In The First Half Of The Year, Lu Tai's Net Profit Was Over 400 Million, And Vietnam's Factory With A Super Profit Ability Contributed 36 Million 980 Thousand.

Lu Tai textile Limited by Share Ltd (hereinafter referred to as "Lu Tai A") has recently disclosed semi annual reports in 2019. During the reporting period, the company achieved operating income of 3 billion 185 million yuan, operating profit of 495 million yuan, net profit of 411 million yuan attributable to shareholders of listed companies, and net profit 377 million yuan excluding non recurring gains and losses, respectively, representing a decrease of 2.89%, 9.33%, 9.03% and 2.83% over the same period last year.

During the reporting period, the operating cost of the company was 2 billion 211 million yuan, a year-on-year decrease of 6.35%, and the sales cost was 78 million yuan, an increase of 16.28% compared with the same period last year. The management cost was 191 million yuan, an increase of 17.11% over the same period last year. In 2019, the R & D expenditure in the half year was 162 million yuan, a decrease of 0.4% over the same period last year, and the net cash flow from operating activities was 120 million yuan, down by 82.84% over the same period last year.

The industry believes that the two quarter Lutai A performance has declined, mainly due to the downstream demand is relatively flat, resulting in a slight decline in domestic plant start-up rate, and part of the replacement of old capacity.

Shen Wan Hongyuan securities analyst Wang Liping introduced that along with the steady release of Vietnam's capacity, the overseas layout of Lu Tai A continued to improve. It was observed that the two phase of Lu Tai A Vietnam was gradually put into operation and its capacity was released in an orderly manner. At present, Vietnamese spinning two phase 76 thousand spindles spinning production line and garment factory two phase 3 million high-grade shirts have been put into operation. It is estimated that the total production capacity of Lu Tai A is currently about 136 thousand spindles, 30 million Beige fabrics and 9 million shirts. In addition, Lu Tai A has continued to increase Vietnam's investment and Vietnam's production capacity has increased steadily. Its Vietnam two stage 40 million meter colored fabric expansion project has completed the construction of its main factory building, and it is estimated that Vietnam's factory output will increase 10 million metric colors in 2019. Meanwhile, at the end of 2018, the company invested in 144 thousand projects of spinning and air spinning in Xining, Vietnam, to improve the Vietnamese dyed fabric industry chain and achieve the balance of capacity facilities.

According to the financial report, during the reporting period, Lu Tai A accounted for nearly 60% of its overseas revenues, indicating that its Vietnam factory had better profitability. In the first half of this year, the overseas income of Lu Tai A amounted to 1 billion 860 million yuan, accounting for about 58% of its total revenue. Among them, the income in Europe and the United States amounted to 580 million yuan, accounting for 18% of the total income. At present, the overseas production capacity of Lu Tai A is about 1/4 of total capacity, much higher than that of products sent to the United States. The advantage of Vietnam's preferential tax policy and favorable trade environment is obvious. Its Vietnam factory has a higher net interest rate. In the first half of the year, Lu Tai (Vietnam) achieved net profit of 36 million 980 thousand yuan, and its net interest rate is expected to be 5 percentage points higher than that of domestic factories. In the future, with the increase of Vietnam's capacity, the overall net interest rate of the company will be uplifting.

Everbright Securities researcher Li Jie judged that in the long run, Lu Tai A is the global leader in color weaving and has a prominent position in the industry. At present, both Vietnam and Shandong are building capacity projects. Vietnam's 40 million Beige weaving project and 3 million shirts projects will be put into operation in the second half of 2019. The scale expansion and capacity growth of the 2~3 haven't been predicted.

According to public information, Lu Tai A is a textile and garment enterprise group with integrated vertical production capacity, which integrates cotton planting, spinning, dyeing, weaving, finishing and garment making. It mainly produces and sells products of yarn dyed fabrics, dyed fabrics, garments and other products of medium and high grade shirts. The company has become the world's largest manufacturer of high-grade yarn dyed fabrics and international brand shirt manufacturers. At present, the company has built production bases in Kampuchea, Burma, Vietnam and other countries, set up design institutes in Italy, set up market service agencies in the United States, fully play the international resources advantages, and achieve the internationalization of industrial layout.