Textile Companies Say RMB Appreciation Has Limited Impact On Performance.

Textile enterprises say that the appreciation of RMB has limited impact on the performance

As of yesterday, the yuan has appreciated by more than 0.8% against the US dollar after restarting its currency reform.

What will be the impact of RMB appreciation on the textile and garment industry when profit margins approach the breakeven point?

"Appreciation of the renminbi has some impact on the company's performance.

However, because the company's procurement and sales links are carried out abroad, this offset the impact of RMB appreciation.

In fact, as the company produces high-end products, both the price of raw materials and the appreciation of the renminbi continue to maintain the gross profit of the company. "

A ruyi people in Shandong said yesterday in an interview with reporters.

Similarly, Jiangsu sunlight is the world's largest worsted spinning enterprise. A company surnamed Wang told reporters in an interview that "because the company has brand advantage, it ensures the company's sales volume.

Therefore, the impact of RMB appreciation on corporate performance is limited.

Liu Zhiru, an industry analyst at Hongyuan securities, said that if the RMB appreciates by 1%, the net profit of Lu Tai and Dayang will decrease by 0.61% and 0.57% respectively.

Therefore, the large textile and garment export enterprises with full orders and bargaining power will not change significantly this year because of the exchange rate reform.

The latest export data released by the General Administration of Customs showed that in June, exports of textiles and garments were 21 billion 62 million US dollars, up 56.22% over the same period last year, of which 6 billion 595 million US dollars in textile exports, an increase of 31.06% over the same period last year, and 14 billion 467 million US dollars in clothing exports, representing an increase of 71.21% over the same period last year.

Analysts said that the rebound in overseas demand was the main driving force for the growth of China's textile and clothing exports in the two quarter.

However, considering that the share of China's textile and garment export trade accounts for about 80% of the total value in the US dollar, the industry's export growth will slow down in the three quarter and fourth quarter, due to the superposition of the recent RMB appreciation and the lag of the debt crisis.

Liu Zhiru said that the appreciation of the renminbi will further weaken the competitiveness of the entire textile and garment export industry and will accelerate the pfer of foreign orders to low-cost countries such as India, Bangladesh and Vietnam.

China's textile and garment export enterprises of many sizes and margins are thin, and the appreciation of the renminbi will further reduce the profit margins of export enterprises and speed up the integration of industries.

Wei Fengchun, chief macroeconomic analyst at CITIC Securities, said that the appreciation of the renminbi may not be a major factor affecting the textile and garment industry. In addition, because of the emergence of the "Lewis inflection point" and the rising labor cost, the pressure on the textile and garment industry in China is greater than outside, forcing enterprises to use machines instead of labor.

"In order to cope with the rise in labor costs, the company is considering raising prices and increasing the added value of products," said Mr. Wang of textile enterprises.

As the textile and garment industry itself is a highly competitive industry, it is only by constantly improving itself that we can make ourselves invincible.

Shandong Ruyi stakeholders also said that the company is also strengthening the development of high-end products.

Wei Fengchun said that the emergence of "Lewis turning point" forced the industry to upgrade its industrial structure.

The so-called survival of the fittest, to the last left are high-quality enterprises, and thriving.