The market value of China's largest apparel group refers to why the capital of 100 billion has always been favored by Shenzhou International?

Approaching the market value of 100 billion Hong Kong dollars, 53 times in 8 years, the stock price of this Uniqlo foundry became "Tencent in the apparel industry."

Although the name is unknown, and it is in the low-cost clothing processing industry, Shenzhou International's performance continues to grow, and the stock price has also achieved amazing returns. As of Friday's close, Shenzhou International continued to rise to HK$63.4 per share, with a market capitalization of HK$95 billion, which is close to 100 billion Hong Kong dollars and is also the highest apparel market group in China.

Goldman Sachs published a research report, expecting Shenzhou International's sales in 2017 and 2018 to increase by 15% and 12%, of which Vietnam's business contributed 14% to 2018 production, and China's business grew by 5-10%. In addition, the bank expects Shenzhou's market share of orders from major customers such as Nike, Adidas and Uniqlo to increase further from the current 10 to 15%.

As China's largest knitwear manufacturer and exporter, Shenzhou International in the first half results once again recorded strong growth, with sales up 18.9 percent to 8.264 billion yuan, net profit attributable to shareholders rose 24.1% to 1.799 billion yuan .

Among them, sales of sports products accounted for approximately 66.8% of total sales. Revenue from sales of sports products increased by approximately 22.9% over the same period last year. Sales of leisure products accounted for approximately 24.9% of total sales. Revenue from sales of leisure products increased by approximately 17.7% over the same period last year. Sales of underwear products accounted for approximately 7.5% of total sales. Revenue from sales of underwear products decreased by approximately 5.3% compared with the same period last year.

The company mainly produces knitted sports goods, casual wear and underwear, and its customers include UNIQLO, Adidas, Nike and PUMA. According to Bloomberg data, among the four important customers of Shenzhou International, the fast-growing UNIQLO parent company's fast-selling revenue accounted for 21.2%, the income from Adidas accounted for 20%, and the income from Nike accounted for 19%. .

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 compound revenue and net profit compound growth rate reached 17% and 22% respectively. It is worth noting that in the past 8 years, thanks to the continuous growth of performance, Shenzhou International's share price has increased 53 times, which is the group with the highest return on investment in the apparel industry.

Shenzhou International Group was founded in 1989 by Chairman Ma Jianrong, President Guan Yunlin and Ma Renhe. Its business scope mainly includes the production of sportswear, casual wear, underwear and other knitted garments for domestic and foreign brands. Like other foundry companies, it has taken advantage of the advantages of no portal restrictions, and has almost covered the entire chain of knitting industry products in the industry chain.

The steady growth of Shenzhou International's performance is mainly due to the global textile industry environment, vertical integration of production capacity, and customer relationship management.

At present, the global textile industry is undergoing a fourth shift. From China's Yangtze River Delta and Pearl River Delta regions to the lower-cost mainland China and Southeast Asia, the trend to Southeast Asia is even more pronounced. In 2016, Vietnam’s textile exports amounted to 23% of China’s textile exports. Shenzhou International initially benefited from the global textile industry transfer. In recent years, in order to cater to the trend of the industry to Southeast Asia, the group also opened factories in Vietnam and Cambodia.

Shenzhou International's own unique production mode is the key reason for its steady growth. It is reported that the Group is in the OEM mode in the production of garments, and in the production of fabrics, according to the design and functional requirements of customers, the corresponding fabrics are produced and produced. In fact, OEM's production profit is relatively thin, but because Shenzhou International has taken the middle and lower reaches of the industry chain, providing customers with one-stop efficient service, reducing procurement costs and improving the ability of the supply chain to respond quickly, it has obtained A group of stable customers, while improving the group's bargaining power and voice.

More importantly, Shenzhou International continues to invest in technological innovation, focusing on product development and production efficiency, and has won more than 180 patents to date. According to statistics, the Group's R&D investment is about 2% of annual revenue, while the investment in technological innovation directly raises the Group's gross profit margin and also increases production. The data shows that the Group's per capita output increased by 10% in 2016.

Some analysts pointed out that Shenzhou International's high-efficiency and low-cost production model is the main reason for its long-term stable strategic cooperation with international brands such as Adidas, Nike, Puma and Uniqlo.

