Knitting factory giant 360 million transferred equity of knitting, printing and dyeing!

Knitting printing and dyeing is not easy to dry! Knitting factory giant 360 million transferred equity of knitting, printing and dyeing!

On June 30, Zhejiang Furun (600070) disclosed that the company intends to transfer the 46% equity of its holding subsidiary Zhejiang Furun Printing and Dyeing Co., Ltd. and 51% equity of Zhejiang Furun Knitting Co., Ltd. for the first time by public listing. The total price of listed transfers shall not be less than 360 million yuan.

Zhejiang Furun said that this time the divestiture of traditional assets through public listing and transfer will help to optimize the company's industrial structure and improve the company's profitability, in line with the company's strategic planning. At present, Zhejiang Furun's digital marketing-based information service industry has accounted for 53.70% of revenue, and has ushered in an explosive dividend period in digital marketing such as short video and live broadcast. With the divestiture of traditional businesses to focus on the main business, Zhejiang Furun's future performance growth momentum is full.

It is understood that the traditional assets of Zhejiang Furun's divestiture are 46% equity of Zhejiang Furun Printing and Dyeing Co., Ltd. (including its subsidiary Zhejiang Minghe Steel Pipe Co., Ltd., etc.) held by the company, and 51% of Zhejiang Furun Knitting Co., Ltd. For the equity, the value of the corresponding shareholder's equity evaluation value of 35962.66 million yuan will be used as the initial public transfer transfer base price.

According to the announcement, due to the continuous escalation of trade frictions, rising labor costs, and increasing pressure on environmental protection, Zhejiang Furun's traditional knitting, dyeing and seamless steel pipe processing business has less and less profitability. According to Zhejiang Furun's 2019 annual report, the company's steel pipe sales and processing gross margin was 13.51%, a year-on-year decrease of 3.15%. The gross profit margin of knitwear sales and processing was 20.62%, a year-on-year decrease of 0.11%.

Prior to this, in accordance with the strategic plan of “gradually divesting inefficient assets and gradually forming a clear main business”, in order to concentrate resources to develop core businesses, Zhejiang Furun’s asset structure has been continuously optimized. According to its 2019 annual report, during the reporting period, Zhejiang Furun has transferred the equity of subsidiaries of some of its traditional industries, including the equity of Haimao, apparel companies, and people's pharmacies. The sale of the shares of other holding subsidiaries of traditional industries this time will further optimize the company's asset structure and make the industry's main line clearer.

It is understood that Zhejiang Furun was originally engaged in knitting, printing and dyeing, and seamless steel tube processing. In order to break through the constraints of the original industry, Zhejiang Furun started the transformation and upgrading of "traditional and emerging industries". In 2016, Zhejiang Furun acquired a 100% stake in Taiyizhishang, which is a technology company that relies on big data technology to provide Internet marketing services and marketing data analysis services to customers. Through this acquisition, Zhejiang Furun has formed the industrial structure of "traditional industry + big data + Internet". After combing the data of Zhejiang Furun's annual report, its information service industry's revenue ratio has increased year by year, from 35.83% in 2017 to 53.70% in 2019.

Public information shows that Taiyizhi is still a company that has been involved in the field of digital marketing for a long time. It has already formed a deposit of technology and data resources and has a first-mover advantage. In the current market, digital marketing has once again become the focus of attention, and digital marketing areas such as short video and live broadcasting have become the popular form of advertising for many advertisers. Marketing service companies are ushering in a new round of digital marketing dividends. The analysis of Guohai Securities Research shows that from the industry data, the mobile Internet advertising market is expected to reach 484.49 billion yuan in 2020, an increase of 16.5% year-on-year; and advertisers pay more attention to the cost-effective investment return rate. In 2020, advertisers’ digital marketing The willingness to put on social platforms and video platforms has increased, and the overall growth rate of China's digital marketing is expected to be 14% in 2020.

Especially the byte beating system, its layout and extension in the fields of advertising marketing, games, large-screen, film and television content brokerage, etc. can be said to bring an explosive digital marketing growth dividend. Related concept stocks in the A-share market also set off a wave of ups and downs this year.

And Taiyi Zhishang has been carrying out related businesses on Toutiao and Douyin platforms since August 2018. The platform business in the fourth quarter of 2018 and 2019 has achieved rapid growth in revenue. The related business of the two platforms achieved operating income of more than 500 million yuan, of which the Douyin platform exceeded 360 million yuan, and today's Toutiao platform exceeded 150 million yuan, with a year-on-year growth rate of 196.8% and 123.6%, respectively. Industry analysts believe that the byte beating system has broad prospects, and Zhejiang Furun has full momentum for future performance growth.

In addition, Zhejiang Furun's marketing data analysis service has a gross profit margin of 83.72%. According to its latest announcement, customers are increasingly demanding the dimensions, accuracy and data conversion rate of data labels. The company needs to purchase a large number of data sources and hot data resources, and the frequency of data usage increases due to increased customer demand, so the business cost Decline, gross margin rises. As more and more advertisers increase their demand for big data marketing, marketing data analysis services will also become the growth point of Zhejiang Furun's performance.

