New Australian Textile: Environmental Investment Accounts For Net Profit Of 15%

The new Australian textile industry is divided into wool textile industry. Its main business is the development, production and sale of worsted yarn. Its main products are wool worsted yarn and intermediate wool wool, which are mainly used in the downstream textile and garment industry. Reporters noted that the company's performance in the past three years has basically not increased, and some years have also seen a decline. At the same time, the company's investment in environmental protection has remained high for many years, accounting for about 15% of net profit. In the situation of weak demand, taking the high-end line is a good way to break through the garment and textile industry. However, the company has a high debt ratio and tight capital chain. The company has not mentioned how to establish a high-end sales channel in the prospectus.

　　 No increase in performance in successive years

According to the prospectus, the total volume of the proposed IPO shares of the new Australian textile company is no more than 2 million 680 thousand shares. After deducting the issuance cost, the new shares will be used to replace the "20000 spindles high-grade wool worsted ecological yarn project", which has invested funds and its subsequent investment, and "repay 100 million yuan bank loan project".

The data show that the "20000 spindles high-grade wool worsted ecological yarn project" is a capacity expansion based on the original 44000 spinning capacity of the company. After completion, it will further increase the production scale of worsted relief in the company's spinning industry chain, adding 2280 tons of high-grade worsted yarn annually, and the company's spinning industry chain will ease the increase of production capacity ratio, which is conducive to the further improvement of operational efficiency.

The main business of the company is the development, production and sale of worsted yarn. Its main products are worsted yarn and wool top wool, which are mainly used in the downstream textile and garment industry. The reporter noted that, influenced by factors such as export reduction and insufficient domestic demand, the performance of garment and textile enterprises in recent years, especially last year, is very unsatisfactory. Public data show that between 2011 and 2013, there were no significant changes in operating income and net profit of new Australian textile (see Table 1). In 2012, the company's operating income increased slightly compared with 2012, but net profit decreased by 20%.

The company that has encountered difficulties in the development of the industry is not only a new Australian textile company, but also faces the risk of exchange rate fluctuations in addition to the risks faced by other enterprises. New Australian textile takes 100% Australian wool as raw material. In 2013, the export revenue of the company accounted for 45% of the total sales revenue. Under the current RMB devaluation trend, the exchange rate risk increased, and the exchange rate cost may increase. At the same time, the market saturation of textile industry is high, and the market competition is fierce. The company will face a higher market risk. During the reporting period, the net profit and loss of the company's remittance was -451 yuan, 760 thousand yuan and 1 million 260 thousand yuan respectively.

Facing the current China Woollen Textiles With the serious problem of homogenization of the market, many enterprises are actively seeking a way out. From the current situation, the enterprises that take the high-end route and brand line will have a much better operation. New Australian textile IPO raised funds to invest in the "20000 spindles high-grade wool worsted ecological yarn project", which is to move towards high-end and brand lines.

However, the reporter noted that in the past three years (from 2011 to 2013), the amount of cash flow generated by corporate investment activities was -7844 yuan, -7102 million and -1.45 billion yuan respectively. The advertising expenses were 720 thousand yuan, 1 million 710 thousand yuan and 2 million 410 thousand yuan respectively, and the growth rate was faster. Companies continue to invest, business revenue is not growing, is the original customer orders decline, or to open up the market disadvantage, or the company's products gradually lose competitiveness?

In this regard, the industry said that the high-end and brand line is indeed one of the ways to break through, but whether it is to build a brand or to establish a high-end sales channel, all need to invest a lot of money. During the reporting period, the company's asset liability ratio is running at a high level. By the end of 2013, the company's short-term borrowing has surged, and whether it will have enough strength to expand the high-end market and increase the performance of the company is not yet known.

However, the company did not specify in the prospectus on how to build brand and high-end sales channels. If the company enters the high-end market hastily, will it lead to the breakup of capital chain? As at press deadline, the company did not reply to the above questions.

　　 environmental protection High investment

In addition to lack of demand and serious homogenization problems, environmental protection is also a sword of Damour, who is hanging on the textile industry.

As everyone knows, textile industry It is one of the energy consuming industries in the manufacturing industry. It is also one of the industries that use more water, produce more waste water and have greater impact on the environmental quality. With the development of the society, the public is increasingly calling for energy saving and environmental protection. The state has continuously introduced the tasks of energy saving and environmental protection and the requirements of new emission standards. As a key pollutant discharge industry, textile enterprises have been concerned, and new demands have been put forward in terms of energy conservation and emission reduction.

Reporters noted that the company "annual output of 10000 tons of wool washing production line" wool washing wastewater, soft water preparation wastewater and domestic sewage treatment after the row to the Qian Tang River, as early as 2011, the new Australian textile is to implement technical transformation projects, supporting transformation of sewage treatment facilities. The original factory building, auxiliary room and sewage pretreatment station are mainly used for technical transformation of wool washing machine, sewage pretreatment station and grease recovery device, and two sets of soft water preparation devices are added.

However, this is just one of many environmental projects that companies need to deal with. Statistics show that the company's investment in environmental protection has always been high (see table two). During the reporting period, it invested 18 million 810 thousand yuan, 11 million 860 thousand yuan and 16 million 500 thousand yuan respectively, accounting for 18.6%, 14.7% and 16.3% of the company's net profit for the current period.

The industry insiders said that due to the strict implementation of the new environmental protection emission standards, the input of environmental protection equipment in printing and dyeing enterprises increased year by year, which greatly promoted the production cost of the enterprises. It is difficult for the printing and dyeing industry to get a temporary tax reduction policy in 2014. The state does not introduce more stringent policies, which is the biggest positive for printing and dyeing industry. However, according to the current situation, the more stringent environmental standards are a trend. If the country's environmental protection requirements are further improved and the net profit of the company can not get a faster growth, the proportion of the future environmental protection expenditure to net profit will further increase.