In The First Half Of This Year, Huafeng Spandex, Which Serves Nike, ADI And Li Ning, Has Made A Huge Profit Of 665 Million?

Zhejiang Huafeng spandex Co., Ltd. (hereinafter referred to as "Huafeng spandex"), the first listed company in Wenzhou, released its annual report for the first half of 2020 on the evening of July 28. During the reporting period, the company realized 6.098 billion yuan of operating revenue and 665 million yuan of net profit attributable to shareholders of listed companies, which decreased by 9.43% and 22.42% respectively.

As of the end of the reporting period, Huafeng spandex had a total assets of 17.719 billion yuan and a net assets of 9.996 billion yuan attributable to shareholders of listed companies, up 4.39% and 28.81% respectively year-on-year.

During the reporting period, Huafeng spandex completed issuing shares, paying cash to purchase assets and raising supporting funds to the major shareholder Huafeng Group. After the completion of the transaction, through resource integration, the company extended the industrial chain from chemical fiber industry to basic chemical raw materials and polyurethane product material manufacturing field on the basis of original advantageous industries, realizing the long-term development from spandex industry First to the global polyurethane products industry leader's leap forward development.

According to the public information, Huafeng spandex was established in 1999, which is one of the earliest developed and most mature enterprises in the domestic spandex industry. At present, Huafeng spandex is the largest spandex production enterprise in China. It has formed professional spandex products such as circular knitting machine, warp knitting and yarn wrapping, as well as high resilience warp knitted spandex, high temperature resistant spandex, chlorine resistant spandex, black spandex and diapers Spandex and other differentiated spandex products.

The reporter learned here that Huafeng spandex production bases are located in Ruian, Zhejiang and Chongqing. Zhejiang Rui'an is the headquarters, with two plants in Xincheng and Huafeng Industrial Park (Dongshan plant area) in Ruian economic development zone. Among them, the approved scale of ShenTeng plant area is 6000 tons, which was shut down in July 2017. The current production capacity of Dongshan factory is 60000 tons. Chongqing base is a new base of the company, with a production capacity of 90000 tons at present, and has a production capacity of 100000 tons of differentiated spandex in the future.

It is reported that spandex has high elongation, low elastic modulus and high elastic recovery rate. In addition to its high strength, other physical and mechanical properties are very similar to natural latex silk. Compared with latex silk, spandex is more resistant to chemical degradation, and has the advantages of sweat resistance, salt water resistance and various dry cleaning agents. Generally, spandex is not used alone, but a small amount of it is added into the fabric. Adding 1-10% spandex silk to the fabric can significantly improve the performance of the fabric and increase the elasticity. It is widely used in underwear, socks, sportswear, swimsuit, tights, etc. (30%), leisure clothing, health care products, etc. (20%), home textile products (15%), underwear lace and clothing tightness Oral (5%).

Spandex is mainly used in four forms: bare silk, core spun yarn, twisted yarn and covered yarn. From the weaving form, circular knitting machine and warp knitting are mainly used for knitted underwear, socks, sportswear, swimwear, etc.; wrapping yarn is mainly used for woven casual wear and jeans; cotton bag is mainly used for elastic lining clothes; lace is mainly used for decorative lace and elastic band.

In recent years, China's demand for spandex will increase to 8.8% annually, and the demand of China's spandex is expected to increase to 8.8% in the future

First of all, the growth of textile clothing volume will drive the growth of spandex demand. From a long-term perspective, the global consumption and consumption of clothing are still broad with the upgrading of global consumption and income. According to statista, the demand of clothing market in Asia Pacific region will account for 38% of the world in 2020. In recent years, the growth rate of clothing market in Asia Pacific region is the highest (up to 4%), and the CAGR of clothing market in North America will reach 2.0%. According to Grandview research, the demand of clothing market in developing countries such as China, India, Mexico and Bangladesh will reach 4.3% from 2020 to 2027, and the clothing market in North America will reach 4.3% CAGR will reach the market demand of 3.0%. In addition, in recent years, the global textile and clothing trade scale has also resumed growth. According to the World Trade Organization (WTO) data, the world textile and clothing market trade scale in 2018 reached 315 billion US dollars and 505 billion US dollars respectively, with an increase of 6.4% and 11.1%, which is the fastest growth rate of the world textile and clothing trade since 2012.

