Fujian Xingye Leather IPO Successful &Nbsp; Cow Head Shoe Upper Leather Status Consolidate

December 28, 2011 CSRC announcement shows that domestic

Statistics show that the output of leather products ranks first in the world, and the international market share exceeds 50%.

Among them, in 2008 and 2009, the market demand of China's cattle hide upper leather reached 260 million and 280 million square meters respectively. It is estimated that the demand for cattle hide upper leather will continue to grow well in the next few years. In 2012, it will reach 340 million square meters, with an average annual growth rate of more than 7%.

However, a current situation is that China's tannery enterprises are small and medium-sized enterprises, small enterprises are numerous, production concentration is relatively low.

With the success of Xingye leather IPO, it will become the first one in the territory.

The "boss" status of ox head shoe upper leather

Xingye leather Polytron Technologies Inc (hereinafter referred to as "Xingye leather") is the predecessor of Fujian Jinjiang Anhai Xingye leather products factory, founded in 1992.

At present, it is a leading enterprise in the leather industry of China. Its main products include the development, production and sale of the top grade cattle head shoe upper leather, including the Napa series, the natural throw series and the special effect leather series.

The three series of products are in mass production stage. The chrome free tanning green leather series is still in the small batch trial stage.

Its products are widely used in leather products such as leather shoes, bags, wallet, leather belts and so on.

The "Xingye" trademark has also been rated as "China's well-known trademark".

From 2008 to June 2011, the business income of Niu tau shoe upper leather business accounted for 94.07%, 93.64%, 91.39% and 93.13% of the main business income respectively, and the main business was outstanding.

NUPA series and natural fall series occupy the leading position in the business income of cattle head shoe upper leather, accounting for more than 80% of the business income of cattle head shoe upper leather.

Among them, the income of Napa products has been growing rapidly. Since 2010, there are more and more smooth shoes on the market, which makes the sales of Napa products with a more smooth surface. The special effect leather is also popular among young people because of its fashion, novelty and trend, and the market demand continues to increase. The business income of natural fall products decreases rapidly. The main reason is that the products of the downstream industries, the footwear industry, are popular consumer goods with fashion factors, and the market demand changes rapidly with people's consumption habits.

In 2010, the other company's business income was 89 million 494 thousand and 300 yuan, accounting for 8.61% of the main business income, which increased more than that in 2009 and 2008. The reason is that in 2010, the company sold blue (Ban Chengpin) to 19 million 667 thousand and 500 yuan, while the rest of the year sold less blue.

Prospectus shows that Xingye leather has strong core competitiveness in leather technology.

The company has four design patents, two invention patents for leather technology, and the "clean leather production technology" project is listed as "national Spark Program" by the Ministry of science and technology.

Since 2011, the development of new products has been strengthened, and the growth of company's performance has been promoted.

In terms of procurement, raw material procurement can be divided into three categories: raw material daily procurement, specific procurement of raw materials needed for customized products, and strategic procurement of raw materials.

At present, most of the raw materials it needs are purchased from developed countries in foreign countries, including NATIONAL BEEF PACKING CO., LLC, TYSON, FRESHMEATS.INC, RICH INTERNATIONALINC., TASMAN HIDE, etc.

In addition, Xingye leather is wholly owned by the Swiss leather company and shares in the Jinjiang Rural Cooperative Bank of Fujian, accounting for 1.915% of the bank's shareholding.

Rason leather was set up in Zhangpu County of Fujian in 2006, with a registered capital of 40 million 86 thousand and 600 yuan. Cai Jianshe, the legal representative, is engaged in the research of new technology of raw leather, wet blue leather, new finishing technology for leather finishing, research of new leather materials, new technology and new technology. The production and sale of ox head, two layers of leather and leather products, and the import and export business of self supporting and acting all kinds of commodities and technology.

In 2008 -2011 June, the main business income of Xingye leather increased from 823 million yuan in 2008 to 1 billion 40 million yuan in 2010, an increase of 26.32%. In 2011 1-6, revenue continued to grow, reaching 606 million yuan, showing a good growth trend.

According to the statistics of productivity promotion center of leather and shoemaking industry, the market share of Xingye leather upper leather in 2008 -2011 was ranked first in June. As the only tannery enterprise, it was selected as the list of the top ten enterprises in China's light industry leather industry.

