Investment Highlights ◠Brand apparel domestic sales grew steadily. Relying on its own fabrics and its own processing base, the company shirt and suit market share are far ahead, is expected to benefit from long-term residents to upgrade consumption. ◠After February 2009, the sales of the Company's real estate went up month by month. Real estate revenue in the past two years has been locked. ◠With the booming capital market in 2009, earnings from equity investment are expected to gradually increase. ◠It is estimated that the company's earnings per share for 2009, 2010 and 2011 will be 1.041, 0.713 and 0.695 yuan respectively, and its investment rating will be "recommended". ◠main risk factors: the main real estate sales revenue recognition progress may be deviated from the expected. Income from textile and garment stable The main industry of textile and apparel is the core basic industry of Youngor [13.50 -1.24%] (600177). Rely on its own fabric and its own processing base, Youngor dress has always been to high quality workmanship and higher cost-effective by the domestic mass consumer acceptance, according to the China National Business Information Center in 2008 statistics, Youngor shirt market share of 13.3%, suit market share 15.4%, far ahead of the second and third place. In the meantime, the Company formed a marketing model that focused on direct sales channels. This is in favor of the stability of the sales network and the enhancement of the brand image. In recent years, the net profit growth of Youngor's domestic sales surpassed the growth of domestic sales. In 2009, domestic sales of apparel companies still maintained a positive growth of more than 8% on a monthly basis, with the cumulative growth rate maintained at above 15% in January-May. Based on our goal of adding 300 new channels in 2009, we estimate that Youngor's domestic sales will still be expected to achieve 10% -15% growth in 2009. Considering the unsustainable price hikes in 2009, we expect gross margin and net sales to remain stable in 2008 Afterwards, with the gradual improvement in economic conditions and the exclusion of channel expansion, we estimate that Youngor is still expected to achieve a growth of about 5%. The gross profit margin will also be raised as a result of reduced discounts and product price increases. Younger export business in 2008 reached 3.759 billion yuan, of which, Singapore 2008 main business income consolidated income of 2.817 billion yuan, accounting for Younger export business income of 75%. Affected by the low gross profit margin of Singapore and Malaysia, the gross margin of Younger's export business dropped from 20.57% in 2007 to 12.69%. The future Younger export business can be improved, mainly depends on the integration of business conditions in Singapore and the United States market conditions can stabilize. We judge that the business in Singapore and Malaysia will be difficult to improve in 2009, but after the completion of the integration, we can achieve a gross profit margin of 15% and a net profit margin of 3.5%. Real estate business cycle advantages Youngor's existing real estate projects (unsettled, under construction and pending construction) a total area of ​​3.99 million M2, concentrated in the Yangtze River Delta, Ningbo, Suzhou, Hangzhou, Shaoxing and Cixi more economically developed areas, the equivalent of medium-sized real estate The size of the listed company. In Ningbo, Youngor is a typical regional leader, will directly benefit from the volume and price of real estate in Ningbo. Sun City is the largest profit project in Suzhou. Based on our estimates, we expect net profit of the project to reach as high as 1.36 billion. In addition, with the property market pick-up in 2009, the risk of high-priced land in Hangzhou gradually resolved. The Shaoxing, Cixi villa project-based; project earnings outlook is more objective. The 2008 annual report shows that the company real estate principal accounts book sales of 55.3 billion yuan. According to the Ningbo residential and real estate network, as of early June 2009, Lake View Garden Fairview Park, the city of Liwan sales progress, as well as the first phase of Sun City a listing of pre-sale, the company advance receipts should be close to 80 100 million yuan (including the first quarter has been confirmed 1.5 billion), high receipts in advance for 2009, 2010 Younger real estate main business profitability has provided a guarantee. In order to avoid the impact of fluctuations in investment income on the annual performance of the joint-stock company, Youngor made two decisions in the equity investment field in 2008. First, the development and establishment of Shanghai KaiSheng Investment Management Co., Ltd. by Youngstar, a Young Holding company, And investment business mainly on the Kai Shi investment, waiting for the relevant business maturity, will consider the injection of joint-stock companies; the second is fully paid for impairment of Haitong Securities [16.23 -1.46%], Golden Horse shares [6.14 -2.54%] At present, all available-for-sale financial assets held by Youngor are in net income. As of the end of the first quarter, the company still holds 137.3 million shares of CITIC Securities [28.22 -1.67%], 0.675 billion shares of Haitong Securities and 0.413 billion shares of Kinmen and Matsu, the closing price of June 19 to calculate the total market capitalization of 5.154 billion; the same time, fiscal 2008 Dividends before tax 0.75 million. In addition, the Company also holds a large number of shares that are going to be listed and are not yet listed. These equity investments were apparently undervalued in the company's financial statements in a cost-based manner. Dividend distribution and sale of shares, will together constitute the 2009 investment income. Earnings Forecast and Rating Forecast The Company's earnings per share for 2009, 2010 and 2011 are 1.041, 0.713 and 0.695 yuan respectively. As a leading enterprise in the textile and clothing sector, with the current macroeconomic situation still uncertain, the company's profit growth in 2009 has been locked, and the returns in 2010 are basically locked. Based on the steady development of apparel domestic sales, the continued booming of real estate and securities markets opened up room for the company's share price to rise. According to the Division of valuation method, the company's reasonable value of the central 16 yuan, and recent changes in equity will help solve the problem of restricted shares circulation, raised investment rating to "recommended."