Obvious advantages in scale, "Moat" has now appeared. According to the statistics of Hong Kong Customs, in 2013, China exported 1800 tons of cashmere yarns, of which the cashmere industry accounted for 1/3 of exports, which was nearly 3 times that of the second. The national cashmere sweaters exported more than 1,600 pieces, including China Silver. The cashmere export accounts for about 15%, and is also more than twice as high as the second place. It is believed that with the release of the company's production capacity, there is still much room for improvement in the future.
Related company stock trends
China Silver Cashmere Industry
. It can be seen that the company's scale has obvious advantages. We believe this is the result of many years of enhanced control of cashmere resources, technological progress, industrial chain extension, and process optimization. At the same time, we believe that this scale advantage and supporting factors behind it will continue to be a strong “moat†that will provide more opportunities for future business expansion and brand building.
The release of production capacity opens up the performance space, and 2015 is the peak release period. At present, the production capacity is still the main bottleneck restricting the growth of business performance. The 720-ton slub yarn project was put into production in the first half of 2013. However, the domestic capacity of 1080 tons still cannot fully meet the sales and self-demand of cashmere yarn, and there will still be some external mining. The Cambodian multi-component project (2 million cashmere sweaters capacity) was put into operation at the end of 2013 and will fully release the production capacity in 2014. The fixed increase project has been stepped up and the 5 million cashmere sweater project is expected to be put into operation in the second half of the year to ease the current cashmere. The issue of insufficient production capacity of products; and the two major categories of linen and wool will be put into operation next year. On the whole, the capacity is still tight in 2014. It is expected that this situation will be effectively mitigated after the scheduled addition of the project to production in 2015. At that time, the performance will also grow further rapidly.
The customer structure continues to be optimized and the company's texture continues to increase. The company continues to make deep-industry chains, relying on the control of cashmere resources and the advantages of yarn quality, and the products continue to extend to downstream garments. In 2013, Uniqlo focused on purchasing cashmere sweaters from the company for the first year, and it is expected that its purchase volume will account for about half of the sales volume of ready-made garments. We believe that as the company becomes the core supplier of Uniqlo, which is strictly known as supply chain management, the scale, reaction speed, and product quality of the company will attract more international brands, such as ZARA with Uniqlo and four fast fashion brands. H&M, GAP, etc., or chain store brands in important cashmere consumer countries such as Europe and the United States are all in line with the company's development direction. Moreover, the expansion to high-end linen and wool category is undoubtedly an important highlight to attract these international brand customers. We believe that the resources of suppliers with high-end industrial bases will become increasingly scarce and the value will become increasingly prominent.
The strategy will enter the second phase and will advance in an orderly manner in the next five years. According to the company's three-step strategy, the first phase has become the five-year strategic goal for the global leader in cashmere products. The second-phase strategic objective is to build a high-end industrial base, optimize customers and product structure as a five-year strategic goal, the third step Then we hope to realize the strategic goals of ODM and OBM. The company is currently building a strategy for high-end industrial bases in the second phase, focusing on the reorganization and optimization of several major sectors of procurement, production, trade and capital to meet the internal requirements of the current internationalization, scale, and supply chain integration, and to strengthen the The linkage between the two parties will enhance the refined management capabilities and response capabilities, and lay a solid foundation for further attracting international brands and platforms.
Product structure upgrades and long-term strategic transformations will be carried out simultaneously to maintain “recommended†ratings. Taking into account the dilutive increase of RMB2.3 billion, we maintain our 2013-2015 EPS of 0.39, 0.58, and 0.82 yuan respectively, corresponding to dynamic PE of 24.9, 16.8, and 11.8, respectively. We believe that the company's product structure upgrade and long-term transformation strategy is clear and there is ample room for growth. At present, the stock price has a safety margin and both offensive and defensive, and maintains a “recommended†rating.
Risk Warning: Deterioration in the international economic environment led to sluggish demand, and the rate of expansion of production capacity could not absorb as quickly as expected.
Author: Patrick Yu Hui Geng Banghao (Source: Ping An Securities)
Click to enter the "community" to participate in the discussion
A visor cap is a type of headwear that consists of a brim or bill at the front and a band that goes around the head. Unlike traditional caps or hats, visor caps do not have a full crown, leaving the top of the head exposed. Visor caps are commonly used in sports such as golf and tennis to shield the eyes from the sun while allowing for better ventilation and a cooler head. They are also popular for outdoor activities such as hiking, fishing, and gardening. Visor caps come in a variety of materials, including cotton, polyester, and nylon, and can be adjustable or fitted. They are a practical and stylish accessory for any outdoor enthusiast.
Sun Visor Cap,Visor Sun Hat,Custom Visor Hats Wholesale,Sun Visor Hat UV Protection,UV Sun Visor Hat
Yantai Belief Cap Co.,Ltd. , https://www.beliefcaps.com