Textile Industry Downturn YOUNGOR Sold Nearly Twenty Thousand Employees

Industry revenue increased 2.9% in the first quarter, and net profit decreased by 21.44%.

Since the beginning of 2008, the textile and garment export industry in China has not been improving.

Since the entry into the so-called "Post Crisis Era" in 2010, the expansion of the domestic demand market has been seen as a key factor in saving this traditional industry.

In the process, garment enterprises with a certain brand superiority in China are regarded as the first group to benefit.

This kind of good saying goes to the peak in 2011, but is it true?

As of April 30th, textile and garment enterprises listed on A shares in China showed their earnings in 2011, and the situation was not ideal.

according to

Channel statistics, 73 listed textile and garment enterprises in China last year achieved a total operating income of 166 billion 753 million yuan, an increase of 15.63% over the same period last year, but the total net profit attributable to shareholders of the parent company during the period was only 12 billion 470 million yuan, up only 2.16%. from the same period last year.

Exports are still sluggish

In the just concluded "111st session"

On the three stage, textile and clothing and footwear, medicine and other parallel, is still one of the biggest trading volume protagonist.

However, in a recent research report by the Founder Securities Institute for textile and garment industry, the performance of European and American buyers has been described as "chill".

In the first phase of the Canton Fair, the volume of mechanical and electrical products in Europe and the United States dropped by more than 30%, according to the research report.

In the three phase of the Canton Fair, foreign trade enterprises such as shoes and garments, which are also the main export markets in Europe and the United States, are not optimistic about the export situation.

Founder Securities quoted China Export and Credit Insurance Corp's "E R I index" for the first quarter of 2012, which was released by China Export and Credit Insurance Corp. In the ten major industries, such as information technology, energy, medicine, chemical products and metal products, the E R I index of China's textile and garment industry showed a decreasing trend in the first quarter, and the credit level was listed as C level.

In the first quarter, the world economy is still not out of the doldrums. The developed economies, especially the European market, are greatly affected by debt crisis, fiscal tightening and high unemployment rate. The demand for trade has shrunk sharply, coupled with the rise of trade protectionism, trade frictions and the worsening trade environment.

"In the first quarter of 2012, the E R I composite index fell from 103.90 in the fourth quarter of last year to 102.29 points, indicating that China's short-term export trade credit risk rose slightly."

Orient Securities believes that the economic efficiency, investment, export and domestic sales of textile and garment industry all maintained growth in the first quarter of this year, but the gross profit margin of manufacturing export enterprises will decrease significantly compared with the same period last year.

Compared with pure manufacturing export enterprises, Dongfang securities predicts that the overall gross margin will continue to rise year by year.

YOUNGOR net profit fell 34% last year

As the Oriental Securities Research Institute shows, the domestic market is indeed worth comparing with the export market.

In fact, the downturn in demand in Europe and the United States has been going on for quite some time.

Therefore, since 2010, the appeal of garment enterprises to fight for domestic market is getting higher and higher.

Take the PRD as an example, many garment enterprises began to spend a lot of money to cultivate their brands, and hoped to have a share in the continuously expanding domestic demand market.

However, this road is not smooth sailing.

According to W ind statistics, combined with the 2011 Annual Report and a quarterly report in 2012, the profitability of the 73 listed textile and garment enterprises in China has declined sharply, of which 26 companies net profit has declined year by year, many of which are familiar with well-known domestic clothing brands.

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Domestic brand clothing leading enterprises

For example, the report shows that the total number of attrition in 2011 was 17199.

In response, Liu Xinyu, YOUNGOR's chief executive, responded that the main reason was that YOUNGOR pferred wholly-owned subsidiary "new horse clothing", and about 20 thousand employees of the company no longer belonged to YOUNGOR.

According to public figures, the figure accounts for about 4 of the original number of YOUNGOR.

However, the rumor is rumours, and the sale of "new horse clothing" and the return to the main garment industry are among the series of "downsizing" plans of YOUNGOR.

The fundamental reason is that it is inseparable from performance.

According to the 2011 annual financial report released by YOUNGOR, the company achieved operating income of 11 billion 539 million yuan during the period, down 20.49% from the same period last year, and the net profit attributable to shareholders of listed companies was 1 billion 763 million yuan, down 34.03%.

Men's clothing industry has the best quarterly performance.

It is interesting to note that according to a recent research report by Guo Hai securities, YOUNGOR's menswear brand industry is still the most robust subdivision industry in the textile and garment industry.

"Textile and apparel industry grew by 2.9% in the first quarter, and net profit fell compared with the same period last year. In the 21.44%. industry, the men's wear industry performed best quarterly, the performance growth and business indicators were more robust, and the outdoors and women's wear continued to grow at a high level, and the performance slightly exceeded expectations. The slowdown in leisure wear and home textiles was more pronounced, with the pressure on the casual wear industry increased."

Research shows that in addition to the improvement of apparel inventory and cash flow, Semir clothing and searcht are facing terminal inventory pressure.

Does this mean that textile and garment enterprises also encounter bottlenecks on the way of absorbing gold from domestic sales? The relevant enterprises do not think so.

Whether YOUNGOR or Metersbonwe, most of the listed companies whose growth rate has slowed down are mentioned in the annual report that 2011 is "strategic and operational structural adjustment year" and have made optimistic forecasts for the future market.

As for brokers,

Still maintain the textile and garment industry "overweight" rating, because many enterprises low valuation.

Guo Hai Securities Research Report also holds a similar view that the current brand clothing retail enterprises dynamic valuation of less than 20 times, at the bottom of history, brand clothing sub industry investment value has emerged.

But also pointed out that the two quarter is the brand clothing industry off-season, relatively large or difficult to show.

The implication is that even the relatively dominant domestic brand is still in the "accumulation" state, not to the time of "outbreak".