The textile and clothing industry is my country’s traditional advantageous industry, and it is also an industry that has been greatly affected by the COVID-19 epidemic. Recently, listed textile companies such as Jiumuwang, Red Dragonfly, and Youngor decided to distribute large cash dividends to shareholders. The reporter also noticed that on the cash dividend list of A-share listed companies recently released by the China Listed Companies Association, a number of textile and apparel companies were on the list.
For listed companies, large dividends are often paid out for two reasons. Either the company has huge profits and wants to give back to investors;
So, what are the plans behind the current generous dividends of listed textile companies?
Huge returns
23 “cash cows” on the list
The cash dividend list of A-share listed companies released by the China Listed Companies Association includes 200 “listed companies with generous returns” and 200 “listed companies with sincere returns”. The release of this list has positive significance in encouraging listed companies to actively practice the concept of respecting and fearing investors, guiding market expectations, and boosting investor confidence.
The reporter combed and found that among these “cash cow” listed companies, 9 listed textile and apparel companies such as Hengli Petrochemical were included in the “List of Listed Companies with Generous Returns”, and 17 listed textile and apparel companies including Hongdou Co., Ltd. were included in the “List of Listed Companies with Sincerity”. Return list”. Among them, three companies, Heilan Home, Semir Clothing and Shanghai Petrochemical, were selected into the above two lists at the same time.
The “List of Listed Companies with Generous Returns” takes the total cash dividends distributed in the past one year and the past three years as the main indicator. In this list, Hengli Petrochemical ranked 37th, Youngor ranked 95th, Heilan House ranked 110th, Semir Clothing ranked 121st, Ordos ranked 127th, and Rongsheng Petrochemicals ranked 150th, Shanghai Petrochemical ranked 179th, Hengyi Petrochemical ranked 188th, and Huafeng Chemical ranked 200th.
The “Sincere Return List of Listed Companies” uses the dividend payout ratio in the past one year and the past three years as the main indicator. In this list, Hongdou shares ranked 4th, Anzheng Fashion ranked 7th, Jiangnan High-fiber ranked 13th, Jiumu Wang ranked 14th, Luolai Life ranked 21st, and Semir Clothing ranked 21st. Ranked 23rd, Blonde Rabbi ranked 38th, Dahao Technology ranked 44th, Mu Gaodi ranked 45th, Shanghai Petrochemical ranked 57th, Fu Anna ranked 66th, and Jiaxin Silk ranked 23rd. Ranked 105th, Sanfangxiang ranked 125th, Disu Fashion ranked 153rd, Heilan House ranked 160th, Langsha Co., Ltd. ranked 163rd, and Ordos ranked 185th.
Sustained and reasonable dividend distribution by listed companies is one of the basic factors to ensure the steady development of the stock market. Market analysts believe that, under normal circumstances, cash dividends from listed companies are carried out without affecting the company’s subsequent ongoing operations. Against the background of relatively high operating pressure in the current market, the large dividends paid by listed textile and apparel companies indicate that the operating performance of textile and apparel companies is relatively stable, their ability to withstand market risks is enhanced, and their profitability is also improving.
From another perspective, the textile and garment industry, as an industry closely related to people’s lives, has strong development resilience. In market competition, as long as enterprises find the right direction and follow the right path, they can achieve steady development and provide a solid foundation for the development of the industry. Investors bring sustained and stable income.
Strength “attracts money”
Increased corporate profitability
The key to a listed company’s ability to provide investors with dividend returns is that the company “can make money.”
In recent years, facing the complex and severe external environment and market situation, textile and garment enterprises have actively promoted technological innovation and structural adjustment, grasped the basics, strengthened the main business, cultivated strong points, increased resilience and focused on efficiency, and continued to improve their ability to “attract money”. It is the basis and key for enterprises to achieve large dividends.
In 2021, as the core listed subsidiary of Hengli Group, Hengli Petrochemical’s operating income and profit scale reached new highs. The company distributed cash dividends of 7.109 billion yuan to shareholders, accounting for 45.78% of the company’s annual net profit. The scale of cash dividends set a record. new highs.
Behind Hengli Petrochemical’s “strength” dividends, in addition to the company’s adherence to the concept of “continuous and stable returns to market investors”, the key is that the company always insists on implementing sound operations and sustainable development in accordance with its own established strategic ideas and industrial planning. At present, the company has formed an industrial development foundation and pattern based on the “big chemical” platform support of the upstream “oil, coal, and chemical” integration and the “new material” R&D accumulation of downstream “silk, film, and plastic”.
