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Textile And Garment Enterprises Reduce Capital Pressure

2008/11/24 11:36:00 25

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The State Council promulgated the new light textile industry policy aimed at alleviating the financial pressure of enterprises: in November 19, 2008, Premier Wen Jiabao chaired the State Council executive meeting, and decided to "six policy measures to promote the healthy development of the textile industry". It clearly pointed out that the state will lighten the financial pressure of light textile industry by increasing financial subsidies, lightening taxes and fees, raising the export tax rebate rate, suspending the "real conversion" policy of processing trade margin, increasing credit support and supporting technological pformation.

We believe that the two measures to suspend the processing trade margin "real pfer" policy and raise the export tax rebate rate are the most direct operational significance, and other measures need to be promulgated after specific implementation rules are issued before inspecting its actual impact.

The moratorium on margin will effectively improve the cash flow status of processing trade enterprises: the policy of "real conversion" is mainly aimed at processing trade which accounts for about 30% of China's textile and clothing exports, and will release the processing trade margin paid to the customs in the early stage, effectively relieving the financial pressure of processing trade enterprises, improving the speed of capital pfer, and directly supporting the processing trade enterprises.

It is expected that the export tax rebate rate will be raised to 17% at one time: in the third clause of the "measures", it is clearly stated that "the export tax rebate rate of textiles, clothing and some light industrial products will continue to be appropriately raised", but no specific time and rate have been announced. We expect that the export rebate rate of the textile and garment industry will increase from 14% to 17% in December this year, which is equal to the highest level in history.

Improving the export rebate rate is a double-edged sword. In the short term, it will relieve the pressure of enterprises and increase the frequency of international trade friction. In the future, the implementation space of the policy will be smaller and smaller.

Maintain the industry's "synchronous big city -A" investment rating: the introduction of the six measures constitutes a favorable short-term policy for the whole industry. We maintain the investment rating of the "synchronous big city -A" in the entire textile and garment industry.

We suggest that we should pay close attention to the investment opportunities of the following two types of Companies in the short term: the export enterprises that are full of orders and expected to keep growing in the 09 years, and based on the expectation that the export tax rebate rate will be raised again, will constitute an investment opportunity in the short term. We recommend Jin Fei Da and Lu Tai A. The suspension of the "real pfer" system of processing trade margin will directly improve the cash flow situation of the processing trade enterprises. The Dayang creation and the three friends of Jiangsu listed companies will be the direct beneficiaries.