The Secret Behind Wei Bridge's Magnificent Financial Report: Profit From Borrowing Cotton Quotas

2013/9/2 15:54:00 57

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Wei Qiao Textile Textile Industry Cotton Import Quota

unlike a large number of small and medium-sized cotton spinning enterprises that are facing bankruptcy, the world's largest cotton a href= "http://www.91se91.com/" target= "_blank" > textile "/a" producer -- Wei Qiao textile has handed out a brilliant semi annual report card: as of June 30th this year, the net profit of shareholders of Wei Qiao textile parent company increased by about 392.6% over the same period last year, reaching 266 million yuan; gross profit increased by 43.6% from last year to 602 million yuan; gross margin was about 9%, up 3.6 percentage points from the same period last year. 
The huge profits of < < a href= > http://sjfzxm.com/news/index_c.asp > > Wei Qiao textile > /a again make the industry question the fairness of the cotton quotas of the NDRC. Zhang Yuefeng, an analyst with Changjiang Securities, said in August 27th that in the first half of this year, the production cost of cotton import quotas for Wei Qiao textile saving was at least 600 million yuan, and the amount of "subsidy" far exceeded the net profit of Wei Qiao textile. 
 because the domestic cotton price is far higher than the international cotton price, Wei Qiao textile enjoys a huge cost advantage of imported cotton. In the view of Xia Zhilin, President of Shandong Textile Industry Association, the NDRC holds the right to distribute cotton quotas, and will announce the application conditions and allocation principles of cotton quotas annually. But in the allocation of cotton quotas, the industry has always questioned its transparency. 
 profit margin is .
 in the general downturn of cotton spinning industry, how did the profit increase of Wei Qiao textile company increase nearly 4 times in the first half? How do we achieve it? 
 the public explanation of Wei Qiao textile is: "in addition to the low profit base in the same period last year, it was mainly due to the decrease in the unit sales cost of the group and the increase in gross profit and the increase in electricity profits due to the decline in coal prices, while the financial cost of the group decreased during the same period." 
 but the industry obviously disagrees with this explanation. 
 "reasonable explanation is that Wei Qiao textile depends on the huge price difference between the international and domestic cotton prices." Zhang Yuefeng analyzed that in the first half of this year, the average price difference between domestic and foreign cotton reached about 7800 yuan per ton, even if the transportation cost was deducted, the price difference would reach at least 4000 yuan. Wei Qiao textile, which gets import quotas, is equivalent to a "subsidy" of over 600 million yuan, which is much higher than its net profit of 266 million yuan. 
 China's < a href= "http://cailiao.sjfzxm.com/Matertial/show/default.aspx > > cotton < /a > price has always had a big price difference with foreign countries. In the first two years, due to the sluggish international economic environment and low demand for downstream, international cotton prices continued to fall, and the domestic price of cotton at the highest level was 6000 yuan / ton at home and abroad due to the domestic reserve policy. In order to limit the impact of cotton imports on the domestic market, since 2004, the state has stipulated that cotton imports need quotas. The allocation of quotas is directed by the NDRC. 
 according to the introduction, cotton accounts for about 70% of the total cost of textile enterprises. For spinning enterprises, the availability of cotton import quotas is directly related to the cost of production. 
Zhang Hongxia, chairman of Wei Qiao textile, said in his speech at the interim results conference that the inventory turnover period in the first half of the year increased from 149 days in the same period last year to 210 days. This is mainly due to the rising stock of raw materials, the company mainly imports cotton and has a long turnover period, resulting in an increase in inventory turnover. 
 for textile enterprises, if you want to get imported cotton, you must apply for quotas. Then, how much cotton quota did Wei bridge get? 
 public information shows that in 2012, Binzhou, Shandong Province, where Wei Qiao textile was located, won 436 thousand and 800 tons of cotton import quotas, and the cotton quota obtained by Wei Qiao textile exceeded 300 thousand tons. By the beginning of May this year, when the national development and Reform Commission issued the third batch of cotton quotas in Binzhou in 2013, Binzhou had striving for a total of 206 thousand and 900 tons of imported cotton quotas. In the quotas of imported cotton, the import quota of cotton obtained by Wei Qiao textile reached 150 thousand tons. {page_break} 
