"Chinese Hosiery Capital" Zhuji difficult moment

The performance of 13 listed companies and 10 companies has plummeted. Five of them have already lost money and only three have achieved growth.]

North of Hangzhou, south of Yiwu, Zhuji, located in the north-central part of Zhejiang Province, has been known as “the capital of Chinese hosiery industry”. The county-level city, which has an area of ​​only 2,300 square kilometers, has attracted much attention from the market because it sits on 13 A-share listed companies. Among them, only in 2011, Zhuji City successfully cultivated six listed companies.

Judging from the data in the first quarter of this year, the performance of the 13 listed companies that had brought glory to Zhuji has dropped significantly. Five of these companies have already lost money and only three have achieved growth. In order to ease the operational dilemma, at least five companies have announced that they want to use restructuring to improve their competitiveness, and some of them are already working on it.

Frequent reorganization

On July 23, Dadongfang announced that the company intends to acquire 3 natural persons including Jiang Zhongyang, Lu Wei, and Han Jun by issuing shares and paying cash, and Shanghai Perfect World Network Technology Co., Ltd. and Suzhou Longyue Investment Center. (Limited partnership) holds 100% equity of Shanghai Youtang Network Technology Co., Ltd. (hereinafter referred to as “Youtang Network”).

After friendly negotiations between the parties to the transaction and according to the “Agreement on the Issuance of Shares and the Payment of Asset Purchase Agreement”, the trading price of 100% equity of Youtang Network was 562,500,000 yuan.

A resolution of the Southeast Supervisory Board shows that after the transaction is completed, Dadongfang will hold 100% equity in Youtang Network, which can effectively solve the problem of the single business in Southeast China and help enhance the ability of listed companies to withstand the risks of economic fluctuations. Strengthen the listed company's sustainable development ability and core competitiveness.

According to statistics, the company’s operating income has dropped continuously for the past three years, and its net profit has also dropped from 79.23 million yuan in 2011 to 14.94 million in 2013. In 2012, it even ended with a loss of 55.54 million yen. Among them, subsidies from the government support the performance: In 2011, government subsidies received were as high as 189 million yuan, and in 2013 it dropped to 86.03 million yuan.

In fact, the 13 listed companies in Zhuji are far behind the Southeast.

Just one month ago, another local listed company, Shenke Co., Ltd. had also issued an announcement. The company used 294 million yuan in assets and liabilities of all assets and liabilities except for the raised funds as of Dec. 31 last year. All the shareholders of Film & TV Production Co., Ltd. held the equivalent of 100% equity of Hairun Film and TV for asset replacement, which was then backdoored by Hairun Film and Television.

In addition, due to major asset restructuring, both Fansen and Honglei have suspended trading. Zhejiang Furun was once planning to plan for non-public offering of stocks and raise funds for the acquisition of animation and game assets. However, due to immature conditions, it ended the most.

More than half of the performance fell

Zhejiang Furun is a joint-stock pilot company established under the approval of the original Zhejiang Provincial Shareholding System Pilot Coordinating Group Zhegu [1994] No. 8 Document. On June 4, 1997, the company officially entered the capital market, and the first listed company in Zhuji City was born.

In the following years, the pace of the birth of listed companies in Zhuji City was almost stagnant. Until 2002, it again ushered in the listing of FIDA Environmental Protection. Two years later, on the list of Zhuji listed companies, the names of Haiyue shares and Dunan environment were successively added.

Of Zhuji's existing 13 listed companies, all 9 were successfully listed after 2007. Especially in 2011, this small county-level city ushered in the outbreak of listing: Zhuji has successfully cultivated 6 listed companies this year, accounting for nearly 50% of the listed companies under its jurisdiction. From the time of listing, almost every Every two or three months, a local company can be successfully listed.

According to public reports, Zhuji City has been focusing on supporting six major industry-leading industries and modern agriculture and modern service industries in the development of listed companies. Among them, the “six major industries” are copper processing and new materials, mechanical and electrical equipment manufacturing, textile and apparel, environmental protection new energy, pearls, and hosiery, and the leading enterprises in these six industries have become the key targets for listing and cultivation. The 13 companies basically cover the leading companies in the six industrial leading industries.

However, more than half of the listed companies that have brought honour to Zhuji have faced the dilemma of a significant decline in their performance.

Among them, the Shenke shares net profit loss of 28.5409 million yuan last year, becoming the first loss since 2011, the first half of this year, the company continued to lose 5858700 yuan, the operating situation is still no real improvement. Tianli Environmental also suffered a huge loss last year, with a loss of 152 million yuan.

In addition, the company’s net profit last year dropped sharply by 80%. According to the company, in the first half of this year, due to the continued weakness in the apparel terminal market and the decline in sales, its operating income dropped by a large margin, and it did not even rule out the possibility of losses.

Even those companies that can maintain profitability are less optimistic. Honglei shares, Louxiao technology, Dadongnan, etc. all achieved profitability last year. In the first quarter of this year, they all went into losses without exception. According to the forecast of Zhejiang Furun’s performance, net profit in the first half of this year will be reduced by 60% to 70% compared to the same period of last year due to the significant increase in costs and a substantial reduction in investment income. From the first quarter, the company only realized a net profit of 1,096,600 yuan, compared with 89% in the same period last year.