Review Of The Credit Risk Outlook Of Garment Home Textile Industry In 2017 Next Year

In recent years, China's e-commerce has been developing rapidly, and online shopping is gradually rising. The total consumption of Internet has increased rapidly.

In the 2014-2016 years, the total retail sales volume of the whole country was 27898 billion yuan, 38773 billion yuan and 51556 billion yuan, up 49.70%, 33.30% and 26.2%, respectively.

Jingdong's "2016 China electricity consumer behavior report" released in January 12, 2017 shows that the scale of e-commerce market in China has ranked first in the world in 2016, and the volume of e-commerce pactions will exceed 20 trillion yuan, accounting for more than 10% of the total retail sales of social consumer goods.

According to Alibaba's earnings report, as of May 2017, the annual active buyers of China's retail business platform reached 454 million, and mobile terminals reached 507 million monthly active users.

In the next few years, China's online retail market still has great room for growth.

In addition, with the development of the national logistics system and the upgrading of urban and rural broadband network, the use of smart phones and portable tablet computers is becoming more and more popular. The APP applications of various online shopping are also improving. Under this background, the consumption habits of domestic consumers are gradually changing, and the willingness to purchase goods through the upper network will be further enhanced.

National Bureau of statistics data show 2015 and 2016

Retail sales of similar commodities increased by 21.4% and 18.1% respectively over the same period last year.

With the development of new consumption habits, all kinds of clothing and textile enterprises have to pform and upgrade their marketing channels. For some enterprises that have laid the line for sale in advance, the marketing channels have been widened, forming a new situation of laying equal stress on development both online and offline.

In 2016, except for the slight decline in the online income of the Pathfinder, the other companies' online revenue increased to varying degrees. Among them, the income of Semir apparel line grew the fastest, increased by 80%, and the income reached 30%; the growth rate of the online income of blonde Rabbi, Sanfo outdoor, Taiping bird and Hai Lan home was 40%-50%, and the growth rate of the nine Mu Wang line was 33.5%.

Since 2014, the cost of channel and financing has increased, and the rate of fee for garment home textile industry has been increasing continuously. In 2016, the period cost rate of SW apparel home textile industry listed companies increased by 0.16 percentage points to 24.92% over the same period last year, of which the percentage of sales expenses increased by 0.07 percentage points to 17.26%, the management fee rate decreased 0.16 percentage points to 6.54%, and the financial cost rate increased 0.25 percentage points to 1.12% over the same period last year.

The rise of financial expenses and channel costs has led to the continuous growth of costumes and costs of garment textile enterprises, and further squeezing the profit margins of enterprises in the industry.

According to the statistics of wind, the operation efficiency of garment and textile industry in 2014 and 2015 has steadily increased, but the 2016 year old has declined.

In 2016, the gross profit margin of SW apparel and home textile industry listed companies was 36.59%, down 1.29 percentage points year-on-year.

Net interest rate in 2016 was reduced by 1.40 percentage points to 9.94% over the same period.

By the end of 2016, the number of textile and clothing enterprises in China reached 15715, of which 1668 were in the textile and garment industry and clothing industry in 2016, with a deficit of 10.61%, representing a 0.45 percentage point decrease over the same period in 2015.

After 2011, the proportion of loss making enterprises in textile and garment industry accounted for a relatively stable proportion in all industries, with a deficit of around 11%.

From the deficit point of view, the cumulative loss in 2016 was 5 billion 340 million yuan, an increase of 6.16% over the same period last year.

In 2017, 1-9, the loss of textile and clothing enterprises was 12.88%, down 0.98 percentage points compared to the same period last year. The total loss was 4 billion 380 million yuan, down 13.10% from the same period last year, and the deficit and loss in 2017 were narrowed.

Since 2012, after a round of industry reshuffle, large enterprises of textile, clothing and apparel industry have been developing by means of scale advantage or brand advantage. Small businesses have been gradually eliminated from competitive disadvantage, and industrial resources continue to cluster into large enterprises. At present, the enterprises that remain can still have a certain business competitiveness, which is also the reason why the loss and loss of textile and apparel enterprises have narrowed compared with the same period last year.

From 2013-2016 years of performance data of apparel and home textile sub sectors listed companies, the performance of apparel home textile sub sectors continued to differentiate, and the performance of casual apparel was better. In 2015 and 2016, the revenue increased by 11.34% and 24.99% respectively, and net profit increased by 5.39% and 5.01% respectively. 2014-2016 years, women's clothing business revenue maintained a growth rate of more than 11%, but net profit in 2015 and 2016 decreased by 89.86% and 12.62% respectively, and the decline was larger. Men's business income and net profit growth continued to decline, 2016 operating income increased to 3.68%, net profit dropped to 54.39%, income from domestic textile industry continued to grow, 2016 income increased by 3.68%, but net profit declined continuously, and the decline in the proportion of 2016 was reached.

