Industry Analysis: Textile Industry Performance In The First Half Of The Year Has Been Cool

This year, the outbreak of new crown pneumonia has a profound impact on the development of China's textile and clothing industry. From the central government to local governments, a series of assistance policies for export to domestic sales have been implemented in succession. According to the data in August, the investment, export and consumption troika of China's economy has recovered as a whole. Under the background of general decline in performance in the first half of the year, how will the textile and garment industry turn over in the future?

Industry insiders said that the epidemic has intensified the industry reshuffle, but in recent years, enterprises have been accelerating the pace of international production capacity cooperation, accelerating the global layout, and effectively improving the long-term order receiving ability and international competitiveness of enterprises. Most of the small enterprises are not optimistic about the domestic market, but they need to continue to develop their products in the domestic market.

The epidemic situation intensifies, the industry reshuffles, and the leading enterprises have obvious advantages

From the perspective of the general environment, although the export of epidemic prevention materials is still supporting the growth of China's textile export, the negative impact of the epidemic on textile manufacturing companies can not be ignored. First, the domestic epidemic situation is serious, the resumption time of each factory is delayed, and the production capacity is unstable. Second, the scale and rebound of the epidemic sweeping the world may increase the risk of overseas customers cutting orders.

As of September 7, 369 textile and garment enterprises with Shanghai, Shenzhen, Hong Kong and US stocks have published their 2020 semi annual reports. According to statistics, 369 textile and garment enterprises realized 681.728 billion yuan of business revenue in the first half of 2020, a decrease of 52.483 billion yuan compared with 734.211 billion yuan of the same period of last year, and the net profit attributable to the parent company was 5.163 billion yuan, a decrease of 42.256 billion yuan compared with that of 47.556 billion yuan in the same period of last year 93.30 billion yuan.

"The textile and clothing industry chain and supply chain formed over the years are undergoing a severe test, and the demand downturn caused by the epidemic situation has become the main constraint factor." Cao Jiachang, chairman of the China Textile Import and Export Chamber of Commerce, said that the current international community is seriously affected by the epidemic situation, and it is estimated that the global main market demand will decline by 15% - 25% in the whole year. The situation of traditional textile foreign trade enterprises is aggravated by logistics obstacles, limited channels and increased inventory pressure.

According to the data of the General Administration of customs, from January to August 2020, China's clothing exports totaled US $82.61 billion, a year-on-year decrease of 15.74%, 0.8 percentage points narrower than that from January to July. In August, China's clothing export volume reached 16.21 billion US dollars, up 3.23% year-on-year. It was the first time that China's clothing exports resumed positive monthly growth after seven months of negative growth in the year.

Under the background that the overall negative impact is relatively large and the recovery of foreign trade is still in the beginning, internal resources shuffle in the industry recovery, which intensifies the cleaning up of small enterprises and traditional enterprises, and makes the industry reform come ahead of time. Top quality enterprises that can provide stable production capacity are favored in the crisis, while more brands have to return to the new starting line.

Ju Xinghai, a researcher at Guosheng securities, said that the epidemic environment tests the production stability of suppliers, and the top enterprises perform better. Enterprises that can achieve industrial chain integration are more dominant. The epidemic also drives resources to concentrate on leading companies in the industry. According to the semi annual report of the famous clothing brand Meibang clothing, in the first six months of 2020, Meibang clothing achieved a total revenue of 1.602 billion yuan, a year-on-year decrease of 40.64%, and a net profit loss of 478 million yuan, a year-on-year decrease of 247%. The company explained that the sharp decline in performance was mainly affected by the epidemic. However, it is worth noting that in the past three years, Meibang clothing lost 305 million yuan and 825 million yuan in 2017 and 2019 respectively, and the problem seems to have been buried.

