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Dragon Group: Lower bound for the big hands and feet - Dragon Group - Printing Industry by big tree
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Dragon Group: Lower bound for the big hands and feet - Dragon Group - Printing Industry by BIG TREE
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| Article Posted: 06/14/2010 |
| Article Views: 118 |
| Articles Written: 1033 - MORE ARTICLES FROM THIS AUTHOR |
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Dragon Group: Lower bound for the big hands and feet - Dragon Group - Printing Industry |
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Business,Business News,Business Opportunities
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With the world will Environmental protection Rose to the first question, China is also vigorously promoting low-carbon, green. It stands to reason, a can do environment-friendly ink manufacturers should seize every opportunity became famous, fine. But the Dragon was the opposite group, although to fame in his department, but not a good name.
Released from the company's data: in 2009 net profit of 36.4146 million yuan, higher than last year's 3011.91 6.2955 million yuan, appears to be optimal for sesame steadily high. But look at its accounts receivable in 2009 was 79.0881 million yuan, in 2008 to 71.1964 million yuan, bigger than the increase in net profit, it really played a backgammon.
Gross margin has peaked According to the prospectus, Dragon Group revenue and profit source of relatively high concentration, 84% of total revenue from water-based ink, 90% of the gross profits from water-based ink. The Dragon Group inks now reach 39% gross margin, the possibility of coming up again has not.
This raises a question, if water-based ink material prices, production costs, then the company's gross margins will shrink, company will have problems. Current profit growth depends on growth, then the assumption that once again the impact of environment by the economic depression, ink sales decline, that the company will be the fatal blow.
Margin gradually saturated and profit margins will become increasingly narrower margins have been saturated, how can we expect it to rise in net profit? This is why the company's 2008 net profit growth in 2009 is not one of the reasons.
Capacity expansion risks As the ink industry leaders, Denon Group indeed smug. According to its own statistics, the next few years, domestic ink market will maintain an annual growth rate of 20%, to 2012, annual output will reach 160,000 tons or more.
Dragon Group's new projects that will produce water-based inks will surge 22 thousand tons, which will Sell Sharp increase in the amount of guarantee. The company decided to also open up new sales branch 20, to increase sales capacity, but the possibility of fluctuations in downstream industries and the supply and demand situation will effect about their projects.
Fluctuations downstream industry if, for 90% of the profits are dependent on water-based ink of the Dragon, the operation will be seriously affected. The company's products are mainly used Corrugated paper Box Food , Medicines, beverages, etc. Packaging Printing And label printing. These downstream sectors may appear stable, but we do not like "Sanlu Group" sudden closures will reduce the packaging and printing needs.
And, once the phenomenon of oversupply, lower prices that water-based ink on the face of embarrassing situations. Prices have gone down, not to mention an impact on current sales, future price increases will once again bring many negative factors. So blind capacity expansion is bound to increase the company's operational risk.
Seriously affected by the economic cycle
It is understood that the development cycle ink industry and national economic development cycle to maintain a strong positive correlation. Meanwhile, with the printing ink industry is also closely related to the development of the industry. China's printing industry, mainly in the Pearl River Delta, Yangtze River Delta and Bohai Bay regions. Therefore, the ink industry is also concentrated in these three areas.
Global Financial Crisis has seriously affected China's economic development. PRD enterprises closed down, many workers have been forced off. This is undoubtedly also affected the operation of the ink industry development. The Great Depression led directly to a substantial decline in sales of ink. We are not difficult to analyze why a printing ink industry, leading enterprises and 40 million yuan less than the net profit. I am a professional editor from China Product, and my work is to promote a free online trade platform. http://www.himfr.com/ contain a great deal of information about mylar paper , laminating sheet welcome to visit!
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