Post on 04-Aug-2018
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Roo Hsing CO., Ltd.
7/31/2017
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Contents
2
Page
Jeans are back to the fashion trend and dominate the market again 3
The market positioning of Roo Hsing company 8
4 big factors driving the growth 12
Continuous pouring of the investment into research and development 17
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Jeans are back to the fashion trend and dominate
the market again
3
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The market size and growth of global apparel retail
industry
4
1135.41180.2
1225.71277.7
1323.11382.8
1446.51514.1
1584.91659.5
2012 2013 2014 2015 2016 2017預估 2018預估 2019預估 2020預估 2021預估
2017
estimate
2018
estimate
2019
estimatee
Unit:$ Billion USD
• In the year of 2012, the global apparel retail industry market was approximately $11,354 million. Until 2016, the market had been
growing to $13,231 million. The compound annual growth rate is about 3.9%. It is estimated that the global apparel retail industry
market will reach $16,595 million in 2021. The compound annual growth rate is about 4.6%.
• The main factors of future growth: Consumption upgrade、the increase of average sale price( driven by developing countries)
Source:2017 version of Euromonitor Passport Data
2020
estimate
2021
estimate
.
The market share and future growth of the jeans in the
apparel retail industry
5
Rank
(the 2016 retail sales)items
Percentage
(the 2016 retail sales)
Retail sales(10 billions USD) Compound annual growth rate%
2012 20162021
(estimated}2012~2016 2016~2021
1 Tops 17.26% 197.0 228.4 285.4 3.77% 4.56%
2Sportswear and
casual wear13.02% 138.9 172.3 230.6 5.53% 6.00%
3 Bottoms 12.47% 145.5 165.0 199.0 3.19% 3.82%
4 Underwear 8.49% 92.0 112.3 145.4 5.11% 5.30%
5 Jeans 7.57% 86.6 100.2 129.8 3.71% 5.31%
6 Sweater 6.37% 73.8 84.3 104.8 3.38% 4.45%
7 Jacket and coat 6.11% 74.9 80.9 94.5 1.95% 3.16%
8 Living clothing 2.25% 24.8 29.8 37.7 4.70% 4.82%
Other clothing 26.45% 301.8 349.9 432.2 3.77% 4.32%
Total 100.00% 1135.4 1323.1 1659.4 3.90% 4.63%
• According to the marketing distribution of global apparel retail industry divided by product categories, jeans rank number 5 in
global apparel sales in 2016. The compound annual growth rate from year 2012 to 2016 is about 3.71%. The estimate rate to year
2021 can be 5.31%.
Source:2017 version of Euromonitor Passport Data
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The year of 2014 is the bottom for global sales of the
jeans
6
• According to the report by CNBC in 2014, the legging yoga pants, which was the main product for outdoor recreation, officially
surpassed the jeans and became the female and teens’first choice. At that time, the reports speculated whether the jeans would be
disappearing from the market or not. CNBC even described that the jeans“faced the unprecedented strong opponent and were
moving on the way of chronic death.”
Source:CNBC, Statistic by Piper Jaffray
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Denim is back and sport and casual wears should be
careful
7
Source:Google Trends data
• Starting from the end of 2015, the interest of market in jeans was becoming higher and higher. The search interest data statistics in
November 2016 even revealed that the gap between jeans and yoga paints was becoming significantly widening.
• The analytic report published for the investors by foreign analyst said, “We believe the trend of sport and casual wear has remained
stagnant. For the future, we can only expect the slight growth.”
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The market positioning of Roo Hsing company
8
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The huge market of clothing industry
9
The statistics of world famous branders
Rank Top ten branders Market share
1 H&M 1.5%
2 Inditex 1.4%
3 Nike 1.2%
4 Gap 1.1%
5 Fast Retailing 1.0%
6 adidas 1.0%
7 PVH 0.9%
8 VF 0.7%
9 Hanesbrands 0.7%
10 Levi's 0.6%
The statistics of famous Asia branders
Rank Top ten branders Market share
1 Fast Retailing 2.7%
2 Bestseller 1.1%
3 adidas 0.9%
4 Heilan Home 0.8%
5 Shimamura 0.8%
6 Nike 0.8%
7 Inditex 0.7%
8 World Co Ltd. 0.5%
9 H&M 0.5%
10 Semir Group 0.5%
• In 2005, WTO started to cancel global textile quota system. Clothing industry has the brand-new competition.
• Amancio Ortega Gaona, the CEO of Inditex Group(Zara), is the fifth richest man for Forbes by having 1.4% of the global clothing
market share. Yanai Tadashi, the founder of Fast Retailing (Uniqlo), is the richest man in Japan.
• To serve one Zara, Taiwan needs 12 Eclat Textile or 14 Makalot Industrial.
• International big brands have started to integrate their suppliers ( i.e decrease the numbers of suppliers). For example, Levi’s will
have only 5-8 suppliers in the next 2 to 3 years around the world, and only two of them ( Roo Hsing Company in Taiwan, Crystal
Group in Hong Kong) are located in East Asia.
source:2017 version of Euromonitor Passport Data �The clients of Roo Hsing Company
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The investment structure of Roo Hsing Company
10
JD United
(BVI)
Limited
JD United
(BVI)
Limited
Tooku
Holdings
Limited
(BVI)
Tooku
Holdings
Limited
(BVI)
Roo Hsing CO., Ltd.
Roo Hsing
Clothing
CO.,Ltd.
(Cambodia)
Roo Hsing
Clothing
Ltd. (El
Salvador)
Roo Hsing
Clothing
Ltd.
