The production scale will reach 2 million ingots of Xinye Textile, and its revenue will exceed 86 bi

Henan Xinye Textile Co., Ltd. (hereinafter referred to as “ Xinye Textile & rdquo;) recently issued a notice that the company intends to provide 300 million yuan of joint and several liability guarantee to Xinjiang Jinyu Textile Co., Ltd. (referred to as Jinyu Textile Co., Ltd.), a wholly-owned subsidiary, for a period of 31 December 2020.





The announcement shows that Jinyu Textile mainly deals in the production, processing and sales of cotton textiles, cotton acquisition, and import and export business of its own products and related technologies.





As of September 30, 2018, Jinyu textile industry had total assets of 1.312 billion yuan, total liabilities of 464 million yuan, net assets of 848 million yuan, asset-liability ratio of 35.379%, main business income of 604 million yuan, total profits of 559.406 million yuan and net profits of 509.137 million yuan.





At present, Xinye Textile has approved a total external guarantee of 1.31 billion yuan, accounting for 40.003% of the audited net assets on December 31, 2017, and 14.367% of the total assets.





Xinye Textile said in the announcement that the company's guarantee for the wholly-owned subsidiary can meet the financing needs of the wholly-owned subsidiary's business. The risk of the company's guarantee can be controlled and will not have adverse effects on the company.





Industry insiders said that Xinye Textile, as the leader of white yarn production and marketing in the cotton spinning sector, has sustained the release of project capacity in recent years, and its performance has maintained a high growth rate. In the future, the company is expected to gradually contribute to the performance of the construction capacity project.





Observation shows that Xinye textile production capacity mainly comes from Yuhua, Jinyu, intelligent spinning and other projects in Xinjiang. The total yarn production capacity is about 1.7 million spindles. With the increase of production load, the performance of the current contribution of production capacity is expected to increase steadily. In addition, the knitted fabric project of Xinye has been put into operation, and subsequent production capacity will continue to release; in terms of production capacity, Xinjiang 165,000 spinning projects. As well as our denim fabrics project is expected to release production capacity and contribute to performance by the end of 2019.





The main product of Xinye Textile is white yarn, which is widely used in the textile market. The annual growth rate of yarn products can basically maintain double digits, and the new product ratio of yarn products is gradually increasing, which has a good market response. This depends on the company's continuous investment in R&D. Since 2018, R&D expenditure has totally invested 125 million yuan. The ratio of R&D expenditure of about 3% provides continuous guarantee for the stability and improvement of the company's product competitiveness.





According to the public data, Xinye Textile is one of the state's major textile backbone enterprises and one of the 520 key supporting enterprises in China and 50 in Henan Province. The largest shareholder of Xinye Textile is Xinye County Finance Bureau, with a controlling proportion of 27.3%. There are eight wholly owned subsidiaries, one holding subsidiary and one joint venture. The main business includes cotton spinning, cottonseed processing, cotton processing and marketing, logistics, trade and so on. It belongs to the leading enterprise of cotton textile industry.





According to the financial report, Xinye Textile's performance has increased steadily in recent years. From 2012 to 2017, Xinye Textile's business income increased from 3.158 billion yuan to 5.195 billion yuan, with an annual compound growth rate of 10.47%; the net profit attributed to the parent company increased from 0.8 billion yuan to 292 million yuan, with an annual compound growth rate of 29.56%.



In the first three quarters of 2018, Xinye Textile realized business income of 4.746 billion yuan, an increase of 24.06% over the same period last year. Its net profit attributed to its parent company was 317 million yuan, an increase of 33.70% over the same period last year, a slight decrease from the growth rate of 40.84% in 2017. In recent years, the company's gross interest rate has stabilized at about 16-17%, and the net interest rate has increased year by year. In the first three quarters of 2018, the company's gross interest rate reached 16.91%, and the net interest rate reached 6.69%.



Xinye Textile is expected to achieve net profit of 351-409 million yuan belonging to its parent company in 2018, an increase of 20-40% over the same period last year, mainly due to the expansion of yarn and fabrics production capacity to drive profit growth.



Chen Bo, an analyst at Fortune Securities, believes that Xinye Textile, as the leader of white yarn production and marketing in the cotton spinning sector, has sustained the release of project capacity in recent years and maintained a high growth rate. In the future, the company is expected to gradually contribute to the performance of the construction capacity project. In addition, the company does not exclude the possibility of future new capacity projects, state-owned enterprise reform and mergers and acquisitions. In addition, the performance of Xinye Textile's three-quarter report in 2018 is slightly higher than expected, and all financial indicators perform well. Judging from this, the logic of Xinye Textile's performance growth in the next 2-3 years will not change significantly. It is estimated that the company's operating income will reach 6.411 billion yuan, 7.565 billion yuan and 8.624 billion yuan respectively in 2018-2020, and the net profit attributable to the parent company will reach 368 million yuan, 449 million yuan and 539 million yuan respectively. 。



The news from Xinye Textile also shows that by 2023, the production scale of the company will reach 2 million ingots of converted yarn, more than 3,000 shuttleless looms, 300,000 tons of cotton yarn annually, 300,000 meters of high-grade fabrics, 30,000 tons of knitted fabrics, annual sales revenue will reach more than 10 billion yuan, the overall economic strength and competitiveness of the country's top three cotton textile industry.