Gilimex reversed the line of the textile industry, the stock price doubled

9-month profit was double the same period regardless of Covid-19

The textile industry suffered heavy losses when it was double influenced by the Covid-19 epidemic. Raw materials were interrupted when the epidemic broke out in China and the shortage of orders when the epidemic spread to key export markets such as the US, Europe, and Asia.

Many large enterprises such as Song Hong Garment (HoSE: MSH), Viet Tien (UPCoM: VGG), Textile TNG (HNX: TNG), Vinatex (UPCoM: VTG) ... recorded a decrease in profits from 20% to 70% in Last 9 months. Thanh Cong Textile and Garment (HoSE: TCM) also inevitably declined in profit in the first quarter, to the second and third quarters grew again thanks to flexible restructuring to face masks and medical protective equipment to the US .

However, only Binh Thanh - Gilimex Import Export Production and Trading JSC (HoSE: GIL) reported profit growth in all three quarters despite the impact of Covid-19 translation. Compared to the same period last year, Gilimex recorded a 34.4% increase in after-tax profit compared to the same period last year in the first quarter, double that in the second quarter and 3 times the third quarter. In the first 9 months, net revenue of business is 2,546 billion dong, up by 45%; Profit after tax is 189.5 billion, double that of 9 months of 2019.

Increase in revenue, sharp improvement in profit margin from 14.5% to 27.5% and financial revenue by 55% to reach VND 44 billion (thanks to the interest rate difference) are the factors driving Gilimex's profit. for 9 months.

Enterprises explained that revenue increased due to changes in the structure of exported products, but did not explain clearly.

Gilimex produces a wide range of textile and garment products such as household products, bags, backpacks, outdoor furniture, and clothing. The company's products are mainly exported to the main markets of Europe and America. Export revenue increased from 40.5 million USD in 2014 to 100.9 million USD in 2019, the contribution to net revenue is about 85-99%.

According to Mirae Asset Securities, two major partners of Gilimex, Amazon and Ikea, are strong financial units and have stable business operations with the mainstream online business in recent years. This is what helps Gilimex avoid the pressure from the Covid-19 epidemic in 2020 and upstream the textile industry. In 2021, textile and garment enterprises expect to maintain the growth rate of export of traditional textile products thanks to growth from online segment.

The growth of business results pushed GIL's stock price to break out from the price range of 15,000 at the end of July to VND 37,000 today, doubling in more than 3 months.

Invest in industrial zones, expect revenue from 2021

Gilimex has 36 sewing lines in 2 factories: Binh Thanh (Ho Chi Minh City) and Thanh My (Ba Ria - Vung Tau), focusing on household goods, in which Binh Thanh factory focuses on high value products. and is a new product research and development center. In addition, Gilimex has a processing system of 36 other lines. The goal is to develop the internal sewing line system to 37 by 2020 and increase the number of external processing lines to 58.

Enterprises have plans to build new sewing lines, expand garment production, and household garment production in regions with competitive labor costs such as regions 3 and 4; buying factories in the same industry with a budget of about 250-300 billion dong.

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In addition, Gilimex plans to invest in developing two industrial parks in the Central region, developing a land fund to establish a chain of clean customers to serve domestic industrial parks in key areas such as Binh Duong, Dong Nai, Bac Ninh. , Hai Phong and HCMC. This is a business segment that is expected to bring sustainable and long-term value to the business in the period 2020-2030.

At the end of 2019, the enterprise has consulted shareholders about the investment plan of Phu Bai 4 Industrial Park project (Hue) with the capital contribution of 255 billion VND, accounting for 51% of the capital of Gilimex Industrial Park Company (the investor project).

The total size of the land for research and investment is about 507 hectares, with a total investment of 3,000 billion VND. Gilimex plans to invest in Phu Bai 4 industrial park into a green, clean, advanced technology industrial park that meets Singapore standards.

Updating progress at the annual General Meeting of Shareholders in June, Gilimex's leaders said that they were applying for investment policy. In early October, the Ministry of Construction responded to the Management Board of the Industrial Economic Zone of Thua Thien Hue province regarding the Gilimex Industrial Park project investment proposal that the application was basically completed, and proposed appropriate investment. approved construction planning.

In addition, the unit also invests in Hung Khang Real Estate Company and Hoang An Investment and Development Company - owning 2 land plots in Binh Duong adjacent to the industrial park to create the basis for development goals. 3-4 star hotel chains.