Youngor is really sober

Recently, Li Rucheng, who had not appeared in public for a long time, appeared in the meeting room on the first floor of Youngor’s headquarters. Compared to a year and a half ago, the younger company's chairman was a bit thin and more complex.

“The investment in 2008 was indeed a mistake. We need to reflect on the fact that investing in Haitong Securities has cost more than one billion yuan. This has caused a lot of problems for Youngor.” At this time, Li Rucheng’s expression is particularly dignified. His words set off the emotions of the small shareholders present. One investor from Taizhou, Zhejiang Province, excitedly asked that he had purchased all his shares and even borrowed debts to purchase Youngor's shares several times. The total investment was as high as RMB 12 million, but now Youngor's share price has dropped by 70%. How can this be explained?

At that moment, Li Rucheng paused and said: "No one can control the stock price fluctuation. Youngor's team is very dedicated and the pressure is also very high. This time preparing to issue corporate bonds is also looking for opportunities."

Youngor's share price rose from 5 yuan at the end of 2006 and rose to nearly 40 yuan in the summer of 2007, and then it has turned all the way down to around 7 yuan. Li Rucheng admitted mistakes, but did not give specific reasons for the mistakes, then he said: "Youngor will not fall, thanks to the financial crisis so that we wake up, after the bad will be good."

In fact, shareholders are aware of Younger's problems. This textile and garment company, which has a history of 30 years, entered real estate and financial investment in 1992 and 1993 respectively. For more than 10 years, Youngor has developed various types of properties such as houses, villas, and business buildings to reach 3 million square meters. At the same time, it also holds stocks of more than a dozen listed companies such as China Life, Ningbo Bank and CITIC Securities. From 2006 to 2007, the prosperous real estate and stock market made Younger's investment in the transition to investment. In January-September 2007 alone, the investment income reached US$223.6 million, accounting for 98.5% of the total profit of the entire company. Real estate income also It reached nearly 2 billion yuan.

In the past few years, the locomotives of finance and real estate have been running at a pace that the main business apparel can't keep up with. At the beginning of 2000, the domestic garment industry encountered bottlenecks. Many people advised Li Rucheng to abandon Youngor's local brand and introduce international brands. Li Rucheng is not right or wrong.

At this time, Li Rucheng did not realize that the financial and real estate success was unsustainable. With the Shanghai index falling from 6,124 points to 1,800 points and the real estate market, Li Rucheng stated at the January 15th meeting that "the financial crisis has sobered us." He promised to say: "In the future we will be more cautious, and operations will become more mature."

Stripping financial options?

The handling of financial assets is undoubtedly the biggest headache for Li Rucheng. On December 3, 2008, Youngor issued an announcement that the company hired Shanghai Kaishi Investment Management Co., Ltd. to provide professional investment advisory services for Youngor.

Kaishi Investment was established in October 2008. The legal representative is Li Rucheng. Its management team consists of a group of industry insiders such as Chen Jiwu and Li Wenzhong, and has many years of experience in the investment field. Li Rucheng believes that although Youngor has accumulated more substantial financial assets, he has not been professional team operations for a long time and it is necessary to hire a professional team to further optimize the company's asset allocation and achieve asset value preservation.

Judging from the announcement, Kaiser Investment just provided Youngor with investment analysis and professional advice. “The future of this related-party transaction may shift the losses caused by the financial business so as not to have too much impact on the performance of listed companies.” Wang Rong, an analyst at Union Securities Textile and Apparel Industry, told BusinessWeek. Recently, Wang Rong has just returned from Youngor's research.

