The business review of the board of directors of Nuobang (603238) in the half year of 2018 is as follows:
1. Discussion and analysis of business conditions
The company firmly grasps the core business and market demand, integrates with the project system, adjusts the structure deepening, improves the efficiency breakthrough, promotes the team improvement, and deeply implements the annual business theme of “fulfilling the listing commitment with responsibility, and breaking through the leading efficiency with efficient integration”. During the reporting period, the company achieved sales revenue of 420 million yuan, an increase of 76.48% over the same period last year, and a net profit attributable to shareholders of listed companies of 24.605 million yuan, an increase of 17.17% over the same period last year.
1. The industrial chain is effectively integrated, and the company’s profits have grown steadily
The company strives to build a brand enterprise integrating non-woven materials and products, Bang Yi Technology focuses on dry towel business, Hangzhou Guoguang focuses on wet wipes business, jointly relying on the company’s spunlace non-woven material advantages, so that the company to achieve dry wipes and wet wipes business areas complementary, extend the company’s industrial chain, enhance industry influence, enhance the company’s profitability, during the reporting period, the company’s operating income and net profit are increased compared with the same period last year.
2. The technical transformation project is completed, and the company launches new products
In order to cope with the fierce market competition, the company actively and quickly adjusts the product structure to “high quality, high price, high quality”, and the company effectively adjusts the product structure and sales price. The technical transformation of the company’s No. 8 line was completed in the first quarter of 2018, changing the original wet production line into wet, dry and dry and wet mixed production lines, launching CBS dry and wet composite spunlace materials, and evenly implanting the original bamboo pulp into the voids of the 3D fluffy fiber network using low-pressure multi-channel spunlaces, forming both ultra-high liquid absorption capacity and high strength as support, which is an ideal wiping material for civil health, medical and industrial use.
3. The construction of fundraising and investment projects is carried out normally, and the company’s annual output of 15,000 tons of industrial spunlace composite nonwoven materials project plant has been preliminarily completed, and the production equipment will land in the second half of the year
The installation continued and the project progress was carried out normally.
2. Possible risks
1. Risk of fluctuation of raw material prices
The company’s main raw materials account for a large proportion of production costs, among which the price changes of major raw materials such as viscose fiber and polyester fiber have a greater impact on the company’s production costs. In recent years, due to the price fluctuations of petroleum and other basic chemical raw materials and the impact of environmental pressure on raw material prices, if the prices of major raw materials continue to rise in the future, it will adversely affect the company’s profitability, and the company faces the risk of changes in profitability caused by fluctuations in the prices of major raw materials. On the contrary, the price of the above-mentioned main raw materials has decreased, thereby reducing the company’s product costs and improving the company’s profitability.
2. Risk of exchange rate changes
The company’s import and export trade is mainly settled in US dollars or euros, and the exchange rate between the settlement currency and RMB may fluctuate with changes in the domestic and foreign political and economic environment, with greater uncertainty, which makes the company face the risk of exchange rate changes. During the reporting period, on the one hand, the company’s export sales accounted for a relatively high proportion; On the other hand, due to the expansion of production scale and changes in product structure, the amount of raw materials and equipment purchased by the company from abroad is increasing. The increase in export sales and overseas procurement will further expand the impact of RMB exchange rate change risk on the company’s business, which may cause the company’s exchange loss to change.
3. Risks related to major asset restructuring
In 2017, the company implemented major asset purchase, and finally acquired 51% of the equity of Hangzhou Guoguang Travel Products Co., Ltd. by way of cash capital increase and equity transfer, and included Hangzhou Guoguang in the scope of the company’s merger in October 2017. The transaction will face a series of risks such as the failure to realize Hangzhou Guoguang’s performance commitments, goodwill impairment, and acquisition integration. In response to the performance commitments made, the performance pledges and management will operate diligently and do their best to ensure that the profit commitments are achieved. However, changes in many factors during the performance commitment period, including but not limited to economic environment and industrial policies and unexpected events, may adversely affect business management. If the performance commitment of the target company is not realized, it will cause the goodwill of the listed company to be impaired at the level of the consolidated statement and affect the overall operating performance and profitability of the listed company. In addition, because Hangzhou Guoguang has certain differences from listed companies in terms of main business, organizational model, management system and enterprise development and business philosophy. If the integration and communication process is not effectively integrated, it may also adversely affect the overall production and operation of the listed company.
3. Analysis of core competitiveness during the reporting period
1. Scale and product advantages
The company has eight spunlace production lines, covering the two major production processes of dry carding and wet forming, with a production capacity of more than 30,000 tons, and the production line scale is at the leading level in the domestic spunlace nonwovens industry, and has achieved mass production of more than 2,300 varieties of nonwoven material products. Hangzhou Guoguang, the company’s holding subsidiary, ranked first continuously in China’s wet wipes export volume ranking from 2015 to 2017, and its products have covered six major areas, such as baby wipes, personal care wipes, cleaning wipes, functional wipes, wet towels and dry wipes, the company extends the product line to terminal consumer goods under the framework of the main process of spunlace, creating a complete industrial chain from spunlace nonwovens to products.
2. Technical advantages
(1) Have continuous R&D and innovation capabilities. The company always adheres to scientific and technological innovation and talent construction as the center to build the core competitiveness of enterprises, implements differentiated business strategies, technology research and development closely follows the latest international development direction, new products in line with the international market, and constantly develops the application field of spunlace nonwovens and develops new products with high added value.
(2) Differentiated proprietary equipment technology. Compared with most enterprises in the industry, the company has achieved digestion, absorption and independent innovation in equipment technology, and can customize the equipment according to the optimization of process parameters, so that the company has a differentiated competitive advantage in equipment technology.
(3) With advanced production technology. The company adheres to the research and development of production process technology, and is committed to the development of differentiated and personalized spunlace nonwoven materials and their products.
3. Brand and customer advantages
After more than ten years of development, it has gradually established a high-quality and high-end product image in domestic and foreign markets, and “Nuobang” trademark has successively won the honorary titles of “Zhejiang Famous Trademark”, “Zhejiang Famous Brand Product”, and enjoys higher and higher popularity in the industry. The company has established stable cooperative relations with well-known consumer goods manufacturers at home and abroad. Hangzhou Guoguang and its products have passed ISO9001:2008, ISO13485:2012, ISO22716:2007, EU CE, EU REACH, U.S. GMPC, U.S. FDA, Nordic White Swan and Denmark Astma-Allergy and other quality system certification, and its product quality has been recognized by customers and consumers.
4. Marketing advantages
The sales scale of the company’s products in overseas markets has grown rapidly, the company has a professional marketing team, with good communication skills, rich professional knowledge and international marketing experience, understand the changes in the international market, and master a wealth of customer resources. In addition, the company’s marketing department has a special person to adopt the B2B point-to-point mode to carry out full-program services from product development to delivery for different customers, so as to have a deeper understanding of customer needs and grasp the differentiation of market segments.