Domestic Textile Leading 200 Million, The Acquisition Of The American Home Textile Company Bankruptcy Liquidation! Sequelae Of Epidemic Situation: In June, Textile Enterprises Stopped Production Or Increased Production.

In 2020, due to a sudden outbreak, the rhythm of the industry was disrupted. With the continuous spread of the overseas epidemic, the textile market has been in a dilemma. The textile industry suffered a "big slide" in the first half of the year. Now the peak of the epidemic is slowly subsiding, but at the same time, the sequelae of the epidemic are slowly coming.

China Textile 100 strong 200 million acquisition of American home textile company bankruptcy liquidation

The Shanghai Shen Da Limited by Share Ltd, which ranked the top of the list of top 100 textile and garment exporters in 2017, issued by the China Textile Import and Export Chamber of Commerce, announced in June 10th that the company's overseas holding subsidiary was PFIHoldings. LLC (hereinafter referred to as "PFI company") has been seriously affected by the Sino US trade friction and outbreak (the outbreak of the main business) and sustained losses. At the eighth meeting of the tenth board of directors held today, the company adopted the motion on the bankruptcy liquidation of the subsidiary company PFIHoldings and LLC, and agreed to submit an application for bankruptcy and liquidation by the PFI company to the local court.

The announcement shows that in 2015, Shanghai Shenda import and Export Co., Ltd., a wholly owned subsidiary of Shenda group, indirectly acquired the 100% stake in PFI company of the United States through the subsidiary company CROSSRIVER, LLC (hereinafter referred to as "CR company"). The project was completed in November 2015, and the purchase price was $31 million 710 thousand and 800, equivalent to 202 million 527 thousand yuan.

PFI company is mainly located in Sherlock, North Carolina, USA. Its business involves bed products and home textiles, heating products and handmade yarns. Its main customers include well-known department stores and business customers in the United States. Since the second half of 2017, under the adverse effects of the "US priority" policy and the continued warm winter in the United States, PFI has lost significant customers, resulting in shrinking sales and declining profitability. In 2018 and 2019, the company raised 22 million 467 thousand and 700 yuan and 10 respectively for goodwill acquired by PFI company. As for December 31, 2019, the book value of the goodwill was 0 yuan as of 9 million 954 thousand and 500 yuan.

In 2020, the outbreak of the outbreak, the sharp decline in the market demand in the United States, resulting in PFI subsequent orders interrupted, gradually expanded losses, operating capital turnover difficulties. As of May 31, 2020, the total assets of PFI were 109 million 833 thousand and 800 yuan, of which the final balance of Monetary Fund was 3 million 417 thousand and 400 yuan, the total liabilities were 99 million 750 thousand and 400 yuan, the undistributed profit was -2805.30 million, and the owner's equity was 10 million 83 thousand and 400 yuan (Unaudited).

In order to maintain its normal operation, CR has provided some financial support as its shareholder. As of May 31, 2020, the PFI company's assets and liabilities ratio has reached 90%, and the balance of shareholders' loans is 56 million 246 thousand and 800 yuan. If we want to maintain its continuous operation, shareholders still need to provide follow-up financial support, and the risk can not be predicted. Weighing the pros and cons, Shen Da shares intends to terminate the operation of PFI and submit a bankruptcy petition to its local court (the estimated amount of realizable assets is less than the book value, which is actually insolvent), and the PFI company will be liquidated under the auspices of the court.

Japan has broken through 200 enterprises due to the outbreak of bankruptcy, and the textile market is still in a vicious circle of weak demand and overcapacity.

The whole industry chain of the textile industry is in the vicious circle of weak demand and overcapacity. If the market wants to get better, it depends on the demand of the clothing industry. Because the textile and garment industry has always been "one glory, one glory, one damage", and now the downstream garment industry has not performed well, which has also inhibited the textile industry's improvement.

According to the data released by Tokyo business research company in June 3rd, the number of bankruptcies related to the new crown virus epidemic reached 204 at 12 noon.

The cumulative bankruptcy number related to the new crown was 2 at the end of February, and increased to 100 in late April. After that, the growth rate was not reduced, and by June 3rd, it exceeded 200. Many people believe that although the declaration of emergency issued by the government has been completely lifted, it will take some time for all industries to return to the level before the new crown expansion, and bankruptcy will continue in the future.

Export enterprises are facing overseas orders shortage. Recently, textile enterprises have stopped production or increased production.

At present, the decline in overseas orders is a big challenge for many export oriented enterprises. According to the latest customs data, in April this year, China's exports showed an over expected rebound, an increase of 3.5% over the same period last year, a sharp rise compared with the -6.6% in March. China's exports to the United States, Japan and ASEAN increased, and exports to the EU fell by 4.5% compared with the same period last year. However, according to the analysis, the increase in exports in April was mainly due to the early implementation of the peak order of hand orders after the resumption of the resumption of production in China. With the spread of the epidemic in Europe and the United States, a large number of orders were cancelled, and its impact will gradually appear in the two and the second half of the two quarter. In addition, export figures exceeded expectations in April, mainly due to the export of epidemic prevention materials and computer products. China resumed production earlier, and had some alternative advantages in some industrial chains compared with other countries. But such a surge in demand may not last for too long. Once the outbreak continues to cause business failures, unemployment and residents' balance sheets, the demand for such durable goods will soon drop.

April export warming is not a common phenomenon, such as clothing, footwear, bags, furniture, toys, mobile phones and other major commodities exports have suffered negative growth. In April, China's manufacturing industry PMI index sub item data, the new export orders index from 46.4 to 33.5 was corroborated. According to the PMI survey, the proportion of domestic enterprises that reflects insufficient orders is 57.7%, which means that the export growth in April is not equal. The number of "dazzling" figures obscures the difficulties faced by most export-oriented industries.

According to the feedback from the foreign trade industry, the actual overseas orders for domestic related industries are still very small, and many orders are still in the early stage of enquiry shortly after the beginning of the resumption of work in Europe and America. There is still a short time to go before the inspection and the order.

Due to shortage of orders and inventory backlog, textile enterprises stopped production and increased production. In recent years, the production and marketing situation of small and medium sized weaving mills and printing and dyeing factories in Jiangsu, Zhejiang and Guangdong is still stagnant. The main reasons for the instability of small and medium-sized textile enterprises are the following: first, there was a serious lack of direct or processing export orders in 5 and June; two, a large amount of liquidity in the stock occupied by gauze and so on, resulting in difficulties in staff salaries and other expenditures; three, after small and medium-sized textile enterprises judged the turning point of the epidemic in Europe and America, some countries had ulterior motives to raise the epidemic from health to politics. The problem of governance has led to the worse trade and export environment faced by China's export oriented enterprises.