In terms of product development, Xingye leather has successfully developed a series of calf products. Among them, calf Napa and soft leather have become the main products. They have also developed series of products such as crazy horse skin, dream wax leather, crystal flower skin, vegetable tanning oil skin, frosted skin, imitation deer skin, "clong sheep" skin, sofa furniture leather, frosted 281 imitation throw, high-grade automobile upholstery leather and so on. In the development of low-grade leather products into high-end products, we have successfully completed the research of horse oil skin, grind surface Napa leather, soft shaving leather, hand scratching and other varieties, and become the main products.

Sales mode includes direct selling and distribution.

Because the direct selling mode is directly contacted with downstream manufacturers, it is possible to quickly understand the market information of downstream products through the manufacturer, grasp market dynamics and adjust product structure in a timely manner, so as to enhance the brand image of the company.

From 2008 to June 2011, the proportion of direct sales in the main business of the company was 79.20%, 81.59%, 81.28% and 78.62% respectively, and the proportion of distribution was relatively small, accounting for 20.80%, 18.41%, 18.72% and 21.38% respectively.

At present, more than 20 famous brands of shoes for men and women, such as Wenzhou, AOKANG, Kangnai, BELLE, rich birds, Teenmix, Daphne, Mu Lin Sen, camel, Montagut, red dragonfly and spider king, are all cooperative customers of Xingye leather. The company has been offering products to these brands for a long time.

From the sales area, the products are mainly sold in China, mainly in Zhejiang, Fujian and Guangdong. Sales in three provinces account for more than 80% of the main business revenue.

The main customers of the company, such as rich birds, BELLE, Teenmix, Daphne, AOKANG, and wood, are also concentrated in these three provinces.

From 2008 to June 2011, the sales volume of the company in Zhejiang, Fujian and Guangdong provinces was 769 million 501 thousand and 300 yuan, 757 million 732 thousand and 100 yuan, 891 million 680 thousand and 100 yuan and 507 million 469 thousand and 900 yuan respectively, accounting for 93.46%, 92.58%, 85.74% and 83.73% of the main business income respectively, showing a decreasing trend year by year.

The main reason is that in recent years, the company has been expanding its domestic market and foreign market under the premise of maintaining the market in the three provinces, making sales in other domestic markets and foreign markets increasing.

Especially since 2010, sales in Sichuan and other regions have increased significantly.

In fact, from the side, it can be proved that Sichuan has made some achievements in the shoe processing industry pfer in recent years.

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In fact, the listing of Xingye leather has gone through a series of twists and turns.

Since November 2005, Xingye leather plans have been listed overseas.

In order to meet the requirements of overseas listing, the leather products company intends to adjust the shareholding structure of the leather products company and set up a return investment framework, which changed to a wholly foreign-owned company in June 2006.

But in the end, it chose to go back to the A share market. For this reason, a series of more complicated equity pfers were carried out to meet the requirements of A share listing.

Besides equity, environmental indicators are also important.

In order to meet the requirements of A share listing, Xingye leather has invested tens of millions of yuan in pollution control in recent years.

Over the past three years, Quanzhou has carried out several major pollution remediation practices in leather industry.

The technology center of the company is the tannery industry technology center of Fujian province. Its "recycling economy type leather cleaning production technology research and development" has been awarded the first China leather industry energy conservation and emission reduction environmental protection innovation award three prize.

However, with the promotion of national energy conservation and emission reduction, the increasingly high threshold for pollution control is still the biggest test of this industry.

In this regard, Xingye leather explains the environmental risks that may exist in the future. If the country improves environmental standards or tighter environmental policies, the company will pay more capital expenditure and cost, which will lead to an increase in the company's operating costs.

On the whole, the IPO rate of A shares in 2011 was low, and the cases of IPO in Quanzhou enterprises were frequent. But Xingye leather was able to do so. It also provided a new sample for other high polluting enterprises in Quanzhou.

In addition, as of the signing date of the prospectus, Wanxing company holds 84 million 744 thousand shares of Xingye leather, accounting for 47.08% of the total share capital issued before the company, and is the controlling shareholder of the company.

