Youngor: The capital of costume king “changes face”

　 Youngor is China's largest clothing company. According to the data from the China Garment Association, the company has become the industry's number one tax since 2001. It also topped the list in 2002 and has maintained this position since then. After Younger's IPO in 1998, he began to diversify his operations and adopted the “six-wheel drive”—clothing, textiles, foreign trade, securities, real estate, and infrastructure. Among them, in addition to the main business of clothing, Youngor’s two major foreign investments — securities and real estate — are creating incalculable new wealth opportunities for him in recent years.

Shares of CITIC: Flowering wall outside the wall

As the third largest shareholder of CITIC Securities with huge investment, Youngor currently holds 183.66 million shares of CITIC Securities at a cost per share of only 1.74 yuan. With the sharp rise in the stock price of the secondary market of CITIC and the recovery of the entire securities industry, Youngor’s response to CITIC The equity investment in securities has increased the company's performance flexibility in the coming years.

As early as July and August of 1999, CITIC Corporation and 4 other original shareholders and 40 corporate legal persons such as Youngor, and 4 social organizations and industrial corporations including the Shanghai Yongjun Youyou Foundation signed a total of 48 sponsors to sign CITIC Securities Co., Ltd. promoters. Under the agreement, Youngor invested 320 million yuan to subscribe for 200 million shares of CITIC Securities at 1.6 yuan per share, accounting for 9.61% of the total shares of CITIC Securities. With December 2002, CITIC Securities issued 400 million A shares of common stock on the Shanghai Stock Exchange. Youngor’s share of the company’s shares was diluted from 9.61% to 8.06%. According to the statistics at the end of September 2006, Youngor held 124.70 million shares of CITIC Securities. By the end of 2006, the closing price of CITIC Securities (27.38 yuan), Youngor held a stock value of nearly 3.4 billion yuan, while Youngor invested in CITIC Securities. The book balance is only about 300 million yuan. In the battle of CITIC Securities, Youngor's image of the market has completely changed, becoming a venture capitalist from a costume king overnight.

According to statistics, among the listed companies with the value of the stock market in the top ten, in addition to Sinopec, Youngor ranked second. According to Tiantong Securities, in the next three years, Youngor’s CAGR will be over 20%. In the first three quarters of 2006, the company’s main revenue and net profit increased by 13.61% and 49.78% year-on-year, respectively. Revenue and net profit increased by 35.99% and 146.32% respectively year-on-year. The increase in profit in the third quarter significantly exceeded the increase in income. It is expected that the company's EPS in 2006 and 2007 will be 0.39 yuan and 0.45 yuan respectively. The reasonable valuation of the company should be around 7.2 yuan, still more than 28% from the current stock price upside.

Look at the regional developers in the Yangtze River Delta

In the process of diversification, Youngor has made great efforts to enter the upstream textile industry and the downstream clothing sales industry. Another undeniable strategy is to lock in the focus of diversification on real estate.

Established in 1992, Youngor Real Estate has been serving as a key piece for Youngor Estate. In 1998, Youngor was listed on the market, and Youngor Property, which was in a period of real estate downturn, was stripped of related assets because it did not have listing value. In 1999, Youngor relocated the plant to restart the real estate project in the original factory area. At a time when Ningbo real estate was heating up, relying on the original cheap land reserve, the gross profit of the project was once over 40%. From then on, Youngor tasted the sweetness of the Nuggets property.

In 2000, due to the successful launch of the “East Lake Garden” project, Youngor became the premier company among local developers in Ningbo. In 2002, Youngor bought Younger Land as a purchase company in a listed company. The registered capital of Youngor Land in the year was 128 million yuan, but its total assets in 2005 were as high as 4.1 billion yuan, accounting for more than 1/3 of the total assets of Youngor Group. Judging from the resource allocation, Youngor Real Estate has become the pillar of the company.

In 2005, Youngor Real Estate achieved sales revenue of RMB 1.33 billion. In 2006, it purchased 1.37 million square meters of plots in Ningbo, Taizhou, Zhejiang, and Suzhou, Jiangsu, and the developed and planned construction area reached 2.2 million square meters. It has reached the middle and upper scale among domestic real estate companies.

With the completion of the project, it is initially estimated that in 2006 and 2007, Youngor Real Estate will be able to reach an annual revenue of 1.5 billion to 200 billion yuan, depending on only a few major projects. “The goal now is to strive to become a regional developer in the Yangtze River Delta.” Jiang Qun, general manager of Youngor Group, said that the real estate industry is not a short-term source of profit growth for Youngor.