[Comprehensive] Anti-Stomach Masks Business "Rely on Heaven" Xinguo Technology Expands Its Product Line to Suppress Risks

Speaking of the current domestic mask brand, perhaps the consumer is most familiar with the Green Shield.

In the “2015 mask industry companies ranking” released in the China Reporting Hall, the Green Shield retired from the New Third Board company Xingnuo Technology (835159, OC) ranked second, becoming the only domestic brand in the top five, and the other four The family is followed by 3M, Honeywell, You Wei Si and Bai Yuan.

According to the reporter of "Daily Economic News", Xingnuo Technology's main business is Kanglun Fiber and its derivatives products, of which GreenShield masks are its core products and contribute more than 80% of revenue. However, due to the weather-affected products of masks, this also poses certain risks to Xinguo Technology's overall performance.

In response, Xingnuo Technology stated that the company actively promotes the market space for raw materials and other Kang Lun application products, and rationally lays out the company's product line in order to suppress the risk of changes in market demand.

Mask business accounted for over 84% of revenue

Xingnuo Technology's main products are Kanglun Fiber and its derivatives, including Green Shield Respiratory Protection Products and Kanglun Fiber Antibacterial Products. At present, the main product is Green Shield Respiratory Protection Products.

As early as 2012, Xingnuo Technology launched the Green Shield series of anti-PM2.5 masks through its own research and development, which seized the market in the early stages of the large-scale national smog outbreak and became a more competitive brand in domestic masks. In the “2015 mask industry companies ranking” released in the China Report Hall, the Green Shield mask ranks second.

Zhao Danqing, CEO of Xingnuo Technology, said in an interview with the reporter of “Daily Economic News” that Green Shield has competed positively with 3M in terms of technology, brand, marketing, and channel since 2013.

The company's semi-annual report shows that in the first half of 2016, Xingnuo Technology had achieved a total operating income of 31,624,200 yuan and net profit attributable to shareholders of 4,776,100 yuan. From the perspective of the revenue structure of the main business, the mask business remained the core business of Xingnuo Technology, accounting for 84.01% of the main business revenue in the first half of 2016.

In addition, Xingnuo Technology semi-annual report also shows that the Green Shield mask has a high gross margin level. The company's gross profit margin in the first half of the year was 56.62%

Le Limin, vice president and secretary-general of China Textile Business Association, told reporters that the gross margins of the entire domestic manufacturers of anti-halfing masks vary widely, the average profit of some small manufacturers is very low, and the reason why Green Shield has a high gross profit margin is mainly It is due to its brand added value, leading in materials, design, etc., and mastering the channels and pricing.

It is worth mentioning that due to the explosive growth of the mask industry, attracting a large number of companies to enter the industry, leading to increased competition in the industry, Green Shield products face a large number of low-cost product market competition. The reporter noted that the market price of the Green Shield masks products is priced at around RMB 32 yuan, which avoids the old path of low-price competition.

Company income is affected by air quality

Mask business is affected by weather factors to a certain extent. This also means that with the advancement of national air pollution control work, air quality will gradually improve, and the overall performance of Xingnuo Technology will inevitably be affected.

The reporter also noticed that the business performance of Xingnuo Technology in 2015 had a big drop, and it was mainly due to the large year-on-year decline in the sales performance of the core business of masks.

Xingnuo Technology stated in its 2015 annual report that while the mask industry continues to prosper, the industry's competitive environment has undergone major changes and industry competition has become more intense. A large number of companies have entered the mask industry, the industry has become more competitive, and even vicious competition has resurfaced. At the same time, the air quality in 2015 was greatly improved compared with 2014, and the number of severe haze days in major areas of the country was significantly lower than in previous years, which directly led to downward pressure on sales across the industry.

Affected by these factors, in 2015, Xingnuo Technology achieved a total operating revenue of 5,683.23 million yuan, a year-on-year decline of 44.27%. The total net profit realized in the year was 10.4792 million yuan, a year-on-year decline of 53.50%.

Industry economic observer Liang Zhenpeng analyzed with the reporter of “Daily Economic News” that air pollution control is a relatively long process. In a short period of time, the country will still be plagued by haze, and now many domestic consumers have no habit of wearing masks in smog days. The anti-mite mask industry has only just begun in China, and the future market space is still large.

In the first half of 2016, Xingnuo Technology realized a total revenue of RMB 31,642,200, an increase of 8.86% year-on-year. The net profit attributable to the shareholders of the listed company was 4.7776 million yuan, a substantial increase of 104.07% year-on-year, which was a turnaround from the same period in 2015.

Xingnuo Technology stated that it will continue to consolidate and expand the market share of green shield mask products through continuous product development and market investment; on the other hand, it will actively increase the market space for raw materials and other Kanglun application products. Reasonably arrange the company's product line, effectively use the company's channel resources and market advantages, in order to stabilize the company's current market demand changes risk.

This reporter learned that, in addition to the Green Shield series of masks, Xingnuo technology also has Kang Lun yarns, Kang Lun fabrics, Kang Lun space underwear, Kang Lun baby products and other Kang Lun products, but the current sales scale is small.