创意精彩生活 create a wonderful life - texhong · 2017-08-15 · yarn business to denim...
TRANSCRIPT
创意精彩生活
Create a Wonderful Life
www.texhong.com
www.texhong.com
Content
Business Review
Financial Review
Future Plans
Q&A
2
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Business Review
3
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1H2017 Highlights
Revenue increased by 27.9% to RMB 7.45 billion
Driven by the rise in sales volume and unit price of yarns
Complete acquisition of jeanswear business
Profit attributable to equity holders increased by 41.2% to RMB 645 million
One-off gain from the acquisition of jeanswear business Operation subsidy income of the Xinjiang factory
began to normalise Yarn sales volume increased significantly by 14.9% to 300,000 tonnes
Instant increase of production capacity and expansion
of customer base for jeanswear business
New factories that commenced production in stages last year are now running at full steam
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Differentiated Product Mix
Group’s core product
Revenue reached RMB6.75 billion in 1H2017
Accounted for 90.7% of the Group’s total revenue
Sales volume increased by 14.9% to 300,000 tonnes
Fabrics, Garments
& Jeanswear
1 Percentage of product segment revenue to total revenue for the six months ended 30 June 2017
Yarns1
5
90.7% 9.3%
Yarn (Over 1,200
types)
Other Yarn Stretchable
Yarn
Garment Fabrics Grey Fabrics
(Over 2,700 types) Jeans
4.5 million pairs
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Diversified Production Base
Location
As of 30 June 2017 Production facilities
Utilisation rate
As of 31 Dec 2016 Production facilities
Utilisation rate
The PRC
1.64 million spindles, 817 looms and
6 production lines of jeans
Yarns – 100%
1.64 million spindles, 816 looms and
6 production lines of jeans
Yarns – 100%
Vietnam
1.25 million spindles, 400 looms (ramp-up
stage) and 14 production lines
of jeans
Yarns – 100% 1.25 million spindles Yarns – 100%
Cambodia 22 production lines
of jeans In progress of adjustment
12 production lines of jeans
In progress of adjusting and
increasing production
6
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Strong Product Development
7
Meet the demand of quality customers
for different high-end products
Reinforce cooperative relations with Toray of Japan from the yarn business to denim garment business as well
The R&D centre in Xuzhou has been
raising product quality according to market demand
Establish long-term strategic partnerships
Continue to cooperate with INVISTA, an international core-spun spandex fibre manufacturer of LYCRA® fibre, and Lenzing Fibers, the manufacturer of TENCEL® lyocell fibre and Modal® fibre
Use innovative fibre technologies to produce trendy functional yarns
Tap into the
differentiated high-end
market
Expand cooperations
with fibre companies
Develop new products
Improve product quality
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Diversified Customer Base
Over 3,000 customers, of which ~2,700 are domestic and ~300
are overseas customers. About 84% of products are sold in the
PRC, mainly in areas around Jiangsu, Zhejiang, Guangdong and
Shandong
Sales network extended to
Vietnam, Brasil, Turkey,
Bangladesh, Japan and South
Korea
Sales to top 10 customers only accounted for 17.0% of total revenue in 1H2017
• Shaoguan Shunchang Weaving Factory Co., Ltd.
• Ningbo Daqian Textile Co., Ltd.
• Guangdong Qianjin Jeans Co., Ltd.
• Toray International, Inc.
• Zhejiang Limayunshan Textile Co., Ltd.
• Xinchangjing Textiles Co., Ltd.
• TCE Vina Denim Joint Stock Company
• Yixing Magnolia Garment Co., Ltd.
• Black Peony Textile Co., Ltd.
• Foshan Seazon Textile & Garment Co., Ltd.
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Financial Review
9
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Revenue
Revenue reached to RMB7.45 billion
Revenue breakdown by products
Stretchable core-spun yarns Other yarns Fabrics Jeans
Stretchable core-spun yarns
833.3 1,445.9
743.8
931.7 638.4
675.1
1H2016 1H2017
Cotton Demin Synthetic fibre
65.0
223.8
1H2016 1H2017
Other yarns
Jeans Fabrics
40.98% 49.69%
3.00%
1H2017
10
1,738.6 1,850.4
940.5 1,352.0
464.5
498.4
1H2016 1H2017
Cotton Demin Synthetic fibre
221.8 228.3
32.3 39.6 143.5
203.3
1H2016 1H2017
Stretchable grey fabrics Other grey fabrics
Garment fabrics
RMB (Million)
6.33%
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Profit & Net Profit Margin
Gross Profit RMB (Million)
Gross Profit Margin
Gross Profit
1,061.2
1,146.6
18.2%
15.4%
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1H2016 1H2017
Net Profit1
RMB (Million)
Net Profit
Net Profit Margin
456.7
644.7
7.8%
8.7%
0
200
400
600
800
1,000
1H2016 1H2017
1) Profit attributable to owners of the company
11
41.2%
8.0%
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22.7
5.0 13.0
22.5
5.4 12.9
Stretchable grey fabrics Other grey fabrics Garment fabrics
1H2016 1H2017
80,838
40,396 19,791
82,025
54,878
21,008
Cotton Demin Synthetic fibre
1H2016 1H2017
Sales Volume & Selling Price
Stretchable core-spun yarns (Tonne)
46,979 43,567 30,690
65,202 47,815
30,403
Cotton Demin Synthetic fibre
1H2016 1H2017
Fabrics (Million meters)
12
Jeans (Million pairs)
1.9 4.5
Jeans
1H2016 1H2017
RMB per pair
Jeans
1H2017 49.7
1H2016 34.2
Other yarns (Tonne)
RMB per tonne
Cotton Denim Synthetic fibre
1H2017 22,559 24,637 23,723
1H2016 21,508 23,281 23,470
RMB per tonne
Cotton Denim Synthetic fibre
1H2017 22,175 19,485 22,207
1H2016 17,738 17,073 20,803
RMB per meter
Stretchable grey fabrics
Other grey fabrics
Garment fabrics
1H2017 10.1 7.3 15.8
1H2016 9.8 6.5 11.0
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Cost Structure
Raw Materials 75.4%
Direct Labour 10.7%
Depreciation 4.4%
Utilities 7.0%
Consumables 1.7%
Others 0.8%
1H2016
Consumables 1.5%
Utilities 6.2%
Depreciation 4.3%
Direct Labour 10.1%
Raw Materials 77.2%
Others 0.7%
1H2017
13
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Other Income
RMB (million)
One-off Policy Incentives
Operating Subsidies1
Total
Six months ended 30 June 2017
Xinjiang 1.1 65.0 66.1
Other area 37.6 10.7 48.3
Total 114.4
14
1. Operating subsidies refer to business-related recurring subsidies, such as subsidies for loan interest, transportation etc.
