Attention: Economic Operation Report Of China'S Garment Industry From January To October 2021

In October, with the release of the epidemic situation in China and the shortage of energy supply in some regions, and driven by the recovery of domestic and foreign market demand, China's clothing industry, with its complete industrial system and strong supply capacity, has generally maintained a steady recovery development trend, with positive changes in production and efficiency, The two-year average growth rate of domestic sales and exports has accelerated significantly. However, the development situation faced by the clothing industry is complex, and the unstable and uncertain factors are intertwined. It is still faced with many tests to maintain the stable and healthy operation of the whole year.

Economic operation of clothing industry from January to October in 2021

Situation of continuous production recovery

In October, driven by the increasing demand for season change, promotion for e-commerce and active preparation for overseas Christmas season, the growth rate of garment production accelerated compared with that of last month, and the overall recovery growth trend continued. According to the data of the National Bureau of statistics, in October, the industrial added value of Enterprises above Designated Size in China's garment industry increased by 8.2% year-on-year, 3% faster than that of the previous month; From January to October, the industrial added value of Enterprises above Designated Size in the clothing industry increased by 9.1% year-on-year, with an increase rate of 19.1 percentage points compared with the same period of last year, and an average decrease of 0.9% in two years (based on the corresponding amount of the same period in 2019, calculated by geometric average method, the same below), and the decline rate was 0.3 percentage points narrower than that from January to September; The garment output of Enterprises above Designated Size reached 19.125 billion pieces, up 8.88% year on year, 17.26% higher than that of the same period of last year, with an average decrease of 0.1% in two years and a decrease of 1% compared with that in January September.

Steady improvement of domestic market

Although the domestic epidemic has a certain impact on the consumer market in some areas, driven by holiday consumption, online shopping promotion and other factors, the decline rate of clothing retail sales of units above the quota per month has continued to narrow, online shopping has maintained a rapid growth, and the domestic clothing market has steadily improved. According to the data of the National Bureau of statistics, from January to October 2021, the total retail sales of clothing goods of units above the designated size in China reached 782.38 billion yuan, a year-on-year increase of 19.3%, and an average increase of 2.9% in two years, 0.2 percentage points faster than that from January to September; In October, the retail sales of clothing goods of units above the quota decreased by 2.8% year-on-year, 1.9% lower than that of the previous month. Over the same period, online retail sales of wearing goods increased by 14.1% year-on-year, 8.5 percentage points higher than that of the same period of last year, with an average growth rate of 9.7% in two years, 0.4% higher than that in January September.

Export maintained rapid growth

In October, driven by increasing international market demand and preparing goods for Christmas season, the growth rate of China's clothing exports accelerated significantly, with a monthly growth rate of 14.8 percentage points higher than that of the previous month. According to the data of China Customs, from January to October of 2021, China's total exports of clothing and accessories reached 138.85 billion US dollars, an increase of 25.2% year-on-year and an average growth of 7.0% in two years, 1.0 percentage points faster than that from January to September. Among them, the export of knitted garments and clothing accessories maintained a rapid growth, with the export value of US $70.74 billion, an increase of 40.27% over the same period of last year, and an average increase of 8.4% in two years; The export of woven garments and accessories recovered steadily, with an export value of 56.918 billion US dollars, a year-on-year increase of 10.44%, and an average increase of 1.54% in two years.

China's clothing export to the United States has a strong growth trend, and the export to the belt and road has maintained a rapid growth. According to the data of China Customs, from January to October, China's clothing exports to the United States reached 33.09 billion US dollars, an increase of 41.06% over the same period of last year, with an average growth of 9.95% in the two years, driving the growth of China's clothing export by 8.67%; Clothing exports to EU, Japan and ASEAN increased by 20.62%, 8.84% and 23.61% respectively year-on-year, driving the growth of China's clothing exports by 6.73%. Over the same period, China's clothing exports to countries and regions along the belt and road increased by 27.73% year-on-year, with an average growth of 7.86% in two years. Among them, the clothing exports to Kyrgyzstan, Saudi Arabia and UAE increased by 187.02%, 52.45% and 73.36% respectively.

Continuous recovery of operation quality and efficiency

The efficiency of enterprises increased slightly. According to the data of the National Bureau of statistics, from January to October of 2021, there were 12591 Enterprises above Designated Size (annual main business income of 20 million yuan and above) in China's clothing industry, with an operating income of 1182.553 billion yuan, a year-on-year increase of 8.26%, and an increase of 21.11 percentage points over the same period of last year; The total profit was 53.443 billion yuan, with a year-on-year increase of 4.57%, and the growth rate was 25.9 percentage points higher than that of the same period of last year. Compared with the same period in 2019, the average two-year decline rates of business income and total profit of clothing industry are 2.9% and 9.3%, respectively. The average decline rate of operating income in two years is the same as that from January to September, and the average decline rate of total profit in two years is 0.4% narrower than that in January September, which is still in the recovery stage.

