Shenzhou International's share price has turned 60 times in 8 years! Is the first market value of 100 billion clothing group

The diversified business has become the moat of UNIQLO's main foundry, Shenzhou International, and the latter has become the first apparel group with the highest market capitalization in the market with a market value of more than 100 billion.

Although the global apparel retail industry is still in the recovery phase in the past year, the group's net profit once again recorded strong double-digit growth. In the fiscal year ended December 31, 2017, sales of Shenzhou International (02313.HK) reached RMB 18.085 billion, up 19.8% year-on-year; gross profit increased by 15.5% year-on-year to 5.671 billion yuan, with a gross margin of 31.4%. Net profit surged 27.6% year-on-year to 3.76 billion yuan.

The picture shows the stock price change of Shenzhou International in the past 5 years.

Founded in 1988, Shenzhou International is a subsidiary of Ningbo Shenzhou Knitting Co., Ltd. It is a company that integrates four complete processes of weaving, dyeing, printing, cutting and sewing. It is the largest vertical portrait in China. The integrated knitwear OEM is also the largest knitwear manufacturer in China exported to Japan.

In the industrial chain, Shenzhou International has eaten the entire knitting industry and became the largest supplier of Uniqlo, adidas, Nike and Puma. In addition, new customers such as RalphLauren and NewBalance have also contributed to the Group's revenue.

The picture shows Shenzhou International's detailed performance data last year.

By category:

Group sports products sales increased by 22.8% year-on-year to 12.05 billion yuan, accounting for 66.6% of total sales, mainly benefiting from the growth of apparel demand in the European and American markets by international sports brands such as Nike and adidas;

Sales of leisure products increased by 18.4% year-on-year to 4.6 billion yuan, accounting for 25.4% of total sales, mainly due to the increase in demand for apparel purchases from customers such as China and Japan Uniqlo;

Sales of underwear products increased by 0.7% year-on-year to 1.3 billion yuan, accounting for 7.2% of total sales.

The picture shows Shenzhou International's detailed performance data from customers in various regions last year.

By region:

The Group's revenue from customers in mainland China increased by 31.3% year-on-year to RMB 4.844 billion.

Revenue from customers in the EU rose 20.1% year-on-year to 4.031 billion yuan;

Revenue from customers in Japan, such as Uniqlo, increased by 4.1% year-on-year to 3.129 billion yuan;

Revenue from customers in the US such as Nike surged 50.9% year-on-year to 2.337 billion yuan;

Revenue from customers in other regions increased by 6.8% year-on-year to 3.742 billion yuan.

It is reported that UNIQLO, Nike, adidas and Puma account for up to 80% of Shenzhou International's overall revenue. With the leading development and production integration capabilities in fabrics, Shenzhou International signed a Flyknit shoe order with Nike in 2016, becoming a Nike cross-category supplier.

According to Shenzhou International Financial Report data, last year, the Group's revenue from the top three major customers increased by 36%, 10% and 5% to 5.3 billion, 3.7 billion and 3.6 billion, respectively, accounting for 71.05% of the Group's total revenue.

For the strong performance of the Group's performance last year, Shenzhou International said that it has benefited from its expansion of its overseas base capacity, equipment renewal of domestic bases, expansion of environmental protection and continuous improvement of production efficiency. Results.

However, with the acceleration of the aging society, the increase of environmental protection supervision and the limited supply of resources, China's textile and garment industry has long faced the pressure of recruitment and high cost. The transformation and upgrading of the industry has become a self-issuance of enterprises. Shenzhou International emphasized in the financial report that the future development focus of the Group is a continuation of its long-term sustainable development capability.

Under the premise of continuously supporting the supply of manufacturing industry in China, garment manufacturing enterprises such as Shenzhou International are shifting from pursuing speed and scale to focusing on quality and efficiency. The allocation of resource elements is more inclined to enterprises with competitive advantages. Shenzhou International expects that the overall capacity of the industry in the future will be relatively stable, and the concentration of the industry will be further improved.

In terms of market, the Group pointed out in the report that the growth of consumer income in mainland China has promoted the rise of consumption power, so there is a higher demand for upgrading the product quality. The domestic market will have a more significant impact on the Chinese garment industry.

Considering that developing countries such as Vietnam, Cambodia and Bangladesh have lower manufacturing costs and favorable international trade environment advantages, and have the opportunity to undertake more orders from overseas markets, the future plans of domestic apparel manufacturers represented by Shenzhou International will be adopted. Continued progress in technology and management, and strengthening capacity cooperation with neighboring countries will form a complete industrial chain centered on China and transnational cooperation in the Asian region to maximize synergies.

Shenzhou International also said that in the future, it will focus on measures such as improving product innovation capabilities, improving business operation efficiency, improving production automation and optimizing human resource management, and attaching importance to products such as raw material purchase, process development, equipment selection, and end treatment. Continuous improvement of environmental protection throughout the manufacturing process to achieve sustainable development of the Group as a whole.

For the latest US$50 billion taxation bill proposed by China, some analysts believe that the Sino-US trade war has a slight impact on Shenzhou International because the group has a lot of production capacity outside China. Once the US imposes tariffs on Chinese clothing imports, the group can promptly Adjust the order allocation.

After Shenzhou International’s earnings report last year, Morgan Stanley and Citibank remain optimistic about the prospects of Shenzhou International. Dahe predicts that Shenzhou International’s orders for 2018 will continue to grow, and it is expected to surpass production growth and outperform. Peer.

It is worth noting that Shenzhou International was listed in Hong Kong on November 24, 2005. The opening price was 2.7 yuan, and the wave was not surprised to close at 2.775 yuan. After a slight increase, the stock price fell back gradually. In the financial turmoil in 2008, it reached the lowest point of 0.8 yuan on October 27, 2008. This price has become the lowest price in history. As the financial turmoil subsided, stock prices began to pick up. More importantly, the company's income and profits, just like sitting on a rocket, and skyrocketing.

In the past ten years, Shenzhou International's revenue and net profit compound growth rate reached 17% and 22% respectively. In the past eight years or so, thanks to the continuous growth of performance, Shenzhou International's share price has nearly 60 times, and the share price is comparable. Tencent in the apparel industry is also the group with the highest return on investment in the apparel industry.

As of today's close, Shenzhou International shares rose 0.88% to 80 Hong Kong dollars per share. In the past six months, the stock price has increased by 27%, and the market value is currently about 120.2 billion Hong Kong dollars.

Editor in charge: Gao Wei