2016 textile and clothing,

Since 2011, the accounts receivable and the finished product inventory of textile, clothing and apparel industry have maintained an increase. However, the relaxation of credit policy in the industry has led to the growth of accounts receivable, which is far faster than that of finished goods.

Net receivables in 2016 amounted to 207 billion 480 million yuan, an increase of 14.00%% over the same period, an increase of 8.2 percentage points over the previous year, and an inventory of finished products of 104 billion 110 million yuan in 2016, an increase of 4.20% over the same period last year, representing a decrease of 2.2 percentage points over the previous year.

From the following table, we can see that since 2014, the backward production capacity of textile, clothing and apparel industry has been phased out, the growth of new capacity has dropped sharply, the total supply of industry has been intentional control, and the industry is committed to inventory clearance, making the inventory growth rate decline sharply. However, textile and garment industry and garment industry rely on relaxing credit policy to digest inventory, resulting in a large scale of accounts receivable in the industry.

Industry credit rating distribution and change in 2017

1. data selection

We chose the 12 main sample enterprises in the clothing home textile industry (hereinafter referred to as "sample enterprises") as samples to analyze the details, see Appendix 1.

The distribution and pfer of credit level in the 2. industry

As of October 30, 2017, the latest credit rating of the 12 sample enterprises was concentrated among A+~AAA, of which 1 were AAA, accounting for 8.33%, 2 for AA+ and 16.67% for AA, 8 for AA and 1 for A+.

Overall, with the growth of some garment and textile enterprises in 2016, AA+ enterprises accounted for an increase of 16.67% compared to 2016.

The latest rating outlook of the sample enterprises is 1 positive, accounting for 8.33%; the outlook for stability is 10, accounting for 83.33%; the outlook for the negative is 1, accounting for 8.33%.

Among them, the outlook for enterprises with a level of AAA is positive; the outlook of enterprises with 2 levels of AA+ is stable; 1 of the 8 AA level enterprises have negative prospects; the A+ outlook is stable.

In 2017, the rating outlook of sample enterprises was negative.

Excluding 1 first time bonds issuing enterprises (the first credit rating), make the remaining 11 sample enterprises' main long-term credit rating pfer matrix.

From this migration matrix, we can see that there are 8 families in grade 2017, 2 levels up, and 1 levels down.

Among them, Fujian seven wolf Group Co., Ltd. (hereinafter referred to as the "seven wolf group") and the red bean Group Co., Ltd. (hereinafter referred to as the "red bean group") has been upgraded from AA to AA+, and the Shanghai Jialin Jie textile Limited by Share Ltd (hereinafter referred to as "Jialin Jie") has been downgraded from AA- to A+.

Judging from the adjustment of the rating outlook, since 2017, Jialin jiin grade rating outlook has been adjusted from negative to stable. The rating outlook of Shandong Ruyi science and Technology Group Co., Ltd. has been adjusted from a stable to a positive level, and the remaining 10 sample companies have not adjusted their rating outlook.

3. data selection

From the credit level,

There has been some differentiation. Among the 1 sample companies, the rating outlook has been adjusted from a stable perspective to a positive one. 2 companies have been upgraded due to the improvement of their operating conditions. However, another 1 enterprises have been downgraded due to the deterioration of their operation.

In 2017, the rating of the sample enterprises was raised or the outlook was adjusted to positive reasons: (1) the clothing sector and other business sectors performed well, and diversification brought income and profit growth; (2) book money was abundant.

The reasons for the downgrading are: (1) business earnings are poor; (2) management changes lead to increased operating uncertainty; (3) new capacity is not as good as expected.

The full liberalization of the second child policy will release the market potential of children's clothing. According to the health and family planning statistics, the number of live births delivered in 2016 is 18 million 460 thousand, an increase of 11.5% over the same period.

According to the National Bureau of statistics, the total number of births reached 17 million 860 thousand in 2016, of which two children and above accounted for over 45% of the birth population, an increase of more than 10 percentage points over 2013. The effect of the policy is very obvious. The effect of the comprehensive two child policy will be further manifested in 2017, and the births will continue to maintain a certain growth trend.

The growth of new population will provide support for children's clothing and other clothing consumption in the future.

To sum up, the consumption of domestic clothing and domestic textiles will maintain a slight increase in the future. However, due to trade frictions and relative advantages, the loss of orders will be weakened. The ability to earn foreign exchange for garment home textile exports will continue to weaken. Export growth or zero growth or even negative growth will become a new normal. Export oriented SMEs will face certain operating pressure.

The performance of the home textile sub industry has been divided, men's wear and women's clothing performance is poor, and the second child policy has been liberalized. The children's clothing market will have a larger consumption demand in the future, and there is still room for growth in casual wear.

The inventory management of garment home textile industry is getting more and more effective, but the industry mainly relies on relaxing credit policy to digest inventory, resulting in a large increase in accounts receivable and a high scale.

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