Tianshan Textile Raises Funds For Brand Promotion

Today, Tianshan textile (000813, closing price of 3.72 yuan) announced that the company intends to change part of the fund-raising investment.

The change items include: the termination of the Kuche cashmere base project and the technological pformation project of the wool mill, the investment of 8 million yuan, the increase of Shanghai Tian Mao equity, the investment of 6 million yuan, the establishment of cashmere products company in Zhejiang, the additional domestic sales network construction and the brand promotion investment of 17 million 951 thousand and 500 yuan.

The company explained the reasons for the termination of the project in the announcement.

Among them, the reasons for the termination of the Kuche cashmere base project include: the implementation of the national policy of returning the pasture to forests has restricted the construction of the base; because the herdsmen do not fulfill the contract of breeding according to the agreement, the loan principal can not be recovered; the number of original velvet in the southern Xinjiang is far below the actual controllable quantity, and does not have the advantage of building the raw material base.

The main reason for changing the investment plan of the technical pformation project of the woolen mill is that, after investigation, it is found that the equipment to be purchased is not much different from the existing spinning equipment in the woollen mill. The company has organized some technical forces to carry out partial renovation of the existing spinning equipment, and the equipment after pformation has reached the technical requirements and can meet the production needs of the company.

The company intends to increase its holdings of Shanghai Tian Mao as the controlling subsidiary of the company, and the shareholding ratio of Shanghai Tian Mao will reach 69.67% after the company's pferable shares.

At present, Shanghai days Wool Textile Co., Ltd. has reached more than 150 thousand export orders per year, and is expected to achieve an annual profit of 2 million yuan.

The risk of this project lies in the continuous appreciation of RMB and the increase of labor costs, which may make the company's profit level decline.

The production capacity of the cashmere products company that the company intends to invest in is set to 300 thousand, and it is expected to produce 200 thousand units in 2009, with a sales income of 70 million yuan and a profit of 3 million 240 thousand yuan.

The payback period is 2.86 years.

The risk of the project lies in the long overcapacity of domestic industry, the disorderly competition, the lack of domestic demand, and the limited influence of the brand.