(Dominican
)
Operadora
Internaciona
l de Zonas
Francas
Managua
Co., Ltd.
(Nicaragua)
Cheng Tai
Rinsing Ltd
Fain Tei
Enterprise
Co., Ltd
(BVI)
100%100%
Roo Hsing
(Shanghai)
Import/Export
Ltd.
100%100%
The subsidiaries which Roo Hsing holds 100% or more
than 50% shares amount to 31.
Factories in
China (7)
Factories in
Southeast Asia
Cambodia(15)
Myanmar(2)
Factories in
Africa
Tanzania(1)
100%100% 100%100% 100%100% 100%100% 100%100% 100%100% 100%100%
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The world’s largest manufacturing group of jeans
11
• An important player on the world stage
• With the design, style development, and material development in Taiwan, we provide the one-stop service from raw
material.
• Combine with Taiwan’s precision machinery technology, enhance manufacturing efficiency and quality, deepen the
industry’s connection
• The big go bigger.
Rank Main listed
Companies at stock
exchange market
Countries FY14
Revenue
FY15
Revenue
Growth rate%
1Shenzou
International GroupHong Kong 1,807 2,012 11.3
2 Hansae Korea 1,248 1,403 12.4
3 Youngone Korea 1,184 1,401 18.3
4 LUEN THAI Hong Kong 1,224 1,114 (-8.9)
5 Delta-Galil Industries Israel 1,032 1,080 4.7
6 Eclat Textile Taiwan 688 804 16.9
7 Makalot Industry Taiwan 689 736 6.8
8 Basic House Korea 522 559 7.1
9Roo Hsing
CompanyTaiwan 510 555 8.8
10 Handsome Korea 499 545 9.2
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4 big factors driving the growth
12
.
Sales growth
13
• Organic Growth
• Expanding the orders of existed clients
• Levi’s would decrease the suppliers from 33 to 26, and then further reduce to 22 from 2013 to 2015. According to
Levi’s planning, there will be decrease of the suppliers from 20 to 5-8 main suppliers in the next 2 to 3 years. Every
supplier is expected to provide 12.5%~20% of Levi’s requirements of purchase.
• The increase of the orders from other famous brands
• Developing new customers
• Tanzania, Myanmar, Cambodia all have GSP offer, which can raise the willingness of European clients to place the
orders
• Nicaragua, El Salvador are close to the local market of U.S.A. New branders in the U.S.A have placed orders for
delivery.
• Mergers and Acquisitions(M&A)
• The branders’requirements of supplier integration have been established. Roo Hsing deeply feels that textile industry will
face the same competition and consolidation as electronics industry. Just like what English idioms always said, ”Go Big or
Go Home,”in the real world, we choose the “Go Big”way to expand the scale of economy by merging.
• Refer to what the competitors do:
1. In February 2017, the 35-year-old private Hong Kong Company Crystal Apparel Ltd. applied for listing.
2. In May 2017, Texhong acquired Nien Hsing’s Cambodian factory
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Enhancement of production efficiency and adjustment
14
• The introduction of automation in factory
• After half year of the introduction of automation in the Roo Hsing Cambodian factory, the production of the jeans per worker
per day increases from 17 to 21.
• Instead of using the traditional rinsing process, the introduction of the laser machine and ozone rinsing machine can save 67% of
the water consumption, 85% of the usage of the chemicals and 62% of the usage of energy.
• Centralized the logistics operation
• The introduction of ERP and RFID, all global factories online operation
• Unify fabric inspection, raw material is verified by the fabric inspection factory and then distribute to the global plants
uniformly
• Computerize the warehouse management and shorten the pre-operation schedule
Inspection
Factory
China
Factories
Southeast
Asia
Factories
Tanzania
Factories
Inspected raw
material
distribution
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Capital costs are effectively reduced
15
• The advantages of low capital cost
• Using the US dollar as the main currency
• Taiwan has sound financial system and the interest rate is also lower than overseas financing
• Having strong liquidity of funds in the capital market
• Capital allocation is more flexible and the benefits of capital utility appear very quickly
Cost Revenue
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The management of the suppliers’ value chain
16
• Activating the efficiency of funds for the group
• Through the banks as the payment platform, the suppliers can get paid earlier
• With the huge amount of group procurement, the supply price is expected to decline, which will improve the efficiency of
capital utility
• Payment term is stable, which helps Roo Hsing Company have a more flexible capital planning
• The cost of purchase decreases and the interest rate can be kept low
Roo Hsing
company
suppliersBanks
Shipment Payment
discount; payment in advance
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Continuous pouring of the investment into research and development
17
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The development of fabrics and the pattern design
18
• OEM→ODM
• One-stop service, starting from the source
• Fabric development: combine the elements including being elastic, electronic, cool, quick-drying and warm with denim
fabrics.
• The planning of layout: The marking layout increases the efficiency and saves the fabric from wasting
• Style design: follow the fashion trend to meet the customers’ needs
Photo taken from:Internet
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Continue the improvement of production process and
the development of machinery
19
• The research and development of how to improve the production process
• Shorten the working sections
• Enhance the utility of the automatic machinery
• Connecting the machines and operation system together, moving to the one-click production schedule planning system
• The revolution from handwork to machine
• Cooperate with the industry sector and academic sector to improve and develop the textile equipment together
• The history and quality of developing the precision machine tools in Taiwan has achieved the world level
• Cooperate with the Taiwan dealers to develop and manufacture the automation equipment, strengthening the horizontal
connection
• The cost of developing the precision machines in Taiwan is unrivaled in the world
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Q&A
20