New share: Jiangsu Xinmin Textile
(China Daily)Updated: 2007-04-16 09:57
Company profile
The company is headquartered in Wujiang City, Jiangsu
Province, which is known for its silk manufacturing and long history of silk
trading. Starting with a weaving mill in 1958, the company initially specialized
in making natural silk. It is now a diversified textile-related stockholding
company, remaining focused on spinning and weaving, as well as dyeing, finishing
and garment-making.
Investment tips
The funds raised via the initial public offering, about 207 million yuan, is to invest in two projects in manufacturing natural silk and man-made silk. Production capacity for the two projects is expected to increase by 43 percent and 60 percent respectively with the completion of the two projects.
The company's revenue in the past three years increased at a 10 to 35 percent rate annually. Its products are highly diversified with the high-end silk products made mainly for export.
Risk reminder
Average growth rate for sales revenue in the silk industry is 17.65 percent and is lower than that of the textile industry as a whole. Average profitability in the silk industry has been dropping over the past five years.
The industry is labor-intensive and the entry barrier is low. The company is facing high competitive pressure. As it is located on the east coast, it does not have the advantage of cheaper labor.
Financial data
Estimated revenue and net profit in 2007 is 1.24 billion yuan and 55.51 million yuan.
Net profit is expected to increase by 22.85 percent and 31.74 percent in 2007 and 2008. Earnings per share are expected to be 0.50 yuan and 0.65 yuan in next two years.
Suggested reasonable price after listing is around 12 yuan to 15 yuan.
(For more biz stories, please visit Industry Updates)
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