Accelerate global distribution and resource utilization to support enterprises to break through

It is difficult to be more organic in danger. At a time when many countries' industrial chains and supply chains have been severely damaged or even "suspended", China's industrial system will take the lead to return to normal operation, and the export competitive advantage will be further highlighted. Cao Jiachang pointed out that in recent years, in the face of the competition and rise of low-cost countries, China's textile and clothing foreign trade industry has actively implemented the "belt and road" initiative, accelerated the pace of international production capacity cooperation, accelerated the transformation and upgrading in R & D and design, intelligent manufacturing and other aspects, and the recognition and implementation of the concept of recycling and sustainable development have become stronger and stronger.

According to the survey of China Textile Import and Export Chamber of Commerce, leading enterprises in China, such as Orient International, Jiangsu Cathay Pacific and Zhejiang International Trade Co., Ltd., have invested or cooperated in overseas factories. Some leading enterprises plan to transfer 20% - 30% of their production capacity to overseas factories within five years. Accelerating the global layout has effectively improved the long-term order receiving ability and international competitiveness of enterprises.

Ma Li, an analyst at Zheshang securities, said that compared with the recovery of revenue, the overall cash flow and inventory situation of the clothing industry in the first half of the year were well controlled, and the anti risk ability was improved. The outstanding performance of the clothing leader in the semi annual report has improved the market's confidence in the stability of the clothing leader's performance.

In terms of investment, textile and garment enterprises are more cautious, and the scale of investment in the whole industry is still shrinking, but the willingness to invest in high-performance fiber and nonwovens is obviously increased. The investment trend inclined to high quality will help the sustainable development of textile industry.

Throughout the world, the Chinese market was the first to show a positive recovery momentum. "On the macro level, the growth rate in the third quarter will be significantly faster than that in the second quarter." Fu Linghui, a spokesman for the National Bureau of statistics, pointed out that in terms of the trend in the later period, the driving force of the rebound in demand, investment and consumption recovery on the whole economy is gradually strengthened.

Seize the opportunity of reform and open up new development space

At the same time of "going out", textile and garment enterprises are also actively exploring new development space. In the context of shrinking international demand, China's super large-scale market advantage provides a broad space for foreign trade enterprises to switch from export to domestic sales, and more high-quality export products for domestic sales will also enrich domestic market supply and further stimulate domestic market vitality and effective demand.

In order to help foreign trade enterprises smooth their sales channels, the Ministry of Commerce has actively set up a consumption promotion platform; the Ministry of industry and information technology has launched special actions to increase the variety, improve the quality and create the brand of consumer goods industry Shanghai and other places have introduced preferential policies for e-commerce, such as zero Commission, flow support, margin reduction and so on, and major e-businesses have also set up special zones and markets for export products.

On the other hand, the opportunity of textile and clothing industry reform has come. The real-time and real-time business decision-making based on consumers' insight and deep understanding of today's business scene will be transformed into the real-time and profound understanding based on the business scene of the past. In the age structure of China's Internet population, the proportion of post-90s and post-95s has increased rapidly, and the proportion of post-90s has reached 44%. How to make their own brand and production meet the needs of young users has become a key issue in the online transformation of enterprises.

In this regard, industry insiders said that under the background that leading enterprises are speeding up the construction of their own data analysis system for product design, production and ordering, large and medium-sized domestic textile foreign trade enterprises should focus on how to highlight regional economic characteristics, accurately reach consumer groups and improve market expansion efficiency in online transformation.

Liu Hui, chief data officer of Jingdong big data research institute, believes that for small and medium-sized brands, another key force to expand China's market is technology. Especially based on the intelligent supply chain technology of big data, e-commerce may expand to the "goods for people" mode in the future, access to the digital supply chain of e-commerce, and realize intelligent push, commodity information can directly reach consumers' demands The user group with the most matching purchasing power enables small and medium-sized enterprises to skip the market shaping and category shaping, and directly impress consumers with the price performance ratio of commodities.

Liu Hui believes that in the future, the reverse customization mode of consumers will help enterprises more and more. By precisely combining the demands of consumers for goods and sales customization, made in China is expected to achieve a certain degree of curve overtaking and become a global Benchmarking Project.