Productivity Of Wenzhou'S Synthetic Leather Policy

< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > synthetic leather < /a > serious overcapacity. In recent years, the company's profitability has declined sharply: Amway's products include eco functional synthetic leather and ordinary synthetic leather, and its downstream applications are shoe leather, upholstery leather, luggage leather and other leather.

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< p > in recent years, the expansion rate of synthetic leather production is faster than that of the downstream market. The decline in price caused by overcapacity has resulted in a decline in profitability of the company. The ROE after 2012 was only 3.40% (2010 and 26.49% respectively in 2011 and 8.34%); /p >

< p > > a href= "//www.sjfzxm.com/news/index_p.asp" > Wenzhou < /a > the synthetic leather policy has brought about the contraction of production capacity, but the recovery of the industry needs time. Wenzhou's largest synthetic leather production base accounts for about 50% of the country's total output. The Wenzhou municipal government promulgated the "Wenzhou synthetic leather industry upgrading plan", which will reduce the synthetic leather production line by 30% and 50% respectively by June 2014 and December 2015. The measure will significantly improve the supply and demand pattern of synthetic leather in China. However, considering the influence of the Wenzhou synthetic production line's migration, the contraction of the supply side will be a slow process.

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< p > the company adjusts the incentive structure through equity incentive. The exercise condition is increased by 90% from July 2013 to 6%. The company rebounded from ROE to 6%: the company announced the equity incentive plan in July 2013, the exercise condition was 90% after deducting non profits, and 6% after the deduction.

The company hopes to adjust the single incentive structure of executive compensation incentive through equity incentive. The production of IPO investment projects and < a href= "//www.sjfzxm.com/news/index_p.asp" > raw material < /a > cost reduction will be the main driving force for revenue growth and ROE recovery.

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< p > investment recommendation < /p >

< p > the production capacity of the remaining 1250 meters of synthetic leather in the IPO investment project was officially put into operation in August 2013. Under the assumption that the government subsidy is 12 million yuan this year, we expect that the EPS in the 2013-2015 years will be 0.335 yuan / share, 0.414 yuan / share and 0.578 yuan / share, respectively, up 44.84%, 23.77% and 39.57% respectively.

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