Traditional garment industry slumps in performance

According to the “Acquisition Report Summary” disclosed by China Apparel, after the completion of the reorganization transaction, Yangfeng Stock will hold 290 million shares of China Apparel, 48.24% of the total share capital of China National Garment Co., Ltd., becoming the controlling shareholder of the listed company. At this point, China's clothing will be transformed from state-controlled listed companies into private enterprises. In terms of business, its main business will also transform its former textile printing and dyeing and textile trading business into the development, production and sales of phosphorus compound fertilizers.

According to public information, China Garment is a textile and apparel-oriented industry. It is a company integrating brand marketing, industry consulting, apparel, fabrics, printing and dyeing, and cashmere. It was listed on the market in 1999, and its annual sales revenue has reached nearly 2 billion yuan. .

At present, this textile industry leader has been acquired and suddenly ended. This substantive progress in the settlement of dust has made the local textile industry stunned.

"Equivalent to saying that it was shelled, was listed on the backdoor. Chinese clothing is completely out of the textile industry and turned into the fertilizer industry." Local textile industry insiders lamented.

Another incident triggering the industry’s nerves came from the Chinese energy company Haidong Green, a local company.

A few days ago, China Energy Conservation's largest single shareholder, Chongqing Zhonghua Energy, has entered into a three-year shareholder's contract with another major shareholder, Niu Brothers Holdings Co., Ltd., through its wholly-owned subsidiary, Hong Kong Rongan Investment Co., Ltd. Although the founders of the company, Sticky Jiang and Sticky Wealthy, still maintain a 25.09% stake in the company, they have no chance to challenge Chongqing's largest shareholder status during the contract period.

For similar incidents, many people in the industry believe that it may not be long before Baihong Industrial will perform. To give up the position of the largest shareholder, this has motivated the long-standing psychological obstacles of Minnan enterprises: the mastery of control rights has triggered a series of speculation in the industry.

“For the long-term owners of Minnan, they have always been 'next to the head of the chicken, not for the tail of the phoenix'. If they do not encounter a certain bottleneck, they will not give up control of the company. The two companies have retreated to the second place, which shows that the traditional The development of textile enterprises has encountered unprecedented difficulties," said Mr. Deng, a senior executive who has worked in the local textile industry for more than ten years.

Last week, Baihong Industrial disclosed its financial results. In the first half of 2013, the group’s revenue was approximately RMB 3.116 billion, up 4.8% from the same period of last year; net profit was RMB 242 million, down 38.7% from the same period of last year. Its profit in 2012 was 750 million yuan, down 16.94% year-on-year.

Chinese clothing is also poor performance. Before the announcement of the acquisition report, China Garment just released its 2013 semi-annual performance forecast. It is expected that the net loss attributable to the shareholders of the listed company in the first half of the year will be 25 million to 30 million yuan. The amount of losses in the same period last year was 18,905,400 yuan. In 2012, the company's revenue was 1.565 billion yuan, a year-on-year decrease of 11.82%, and the net loss attributable to the shareholders of the listed company was 44.174 million yuan. At the same time, inventory at the end of 2012 reached 245 million yuan, accounting for more than 20% of total assets.

The decline in performance was due to the drop in gross profit margin caused by the overall downturn in the industry. Baihong Industrial stated that “the increase in total revenue and net profit are mainly due to the drop in gross margin of products. Its main business is the production and sales of polyester filament products and polyester film products. The market prices of main raw materials pta and meg fell, resulting in a decrease in the prices of polyester filament products following the prices of their raw materials. In addition, the fierce market competition has led to a drop in gross margins and an increase in relative sales costs of products."

Many companies such as Xincheng Textile and Lianhe Textile have stated that due to the sharp increase in rent and human capital and the high inventory, the domestic apparel industry is currently experiencing a grim downturn, and the upstream textile industry has received the most direct Affected, many small textile companies suffered serious losses in orders.

“Before this, the number of textile enterprises on the market was too numerous and too fragmented, and the changes that have taken place in the past are just a normal process of pooling quality resources and eliminating outdated production capacity. This situation will continue for some time, and the phenomenon of acquisition and borrowing will continue to occur. It is based on the production of conventional textile-based companies. If it is not transformed in time, it will disappear from the market,” said Mr. Deng.

In addition to the preliminary communication, from the initial plan in March to the end of July, the announcement of the acquisition was issued. The China apparel and Yangfeng shares were connected for five months. The reporter learned that Chongqing China Energy Conservation Co., Ltd. has entered the China Energy Saving Haidong Qinghe Baihong Industrial Co., Ltd., and has also experienced more than one year of contact and investigation.

Insiders believe that for both parties, each negotiation during this period is an invisible contest and game. "The original major shareholder can still have much initiative. The negotiation during this period is very important." According to Jinjiang government officials.

In addition to purchasing stakes in China's energy-saving Haidong Qinghe and Baihong Industrial, China Energy Conservation's parent company, China Energy Conservation and Environmental Protection Group, has also established a new material company in Nanan. Its figure frequently appears in the industry chain related to Quanzhou's manufacturing industry, and its ambition can be seen.

Fortunately, local textile companies rely on their own advantages to ensure certain initiatives.

At the time of the full purchase of China Energy Conservation Haidong Greentech, Chongqing Energy Conservation stated that it is not intended to make significant changes to the existing operations and businesses of China Energy Conservation Costin, or to reconfigure fixed assets and employees, solely because of the share offer. No intention to acquire or sell its assets or business. In response, China’s energy-saving Haidong Youth also responded that the founder’s shares of the Nissan Brothers will not change and will continue to be committed to the new environmental protection materials business in the future.