In Order To Ensure Procurement Channels For Cotton Raw Materials, This Chemical Fiber Tap Hit 500 Million Again.

Xinxiang chemical fiber Limited by Share Ltd (hereinafter referred to as "Xinxiang chemical fiber") issued a notice in the evening of April 7th, saying that in order to promote the landing and development of the company's business in Xinjiang, and implement the national western development policy and the "one belt and one road" strategy, the company intends to invest 500 million yuan to set up Xinjiang Tian Lu new Mstar Technology Ltd (provisional name, hereinafter referred to as "Xinjiang Tian Lu"). Battalion covers cellulosic fiber, synthetic fiber, yarn, yarn, textile manufacturing, dyeing and finishing, deep processing and sales, and manufacturing and marketing of cotton pulp.

Xinxiang chemical fiber shows that Xinjiang is the most important High-yielding Cotton Region in China. The cotton yield per unit area is far higher than that of the rest of the country. The cotton planting area, total output and output have been ranked first in the country for 18 years in a row. Through the establishment of a wholly owned subsidiary in Xinjiang, the company will help ensure the certainty of the procurement channel of the raw material (cotton lint), the stability of the purchasing price, and the overall profitability of the company. In the future, the wholly owned subsidiary also plans to realize the export and logistics transportation to the important customers in South Asia and the Middle East through the "China Brazil economic corridor", which is conducive to the convenience of the company's products. In addition, the establishment of Xinjiang subsidiary is conducive to the realization of the company's development strategy, and is the long-term development needs of the company.

Reporters learned that, as early as in 2012, the Xinxiang Xinjiang chemical fiber established subsidiary of the egret fiber, the original plan to provide stable cotton pulp. However, due to tighter environmental protection, higher raw material prices, and weather and transportation factors, the capacity was not fully released and the performance was not as good as expected. In 2017, the company made a large amount of asset impairment losses. In 2018, Xinjiang egret adjusted its management mode, optimized enterprise operation and meticulous management of enterprises, and realized turning losses into profits.

This evening, Xinxiang chemical fiber released 2019 annual report shows that during the reporting period, the company achieved operating income of 4 billion 804 million yuan, an increase of 6.9% over the same period; the net profit attributable to shareholders of listed companies was 129 million yuan, an increase of 14.65% over the same period last year. Basic earnings per share of 0.103 yuan.

In 2019, the production and sales volume of main products of Xinxiang chemical fiber increased, and the profit of viscose filament yarn increased, and the concentration of spandex fiber industry increased. During the reporting period, the company produced 61422 tons of viscose filament, 8622 tons of viscose staple fiber, and 82577 tons of spandex fiber.

Public information shows that, as a large domestic textile raw material production enterprise, Xinxiang chemical fiber main viscose filament, viscose staple fiber and spandex production and sales, leading products "Egret" brand regenerated cellulose filament, regenerated cellulose short fiber, spandex three series of thousands of varieties, comprehensive strength in the chemical fiber industry is among the best. Xinxiang chemical fiber now has 70 thousand tons of viscose filament production capacity, ranking the first and 120 thousand tons spandex production capacity, ranking the top three in China. It is truly viscose filament and spandex double faucet.

After years of continuous business adjustment, Xinxiang chemical fiber has basically formed a business model with spandex and viscose filament as its main business. In the future, it will further focus on the collaborative development of the two main industries, and continue to grow bigger and stronger.

According to the results of the report, in 2018, the income of spandex and viscose filament business accounted for 43.2% and 38.9% respectively, accounting for 82.1% of the total, which was 16.5pct higher than that in 2013. The gross profit accounted for 32.6% and 59.7% respectively, accounting for 92.3% of the gross profit of the company, which was the main source of the company's performance.

In 2018, the gross profit margin of Xinxiang chemical fiber spandex and viscose filament yarn business was 9.6% and 19.4% respectively. In 2016, the spandex industry was in a depressed state, resulting in a low gross profit margin of the polyurethane fiber. In 2017, the viscose filament business was affected by the high price of raw materials, and the gross profit margin decreased significantly.

In 2018, Xinxiang chemical fiber viscose staple fiber business gross profit margin -4.0%, in the first half of 2019 fell to -13.4%, the loss is more serious, mainly due to viscose staple fiber industry a large number of new capacity production, product prices continued to slump, the company further reduced the viscose staple production, thereby reducing the overall performance of the company.

With the gradual withdrawal of viscose staple fiber business, Xinxiang chemical fiber will form an industry pattern of spandex and viscose filament business, which will help to promote long-term healthy development of the company.