Zhejiang Furun said that with the further acceleration of the construction of new infrastructure such as 5G and data centers, digital technologies such as big data and blockchain will be more widely implemented. Seize the opportunity of "new infrastructure", take Thai One Finger as the main body, continue to expand the big data business, actively promote the transformation of existing businesses, and promote the health of financial indicators; take Furun Digital Chain as the main body and carry out in the blockchain ecological field Business layout; with Furun Data as the main body, business layout in the field of financial technology.

The announcement shows that if the initial public listing transfer fails to solicit qualified eligible transferees or ultimately fails to complete the transaction, the second public listing transfer will be made at a minimum price of not less than 70% of the assessed value. If the second public listing transfer fails to solicit qualified intent transferees or ultimately fails to complete the transaction, the third public listing transfer will be carried out at a base price of not less than 80% of the second public listing transfer base price. The transaction price is subject to the actual transfer price.

About Furun

It was founded in 1994 by Zhejiang Knitting Factory, the predecessor state-owned unit of Furun Holdings, and a number of companies. In 1997, Zhejiang Furun was listed on the Shanghai Stock Exchange and was the first listed company in Zhuji City, Zhejiang Province. After more than 20 years of development, the company has formed a two-wheel-driven business model of traditional business such as printing and dyeing knitting, steel pipe processing and sales, and emerging business of marketing technology. The traditional business has a solid foundation. The printing and dyeing company is one of the top 10 printing and dyeing industries in the country. Minghe is one of the largest seamless steel pipe production enterprises in East China. In the emerging business, Taiyizhi is one of the earliest companies in the domestic marketing technology , Formed the precipitation of technology and data resources, with a first-mover advantage.

Since the establishment of Zhejiang Furun more than 20 years ago, after three stages of development, it has gradually expanded its business boundaries in line with the adjustment of the industrial cycle, and its revenue has also increased significantly.

1994-2007: Started with knitting, printing and dyeing. It is a large state-owned knitting enterprise. Zhejiang Furun is approved by the Zhejiang Provincial Shareholding Pilot Work Coordination Group and is approved by Furun Group (formerly Zhejiang Knitting Factory), Zhejiang Zhuji Wool Knitting Factory, Zhuji Electric Power Industry Corporation, Zhejiang Hangjiahu Technology Development Company, Zhuji Yinda The joint-stock enterprise jointly established by the Economic and Trade Corporation and Zhuji TV Development Company was registered in 1994. The main knitwear, worsted woolen, silk knitwear and silk garments were large state-owned knitting enterprises at the time. It was listed on the Shanghai Stock Exchange in 1997, and revenue increased from 80 million to 662 million in 2008.

2008-2016: Expanding the second main business of steel pipe sales. In 2008, through the implementation of capital increase and share expansion of Minghe Steel Pipe, the sales and processing of steel pipe became the company's second main business. As of 2016, the company's operating income increased to 879 million.

2017 to present: Upgrading to a marketing technology company. While promoting the upgrade of the traditional main business, the company acquired a 100% stake in the digital marketing technology company Taiyi Zhishang to realize the transformation to marketing technology. After the merger with Thai One Finger, the company's revenue grew rapidly, from 879 million in 2016 to 2.767 billion in 2018. At present, the company adopts a strategy of industrial integration with advancement and retreat. Through the transfer of shares of Furun Haimao, Furun Apparel and People's Pharmacy, the main business is further clarified.

The controlling shareholder is Furun Group and the actual controller is Zhao Linzhong. As of 2019Q1, the top four shareholders of the company are Furun Holdings, Huifeng Venture Capital, and Jiang Yougui, with shareholding ratios of 19.40%, 6.17%, and 6.03%, respectively. Among them, Huifeng Venture Capital holds 81% equity of Furun Holdings, Zhao Linzhong controls Huifeng Venture Capital by holding 38.77% shares, indirectly controls Furrun Holdings, and is the actual controller of the listed company. In 2016, the company acquired Taiyizhishang by issuing shares to purchase assets, and after binding the interests of listed companies and Taiyizhishang original shareholders, the founder of the former Taiyishang Jiang Yougui held 6.03% of the shares and became the company's third largest shareholder.

Furun Holdings was restructured from a state-owned factory to form a multi-industry radiation circle. Founded in 1982, Furun Holding Group was formerly a state-owned Zhuji Knitting Factory. In 2011, it was transformed from a wholly state-owned enterprise into a state-owned capital shareholding company. Except for Huifeng Venture Capital, the Zhuji Municipal People's Government still holds 19% of the shares of Furun Holdings. . Prior to the restructuring, Furun Holdings merged 22 state-owned enterprises such as the state-owned Zhuji Distillery, Zhuji City Commercial (Group) Company (Zhuji City Commercial Bureau) and its affiliated trading companies, state-owned Zhuji Fertilizer Plant, and Zhuji Knitting General Factory Since then, the Group has comprehensively utilized industrial radiation finance, building materials, film and television, the Internet, and waste knitwear for high value, as well as the Internet, real estate, pension services, ecological agriculture and other fields.