Fengzhu Textile: Three Advantages Against Industry Pressure

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The "roller coaster" market of raw materials has brought great pressure to the company's operation. The company timely evaluates the overall supply and demand of cotton and cotton yarn, and appropriately controls the inventory.

At present, the performance of most textile and apparel listed companies has been disclosed. As far as the key companies that have announced their results are concerned, the overall performance is slightly lower than expected. The reporter also carefully read the dense text and data of some textile listed companies, and obtained valuable information from the annual report.

As a famous supplier of local sports fabrics in Jinjiang, Fengzhu Textile has a strong research and development foundation. As a benchmark enterprise in the printing and dyeing industry, high-tech may be a "weapon" for Fengzhu Textile to break through ". Fujian Fengzhu Textile Technology Co., Ltd.'s total operating income reached 0.941 billion yuan in 2011, an increase of 1.82 from 0.924 billion yuan last year. In the new year, in the face of difficulties and pressures, the company's managers will actively take measures to deal with challenges and make various preparations. In 2012, the company's operating target is 1.081 billion yuan in operating income and 1.027 billion yuan in operating cost.


Three advantages against industry pressure

Journalist: How is the company currently operating? What is its position in the industry?

Shi JinpingAt the beginning of listing, the company's main business income was 0.345 billion yuan, net profit was 37.73 million yuan, total assets were 0.596 billion yuan, and net assets were 0.531 billion yuan. After several years of development, by the end of 2011, the company's main business income had reached 0.935 billion yuan, total assets were 1.234 billion yuan, and net assets were 0.607 billion yuan. The company's production equipment has reached the advanced level of its peers in the world, and the infrastructure facilities such as water, electricity, steam and sewage treatment are complete, it is one of the 100 key industrial enterprises in Fujian Province, a national large-scale industrial enterprise, a key high-tech enterprise of the National Torch Plan, a national innovative enterprise, and has been awarded the top ten competitive enterprises in China's knitting industry for 7 consecutive years.


Journalist: Affected by the current economic downturn, weak external demand, and high costs, the textile industry as a whole has been greatly affected. What competitive advantages does the company have to remain invincible?

Shi Jinping: The company has always had obvious competitive advantages in technology, capital and environmental protection. In terms of technology, the company is the maker of national and industry standards, and has a national enterprise technology center, which meets the high-tech level requirements of long working procedures and complex processes in the dyeing and finishing industry., Can adapt to the situation of deep processing, high technology, and high value-added competition; in terms of capital, the dyeing and finishing industry that adopts advanced technology and technical equipment has large initial investment, significant economies of scale. With a good reputation, the company has smooth direct and indirect financing channels to ensure the company's business development; in terms of environmental protection, the dyeing and finishing industry consumes a lot of water, and the pollution of water resources is also serious. The textile industry has higher environmental protection requirements. The indicators of sewage treatment in the company's production and operation are much better than the national discharge standards.


Plan to expand the upstream and downstream of the industrial chain

Journalist: The industry in which the company is located is a traditional industry, which is greatly affected by various influences. Does the company have any plans to invest in the upstream and downstream of the industry chain?

Shi Jinping: The textile industry is a traditional pillar industry of my country's national economy and an important livelihood industry. It is also an industry with obvious international competitive advantages. It plays an important role in prospering the market, expanding exports, absorbing employment, increasing farmers' income, and promoting the development of urbanization. The company is a high-tech enterprise with knitting dyeing and finishing and high-grade knitted fabric production as its main business, and is committed to becoming a global leader in high-grade knitted fabrics. The company focuses on independent innovation, technological transformation, elimination of backwardness, and optimization of layout, promotes structural adjustment and industrial upgrading, consolidates and strengthens its leading position in the dyeing and finishing industry, and promotes the company's transformation from large to strong.


Journalist: Does the company have any expansion plan in the upstream and downstream of the main textile industry? What other investments does the company have?

Shi Jinping: The company's three bleaching and dyeing plants at its headquarters are the company's core business, and it is also equipped with a weaving plant, a dyeing plant, and a sewage treatment plant. In addition, the company has a wholly-owned subsidiary of cotton spinning with 100000 ingot production capacity in Jiangxi and Shandong respectively. In addition, the company also invested 30 million yuan in Shanghai xingye venture capital co., ltd, accounting for 10% of its shares.


Multi-strategy to resolve business problems

Journalist: In the current economic situation, what are the main problems in the company's operations and what measures have been taken?

Shi Jinping: 2011 was a severe year for the entire textile industry. In the face of the severe textile industry in 2011, the company's operating performance has been greatly impacted, and the growth of operating income is not obvious. 2011 was the hardest year since the company went public. First of all, the sharp fluctuation of raw material prices represented by cotton and cotton yarn and the "roller coaster" market have brought great pressure to the company's operation. From the high price in early March to the low price in August, the price has dropped by more than 40%, which increases the risk of the company's purchase and reserve of cotton needed for production. At the same time, the market wait-and-see attitude strongly affects the normal production of orders, this has resulted in poor production and sales, increased inventories, increased capital occupation and a decline in profitability. To this end, the company took timely measures to assess the overall supply and demand of cotton and cotton yarn, and appropriately control inventory. Secondly, under the condition that the company actively develops export orders, the RMB continues to appreciate, which squeezes the profit margin of export orders to a certain extent. To this end, the Company has reduced the adverse impact of RMB appreciation on the Company by signing forward settlement agreements with banks to lock in export revenue, increase foreign currency liabilities, increase imports of raw materials, and use export credit insurance policies to increase export transfer financing. Furthermore, the company is facing the problem of recruitment difficulties for general workers to a certain extent. The company increases the attractiveness of the company's positions, reduces the difficulty of recruitment, maintains the stability of employees in the company's production plants, and ensures the normal production of the company by improving the salary and benefits of employees, refining the promotion mechanism, and strengthening the construction of the company's party group and culture.

In view of the fact that the company's customers are mainly concentrated in Fujian Province and have relatively little influence in the country, the company adheres to the strategy of going out, actively promotes the company's brand building, and strives to build a well-known knitted fabric brand in the country. By participating in various fabric fairs, recommend fairs, etc., strengthen industry exchanges, and use the information exchange platform of various textile fabric exhibitions to fully exchange information with textile counterparts, upstream and downstream, and brand customers; in addition, the company also actively participates in national and industry The formulation of standards expands the company's influence.

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Fengzhu textile headquarters service telephone:0595-8205 0055
Insider Trading Report Phone:0595-8565 6506 Miss Chan Mei-jin (Secretary of the Board)

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