Youngor: Steady investment transformation in the main business

Li Rucheng, Chairman of Youngor Group Co., Ltd.

We must firmly grasp the strategic basis for expanding domestic demand, accelerate the establishment of a long-term mechanism for expanding consumer demand, release the potential for residential consumption, maintain a reasonable increase in investment, and expand the scale of the domestic market.

———From the Party's report to the 18th National Congress

In the apparel sector, two years invested RMB 1 billion to improve channels, relying on flagship stores to carry out brand operations, and investing in a segment that invested RMB 3 billion to enter the West-East Gas Pipeline Project, transforming into a stable and growing industry investment. In recent days, Younger has once again demonstrated to the world the aspirations and path choices of “creating a world brand and building a century-long enterprise” with its series of major actions in the main business of clothing and investment.

Following the establishment of a branch office in Italy and the establishment of a fashion design center in Europe, Youngor is currently stepping up its efforts to select fashion designers around the world to ensure that Youngor's high-end products are in sync with international fashion trends.

Corresponding to the design and development aspect, this is Younger's major channel development in this year.

Yesterday, the reporter saw in the Youngor Center Store that this 5,000-square-meter flagship store brought together the five major brands of Youngor and reopened for a month. The single-store top daily turnover exceeded 1 million yuan.

In the past two years, Youngor has been striving to promote the expansion of store channels and brand image. It has established large-scale flagship stores in Beijing, Hangzhou, Shanghai, Xi’an, Shenyang, and other cities with a business area of ​​over a thousand square meters. The accumulated investment exceeds 1 billion yuan.

As of the end of the third quarter of this year, Youngor has opened 433 new outlets, closed 213 at the same time, and increased its net operating area by more than 40,000 square meters. The total number of outlets reached 2636, further improving the distribution of channels.

Channel outlets, especially large-scale flagship stores, carry the important responsibility of the “Three Younger” development concepts of Ten Years of Fashion Youngor, Youngor Technology, and Younger Cultural, and Youngor will also use this to achieve the transition from a multi-brand strategy to a branded apparel operation.

"After so many years of development, Youngor has a number of mature production workers, and has advanced clothing production management experience. Now Youngor is mainly engaged in brand and sales operations. This is the fundamental transformation of Younger's garment industry," said the company's responsible person.

Especially after the international financial crisis, Youngor Chairman Li Rucheng repeatedly stated that the greatest inspiration for Youngor in this crisis was for Youngor to realize that his strength is still the garment industry.

Since the beginning of this year, the sales of major department stores across the country have declined to different degrees, but the domestic sales of Youngor brand apparel have maintained a steady growth. In the first three quarters, Youngor's branded apparel sales revenue was 2.811 billion yuan, accounting for 36.41% of operating income; apparel business's net profit was 624 million yuan, accounting for 57.48% of the overall net profit.

Obviously, the contribution of the main business of clothing to Youngor is continuously improving, and it further reflects the supporting role of the branded apparel of Youngor's core business to the steady growth of its performance.

While the branded apparel industry was transformed from a multi-brand strategy to a brand operation, Youngor’s investment business also began to transform into an industry investment that was conducive to stable growth and long-term return.

Recently, Youngor announced a related-party transaction announcement that it plans to invest 3 billion yuan to subscribe for 30% of Beijing Guolian Industrial Investment Fund (Limited Partnership)'s share of investment, and the joint investment of China National Social Security, Baosteel Group, and other three projects of China West-East Gas Pipeline.

Youngor began to explore the financial investment industry as early as in 2007, mainly to participate in the private placement of listed companies, and the investment model is relatively single, which has a great impact on the fluctuation of the company's performance. Since the beginning of this year, Youngor has repeatedly stated that its financial investment business will adjust its structure, control its scale, and seek new investment in the industry.

The Youngor's investment in the West-East Gas Pipeline Project of the 3rd West-East Gas Pipeline Project was the first to open up China’s private capital into the field of oil and gas pipelines. It also fully responded to and complied with the state’s industrial policy of encouraging private capital to participate in the construction of oil and natural gas, marking the opening of China’s oil to private capital. A new pace.

Relevant data show that the West-East Gas Pipeline Project of the Third Line was approved in September this year and is expected to be put into full production in 2015. According to the preliminary forecast of PetroChina, the total investment of the project is RMB 116 billion and the investment recovery target is about 11 years.

Around domestic consumption

Accelerate transformation and upgrade

In the next ten years, Youngor will benefit from a series of policies and measures to expand domestic demand in the country and make corresponding adjustments to the company’s development strategy accordingly. The report of the 18th National Congress of the People's Republic of China proposed that China complete the construction of a well-off society in 2020 and double the income of urban and rural residents. This fully embodies the people-oriented core position of the scientific development concept and also gives us new hope for future development. As we all know, the increase in income will directly stimulate consumption growth and improve the consumption structure. This means that in the next decade, we will face a bigger domestic market, especially our high-end products, which will usher in a new high. growing space. Another factor that gives us confidence in domestic consumption is the development of urbanization proposed by the 18th National Congress of the Communist Party of China. The area where Youngor is located was previously a remote town and it is now a modern city. The central government proposes to promote the integration of urban and rural development and gradually narrow the gap between urban and rural areas. This is another rare opportunity for us.

In my opinion, urbanization is China's greatest potential for domestic demand in the future. In the next decade, more and more rural residents will be transformed into urban residents, driving urban population growth, expansion of urban built-up areas, and social and lifestyle development. It will constitute a new driving force for China's economic growth in the future, and will also bring new market space to our company. Younger’s recent funding of the West-East Gas Pipeline Project in the West-East Gas Pipeline indicates that some of the “glass doors” in the monopoly sector have been opened to private capital after the 18th National Congress. As the saying goes, Spring Plumbing Duck Prophet, I believe that this kind of market-oriented reform will become bigger and bigger in the future. We will seize the current period of strategic opportunities, focus on a new space in the domestic consumer market, based on the real economy, adhere to the main business, accelerate the transformation and upgrading, and comprehensively build fashion Youngor, Youngor Technology, and cultural Youngor, creating a world brand and building a century-old enterprise.