Jiansheng Group (603558): Affected by the downturn of the industry boom in the second quarter, concerned about the continuous release of production capacity in Vietnam

Jiansheng Group (603558): Affected by the downturn of the industry boom in the second quarter, concerned about the continuous release of production capacity in Vietnam

The company disclosed the semi-annual report and realized revenue in the first half of the year.

27 ppm, a ten-year increase of 9.

31%, realizing net profit attributable to mother 1.

44 ppm, an increase of 30 in ten years.


The growth of investment points in the second quarter accelerated due to the uncertainty of Sino-US trade: quarterly, the company’s Q1 and Q2 achieved revenue growth of 18 respectively.

0%, 2.

2%, the net profit attributable to mothers increased by 57.

2%, 12.


About 85% of the company’s revenue comes from exports, and the growth rate of Q2 has gradually increased, mainly due to the uncertainty of Sino-US trade relations.

Since mid-May, the US Trade Office has disclosed the fourth tariff list to be levied a 25% tariff on China. It involves the export of garments and home textiles to the United States, which affects the export orders of textiles and apparel.

8%, a further increase from Q1.

The growth rate of domestic demand, the external demand is not good, the industry’s prosperity is declining, and market competition is more fierce, leading to the company’s Q2 growth rate.

In terms of categories, in the first half of the year, the company’s cotton socks and seamless underwear revenue accounted for about 64% and 36%, respectively.

Among them, cotton socks revenue increased by 0 in ten years.

8%, maintained steady growth, seamless underwear revenue increased 25%, customer orders grew steadily.

In the first half of the year, Qiaoer Tingting, who produced seamless underwear, realized a net profit of 60.34 million yuan after deductions, and has achieved 63 promised performance in 2019.


By region, the company’s export sales accounted for about 86% in the first half of the year, and the export growth rate remained at 11.

With a 2% increase, the stickiness of cooperation with major customers has increased.

In the first half of the year, the company’s internal sales were basically flat for two years, and competition in the domestic apparel manufacturing market was affected by the decline in the industry’s prosperity.

In terms of profitability, the company’s gross profit margin increased by 1 in the first half of the year.

31 points to 28.

72%. One is that the gross profit margin of seamless underwear increased from 31% to 35%. The other is that the proportion of seamless underwear revenue increased due to higher gross profit margin.

In terms of period expense ratio, the company’s scale effect appeared, the cost was well controlled, and the overall period expense ratio gradually decreased to zero.

67pct to 12.


In addition, there are other gains that increase slightly, credit impairment losses are negative, yields are slightly reduced, and eventually the company’s net interest rate increases.

73pct to 17.

35%, driving the company’s rapid growth in net profit.

Without looking at it, Vietnam ‘s high-margin production capacity continues to be released: In the first half of the year, the subsidiary Vietnam Jiansheng achieved a net profit of 46.36 million and an ROA of about 8.

2%, the domestic cotton socks production company’s total 北京体验网 net profit is about 37.86 million yuan, and the total ROA is about 2.

1%, Vietnam’s production capacity achieves higher profit margins.

In 2019, the company’s Vietnam base will continue to expand production capacity and strive to complete the expansion1.

Crop target of 5 billion pairs of cotton socks.

Another 90 million pairs of cotton socks from Qinghua and 18 million pieces of seamless underwear from Xing’an are scheduled to be put into production by the end of 19th.

The continuous release of high-margin production capacity in Vietnam is expected to promote the company’s rapid growth. Investment suggestion: Our company predicts that the annual return in 2019 and 2021 will be 0.

62, 0.

74 and 0.

86 yuan.

Return on net assets were 8, respectively.

2%, 9.

3% and 10.

0%, the current company PE (2019E) is about 14 times, maintaining the “Buy-A” recommendation.

Risk reminders: Uncertainty in Sino-US trade relations affects the industry’s prosperity; the company’s production capacity is released or falls short of expectations; exchange rate risks; fierce market competition makes the cotton socks gross margin down.