Three Potential Risks Of Textile Industry Must Be Vigilant

China spin The Federation of Industry predicts that in the first half of this year, the main economic indicators of textile enterprises above designated size will still maintain a steady growth, but with the disappearance of low base and seasonal factors, the growth rate of textile exports will gradually fall back, generally maintaining around 10%.

　 When cotton prices are no longer "crazy"

Since this year, cotton textile enterprises that have suffered from the difference between domestic and foreign cotton prices for a long time can finally breathe a sigh of relief.

Taking April as an example, the difference between domestic and foreign cotton prices was between 3500 and 4000 yuan/ton. Last year, the difference between domestic and foreign cotton prices was as high as 6000 yuan/ton. It is estimated that when the price difference between domestic and foreign cotton is less than 2000 yuan/ton, enterprises can still hedge through technological progress and variety development; When the cotton price difference expands to more than 4000 yuan/ton, it is difficult to make up for it in other ways; If the cotton price difference exceeds 5000 yuan/ton, the enterprise will face losses.

There is no doubt that the gap between domestic and foreign cotton prices has narrowed, providing space for domestic cotton textile enterprises to reduce costs and increase profits. Relevant statistics show that in the first quarter, the cotton textile industry's operating income increased by 8.38% year on year, and its net profit increased by more than 49% year on year, making it the fastest growing sub industry in the textile manufacturing industry in terms of net profit growth; Gross profit on sales also increased to 14.05% from 13.46% last year. Last year, under the pressure of high inventory and Khmer price difference, domestic cotton textile enterprises suffered losses across the board. The annual operating revenue fell 2.68% year on year, and the net profit fell 34.67% year on year.

Lutai Group, the leading cotton textile enterprise whose export profit accounts for more than 80%, is the biggest beneficiary. In the first quarter of this year, the operating revenue, operating profit and net profit of Lutai A increased by 14%, 74% and 67% respectively year on year, and the net profit excluding non recurring profit and loss increased by 77% year on year. The operating income and net profit of another leading cotton textile enterprise, Huafu Sefang, also increased by 23% and 25% year on year in the first quarter.

The fall of the cotton price difference also made the cotton textile enterprises start work and receive orders very well. According to statistics, the operating rate of large cotton spinning enterprises in the first quarter exceeded 90%, 90% of the surveyed enterprises' orders in the second quarter were flat or increased year on year, and one third of the enterprises had cotton stocks over 40 days.

Despite the temporary calm, the cotton price difference still has the risk of continuing to expand. In the opinion of Wang Tiankai, president of China Textile Federation, different price formation mechanisms are the main reason for the difference between domestic and foreign cotton prices. "International cotton prices depend on market supply and demand, while domestic cotton prices are supported by temporary prices and import quotas."

Therefore, in the long run, to solve the cotton price puzzle, we should also speed up the reform of the cotton circulation system, improve the cotton macro-control mechanism, and realize the marketization of internal and external cotton prices. It is revealed that the National Development and Reform Commission has launched the reform process of China's cotton management policy and is preparing a timetable. The China Textile Federation also conducts research in major cotton producing areas, and will propose policy appeals and measures to relevant national departments for direct cotton subsidies, cotton system reform, etc., to promote the docking of domestic and foreign cotton prices.

　　 When export competitiveness declines

According to the statistics of China Textile Federation, from January to April this year clothing The total export reached US $82.535 billion, up 16.24% year on year, and the growth rate was 15.17 percentage points higher than that of the same period last year.

The recovery of external demand, low base and replenishment of inventory are the main driving forces for the strong rebound of China's textile and clothing exports. Since this year, the US economy has recovered slowly, the EU economy has gradually broken away from the bottom, forming an upward turning point, while emerging economies have maintained growth, which has helped to revive external demand. It is estimated that foreign retailers have made up a large number of inventories, driving the export of seven labor-intensive products, including clothing, textiles, bags, etc., to US $97 billion, an increase of 21.8%.

The survey data of the Ministry of Commerce also shows that nearly 40% of the surveyed enterprises saw a month on month increase in the amount of their export orders in March, while only 21.2% of the enterprises saw a decline in their export orders, which was less than 25% for the first time since July 2012. In March, the export confidence index of enterprises reached 108.7, returning above the threshold. In the manufacturing purchasing managers' index in March, the index of new export orders has also jumped from 48.5 and 47.3 in January and February to 50.9, back above the threshold.

Large enterprises still play a leading role. According to the statistics of the China Chamber of Commerce for Import and Export of Textiles, the number of enterprises whose exports exceeded US $100 million for three consecutive years only accounted for 0.2% of the total number of export enterprises in China. However, in the first quarter, the total exports of these enterprises accounted for 10.5% of the total exports, of which nearly two-thirds of enterprises achieved export growth.

But what is worrying is that it is an indisputable fact that the international competitiveness of China's textile and clothing has declined. Gao Yong, Vice President of China Textile Federation, said that price is the main driving force for the textile export to maintain growth, while China's share of the world's major markets is declining. At present, China's share of the three traditional markets of the United States, the European Union and Japan has declined from 65% to about 40%. In the first quarter, China's exports to the EU accounted for only 37.5%, down 1.04 percentage points year on year; The global share of exports to Japan was only 69.74%, down 2.28 percentage points. A large number of lost orders have been quickly eroded by Southeast Asian countries such as Vietnam, Bangladesh, Indonesia, etc.

Industry experts remind that, considering that external demand has not improved significantly, China's textile exports do not have the external conditions for sustained high growth in the near future.

　　 When clothing industry encounters high inventory

For the clothing industry, high inventory is an unavoidable topic. According to the statistics of the National Business Information Center of China, the retail sales of clothing of the country's 100 key large-scale retail enterprises increased by 10.7% year on year in the first quarter of this year, and the growth rate was 4.5% lower than that of the previous year, which was also the lowest growth rate in the same period since 2005. According to other data, as of April 17, the inventory of 50 listed apparel companies that have published their 2012 annual reports totaled about 57 billion yuan, an increase of 3.6 billion yuan over 2011, with a year-on-year increase of 6.76%. Among them, the inventory of 8 companies exceeded 1 billion yuan. At the same time, the depreciation reserves withdrawn from the inventory items of the 50 listed textile and clothing companies totaled 1.11 billion yuan. Under the situation of continuous downturn in external demand and slowdown in domestic demand growth, such a huge inventory scale is almost fatal for garment enterprises.

Inventory has become a major obstacle to the development of garment enterprises. "High inventory not only causes difficulty in capital turnover of garment enterprises, slows down the speed of product development and upgrading, but also consumes the profit space of garment enterprises," said an industry expert.

Under the high inventory, the fate of domestic garment enterprises is double. According to statistics, there were 34 domestic enterprises in the first quarter Brand clothing The listed companies achieved a cumulative net profit of 1.688 billion yuan, down 8.51% year on year. Among them, Youngor's net profit was only 256 million yuan, down 34.27% year on year; Smith Barney Clothes & Accessories The net profit was 126 million yuan, down 47% year on year. In contrast, the situation of Seven Wolves is slightly optimistic. In the first quarter, the company realized an operating income of 950 million yuan and a net profit of 186 million yuan, up 7.17% year on year.

To trace back to the source, high inventory is just the appearance of the current predicament of the textile and clothing industry, which is rooted in the overcapacity caused by the blind expansion of production capacity of clothing enterprises in the past few years, but the market demand did not grow synchronously. Today's "de inventory" battle is actually paying for the mistakes made in the past, It is also the price that must be paid for the transformation of the business model of China's textile industry from extensive to refined.