On January 20, 2022, Weixing Co., Ltd. (002003) announced that Li Yonghong of GF Securities Co., Ltd., Fang Yuan of Sunshine Asset Management Co., Ltd. Fang Yuan, Wu Yelin, and LIBRARY GROUPCharles Jin Liu Xu Xu Shengjia investigated our company on January 19, 2022.
The main contents of this survey are:
Q: Compared to YKK, where is the gap between companies?
A: YKK is in direct competition with the company. YKK's advantages mainly lie in the accumulation and popularity of the brand, and the company is the "product + service" business philosophy, focusing on providing customers with quality products while providing "one stop" service. In addition, the company's zipper has formed a strong competitive advantage in terms of product category diversity, fashion, novelty and innovation ability of styles, rapid response to the market and supporting ability of products. These competitive advantages of the company are in line with the current development trend of the industry.
Q: Some brands will also choose other zipper companies as product suppliers, compared with other zipper companies, what are the company's competitive advantages?
A: Many well-known clothing brands at home and abroad are company customers, but each company has its own characteristics, and downstream customers will also choose suppliers according to their own needs. In order to ensure the safety of their supply chains, downstream customers will often purchase products from two or more suppliers. The advantage of the company is that it continues to focus on the production and operation of excipients, with rich categories, and the company's R&D department actively participates in the design of excipients for new products, and provides customers with full and better services.
Q: What is the company's product development model?
A: The cooperation mode between the company and the customer is mainly in the following forms: first, the company's designers develop new products for customers to choose according to the market trend; second, the company's designers track the brand customers one-on-one, according to the design style of the customer's clothing, joint development; the third is directly based on the brand customer's product design sample draft for proofing production.
Q: What is the impact of the downturn in the terminal consumption boom on the company?
A: At present, the end consumption boom is indeed not very good, and everyone remains cautious about the future; but the current company's order acceptance situation still maintains a good trend.
Q: The company's performance growth this year is mainly from the addition of new customers or the growth of existing customer orders?
A: This year's performance growth has both the expansion of new customers and the increase in the share of existing customers.
Q: Please analyze the company's future performance growth from the situation of each product category.
A: First of all, relatively speaking, it is expected that the zipper business may perform better than the button. Because compared with the button business, the application field of zippers is wider. Secondly, in addition to buttons and zippers, other categories of products rely on existing sales channels and customer resources, and can get rapid growth. Finally, the expansion of new categories can also drive the growth of performance to a certain extent.
Q: What is the process for brand customers to appoint suppliers?
A: First of all, through communication, factory inspection, etc., enter the supplier directory of brand customers, and then designate or recommend by the brand side, and negotiate with the garment factory for specific orders.
Q: What is the reason for the decline in zipper gross margin in previous years?
A: According to the material, the zipper can be divided into metal zipper, nylon zipper and plastic steel zipper. Due to the changes in fashion trends and the cost control of downstream clothing enterprises and other factors, the market demand for metal zippers has declined, and the company's zipper product structure has changed, resulting in fluctuations in gross profit margins.
Q: How does the company view YKK's price war?
A: As long as it is a commodity transaction, it will face price competition, and the frequency may be more intensive in the future. The competition between the apparel accessories industry is not only for the single factor of price, but also includes comprehensive competition in product quality, style, rapid response, marketing services and other aspects.
Q: How big is the price difference between the company and YKK's products?
A: In general, the average price of YKK zippers is higher than the price of the company's products, but the specific products need to be analyzed specifically. Compared with standardized products, YKK prices have relative advantages, but in terms of personalized performance, the company's comprehensive competitive advantage will be more obvious.
Q: What are the reasons for the company's higher gross profit margin this year?
A: First, the embodiment of scale effect; second, thanks to the promotion of the company's intelligent manufacturing, it has improved production efficiency while reducing costs. The company follows the principle of win-win cooperation and will not one-sidedly pursue high gross profits. In the future, the company will maintain a reasonable gross profit margin level.
Q: What were the main considerations for the company's acquisition of Zhongjie Times?
A: On the one hand, the growth rate of the main auxiliary materials industry has slowed down, and the company's management hopes to cultivate the second main business and achieve the steady development of the company; on the other hand, it is also affected by the special historical environment at that time. In 2020, the company has transferred all the equity of Zhongjie Era, and will concentrate its superior resources to do better and stronger main business in the future.
Q: What is the current layout of the company's overseas production capacity?
A: At present, the overseas production bases under construction mainly include the bangladesh phase III project and the Vietnam industrial park project.
Q: What is the proportion of the company's business in china's domestic market and international market?
A: According to the relevant announcements disclosed by the company, the proportion of the company's international business is about 25%, of course, there are cases of indirect exports through foreign trade companies or downstream clothing.
Q: What are the main services provided by the company to customers?
A: The company has a strong sense of service, from solving the comprehensive procurement needs of customers, participating in product design and development, rapid response to delivery and other aspects to provide customers with better services.
Q: What is the company's growth target for the future?
A: The company launched the fourth phase of equity incentive plan and the fifth phase of equity incentive plan in 2020 and 2021 respectively, which can refer to the relevant assessment indicators of the two phases of equity incentives.
The main business of Weixing Co., Ltd.: resin buttons, natural material buttons (wood buckles, real shell buckles, fruit buckles, horn buckles), laser engraving buttons, injection buttons, metal buckles, ABS electroplated buckles and other types of buttons and zippers and other clothing accessories production and sales.
Weixing shares 2021 third quarter report shows that the company's main revenue of 2.371 billion yuan, up 30.54% year-on-year; net profit attributable to the mother of 399 million yuan, up 15.55% year-on-year; deducted non-net profit of 388 million yuan, up 79.3% year-on-year; of which in the third quarter of 2021, the company's single-quarter main revenue of 888 million yuan, up 29.13% year-on-year; single-quarter net profit attributable to the mother of 163 million yuan, up 65.4% year-on-year In a single quarter, the non-net profit was 156 million yuan, up 64.32% year-on-year; the debt ratio was 31.99%, the investment income was 10.2772 million yuan, the financial expenses were 8.5161 million yuan, and the gross profit margin was 40.54%.
A total of 8 institutions have given ratings and 8 buy ratings in the last 90 days; the average target price of institutions in the past 90 days has been 14.12; the Securities Star Valuation Analysis Tool shows that Weixing Shares (002003) has a good company rating of 3 stars, a good price rating of 3 stars, and a valuation comprehensive rating of 3 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)
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