 no quota day > /strong > /p >
 unlike the red fire of Wei Qiao textile, the small and medium-sized cotton spinning enterprises that can not get the quota of imported cotton have a rather hard time. 
 in Xiajin County, Dezhou, Shandong, the largest textile enterprise in Dezhou, Heng Hua Textile Co., Ltd. (hereinafter referred to as "Heng Hua textile") has been leased and operated by Zhejiang businessmen because of the broken capital chain. 
 this company has nearly 30 years of history. At the time, it had more than 2500 employees. 
 Heng Hua textile chairman Li Zhen attributed the loss to "policy losses": "the price of foreign cotton per ton is five thousand or six thousand yuan lower than that of the domestic market, and if the import quota of cotton is needed, last year, only a few hundred tons of quota was reached for Heng Hua textile, which is a drop in the bucket." 
 "the huge price difference between domestic and foreign cotton has brought great pressure to domestic textile enterprises. The new company has not yet got the quota of cotton imports, and the Future Ltd will increase the proportion of non cotton raw materials such as chemical fiber." Wang Linhua, executive director of the new century Heng Hua, said frankly. 
 "there have been ten enterprises in Xiajin have stopped." According to Tian Shaoqing, chairman of Xiajin Tianrun Textile Co., Ltd., in addition to Heng Hua textile, a number of small famous textile companies such as Cheng Ping textile, auspicious textile, trustworthy textile and Lihua textile have been discontinued, and some enterprises have even gone bankrupt and bankrupt in Xiajin. 
 "the difference between cotton price inside and outside is five thousand or six thousand yuan per ton, the enterprises are not competitive abroad, the export shrinks, the import cotton yarn increases sharply, the domestic demand is not strong, the business operation is generally very difficult." Liu Guanghou, general manager of Xiajin Tianhong Textile Co., Ltd. complained that "cotton import quotas saved Wei Qiao textile, who would save small and medium-sized textile enterprises without quota or quota?" we talked about import quotas every time, but they didn't work. We attract jobs as much as we pay taxes, but we are like children not born. " 
 the commercialized quota "shady" /p >
 according to the documents issued by the national development and Reform Commission in 2012, eligible enterprises applying for cotton import quotas include state-owned trading enterprises, enterprises with imported actual achievements in 2011 and cotton spinning enterprises with more than 50 thousand spindles of spinning equipment. In order to reduce the pressure of domestic high cotton prices on textile enterprises, China has implemented a 3 to 1 quota of import quotas this year. That is to say, the purchase of 3 tons of national cotton reserves can allocate 1 tons of imported cotton quotas. 
 for cotton spinning enterprises, there are many defects in the policy of entry threshold obviously not high. 
 the NDRC "will be allocated according to the number of applicants, historical import performance, production capacity and other relevant business standards". Liu Guanghou said, "no one knows how to allocate the human resources in the process of implementation." 
 one proof is that cotton import quotas have been "commercialized". Tang Zhongqing, chief representative of the cotton group of Barth (Shanghai), said that in the past 20 years of experience, the quota of cotton imports has never been as good as it was today. 
 "last year when the highest time, the index has been fired to 3800 yuan / ton, a slight drop this year, but the market has also reached 3500 yuan / ton. In 2011, the price of black market was no more than 1000 yuan / ton before the cotton yarn purchase and storage policy. Tang Zhongqing said. 
 "its distribution principle is very vague. In the process of execution, no one knows how to allocate it, and the human factor is very strong." In Liu Guanghou's view, more cotton textile business owners have mentioned the "power rent seeking space" in the quota allocation process, and all kinds of passages have been circulated among the heads of these enterprises. 
 the implementation of the cotton import quota system is a good starting point to protect the interests of domestic cotton farmers. But now, its disadvantages are also obvious. "As long as we can get the quota, 1000 tons will be net profit of $45 million." Li Zhenru said this.