In The First Three Quarters Of The Joint Venture, The Revenue In The First Quarter Of The Year Was Over 2 Billion 800 Million, And The 720 Billion Rupiah Was Overseas In The Year.

Jiangsu's Luen FA textile Limited by Share Ltd (hereinafter referred to as "Lian FA joint-stock") has recently announced its three quarterly report in 2019. During the reporting period, the company achieved operating income of 2 billion 880 million, down 10.5% from the same period last year, and realized net profit of 240 million, down 3.2% from the same period last year, and the earnings per share were 0.75 yuan. During the reporting period, the gross profit margin of the company was 20%, an increase of 1.9 percentage points over the same period, and the net interest rate was 8.4%, an increase of 0.6 percentage points over the same period last year.


In addition, non recurring gains and losses totals 47 million 643 thousand yuan, which has a greater impact on net profit. After deducting the non recurring gains and losses, the net profit of the returned parent was 200 million yuan, down 6.4% compared to the same period.


Quarterly view, the first quarter of 2019 - the three quarter operating income decreased by 8.05%, 17.60%, 4.95%, net profit increased 63.47%, 5.19%, 35.37% respectively. Since the fourth quarter of 2018, the company's revenue side has continued to decline, mainly due to Sino US trade friction and poor domestic and international demand. The increase of net profit in the first quarter of 2019 was mainly due to the increase of fair value changes, the depreciation of RMB and the reduction of financial expenses. In the three quarter of 2019, the decline in net profit was mainly due to the decrease in the fair value and the increase in asset impairment.


In the first half of 2019, the income of dyed fabric, printing and dyeing cloth, printed cloth, clothing, cotton yarn, electric steam and sewage treatment decreased by 21.42%, 21.01%, 82.47%, 18.21%, 17.31% and 3.98%, respectively. Among them, the increase of printed cloth revenue was mainly due to the increase of the company's self run orders. In the first three quarters, the revenue of main products such as yarn dyed fabric, printing and dyeing cloth, clothing and so on still declined, and the income of printed cloth increased year-on-year.


In terms of production capacity, the joint venture company's main construction capacity is mainly home textiles grey cloth and clothing, and the main products such as dyed fabric, dyed fabric and so on are still stable. Among them, the company announced in 2018 that it was planning to build an annual production of 28 million meters of high-grade home textile grey cloth and matching yarn production project in Akesu, Xinjiang. The construction and installation of 160 thousand spindles and 400 home textile wide air-jet loom production lines were completed. Up to now, the company has already obtained the necessary examination and approval procedures and pre formalities before the project is put into operation. The production scale of 200 looms and 50 thousand spindles has been preliminarily formed, and the relevant equipment is being installed in succession, and it is expected to be put into operation gradually.


In the Indonesian project, Luen Fat shares announced in June 2019 that it will cooperate with PTUngaranSariGarments to set up a subsidiary in Indonesia. The subsidiary company has registered capital of 720 billion rupiah, building an annual production of 66 million M high-grade woven fabric. At present, the project implementation body "Luen FA textile (Indonesia) Limited" has been approved by the Ministry of justice and human rights of Republic of Indonesia, and is expected to start construction step by step.


In addition, the joint venture shares issued a notice on May 2019, and the cooperation agreement on the signing of the Ethiopia project has been terminated.


Li Jie, an analyst at Everbright Securities, said that in the short term, the poor demand at home and abroad affected the performance of the joint venture shares. In the first half of this year, the domestic and American revenues of the joint stock fell 9.98% and 11.79% respectively. In the long run, the leading position of lufa hair color fabric leader is prominent. In the short term expansion of home textile grey cloth and clothing products, the future production capacity will promote growth. With the expansion of the company in Indonesia, the global layout will help companies diversify risks and reduce costs.


Public information shows that the joint venture company is a large and new high-tech enterprise with the whole industry chain of ginning, spinning, dyeing, weaving, finishing, knitting, home textile, printing and dyeing, garment making, thermoelectricity, sewage treatment, brand operation and warehousing and logistics. It has a production scale of 310 thousand spindles, an annual production of 160 million meters of dyed cloth, 60 million meters of printing and dyeing cloth, 11 million pieces of garments, 6000 tons of knitted yarn and knitted fabric dyeing, and 28 million meters of home textile grey cloth. The products are sold to more than 20 provinces and municipalities nationwide, and 50% of the main products are exported to more than 30 countries and regions, such as Japan and the United States.


According to the financial report, in the first half of 2019, the total revenue of the joint stock company reached 1 billion 880 million, down 13.2% from the same period last year, and realized net profit of 170 million, an increase of 24.6% compared with the same period last year, and the earnings per share were 0.52 yuan. During the reporting period, the gross profit margin of the company was 19.3%, an increase of 3.1 percentage points over the same period, and the net interest rate was 8.9%, an increase of 2.6 percentage points over the same period last year. In addition, non recurring gains and losses totals 53 million 119 thousand yuan, which has a greater impact on net profit. After deducting the non recurring gains and losses, the net profit of the returned parent was 110 million yuan, up 2% over the same period.