Category: Money tips Release Date: 2007-06-07
Event Description
A few days ago to Rutteri company research, and the Deputy General Manager Miss Qin Guiling the company carried out and visit the company's number of production plant. Lutai continue to carry out targeted the international market, high-end market strategy, on this basis, the gradual strengthening of domestic-brand operation. Of the continuous production due to new projects, will offset lower export tax rebates, the RMB revaluation losses for the enterprises is expected to net the next 23 years, steady growth. Observations from the field of view, a clear sense of corporate governance structure, management practices.
Event Comments
First, in 2006 in Europe and the United States set limits on China textile and apparel circumstances, exports of cotton and shirts are still growing very fast.
Yarn-dyed and shirts Rutteri main export products accounts for over 90% of production in 2006, textiles and clothing from China to Europe and the United States imposed restrictions, but the textile and garment exports continue to maintain rapid growth. 1-11 months although the quantity of cotton exports declined by 6.89 percent year on year, but the average price increase of their exports reached 39.18 percent, driven by the export price, export value up 31.6% year on year rise. The shirt exported the first 11 months of 2006 rose by 153.55 percent year on year, the export unit price rose 49%, while exports rose to 276.16%
Second, the Lutai completion of the project under construction, will become the world's largest manufacturer of Yarn-dyed, the market share will reach 15%.
In 2005, a bank loan to start a 50 million meters Yarn-dyed, 500 million pieces of the project, there are already part of the production capacity is expected in late 2007 or 2008 in the project will be fully put into production, production capacity will reach 1.23 after the Yarn-dyed Fabric 100 million meters, higher than Hong Kong, Esquel Group, the world's largest manufacturer of Yarn-dyed, the market share will reach 15%, continue to maintain the world's No. 1 position.
Third, the company targeted the international market, high-end market strategy based on the gradual strengthening of domestic brand building.
Since its 1998, 2000, B shares, A shares onto the market, the use of raised funds to expand production capacity, until 2005, sales revenue increased by 6 times, net profit increased by five times, in a fast-growing stage. The reason companies have such a high-speed development, mainly due to the international market, high-end markets, strategic positioning, positioning on the international market, the company product quality, technology, technology, management, environmental protection, etc. always maintain the international advanced level; positioned high-end market has prompted the company focus on technological innovation, more than 300 varieties each year to maintain a leading position within the industry, and product gross margin to maintain a high level in the industry.
The company realized the importance of brand building in 1995, registered "Lu Taige Leifen" trademark, but the exclusive agent in the country of France, "Alain Delon" brand sales of shirts, using its own international brand driven brand, in 2004, "Lu Taige Leifen" shirt selected Chinese famous brand in 2005, "Lu Taige Leifen" Yarn-dyed selected Chinese famous brand and own-brand has gained initial success, from 2007 onwards the company completely with their own brands, foreign brands are no longer agents.
Fourth, the company's 300 technical appraisal of the yarn fabrics in the woven through the consolidation of the industry for technology leadership.
Company has been focusing on technical innovation in order to "use the most advanced equipment, the most advanced technology and training the best employees, producing the best products, get the most benefit" for the development of policy, and to scientific research and technological innovation as the core of the competition efforts to ensure that the technology and equipment in the same industry leading level.
The last three years the company applied for 11 patents, of which four types of invention patents. In December 2006, the company produced 300 yarn fabrics through technical appraisal, although the high cost of 300 yarn fabrics, this is not the company would bring much revenue, but mark the industry's technology companies in Yarn-dyed Fabric leading position.
Fifth, the "two taxes combined," the short term has little impact on the company.
As a joint venture, Lutai to enjoy 12% income tax discount rate, China from 2007 onwards implement "two taxes into one" post-tax rate of 25%, but as an old joint venture, Lutai with 5-year transitional period, so past five years, the unified tax system have little effect on the company.
Sixth, the export tax rebate cut, the RMB appreciation will reduce the corporate margins, reducing corporate profit growth in the next two years.
September 2006 textile export tax rebate rate down 2 percentage points of the performance of the company's impact will be displayed in 2007, in addition, the yuan is expected in 2007 will continue to appreciate, these negative factors will weaken due to the increase of production capacity for the enterprise zone years of profit growth, it is expected the next two years, corporate profits will maintain steady growth.
Seventh, the company's reasonable price is 11.4-12.5 yuan, to give recommended rating.
06,07,08 expects annual EPS of 0.8 yuan, 0.844 yuan, 1.04 yuan. If under 07, in 2008 the cotton spinning industry, the average large-cap stocks of 13.5 times, 12.1 times the PE terms, Lutai 11.4-12.5 yuan a reasonable price is to give recommended rating.