The operation quality of the industry has been improved and the profit level has been improved. From January to October, enterprises above Designated Size in the clothing industry suffered losses of 22.48%, 3.87 percentage points lower than the same period of last year; The proportion of three fees was 8.98%, down 0.03 percentage points year on year; The turnover rate of total assets, finished products and accounts receivable were 1.25 times / year, 12.31 times / year and 7.25 times / year respectively, which increased by 5.04%, 2.02% and 4.48% respectively on a year-on-year basis; The profit margin of operating revenue was 4.52%, 0.15 percentage points higher than that of January September.

The scale of investment rebounded slightly

According to the data of the National Bureau of statistics, from January to October 2021, China's clothing industry completed a year-on-year increase of 2.2%, with a growth rate of 33.8 percentage points higher than that of the same period of last year, and still 11 and 12 percentage points lower than the overall level of the textile and manufacturing industries. Compared with the same period in 2019, the investment in fixed assets of clothing industry decreased by 16.4% in two years, 0.3% lower than that in January September, and has not yet returned to the level before the epidemic.

Main influencing factors

The recovery prospect of the international market is still facing high uncertainty

Since the third quarter of this year, the pace of global economic recovery has slowed down as a whole, and the new mutant strains pose a threat to the economic trend, making the prospects of global economic recovery full of uncertainty. The recovery process of clothing consumption demand in the international market fluctuated accordingly, and the strength of recovery was still weak. In the main consumer markets, due to factors such as rising commodity prices and supply chain disruption, consumer demand in the U.S. market weakened. In November, the consumer confidence index of the University of Michigan dropped to 67.4 from 72.8 in September. Although clothing retail maintained a substantial growth, the growth rate slowed down significantly. From January to October, the retail sales of clothing and accessories in the United States increased by 50.39% year-on-year, and the growth rate was 17.04 percentage points lower than that in January June; Affected by the rebound of the epidemic situation, the European Union clothing retail performance was sluggish. In September, the EU textile, clothing and footwear retail sales decreased by 2.3% year-on-year and 0.3% month on month; Affected by the epidemic situation, the recovery situation of Japanese clothing market is unstable. From January to September, the retail sales of textile, clothing and accessories in Japan increased by 0.74% year-on-year, and the growth rate was 1.37% lower than that in January June.

Global supply chain layout adjustment accelerated

Affected by the epidemic situation in Southeast Asia and global supply chain bottlenecks, overseas purchasers and retailers are transferring manufacturing from Southeast Asia to their own countries or other European countries, accelerating the global procurement strategy of "China + multiple countries". With the promotion of vaccines, the epidemic situation in Southeast Asian countries has gradually stabilized, the production capacity of Vietnam, Bangladesh and other order sending countries has rapidly recovered, the clothing export has turned to positive growth, and the global clothing industry chain and supply chain layout are also accelerating the adjustment process in the industrial recovery. According to the relevant clothing export statistics of Vietnam, Bangladesh, Malaysia and Turkey, in October 2021, Vietnam's textile and clothing exports dropped sharply for two consecutive months, and then increased slightly by 4.55% year-on-year. From January to October, Vietnam's textile and clothing exports increased by 5.51% year-on-year; Over the same period, the clothing exports of Malaysia and Turkey increased by 72.71% and 23.55% respectively; From January to September, Bangladesh's garment exports increased by 18.33% year on year.

In addition, according to the clothing import data of the main markets of the United States, the European Union and Japan, the market share of ASEAN in the United States decreased by 3% year-on-year from January to October, while China only increased by 0.21%. Other shares were mainly divided by India, Honduras, Pakistan and other countries; From January to August, China's market share in the EU decreased by 1.94 percentage points, while that of Turkey and Malaysia increased by 1.11 and 2.88 percentage points respectively; From January to October, the market shares of Vietnam, Indonesia and Myanmar in Japan decreased by 4.18 percentage points. In addition to China's increase of 1.89 percentage points, the shares of Bangladesh and Malaysia increased by 0.49 and 1.74 percentage points respectively.

The recovery process of domestic consumption is limited

China's macro-economy continued to recover, but affected by repeated domestic epidemics, extreme weather and other factors, the recovery process of the consumer market was affected to a certain extent, and the sales growth slowed down, but the overall situation was still stable. According to the statistics of the National Bureau of statistics, from January to October, the year-on-year growth rate of retail sales of consumer goods and investment in fixed assets (excluding farmers) slowed down by 8.1 and 6.5 percentage points respectively compared with the first half of the year; In the first three quarters, the growth rate of residents' income and consumption expenditure slowed down by 2.3 percentage points compared with the first half of the year, and the growth rate of per capita clothing consumption expenditure slowed down by 3.14 percentage points compared with the first half of the year; The consumer confidence index in October was 120.2, down 1.23% year-on-year; In November, the new orders index of Manufacturing Purchasing Managers Index (PMI) has been in the contraction range for four consecutive months, reflecting the overall weak market demand.

