How Did The Garment Factory Go Through The Battle Of "Internal And External Troubles"?

Changjiang garment manufacturing Co., Ltd. is a Hong Kong listed companies, a large garment group and multinational enterprise in Hongkong. It was founded in 1949.

It was listed in Hongkong in 1970.

The company has a wide range of business, from spinning, weaving, bleaching and dyeing, and making garments to sales.

In 1987, Changjiang Garments Co., Ltd. split YGM Trading Co., Ltd., Mr. Chen Yongkui as general manager, and was officially listed in Hongkong.

YGM is the first clothing company to bring international brands to the mainland. The most influential brands in Europe and the United States, including MichelRene (France, Malaysia, dragon), Pirerrecardin (Pierre Cardin) and Valentino, are all introduced and operated by the Changjiang group. They have factories in Wuxi and Panyu.

YGM trading has more than 800 outlets, and its huge retail network is located in Hongkong, Macao, mainland China, Taiwan, Southeast Asia, Europe and the United States.

In the past ten years, YGM has been actively developing large retail markets in Greater China, in major cities such as Beijing and Shanghai.

Retail networks in Guangzhou and other places continue to expand in other cities, and the number of retail outlets is increasing year by year.

YGM trade has established more than 200 outlets in the mainland of China.

In addition, the Changjiang Garment Group also has subsidiary companies such as Wuxi Changlian Investment Co., Ltd. and Changjiang Western-style clothes Co. Ltd.

Reduction in domestic losses over the same period

In the 6 months ended September 30, 2018, the revenue reached HK $318 million, an increase of 0.97% over the same period last year. Gross profit was HK $57 million 692 thousand, an increase of 3.75% over the same period last year. Equity holders should make a net profit of HK $1 million 270 thousand, a loss of HK $2 million 148 thousand over the same period last year and a profit of HK $0.01 per share.

Although China's business is still in a deficit during the review period, the Group recorded a total loss of HK $977 thousand, but it has improved compared to the same period in 2017, while a loss of HK $2 million 766 thousand was recorded in the same period in 2017.

This is attributable to the increase in sales, which is said to be mainly due to the positive return of the Wuxi joint venture investment company.

Wuxi joint venture investment enterprises include Wuxi one cotton Investment Co., Ltd., Wuxi Changjiang precision textile Co., Ltd., Wuxi Changxin Textile Co., Ltd. and Wuxi Yangtze River precision textile Co., Ltd.

The Changjiang Garment Group owns 49% of these companies and is the largest shareholder.

Hard times in foreign factories

Bangladesh's factory experienced tough times during the review period.

The Bangladesh authorities suddenly changed import regulations, which seriously affected the production of the group, resulting in delays in shipment and the introduction of high air freight charges.

The increase in operating costs, especially the minimum wage of 51%, which took effect at the end of 2018, was the biggest impact on the group.

By setting orders and cost monitoring, management expects the group to make up some of its losses in the second half of the year.

Burma business remained stable in the first half of 2018.

The local currency depreciates, softens the minimum wage by 33%.

With the growing demand for garments manufacturing in Burma, the group began expanding its existing production facilities in the second half of the year, with the target's maximum production capacity reaching two times the current size by the end of 2019.

Group Wuxi China joint venture recorded profits in the first half of 2018/19, while cotton prices rose, but yarn prices did not rise synchronously, leading to a fall in gross margins.

The strength of the US dollar will help to mitigate the impact of some unfavorable factors.

The pressure of Sino US trade war will continue to affect the group's business in the second half of the year.

New trend

Founder's death

In March 2018, Chen Ruiqiu, the honorary chairman and executive director of the Yangtze River garment industry, died. Mr. Chen Ruiqiu is the founder of the Yangtze River garment making company.

Directors' holdings of shares

At the beginning of 2019, the HKSAR's rights and interests showed that Chen Yongkui, chairman and executive director of the Yangtze garment, was holding 41 thousand shares at an average price of HK $3.0707 per share on January 3rd, involving about HK $125 thousand and 900.

After the increase, Chen Yongkui's latest holdings amounted to 23604847 shares, and the shareholding ratio increased from 11.40% to 11.42%.

The increase of shares by major shareholders should be a good thing for shareholders holding the company's stock: on the one hand, they are optimistic about the company for a long time, some companies are official holdings, and there are management overweight, which are very optimistic about the future of the company. Some companies have large orders on hand, and there will be a large number of potential orders in the future, because no one knows their company better than the management of the company.

On the other hand, I think the company's share price is underestimated. Most of the holdings in this way come from a big decline in the market. Many stocks are also following the big market, and the stock price has dropped greatly. At that time, the company felt that the share price had already been very cheap, and it had been seriously underestimated.

The Yangtze garment industry in 2017 and 2018 experienced two years of downturn. In late 2018 and 2019, the situation of the group began to improve, and actively layout the mainland and Southeast Asian markets.

Changjiang Garment Group is still very strong, so after a trough, it should be able to recover quickly, and the future development can be expected.