Analysis Shows That Export Tax Rebates Or Textile Fiber Stocks Will Be Raised.

The benefits of tax rebate of chemical fiber and textile stocks are limited. The analysis shows that the export tax rebate is more likely to increase, and short-term profits can be raised for export companies.

Noun interpretation

What is viscose fiber?

One of the earliest chemical fibers devoted to industrial production.

Because of its good moisture absorption and comfortable wearing, it has good spinnability and is often interwoven with cotton, wool or all kinds of synthetic fibers for all kinds of clothing and decorative textiles.

High strength viscose fiber can also be used for tire cord, conveyor belt and other industrial supplies.

Viscose fiber is a kind of chemical fiber which is widely used.

Policy guidance

Stimulated by rumors that the export tax rebate will be raised in the near future, textile, clothing and chemical fiber stocks have been out of the market sharply last week, becoming a new hot spot for hot money in the field, but there is no large-scale capital inflow in the whole sector.

A number of analysis reports pointed out that the export tax rebate increase is more likely, but the textile industry is chronic oversupply, overinvestment, export tax rebate increase for industry upgrading is not obvious, only short-term exports to the company to raise net profit.

CICC has recently raised export rebates

According to the National Bureau of statistics, the textile industry in the first 5 months of this year has seen a sharp decline in the various business indicators, the total loss of the textile industry has expanded to 22.85%, the total industrial output value has increased by only 17.27%, and the profit growth rate has dropped to 8.3%, compared with the same period last year, the total industrial output value of 23.95% and the growth rate of profit 43.86% have slowed down significantly.

While the dismal data were released, the State Council and the Ministry of Commerce visited Zhejiang, Jiangsu and other six provinces. The China Textile Industry Association and the textile industry professional media revealed that the export tax rebate adjustment policy is expected to be introduced from the end of this month to the beginning of next month, including the textile export tax rebate rate increased by 2%, the garment export tax rebate rate increased by 4%, and the viscose fiber export tax rebate increased from the current 5% to 15%.

The Ministry of Commerce said that it had submitted the adjustment proposal to the relevant ministries and commissions, waiting for the final approval of the Ministry of industry and information technology and the State Council.

But it did not publish details of the proposed adjustment plan.

CICC research report believes that for the sake of maintaining employment, the export tax rebate is likely to increase in the near future.

Market chemical sector capital outflow

Reflected in the two tier market, Nanjing chemical fiber (600889, stock bar), Xinxiang chemical fiber (000949, stock bar) and some other stocks have been pulled up one week in advance or last Monday.

From last week's whole week, the chemical fiber industry, textile machinery and textile industry rose by more than 8%, winning 6.99% gains in the same period.

Outstanding performance stocks, Xinxiang chemical fiber rose 26.15%, Lu Tai A rose 19.14%, Jilin chemical fiber (000420, stock bar) rose 16.84%, URI shares (002083, stock bar) rose 18.07%.

But from the wisdom of Topview7 month 11 fund flow report to see, from July 3rd to 9, the relevant sectors of the textile industry as a whole did not appear large-scale inflow, chemical fiber chemical plate and even become the 5 Main outflow plate, showing that the market for the temporarily uncertain export tax rebate positive optimism.

Benefit from foreign trade leading stocks

Judging from the scope of the export tax rebate increase in the news, the market generally pays much attention to the increase in the tax rebate of the garment industry, which will not only stimulate exports directly, but also boost the demand for upstream products.

Xinxiang chemical fiber Securities Division said the policy will stimulate exports of downstream industries, thereby stimulating demand for chemical fiber products.

However, the main factor affecting the chemical fiber industry this year is the rise in raw material prices and the decline in product prices. It is expected that the net profit of the first half of the year will decline considerably.

Huafeng spandex (002064, stock bar) securities affairs department also said that the impact of export tax rebate adjustment on upstream enterprises is more indirect.

CICC believes that raising the export tax rebate will enhance the cost advantages of Chinese textile and garment enterprises, promote the increase of their orders, and have a stimulating effect on their performance.

If the policy comes out at the end of July, foreign trade share will be higher than that of YOUNGOR (600177, stock bar) and Lu Tai A, which will account for 6.81%, 4.73% and 4.69% net profit respectively in 2008.

In 2009, the net profit of related companies is expected to be about 8%-14% higher than the current forecast.

For those enterprises whose core competitiveness is relatively weak, the increase in profits brought by the export tax rebate rate will soon be obliterated by the pressure from overseas customers. Therefore, the introduction of this industry policy has no substantial impact on the fundamentals of these enterprises, and there is a big uncertainty about whether the net profit can increase.

Guo Jin securities (600109, stock bar) analyst Zhang Bin believes that the textile industry is facing difficulties in operation. The core factor is that it is eager to expand its scale and grab exports, which results in a high degree of homogenization and oversupply.

Although the export tax rebate increase can ease some enterprises' difficulties, it will not help the industry survive the fittest.