In fact, after the introduction of Nike customers, Shenzhou International accelerated the growth rate in response to changes in customer demand. From 2006 to 2008, in order to meet the demand for sportswear boosted after the 2008 Olympic Games, Shenzhou International actively adjusted the product structure and increased the proportion of high value-added sportswear. In 2009, sportswear accounted for more than 50%.

From 2009 to 2015, it was the key development stage of international sports brands in China. It was during this period that Shenzhou International reached a stable cooperative relationship with international brands. In 2011, Nike once handed the Flyknit upper production business to the supplier Fengtai, but due to technical reasons, the order was abandoned, and Shenzhou International took over the Flyknit order. In 2012, Shenzhou International purchased 2,000 sets of professional equipment at one time. At present, the supply of Shenzhou International has exceeded 75% of the total supply of Nike Flyknit uppers, and the gross profit rate of Flyknit uppers business is higher than the group average. As a key technology of Nike in recent years, Flyknit has high hopes. It is reported that Shenzhou International has built a special plant in Flyknit in Vietnam, and it is expected that the capacity will double after completion.

Since its establishment, Shenzhou International has been growing together with its international customers, and has established a special factory for Nike and Adidas to develop a partnership from the upstream and downstream of the supply chain.

As the Group's product market gradually expands from Japan to the Asia-Pacific region and the European and American markets, some analysts pointed out that Shenzhou International's vertically integrated production lines, diversified products, customers and markets can effectively reduce the Group's operational risks and enhance its business. Overall competitiveness.

In addition, Shenzhou International launched its own clothing brand Maxwin in 2010, which is regarded as the future Uniqlo. In order to accelerate the omni-channel layout of Maxwin, the Group sold 49% of Maxwin's shares to NetEase last year to strengthen the powerful data with Netease. Marketing cooperation.

However, some people in the industry have questioned whether Shenzhou International, which has always been based on the foundry business, has launched its own brand to violate the logic. In response, Ma Jianrong, chairman of the group, responded that when a traditional clothing company has a certain production capacity, branding is a steady attempt, and Maxwin is still at the stage of exploration.

At present, the second largest market capitalization is the domestic sports equipment retailer ANTA Sports, with a market capitalization of approximately HK$83 billion. Since last year, the performance of ANTA Sports has also been rising all the time. At present, Chaohai Home has become the largest apparel retailer in the market.

According to ANTA Sports's first-half results as of the end of June, net profit rose 28.53% year-on-year to 1.451 billion yuan (the same unit), sales rose 19.2% year-on-year to 7.323 billion yuan, and gross profit increased 25.92% year-on-year. % to 3.704 billion yuan, gross margin increased by 2.7% to 50.6%.

Since the beginning of this year, Anta Sports' share price has continued to climb. On July 3, the market value exceeded HK$70 billion for the first time. After the release of the financial report last month, the stock price soared 5.83%, and the market value was HK$79.1 billion. As of today's press release, it has exceeded HK$80 billion. HK$83 billion.

Thanks to the continued growth of the Anta brand business and its other brands, as well as its “single focus, multi-brand, omni-channel” strategy. In fact, Anta Group has already distinguished itself from competitors such as Li Ning by this strategy. Compared with Li Ning Group, which accounts for more than 99% of brand sales, Anta has benefited from the boost of the high-end market in the first half of 2017.

The Haishu home, which was overtaken by Anta, has a good performance and stock price. The current market value is about 41.917 billion yuan, and it is infiltrating into the young Chinese consumer market with a larger store size and ambition.

In the first half of this year, Haishu's home sales increased by 5.59% year-on-year to 9.253 billion yuan, approaching 10 billion yuan, and net profit increased by 5.77% year-on-year to 1.875 billion yuan. Net profit attributable to shareholders of listed companies increased by 5.77% year-on-year to 1.875 billion yuan. .

It is worth noting that the Chinese apparel processing and retail groups, which are favored by the capital market, are seeking transformation and upgrading. Shenzhou International, which manufactures its entire industrial chain, not only improves its production efficiency through further efforts, but also enriches its business types through self-built brands. Anta has transformed into a comprehensive sportswear group through a multi-brand matrix strategy covering multiple market segments. The ambition of Haicang House is not small. On the basis of stable expansion channels, it adopts a series of brand image update strategies to cater to the trend of China's consumption upgrading.