Xinye Textile Strengthens Its Layout In Xinjiang Industrial Chain

In October 21st, Henan Xinye textile Limited by Share Ltd announced that it intends to use its own capital to acquire 42% stake in Xinjiang Yuhua Textile Technology Co., Ltd., which is held by Kaifeng Yinhai cotton Co., Ltd. for 49 million 400 thousand yuan. After the completion of the acquisition, Xinye textile will hold 100% stake in Yuhua textile, and Yuhua textile will become a wholly owned subsidiary of Xinye textile.

Yuhua textile was founded in January this year. The legal representative, Wei Xuezhu, has a registered capital of 100 million yuan, mainly in cotton spinning, cotton weaving, wholesale and sales of knitwear, textiles and raw materials, and acquisition and sale of cotton. As of August 31st this year, the total assets of Yuhua textile amounted to 124 million 655 thousand and 200 yuan and the net assets amounted to 90 million 54 thousand and 300 yuan.

It is worth mentioning that the site of Yuhua textile is Hutubi Textile Industrial Park light textile area, Changji, Xinjiang. In the middle of last month, the policy of Cotton Subsidy Policy was landed in Xinjiang. The industry generally believes that the landing of cotton price subsidy rules will help stabilize cotton farmers' income, and domestic textile enterprises will also benefit from the reduction of raw material costs. Data show that raw material costs often account for 50%~70% of the cost of cotton spinning enterprises, and the decline of cotton market prices will directly reduce the cost of cotton spinning enterprises and contribute to the development of cotton spinning enterprises.

For this time Buy Xinye textile said, "this acquisition is in line with the company's long-term development plan and expansion strategy, and can expand the company's production capacity and scale of operation. The company's comprehensive strength and industry status can be improved, which is conducive to the company's becoming bigger and stronger." As the parent company of Yuhua textile, although Xinye textile is headquartered in Henan Province, its raw material supply base is located in Xinjiang, and Xinjiang owns Akesu's new hair cotton industry, Jinyuan textile and other wholly owned subsidiary companies. At present, Xinye textile mainly produces and operates four series of more than 100 varieties, including pure cotton and blended yarn, pure cotton and blended fabric, dyed fabric, household textiles, etc., with an annual output of 90 thousand tons of high-grade fabrics, 150 million meters of clothing fabrics, and 4 production plants and 9 directly under production workshop.

In 2013, Xinye textile realized business income of 3 billion 260 million 33 thousand and 100 yuan, net profit of 80 million 122 thousand and 600 yuan, and total assets of 5 billion 5 million 742 thousand yuan. However, from its three quarterly bulletin published in 2014, the textile performance in Xinye declined slightly in the first three quarters compared with the same period last year.

In the first three quarters of this year, Newfield Textile revenue was 2 billion 388 million 870 thousand and 300 yuan, an increase of 0.21% over the same period, and net profit of 52 million 750 thousand and 800 yuan, down 16.73% from the same period last year. Xinye textile explained that the main reason for net profit decline was the increase in R & D expenses and the decrease in subsidy income. In addition, in the first three quarters, the net cash flow generated by Xinye's textile business activities was 94 million 637 thousand and 800 yuan, compared with 176 million 694 thousand and 600 yuan in the same period last year, mainly due to the increase in cash payments for purchases of goods and services this year. However, Xinye textile forecast net profit this year is about 80 million 122 thousand and 700 ~9614.72 yuan, an increase of 0%~20% compared to the same period. The profit growth is mainly due to the low price of new cotton listed this year, resulting in a rise in gross margin.

In addition to the new policy of subsidized cotton prices, various financial subsidies of Xinjiang subsidiaries have also increased their earnings to a large extent. In October 13th, after announcing that its subsidiary had received a subsidy of 8 million 785 thousand yuan for the preferential policy of subsidizing the transportation cost of Xinjiang cotton yarn, it also announced in October 23rd that the subsidiary company received 901 thousand and 580 yuan from the state treasury payment center of Awati County Finance Bureau in October 13th, which will be recognized as extra business income, thereby increasing its earnings for the fourth quarter of this year. And the policies are good and specific. Discount Superposition will undoubtedly become an important reason for Xinye textile to continuously strengthen its business layout in Xinjiang.