D, design, manufacture and brand operation of integrated garment. The company has been running the brand of worsted fabrics such as Nanshan and DinoFilarte, as well as garment brands such as "Erma" and "weaving".

1, worsted fabric business

Nanshan Zhi Shang worsted fabric business adheres to the differentiated brand development strategy. Around the positioning of high-end brands, Nanshan and DinoFilarte brands have been launched. The worsted fabrics are facing the high-end market of worsted fabrics at home and abroad, and are high quality suppliers of many luxury brands, middle and high grade professional clothing and international first-line brand clothing. The company is rich in worsted fabrics, and has completed five series of product layout, including classic wool series, top quality plush yarn series, high count blending series, quality leisure series and functional product series, and has gradually formed such special products as jacquard series, semi combed wool series, thick black product series and outdoor sports series.

2. Clothing business

Nanshan Zhi Shang's clothing business implements the strategy of joint development of independent brand and ODM/OEM business. The company has run the three brands of the Chinese career leader brand, "Erma", the advanced custom brand "weaving", and "Paul beatany", "Bo SA Ma GNI" and "mansbrayton". At the same time, relying on the integrated research and development advantages of the complete industrial chain of "fabric + clothing", ODM/OEM business has been launched to provide quality products for many domestic and foreign first-line brand customers. R & D, production services.

Nanshan Zhi Shang's customized clothing business is operated by its subsidiary company. The customized platform is the following single main system, with the volume service, R & D, dress matching, supply resources and technology services as the branch of the integrated service supply chain. The goal is to achieve customized customization. In 2017-2019 years, Nanshan Zhi Shang's customized clothing business revenue was 4 million 553 thousand and 300 yuan, 7 million 459 thousand and 700 yuan, and 1040.92 respectively. Ten thousand yuan.

Nanshan Zhi Shang's retail brand operates 3 retail brands, Paul batayi, Bosa Maggie Ni and mansbrayton. Among them, Paul, Bethany and Bosa Maggie Ni two brands are sold through offline stores, and mansbrayton brand is sold through online online outlets. In the 2017-2019 year, the number of stores in Nanshan Zhi Shang line was 69, 55 and 1 respectively. In recent years, according to the company's development strategy, in order to concentrate on developing group buying business, the retail business has been gradually contracted down, and most of the physical stores have been closed. As of December 31, 2019, Nanshan Zhi Shang only retained 1 comprehensive exhibition experience stores, namely Nanshan factory collection shop.

Nanshan Zhi still insists on optimizing and optimizing customers. After years of efforts, it has established a stable sales customer network, and through the reduction of intermediate sales links, it has implemented a settlement system that is in line with international standards. The company has domestic key customers such as wedding bird, Georges white, Victor, Roman, YOUNGOR, Jordan, tiger leopard and so on. At the same time, it has many customers of world-class brands, such as PEERLESS, ITOCHU, Italy ARMANI, Japan Castle Peak, Spain department store, French Givenchy, Australia EXPEDITION, Australia OXFORD, Russia STRIKESTAR, etc.

According to the Circular of the Federation of industry and information technology of China Federation of industry and Commerce on the list of the third batch of single champion enterprises and single champion products of the manufacturing industry (397) of the Ministry of industry and industry (397), Nanshan Zhi Shang is a single champion demonstration enterprise of the manufacturing industry, and its main products are combed woven fabrics. The worsted brand name "Nanshan" and "professional brand" are recognized by the State Administration for Industry and commerce as "well-known trademarks in China". The "Erma" professional clothing brand built by the company has become the leading brand of Chinese professional wear, and has won the honorary title of "Chinese professional collar enterprise", "ten top brands of Chinese professional wear" and "Chinese clothing growth brand".

In 2017-2019, the operating profit of Nanshan Zhi Shang accounted for more than 90% of the total profit, and the company's profits mainly came from business operations. In addition to the slight decline in the macroeconomic and international market and trade environment in 2019, the company's net profit during the reporting period has maintained an overall growth trend with good profitability. In 2017, business revenue increased by 6.74%, higher than the operating cost growth rate, and the gross profit of main business grew by 19.09%. However, due to the development of market in 2017, the increase of debt financing scale and the confirmation of share payment expenses, sales expenses, management expenses, R & D expenses and financial expenses increased to a certain extent, resulting in a total profit growth of only 11.85%. Operating income increased by 20.03% in 2018, and the gross profit margin changed slightly. However, as managers' salaries, depreciation and amortization remained basically stable, the total profit increased by 34.59%, higher than that of operating revenue. In 2019, operating income and operating profit declined compared with 2018. Net profit decreased by 0.07% compared with 2018 under the influence of lower rate of fees, loss of assets impairment and increase of extra business income.