Wu Huachun is the controlling shareholder of Wanxing company and the largest shareholder of Hengda company, the third largest shareholder of the company. At present, he is the actual controller of Xingye leather.

Wu Huachun is also the founder and chairman of Xingye leather and has more than 20 years of tanning experience. He is currently vice chairman of the Seventh Council of China Leather Industry Association.

The world's finished leather is classified according to the category, the proportion is cow leather 65%, sheep leather 16%, pig leather 11%, goat leather 8%. According to the use, the shoe upper leather 55%, the furniture leather and the automobile leather occupy 21%, the clothing glove leather 15%, other 9%.

At present, leather production in Asia accounts for 53% of the world's total production, while Europe accounts for 27%, while the proportion in North China and the United States accounts for 10%, and that in South America is 8%.

It is worth noting that in recent years, China is becoming a major producer of leather products and one of the most active and potential markets for leather trade.

At present, China's leather products output ranks first in the world, and the international market share exceeds 50%.

Statistics show that in 1998, the output of light leather in the above scale enterprises was 250 million square meters, and the output reached 510 million square meters in 2004, reaching 720 million square meters in 2006, accounting for more than 20% of the world's total output.

Affected by the financial crisis, the output of light leather in China decreased in 2008 and 2009, reaching 640 million square meters and 650 million square meters respectively.

In 2009, China's leather industry above designated size enterprises achieved industrial output value of 603 billion 300 million yuan, an increase of 89.40% over the "fifteen" end of 2005, and an average growth of 17.30% in 2005-2009.

Subdividing into leather upper leather, the market demand of leather shoes upper leather in 2008 and 2009 reached 260 million and 280 million square meters respectively. It is estimated that the demand for cattle hide upper leather in the next few years will maintain a good growth trend. In 2012, it will reach 340 million square meters, with an average annual growth rate of 7%.

In recent years, tannery enterprises in China began to shift from large and medium-sized cities to small cities and towns, among which the most flourishing towns and townships.

From the perspective of regional distribution, 70% of the enterprises are concentrated in the prosperous regions of East China and Southern China. However, small enterprises are the main body, and large scale enterprises are less and production concentration is relatively low.

From the perspective of industrial development, leather industry has entered a period of industrial upgrading.

Energy saving, emission reduction, environmental protection, adjustment of industrial structure and pformation of growth mode have become the key points. Through technological innovation, the core competitiveness of products, the added value of products, and the development of green eco leather are also the development trend of leather industry in the future.

As the first domestic listed company in the field of leather shoe upper leather, the future development of Xingye leather industry is in line with these trends and is well received by the industry.

According to the prospectus, 600 million of the funds raised by Xingye leather will be used for two new projects: first, the annual output of 1 million 500 thousand new top-grade leather finishing finishing projects, with an investment of about 200 million yuan; two, the annual processing of 1 million 200 thousand raw cow skin and 300 thousand blue wet skin of the Swiss leather company, with a total investment of about 400 million yuan.

Among them, item 1 was approved by the Fujian provincial environmental protection department on 20 July 2010, and item 2 was approved by the Fujian provincial Environmental Protection Office on 12 August 2011.

Statistics show that at present, the scale of Xingye leather is 500 thousand pieces of raw cow skin and 900 thousand blue skin of cattle.

After the fund-raising project is put into operation, it will achieve the scale of 1 million 700 thousand pieces of raw cow skin, 1 million 200 thousand blue skins and 1 million 500 thousand high-grade leather finishing projects.

This production capacity will further consolidate the position of "big boss" in Xingye leather industry.

According to the development goal of Xingye leather, the company will continue to expand the production of the company's leading product shoe upper leather, maintain and consolidate the "leading position" as the supplier of upper leather suppliers, expand the development and production of high-grade, multi-functional, high value-added shoe upper leather, and develop and produce high-grade handbags, leather suitcases, leather covers, leather belts, and other decorative leather.

It is worth noting that the development of green chrome free tanning leather and upholstery upholstery furniture leather will be further studied.

Its long-term development goal is "to become the largest supplier of China's upper leather and luggage leather in 3 years, and the special functional leather such as upholstery leather has been successfully developed and sold. In 10 years, it has become the largest genuine leather manufacturer in China and has become the top brand of leather high-end market."