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Consolidated Income Statement
15
RMB (million)
2017 2016
Unaudited six months ended 30 June
Revenue 7,448.5 5,821.8
Cost of sales (6,301.9) (4,760.6)
Gross profit 1,146.6 1,061.2
Selling and distribution costs (263.9) (216.3)
General and administrative expenses (247.4) (226.8)
Other income 114.4 7.1
Other gains — net 51.6 78.1
Operating profit 801.4 703.3
Finance income 4.3 5.1
Finance costs (57.2) (164.3)
Share of profits/(losses) of investments accounted for using the equity method
6.3 (1.2)
Profit before income tax 754.7 543.0
Income tax expense (104.7) (86.9)
Profit for the period 650.0 456.1
Profit attributable to owners of the company 644.7 456.7
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Balance Sheet – Assets
16
RMB (million)
Unaudited As at 30 June 2017
Audited As at 31 December 2016
Freehold land and land use rights 841.8 695.2
Property, plant and equipment 6,468.7 6,231.1
Investments accounted for using the equity method
110.6 99.3
Deferred income tax assets 96.8 117.0
Total non-current assets 7,517.9 7,142.7
Inventories 3,437.5 2,931.3
Trade and bills receivables 1,522.5 1,590.0
Prepayments, deposits and other receivables 602.5 1,308.1
Derivative financial instruments 168.2 317.9
Pledged bank deposits 181.1 181.2
Cash and cash equivalents 1,055.9 1,813.2
Total current assets 6,967.7 8,141.7
Total assets 14,485.7 15,284.3
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Balance Sheet – Liabilities and Equity
17
RMB (million)
Unaudited As at 30 June 2017
Audited As at 31 December 2016
Trade and bills payables 2,755.8 3,044.3
Accruals and other payables 664.7 721.7
Current income tax liabilities 44.5 72.0
Borrowings 2,122.9 3,549.7
Derivative financial instruments 50.3 32.3
Total current liabilities 5,638.2 7,420.0
Borrowings 3,069.0 2,559.6
Deferred income tax liabilities 142.2 113.4
Total non-current liabilities 3,211.2 2,673.0
Share capital: nominal value 96.7 96.7
Share premium 433.8 433.8
Other reserves 567.6 566.6
Retained earnings 4,488.3 4,051.6
Non-controlling interests 49.8 42.7
Total equity 5,636.2 5,191.4
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Cash Flow Statement
18
RMB (million)
2017 2016
Unaudited six months ended 30 June
Net cash generated from operating activities 1,287.1 155.4
Net cash used in investing activities (817.7) (1,261.0)
Net cash (used in) / generated from financing activities (1,226.7) 158.8
Cash and cash equivalents at end of the period 1,056.0 993.2
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Other Financial Ratios
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1) Based on total borrowings over equity attributable to shareholders 2) Based on total borrowings net of cash and cash equivalents and pledged bank deposits over equity attributable to
shareholders 3) Based on profit attributable to shareholders for the 12 months ended of the reporting date over the average of the
equity attributable to shareholders at the beginning and ending of the period
As at 30 June 2017 As at 31 December 2016
Inventory Turnover Days 91 79
Trade and Bill Receivables Turnover Days 38 35
Trade and Bill Payables Turnover Days 83 87
Current Ratio 1.24 1.10
Debt to Equity Ratio 1 0.93 1.19
Net debt to Equity Ratio 2 0.71 0.80
Return on Equity 3 28% 26%
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Future Plans
20
www.texhong.com 21
Form an integrated platform comprising a downstream
industry chain
TEXHONG 天虹紡織
The Group’s strategies – Grasp the opportunities &
Strengthen its existing market position
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The Group’s strategies – Expand production capacity
& jeanswear business
22
Expand capacity to meet quick delivery orders Expand jeanswear business
Procure second-hand equipment to expand domestic production capacity by 100,000 spindles
Investment of RMB100 million
Expect to be in full operation in Q4 2017
Establish a brand new intelligent yarn spinning factory with 140,000 spindles in Xuzhou
Investment of RMB500 million
Expected to be completed Q2 2018
Completed the acquisition of denim garment factories in Vietnam and Cambodia and the associated business of Nien Hsing Textile
Target to achieve a turnaround in 2018
Jointly established a garment factory in Vietnam with Changzhou Hualida Group
Target leading brands in Japan
Orderly expansion of the main operation
Targeted sales volumes of yarn 2017: 650,000 tonnes 2018: 720,000 tonnes
Target to become a growth driver in mid-to-long term
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Q & A
23