In 2017-2019, the operating income of Nanshan Zhi Shang mainly came from worsted fabric and clothing business. In 2017-2019, the proportion of worsted fabric income in main business income was 46.57%, 45.93% and 50.15%, respectively. The proportion of garment income was 53.43%, 54.07% and 49.85% respectively, and the proportion of main business components in each phase changed little.

In 2017-2019, the operating income of Nanshan Zhi's worsted fabric and clothing accounted for more than 97% of the total operating revenue. The proportion of worsted fabric income in the main business income was 46.94%, 46.57%, 45.93% and 48.87% respectively, and the clothing income accounted for 53.06%, 53.43%, 54.07% and 51.13% respectively. Corporate profits also come mainly from business operations, and operating profit accounts for more than 98% of total profits.

In 2017-2019, the interest expense of Nanshan Zhi Shang was 200 million, 240 million, 360 million and 160 million respectively, and the proportion of financial expenses in operating income was 0.96%, 1.28%, 1.49% and 1.49% respectively. The increase of sales cost, management cost and financial cost directly promoted the total business cost, and reached 1 billion 400 million, 1 billion 480 million, 1 billion 780 million and 770 million respectively in the reporting period.

In 2017-2019, the total number of employees in Nanshan Zhi Shang (including subsidiaries) at the end of each reporting period was 6673, 6347 and 6088, respectively, with the improvement of production efficiency and automation.

Nanshan is still a labor-intensive enterprise, and its employees are mainly rural household workers, especially the first line production workers. Most of them are rural household registration workers in Nanshan village and the surrounding rural household workers or local workers who work in rural areas. Some of the rural workers are also farmers and workers, with strong mobility and high degree of attention to current income. Their families have homestead houses and pay social insurance for enterprises. And the enthusiasm of housing provident fund is not high, resulting in some farmers' employees unwilling to bear part of the payment of "five risks and one gold", and asking the issuers and their subsidiaries not to pay "five risks and one gold" for them. The employees have already handled the new rural cooperative medical scheme and the new rural social security system, and the issuers have the objective difficulty in paying social security and housing provident fund. The issuer and its subsidiaries have paid their own reimbursement fees for the NCMS and NNP without paying the social security for the company, and have taken the means of providing free accommodation and housing subsidies to employees to protect their housing.

During the reporting period, Minamiyama Chihisa actively communicated with the social insurance and housing provident fund authorities, and strengthened staff training and publicity, trying to persuade them to pay social insurance and housing provident fund. As at December 31, 2019, the number of employees who had paid social insurance was 4333, and the proportion of social insurance contributions increased to 76.15%. The total number of employees of NRCMS accounts for about 93% of the total number of employees, and the number of employees who pay the housing provident fund is 3755, and the proportion of housing provident fund payment has increased by 65.99%. The issuer promised to continue to mobilize staff to further improve the proportion of social insurance and housing provident fund payment.

In March 13, 2020, the Longkou City Bureau of human resources and social security issued a certificate confirming that from January 1, 2016 to the date of issue, the issuer and its subsidiary, Erma and Nanshan self weight hall, were not subject to administrative penalties for violating the relevant laws, regulations, regulations and normative documents of social security in signing labor contracts, paying social insurance and protecting laborers' rights and interests. There is no record of complaints or reports by workers.

Nanshan Zhi Shang said that the company's worsted fabric business has achieved high efficiency, high quality and high yield by matching the foreign advanced wool worsted enterprises to achieve the world's first-class level of worsted enterprises. The clothing business of the company has been developed from traditional production enterprises to brand enterprises, and the brand is located in the brand of China's professional collar army and the famous brand of China's advanced custom clothes. Drive production and sales, further enhance market competitiveness and enhance market share.

In the future, Nanshan Zhi, based on research and production of worsted and professional wear, has always adhered to the development concept based on intelligent manufacturing, driven by technological innovation and centered on brand operation, and is committed to becoming an international leading wool garment company integrating intelligent manufacturing and brand operation.