Semir: GXG Opportunity To Start Implementing Its Multi Brand Development Strategy

"P" a week mainly review: 1, industry view: (1) Semir acquisition of GXG dust: last week Semir announced the acquisition of GXG agreement announcement, taking this opportunity to implement its multi brand development strategy.

We believe that the acquisition will help to enhance the size and profitability of the company. We need to pay attention to brand synergy in the long run. GXG's specific financial data disclosure and management team stability may be the next focus of attention.

In May, the retail sales volume of 100 a target= "_blank" href= "//www.sjfzxm.com/" > clothing < /a > 6.1%, an increase of 4.4 percentage points compared with April.

The growth rate was mainly due to discount sales and retail sales increased by 4.5%.

In June, HSBC PMI's initial value was 48.3, hitting a 9 month low.

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< p > 2, company tracking: (1) cotton direct subsidy policy loosening: Recently, the relevant national conference revealed that cotton farmers' direct subsidy policy has entered the discussion level. We invited a network expert to hold a teleconference to communicate with investors on the trend and export trend of cotton policy.

Cotton farmers' direct subsidy to promote cotton prices from policy oriented to market regulation, domestic cotton prices and international cotton prices will benefit cotton spinning enterprises cost reasonable return.

It is estimated that the state will subsidize 100-120 yuan per mu, and the 14 year March policy is expected to be launched. If direct subsidy is implemented, the cotton price is expected to fall, and ultimately depends on the trend of international cotton prices.

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< p > < Semir > a target= "_blank" href= "//www.sjfzxm.com/" > dress < /a > acquisition GXG: Semir intends to invest in the purchase of 19.8-22.6 billion, zhe Mu still has 71% shares, owns three brands such as GXG, 12 annual income 1 billion 400 million, net profit 200 million, the pferor promises 13-15 years net profit growth rate is no less than 28.6%/20%20%.

The acquisition helps to improve product and channel layout, and acquisition is basically a shareholding of investors. Semir is committed to ensuring the independence of GXG team operation.

The purchase price corresponds to Mu Shang 12 years PE13.5-15.5 times, 13 years PE10.5-12.0 times, is expected to be thickened 14 years EPS about 20%.

According to the requirement of purchase guarantee, it is considered to increase 13-15 years EPS to 1.41/1.85/2.20 yuan and PE to 16.3/12.4/10.5 times.

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< p > > fuanna tracking: it is estimated that sales revenue will increase by 7-8% in the 1-5 months, and the net profit will be relatively good. The expected growth will be 20-25%, mainly due to the streamlining of the production department staff and the reduction of the cost, leading to the increase of gross margin.

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< p > > YOUNGOR tracking: the company intends to prepare a 484 million impairment of assets for the wholly owned subsidiary of Hangzhou YOUNGOR City North home. It was originally estimated that the carry over revenue of the real estate market in the year of 13 exceeded 8 billion over 50%, and the profit growth slowed down after this asset impairment was prepared.

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< p > last week, < a target= "_blank" href= "//www.sjfzxm.com/" > textile < /a > the trend of garment plate is weaker than that of the market.

Textile and apparel index fell 4.29% last week, down 0.49% from the Shen Wan A index.

Among them, the textile manufacturing index fell 3%, relative to Shen Wan A index rose 0.81%; clothing home textile index fell 5.62%, relative to Shen Wan A index fell 1.82%.

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< p > industry basic data: (1) cotton and chemical fiber prices rose slightly last week mainly: 328 spot spot rose 19321 yuan / ton, Zheng cotton main contract reported 19925 yuan / ton.

Polyester staple fiber rose 0.04% to 10003 yuan / ton, viscose staple fiber rose 0.23% to 13211 yuan / ton, nylon yarn rose 0.5% to 20000 yuan / ton.

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< p > viewpoint: Semir opened "a target=" _blank "href=" //www.sjfzxm.com/ "brand clothing < /a > purchase Prelude; textile manufacturing performance is still better than clothing home textiles.

Semir's acquisition of GXG for 2 billion is the largest merger case in China's apparel industry. We believe that brand clothing has been faced with bottlenecks in recent years because of its extensive growth in horse racing circles. In the future, enterprises may rely more on acquisitions, mergers and endogenous growth to achieve sustained growth. Enterprises with strong financial strength have greater advantages in mergers and acquisitions.

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< p > as far as the situation is concerned, due to the lack of obvious improvement in the retail terminal, it is difficult to improve the profitability of the brand clothing. Leisure clothing and home textiles inventory is expected to perform relatively well earlier, and men's clothing may continue downward on the basis of the first quarter.

Relatively optimistic about textile production in the performance of the company: the order price volume rose, high priced cotton digestion finished, gross profit margin on the basis of continuous improvement on the low base, recommended cotton spinning leading Lu Tai A, Huafu color spinning and Baron East.

Concerned about next week's "seven wolf" private placement of the lifting of the ban, it is recommended to focus on the sound operation of the rich Anna and the adjustment of the longer cycle of the United States and costumes, long-term optimistic about the growth of Shanghai Jahwa brand and channel advantages.

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