Heilan House, known as the “men’s wardrobe”, plans to pay dividends of 2.203 billion yuan in 2021. Since 2017, Heilan House’s cumulative dividends have reached 8.375 billion yuan. The key to Heilan House’s dividends is that both revenue and net profit have increased. In recent years, Heilan House has made strategic adjustments through brand rejuvenation transformation, multi-brand matrix layout, accelerating the growth of online sales business and improving digital operation management, and has made great strides towards new ecological traffic circles such as Tmall, JD.com and Douyin. , the scope of channels is getting wider and wider.
Semir Clothing owns two major brands of adult casual clothing represented by Semir brand and children’s clothing represented by Balabala brand. Relying on breakthroughs in online channels and leading advantages in the field of children’s clothing, 2021.�, Semir Apparel achieved total operating revenue of 15.420 billion yuan, a year-on-year increase of 1.41%; operating profit was 1.929 billion yuan, a year-on-year increase of 74.57%. Since its listing in 2011, Semir Apparel has achieved a cumulative net profit attributable to the parent company of 13.427 billion yuan, with a cumulative dividend of 9.891 billion yuan, and a dividend rate of 73.66%.
“The distribution of cash dividends by listed companies has always been encouraged and advocated by the management, and the provisions for improving the cash dividend system of listed companies have also been written into the revised Securities Law. This is an institutional guarantee to protect the legitimate rights and interests of investors (shareholders). ” Wang Chunsheng, deputy secretary-general of the China Textile Planning and Research Association, said in an interview with reporters that it is generally a consistent practice for listed companies with stable performance to continue to pay dividends, and it is also to satisfy the interests of investors, and the dividend management system has also been written into the company’s articles of association. middle.
It should be noted that according to the regulations of the China Securities Regulatory Commission, the company’s cash dividend level is directly linked to its refinancing qualifications. The cumulative profits distributed in cash in the past three years shall not be less than 30% of the average annual distributable profits achieved in the past three years. This mandatory dividend requirement will also prompt some textile and apparel companies to insist on paying dividends in the context of industry operations facing greater challenges and insufficient cash flow in order to prepare for subsequent refinancing and expansion of equity financing sources.
Of course, this “prepared for a rainy day” operation strategy also reflects, to a certain extent, that textile and apparel companies are confident in continuing to expand investment in the future.
Layout the future
Create sustained and stable income
Listed companies are the cornerstone of the capital market. As an important form of realizing investment returns, cash dividends are an important manifestation of respecting and protecting the rights and interests of investors.
A sustainable, stable, scientific and reasonable dividend mechanism is of great significance to the value recognition and quality improvement of listed companies, as well as the stable and healthy development of the capital market. For the majority of investors, being able to obtain sustained and stable returns is the key to maintaining investment confidence. For textile-related listed companies, how to provide investors with sustained and stable returns in future development is a “must-answer question” that cannot be avoided.
In practice, only by continuously improving the industrial development strength, core competitiveness and long-term profit center of listed companies can we continue to support the healthy development of enterprises and achieve generous returns to investors.
Hengli Petrochemical stated that in the future, the company will continue to “improve the upstream and strengthen the downstream”, continue to promote the creation of a full industrial chain based on new chemical materials and improve scarce production capacity, and dig deep into the dynamic moat built by technology, management, cost, efficiency and innovation. Continuously extend into the blue ocean market with deep industrial chain.
Shanghai Petrochemical said that in future competition, the leading effect of integrated refining and chemical companies with advantages such as full industrial chain, large scale, high raw oil utilization, and diversified products will become more prominent. Therefore, more companies will try to extend upstream and downstream to achieve an integrated layout of the entire industry chain, allowing companies to form comprehensive competitive advantages in terms of cost, product variety, efficiency and other aspects.
Hongdou Co., Ltd.’s apparel business is also accelerating the construction of a win-win development pattern for the entire industry chain. With comfort as the breakthrough point and technology as the support, the company is targeting the new comfortable men’s wear track with a market space of 350 billion yuan. On March 9 this year, the company officially released its new positioning of “classic and comfortable men’s clothing”. This layout is expected to inject impetus into the company’s new round of leapfrog development.
Heilan House, which adheres to the group development strategy, has planned to build its brands into leading brands in various segments, and through incubation, investment, cooperation and other methods, on the basis of the original main clothing business, it will extend to more home furnishing products. Life-related products.
Semir Apparel will increase investment in consumer insights and digital construction, and conduct product research and development to fit consumer wearing scenarios. At the same time, we support and promote the growth of new businesses and fully promote the construction of four major industrial clusters – “clothing industry cluster, children’s industry cluster, e-commerce industry cluster, and emerging industry cluster” to create greater value returns for investors. Achieve high-quality development.
With all kinds of capital favoring trendy industries, isn’t it “favourable” to invest in the textile and apparel industry?
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