For another property asset, Youngor also established a contraction strategy. Youngor's real estate business has risen in Ningbo, and later expanded to Suzhou, Hangzhou, Shaoxing and other places. In 2007, Youngor took a high-profile photograph of Hangzhou Shanghang Business Park plot, No. 50 plot of Zhuantang in Xihu District, No. 51 plot, No. 53 plot in Xihu District, and a total of 7 plots in Suzhou and Ningbo. , The total land price is about 4.47 billion yuan. Among them, the floor price of the former Shanghang Commercial Complex was as high as 15,712 yuan per square meter, and the amount of land transfer fees Youngor had to pay was 1.476 billion yuan. The floor price for the land plot No. 53 mentioned above was also as high as 11,103 yuan per square meter. At present, these two plots have not yet started construction. Brokerage analysts believe that Younger’s acquisition of land in Hangzhou in 2007 was the highest point, which definitely caused considerable impact on its property business. In the future, it will have to slow down and take a little bit of ground. It is only a little dabbled in Ningbo.

Li Rucheng acknowledged at the shareholders’ meeting on the 15th that he will not invest in real estate any more in the near future. “We still have some previous investment income, but the existing funds cannot be moved. What if the situation is worse?” Of course, he also consoled himself and said, “Real estate will come down, although it will not be grabbed as before. There are purchase opportunities, but there are opportunities for development." Obviously, Youngor can only wait for the market to turn in the real estate.

Reinvent the main industry

In 2002, after visiting abroad, Li Rucheng firmly strengthened his confidence in the development of his main business. When the time is right, Younger’s clothing will take an international strategy. In 2007, Youngor acquired the international menswear company Xinma Group for US$120 million. Opens the way for Younger's overseas expansion.

According to Younger, domestic sales of its apparel business grew by about 20% in 2008, foreign sales increased by 60%, and profits increased by 30%. Although affected by the economic crisis, Vice President of Youngor Group and General Manager of Youngor Clothing Chen Zhigao said that in 2009 the company’s garment industry’s sales target is to increase by 20% year-on-year.

The sharp decline in overseas orders is a huge challenge for China's garment industry. According to statistics, in the face of the US apparel market, Chinese exporters who have actively or passively "stowed supply" have already reached 10,000, and orders for textiles and clothing in Europe and America may decrease by more than 20% in the year. The industry expects that China's clothing exports will show negative growth in 2009. . Youngor's program of “turning the crisis into opportunity” is an opportunity to acquire some well-known brands in Europe, the United States, and other places, and is still Younger’s huge acquisition of new horses in 2007.

Li Ru became Youngor’s apparel business and formulated an internationalization strategy: First, to reserve international talents; Second, to build an international platform through the acquisition of international brands and companies; Third, to invest in new clothing formats to create the next round of the apparel industry. Blue sea.

In 2008, Youngor became the exclusive agent of Hart Schaffner Marx (HSM), the largest suit manufacturer in the United States, and established the Lionsmai Clothing Co., Ltd. to take charge of the specific operations. Hao Tiancheng, general manager of Leo Lions, believes that compared with European brands, American brands such as HSM are relatively few in China, and Chinese consumers are still not very well-known. Therefore, he believes there are great market opportunities in the future.

Youngor did not put Baodu on HSM. It also hoped to use the design capabilities of the new horse to cultivate its own casual brand. Li Rucheng believes that the new horse has a strong driving effect on Youngor's apparel industry. “We have gotten an international platform through Xinma, and we can directly face the US market to promote new products. This is the inevitable road for Younger to move from an inward-oriented enterprise to internationalization,” he said.

The new apparel format refers to the current Hemp project that Youngor is currently researching and promoting jointly with Incotech. Hemp is a blend of hemp and cotton fibers and is said to be popular in the international market. Li Rucheng said: "After each financial crisis, there will be some new business forms. Younger hopes to use the crisis to develop some new clothing formats and upgrade the quality of domestic products."

However, Li Rucheng’s road to hope for his main business is also very difficult for Wang Rong. "The agents of foreign brands have a cultivation period, and the length of the incubation period depends on how well the consumer groups accept the brand. The general situation is fast for one year, but it is slow for two or three years. Youngor must have confidence to adhere to it." Wang Rong said, "A company's investment behavior can be lucky and fortuitous, but the revitalization of the main business must be a solid job. There can be no luck."