Business pressure continues to increase

On the one hand, the shortage of energy supply and the rise of price push up the prices of intermediate products. For garment enterprises in the downstream of the industrial chain, the pressure of cost rise is further increased; On the other hand, the multiple growth of international freight prices, the simultaneous strengthening of RMB exchange rate and US dollar index, and the continuous interruption of global supply chain caused by port congestion and shortage of workers have brought greater risks to enterprises' normal delivery and payment collection, which seriously reduced the profit space of export enterprises. According to the data of the National Bureau of statistics, from January to October 2021, the proportion of costs and expenses of Enterprises above Designated Size in the clothing industry accounted for 94.68%, higher than 0.49% in the same period of 2019; In November, the PMI index of small manufacturing enterprises was 48.5%, which has been in the contraction range for seven consecutive months.

Generally speaking, from the fourth quarter to 2022, the development situation of China's clothing industry is still complex, facing multiple uncertain and unstable factors, and the foundation for the industry to continue to maintain stable and good development still needs to be consolidated. From the external environment, the global epidemic continues to spread, the recovery of the world economy has slowed down, and the international market demand is facing certain pressure. The complex situation will drive the adjustment and reconstruction of the global clothing industry chain and supply chain distribution pattern; The domestic epidemic situation is still severe, which will restrict the recovery of the consumer market; The development of the industry will still face many difficulties and risks, such as the rise of comprehensive costs, the structural shortage of employment, and the fluctuation of RMB exchange rate.

Operation analysis of Listed Companies in clothing industry in the first three quarters of 2021

According to incomplete statistics, 35 clothing listed companies in Shanghai and Shenzhen stock markets had a revenue of 97.196 billion yuan in the first three quarters of 2021, of which 28 enterprises achieved year-on-year growth; In the first three quarters, the net profit attributable to shareholders of listed companies was 8.405 billion yuan, and 17 enterprises achieved year-on-year growth; According to the store data statistics released by 14 listed companies, from January to September 2021, 3475 new stores were opened and 3902 stores were closed, and the ratio of opening and closing stores was 1:1.12. Due to the epidemic situation and the reform of retail channels in the Internet era, the adjustment of offline physical stores of enterprises is still being optimized.

Men's wear enterprises

In the first three quarters of 2021, the 10 men's clothing listed enterprises had a revenue of 35.716 billion yuan and a net profit of 6.635 billion yuan. Among them, the revenue of Hailan home and Youngor is over 10 billion yuan, the revenue of Hongdou shares, jiumuwang, septenaeus and baoxiniao is in the range of 1.5-3 billion yuan, while that of Meierya, mugaodi, georgebai and kutesmart is less than 1 billion yuan; From the perspective of enterprises, Hailan home, Mudao flute, seven wolves, happy bird and Georgetown achieved double increase in net revenue and profit, while Hongdou shares and cool smart decreased their net profit.

Women's wear enterprises

In the first three quarters of 2021, the business income of eight women's clothing listed enterprises was 13.951 billion yuan, and the net profit was 1.233 billion yuan. The revenue of Jinhong group, Dishu fashion, anzheng fashion and langzi is more than 2 billion yuan, that of GELIS and Xinhe is between 1.5-2 billion yuan, and that of daily broadcast fashion and La chapel is less than 1 billion yuan. Among them, the net profit of Desu fashion, langzi shares and Xinhe shares increased.

Sports & Leisure

In the first three quarters of 2021, the operating revenue of six listed sports and leisure clothing enterprises is 25.776 billion yuan, and the net profit is - 267 million yuan. In terms of revenue, the first three quarters revenue of SEMA clothing exceeded 10 billion yuan, followed by taipingbird of 7.409 billion yuan, soyute of 4.041 billion yuan, Meibang clothing and biyinlefen within 2 billion yuan, Pathfinder of 658 million yuan; The net income and profit of SEMAR clothing, taipingniao, biyinlefen and Pathfinder have both increased, while souyute has been affected by the shortage of funds. Since 2021, the brand clothing business has been mainly selling inventory products, which has seriously affected the sales performance.

Home wear and underwear

The operating revenue of the five listed companies in the first three quarters of 2021 is 5.958 billion yuan, and the net profit is 651 million yuan. In terms of revenue, Amoy shares ranked first with 2.467 billion yuan, Huijie shares 1.989 billion yuan, and Hongxing shares, Bangjie shares and Langsha shares had revenue less than 1 billion yuan; Among them, the net income and profit of Huijie and Langsha shares increased both.