Secondly, the demand for elastic fiber in the textile and garment industry has increased, which leads to the growth of spandex demand. At present, the average proportion of spandex added is about 3%, and some high-end underwear is about 10%. It is expected that the penetration rate of spandex in the textile and garment industry will continue to increase in the future. In addition, the positive demand of spandex on the downstream products and the positive demand of the downstream enterprises in the development of new products and better capabilities. At present, the price of spandex is in the bottom range. In the future, spandex will gradually penetrate into the fields of industry (automobile, aircraft safety belt), medical (bandage, band aid, knee pad), etc., and the application field of spandex is expected to be further extended.

Jin Yiteng said that spandex is closely related to textile and clothing. China is a big country in the production and export of textiles and clothing: more than 70% of chemical fiber textiles and export clothing contain spandex. In the past decade, China's Spandex export volume has steadily increased from 28000 tons in 2009 to 62000 tons in 2019, with a compound growth rate of 8.5%, in which the export volume in 2019 has increased by 11.1% year-on-year. China's main spandex export countries include Turkey, Vietnam, Egypt, Iran, South Korea and so on, which are less affected by trade friction, and are expected to maintain a steady growth trend in the future.

In addition, as the absolute leader of the global polyurethane industry, Huafeng spandex polyurethane sole stock solution production accounts for more than 60% of the domestic market share. According to the assets appraisal report of Huafeng spandex Co., Ltd., there are more than 30 manufacturers of polyurethane sole stock solution in China, which are mainly distributed in Zhejiang, Jiangsu, Shandong, Fujian, Guangdong and other places. Among them, Huafeng new material (now a wholly-owned subsidiary of Huafeng spandex), xuchuan chemical, shuangxiang chemical, Zhejiang HengTaiYuan, Jiangsu Huada, Hongye Chemical, etc. are the major manufacturers.

According to relevant statistics, in 2018, the production capacity of polyurethane sole stock solution in China was 1.17 million tons, and the total output of manufacturers was about 540000 tons. Among them, Huafeng new material polyurethane sole stock solution accounted for more than 60% of the domestic market. Polyurethane sole stock solution is one of the core products of Huafeng Group. In 1995, Huafeng spandex invested 3000 tons of polyurethane sole stock solution production line. After more than 20 years of development, the polyurethane industry chain has been gradually improved. By the end of 2018, the production capacity of polyurethane sole stock solution was 420000 tons, and the output was about 336200 tons. Huafeng spandex polyurethane stock solution products are sold to more than 20 countries and regions in the world, and has established a complete sales and service network in South Africa, Brazil, Vietnam, India, Pakistan, Turkey, etc. the main domestic shoe manufacturers and the world-famous sports product manufacturers such as Nike, Adidas, skykey, Yasser and Li Ning use Huafeng spandex directly or indirectly Products.

In recent years, under the dual pressure of cost and environmental protection, the development of small and medium-sized manufacturers of polyurethane stock solution has been restricted, and the number of orders has decreased. Huafeng new materials has the advantages of strong market share and price control. In addition, Huafeng cooperated with the polyurethane industry chain (mainly new material polyurethane stock solution and polyester polyol), established a sales network combining direct sales and distribution, and subdivided the market according to product application field, product function, geographical region and customer characteristics.

According to Jin Yiteng's judgment, with the acceleration of spandex industry integration and the elimination of old production capacity, Huafeng spandex continues to increase production capacity in the adverse situation. It is estimated that the domestic spandex industry expansion cycle will end in 2020, and the industry concentration will increase, leading enterprises will continue to benefit. The global textile and garment consumption prospect is still broad, the application of spandex in clothing and weaving industry continues to extend, and the downstream textile and garment market size and spandex penetration rate will continue to grow. Huafeng spandex has an annual output of nearly 150000 tons of spandex, ranking the second in the world and the first in China. After the Chongqing spandex project with an annual output of 100000 tons of spandex is put into operation, the company's spandex production capacity will exceed 200000 tons / year, which will be the world's largest spandex leader.