Making Clothes For The Country Won A Big Prize! Jihua Group, With A Daily Production Of 110000 Sets Of Protective Clothing, Received 10 Million Yuan Of Government Subsidies

On March 25, Jihua Group Co., Ltd. (hereinafter referred to as "Jihua Group") announced that from January 1, 2020 to March 22, 2020, the company had received various government subsidies of 12.8267 million yuan in total. The details are as follows:


The reporter learned that after the outbreak of COVID-19, protective clothing, masks and other protective articles continued to be in short supply. In order to support the national epidemic prevention and control work, Jihua Group, in accordance with the requirements of the competent department, made every effort to transform and increase production capacity to carry out the production guarantee of protective clothing. As of February 27, the company had 11 subsidiaries involved in the production of medical protective clothing and isolation clothing, The daily production capacity of medical protective clothing and isolation clothing is about 110000 sets, and the cumulative output of medical protective clothing and isolation clothing is about 1.14 million sets.


As of February 27, there were four subsidiaries of Jihua Group listed as key production enterprises for temporary storage by the state, namely, Jihua 3502 Professional Wear Co., Ltd., Nanjing Jihua 3521 Special Equipment Co., Ltd., Jihua 3534 Garment Co., Ltd., and Jihua 3543 Knitted Clothing Co., Ltd.


Earlier, on February 5, the executive meeting of the State Council proposed that all the key medical prevention and control materials produced by enterprises should be purchased by the government, so as to dispel the concerns of enterprises about overcapacity after the epidemic. The five measures stimulated the production enterprises of epidemic prevention key materials to speed up the resumption of work and expand capital expenditure at the same time, so as to rapidly expand production capacity. Subsequently, medical protection, diagnosis, medicine, medical equipment and other materials in short supply areas took the lead in significantly expanding production capacity, while rapidly attracting industrial capital to enter, accelerating the expansion of production capacity boundaries, and stimulating the demand release of upstream related industries.


On February 9, the three ministries and commissions jointly launched the first batch of government procurement product catalogs. The Ministry of Industry and Information Technology, together with the National Development and Reform Commission and the Ministry of Finance, issued the Notice on Giving Play to the Role of Government Reserves to Support the Increase of Production and Supply of Materials in Emergency Response to the Epidemic, implemented the requirements of the executive meeting of the State Council for government procurement, made it clear that all surplus production in the product catalog should be purchased by the government, and the relevant policy support for the conversion of surplus production capacity after the epidemic control, Effectively solve the worries of enterprises increasing production.


Liu Jing, an analyst with Shenwan Hongyuan Securities, said earlier that this move would effectively stimulate the release of production capacity of the whole industrial chain of medical protective clothing, masks, goggles, isolation clothing, thermometers, NCP detection kits and upstream raw materials. According to the 2019 China Health Statistics Yearbook, in 2018, there were 3.607 million licensed physicians in China, including 114000 in the public health category; Registered nurses are 4.099 million. Assuming that the proportion of nurses is the same as that of doctors, there are 224000 doctors and nurses in the public health category alone. If one piece is consumed per person per day, it will consume 224000 pieces per day. There is a huge gap in protective clothing. It is estimated that with the completion of the consumption of global inventory, the future demand will be mainly supplemented by new production.


Liu Jing predicted that in the medium term, in the later period of domestic epidemic resistance and after the epidemic situation stabilized, some demand is expected to shift from the 2B end to the 2C end. With the resumption of work of enterprises and the resumption of schooling of students, the consumption of 2C end family protective articles will increase significantly, and masks and household medical equipment are expected to meet the demand of 2B end. Due to the impact of the epidemic buffer period, it is expected that the demand for protective articles will be high in the first two quarters.


With the gradual deterioration of the situation of the COVID-19 epidemic overseas, many countries and regions have entered a state of medical equipment shortage. WHO estimates that in order to meet the growing global demand, the production of protective equipment manufacturing industry must be increased by 40%. WHO is closely communicating and cooperating with governments and industry to promote the increase of production, And ensure that relevant resources are allocated to countries in urgent need.


According to the public data, as the largest military supplies light industry enterprise in China, Jihua shares more than 70% of the market share of military supplies such as professional clothes and leather shoes. The company originated from the military supplies factory established in 1927. In 2009, with the approval of the State owned Assets Supervision and Administration Commission of the State Council, it was funded by Xinxing Cast Pipe Group and Xinxing Real Estate Development Co., Ltd, In 2010, it landed in Shanghai Stock Exchange.


Xinxing Jihua Group, which is de linked from the original production department of the PLA General Logistics Department and the military supplies enterprises and institutions under its jurisdiction, has main business segments such as metal smelting and processing, light industry and textile, equipment manufacturing, trade logistics, property investment and asset management, and modern agriculture and animal husbandry. It is the world's largest R&D and production base for ductile iron pipes and the largest R&D and production base for steel grating in China; It is also the largest R&D and production base for logistics military supplies, professional clothing, professional shoes and boots, and high-end textiles in China.


Hao Shuai, an analyst with Guotai Junan Securities, previously said that thanks to the strong manufacturing capacity and the large demand of the military supplies market, the operating revenue of IHG remained between 22 billion and 27 billion from 2013 to 2018, far exceeding the industry average; From 2013 to 2016, the net profit remained between 900 million yuan and 1.2 billion yuan. In recent years, the company's income and profit fluctuated due to the macroeconomic downturn, the construction of the International Garden and other factors. However, the company's core competitiveness can still ensure that the company is in a favorable position in the market competition.


The financial report shows that in the first half of 2019, Jihua Group realized an operating income of RMB 10.074 billion, with 17.45% of professional clothing, 12.89% of professional shoes and boots, 8.34% of leather shoes, 8.71% of textile printing and dyeing, 9.01% of protective clothing, and 43.60% of trade and other businesses. In the same period, the company realized a total profit of 78 million yuan, a year-on-year decrease of 76.40%, and a net profit attributable to shareholders of listed companies of 18 million yuan, a year-on-year decrease of 92.30%, of which the net profit after deducting non recurring gains and losses was - 0.97 billion yuan, a year-on-year decrease of 197.24%; The basic earnings per share reached 0.004 yuan, a year-on-year decrease of 92.59%.


Jihua Group recently released its performance forecast for 2019. It is expected that the net profit attributable to shareholders of the listed company in 2019 will turn loss into profit compared with the same period last year, and the net profit attributable to shareholders of the listed company is expected to reach 61.1 million yuan to 90.65 million yuan.