Meng Jie Home Textile &Nbsp; Channel Expansion To Stimulate Performance Growth

Domestic household textile consumption accounts for the proportion of the large textile industry and the overall low consumption. According to the consumption habits of the developed countries, the three types of consumption, clothing, household textiles and industrial textiles, should each account for the 1/3 of the total consumption of the industry.

But China's clothing category accounts for 80%, household textile consumption accounts for only about 12%, and household textile consumption accounts for less than 1% of consumption expenditure.

China's home textile industry will continue to maintain steady growth in the future, and the home textile industry is expected to maintain an annual growth rate of 20%.

At the same time, industry concentration will be closer to the leading companies.

Prior to 2007, the financial performance of Meng Jie home textile was better than that of fuanna (002327, closing price of 34.24 yuan), and the difference between Luo Lai home textile (002293, closing price 52.65 yuan) was not large. After 2007, because of the adjustment of the company's strategy in operation, the channel expansion was relatively conservative, and the annual compound growth rate of 2007~2009 company's channel expansion was only about 9.9%, which was 9.6% and 7% lower than that of the two main competitors of fuanna and Luo Lai respectively.

This year, the company will speed up the layout of the sales network.

As of the first quarter, the total number of stores in the company was 1710, of which direct revenue accounted for 24% of total revenue. From the beginning of this year, the number of Meng Jie home textile stores will keep growing at a high speed. The number of newly opened stores will basically remain 400~500 every year, and the planning will reach 3000 in 2012. The sales revenue of the company will be 630 million yuan last year, reaching 8~9 billion this year, and the sales revenue in the next 3~5 year will reach 2 billion yuan.

Meng Jie home textile 2005~2007 comprehensive gross profit margin increased continuously. In 2009, with the increase of the proportion of high-end brands and the proportion of direct business increased, the gross profit margin of the company increased significantly, reaching 36.27%.

In the first quarter of 2010, sales in the terminal market continued to warm up, and the gross profit margin of the company reached 37.66%.

The company's future gross margin will still have room for improvement. The main reason is that the price of new products will be raised. It is estimated that the price increase of new products will be 5%~10% in 2010. Two, the gross margin of high-end brands will still have room for improvement; three, the proportion of direct sales will increase year by year, and the gross profit margin of the direct investment will be more than 50%, which is nearly 20% higher than the gross margin of products sold under the mode of distribution.

The company's fund-raising funds are mainly used for channel development and capacity expansion.

In terms of channel expansion, it plans to invest 185 million yuan, buy 5 stores in Beijing, Shanghai, Shenyang, Changsha and Tianjin, open 30 new stores (leases) and 60 department stores counters, and rectify 100 counters. After the completion of the project, it is estimated that the direct sales market will increase sales revenue by 250 million yuan a year, achieving a new net profit of 31 million 440 thousand yuan.

In terms of capacity expansion, we plan to invest 178 million yuan in the annual production of 300 thousand sets of 800 thousand core production lines to further increase the proportion of self production, while supporting the sales growth after channel expansion.

After the completion of the project, the company will increase its production value by about 500 million yuan, with an annual net profit of 42 million 810 thousand yuan.