The export tax rebate rate is raised, and the performance of the five major industries is getting warmer
With the spread of the international economic crisis, consumption across the country has dropped significantly, and international trade has also declined. According to the International Monetary Fund’s forecast, trade will plummet by 9% in 2019, hitting a new low since World War II. In response to the current crisis, the State Council executive meeting decided to increase the export tax rebate rate for products in some industries, which has a certain boost to the performance of textile, steel, non-ferrous metals, chemicals and electronic information industries.
Textile
Trading opportunities appear
The export tax rebate was raised to 16%, lower than the market’s previous expectation of 17%. However, the export tax rebate policy itself is a trade protection measure. Whether to increase the export tax rebate and the extent of the increase depend on China’s trade policy on the one hand. The multiple increases in the export tax rebate rate have also faced international pressure; on the other hand, domestic employment pressure To increase exports, the government also needs to protect labor-intensive industries in order to maintain employment; thirdly, employment protection and industrial upgrading are incompatible goals. If industrial upgrading is to be achieved, backward production capacity must be eliminated and technological upgrading must be promoted. In reality, Most small and medium-sized textile and garment enterprises in the world are unable to carry out technological transformation.
The expected effect brought about by the increase may make the mid-term reports of some companies better than market expectations. The performance of some export-sensitive companies may be better than market expectations. The main reason is that they benefited from the increase in export tax rebates. Since August last year, Export tax rebates have been increased by 5% since March. According to estimates, taking into account price changes, the net profit of the textile industry can be increased by 8.95 billion and clothing, shoes and hats by 20.52 billion.
The export data in February is still worrying. Exports to the United States, Japan, and the European Union have declined sharply. Excluding the Spring Festival factors, the first two months have still declined slightly; the industry’s first two months The growth rate of fixed asset investment has also declined significantly. Judging from the PMI index, the main index of the textile industry in January 2019 was still at a low level, or even continued to decline, which was much lower than the average level of 20 industries across the country. In January, its comprehensive index PMI, production index, and new order index were 28%, 18.8%, and 15.2% respectively, 17-30 percentage points lower than the national average, and the new export order index was less than 20%. Some market analysts believe that the bad moment for exports will pass in the next few months, but there are no obvious signs of recovery yet. There are trading opportunities for export-sensitive high-beta stocks in the first half of the year.
The recent rebound of overseas textile and apparel stocks has supported the rebound of domestic export stocks. Since February, the US S&P 500 apparel retail index has rebounded by 32%; the Japanese textile and apparel index has rebounded by 18.23%; the clothing index has rebounded by 22.9%; The European Apparel Index rebounded by 25.79%; the rebound in overseas markets has also provided confidence and foundation for the recent rebound of export-sensitive companies. High-beta stocks such as Jinfeida and Zhongyin Cashmere Industry (000982) have rebounded recently. It is recommended that investors actively pay attention to export-sensitive companies.
Steel
Enhanced international competitiveness
According to a survey of 25 major large and medium-sized export companies by the China Iron and Steel Association, about 60% of exports in January were carried over from last year. There are very few new contracts signed this year. It is expected that steel exports will drop by 80% this year. , much more severe than the 50% originally predicted. It can be seen that the export situation of China’s steel products is extremely severe. Therefore, the state’s policy to increase the export tax rebate ratio at this time is for the purpose of supporting domestic steel companies and stabilizing the overall operating conditions of the steel industry.
On March 27, 2019, the Ministry of Finance and the State Administration of Taxation issued a notice announcing that, with the approval of the State Council, the export tax rebate rate for high-end products such as stainless steel plates, cold plates, and coatings will be increased to 13 from April 1 %. This is the first increase in the export tax rebate rate for some products after the steel export tax rebate rate has been reduced five times since 2004, heralding a major change in steel export policy.
The market price of domestic cold-rolled 1.0 sheet has dropped to about 4,200 yuan. The export price after deducting the 5% tax rate is 3,990 yuan/ton. Transportation charges, loading and unloading charges and other miscellaneous charges are not taken into account, which is equivalent to 585 US dollars/ton. tons (FOB). After the export tax rebate is increased from 5% to 13%, the export price after deducting the 13% tax rate is 3,654 yuan/ton. Excluding transportation fees, loading and unloading fees and other miscellaneous charges, it is equivalent to 536 US dollars/ton (FOB), a decrease of 50 US dollars. /ton or so. Compared with European and American prices, our cold-rolled plate prices are 50-80 US dollars/ton lower, which greatly improves the competitiveness of our products in the international market.
The products involved in this increase in export tax rebates are mainly cold-rolled, hot-rolled stainless steel, and electrical steel, all of which are high-end products. This policy orientation is conducive to enterprises increasing investment in technological transformation, continuously achieving technological upgrading of products, encouraging enterprises to participate in international market competition with high-quality products, and building the core competitiveness of enterprises.
Non-ferrous metals
Although exports drop, domestic demand remains stable
The increase in export tax rebates for non-ferrous metal products is the specific implementation of the non-ferrous metals adjustment and revitalization plan passed on February 25: “Adjust the product export tax rebate rate structure to support enterprises to export deep-processed products with high technical content and added value. Increase technological transformation and research and development efforts, promote technological progress. “There have been rumors in the market that the country is expected to increase the average export tax rebate rate for high-precision copper tubes, high-precision copper plates and strips, high-end aluminum foils, high-end aluminum profiles, and high-end aluminum plates and strips from 5% to 13%. For those who can Deeply processed products that replace imported products with domestically produced products can be increased to 17%, and the export tax rebate rate for aluminum alloy profiles that have not previously been given export tax rebates can be increased to 5%.
Data released by the General Administration of Customs two weeks ago showed that China’s unwrought copper and copper materials increased by 45.1% year-on-year in February, with imports hitting a record high. Further breakdown data released by the General Administration of Customs on Monday showed that China’s refined copper imports in February increased by 98.9% from the same period last year to 271,000 tons. The previously announced unwrought copper and copper materials include refined copper, copper alloys, copper materials and blister copper. Data show that in February, China’s copper alloy imports fell by 5.7% year-on-year to 3,000 tons, copper material imports fell by 33.3% year-on-year to 46,000 tons, and blister copper imports fell by 50.5% year-on-year to 9,000 tons. Therefore, in the 45.1% year-on-year increase in unwrought copper and copper materials, the decline in imports of copper alloys, copper materials and blister copper concealed a greater increase in refined copper imports. However, the sub-item data is more in line with our previous views, because the state purchases, stores, and imports arbitrage is refined copper, and the shortage of scrap copper also leads to an improvement in the year-on-year decline of copper alloys and copper materials.
Recently, Antaike’s on-site visit to some copper pole companies in Jiangsu Province showed that copper pole companies that mainly sell domestically, such as Jinhui Group, are less affected by the financial crisis, while export-oriented companies Copper pole companies have a greater impact, such as Dongguan Huaxin, and the company’s domestic sales ratio has begun to increase.
Supported by the country’s planning for power grid construction, domestic demand for wires and cables has not been affected by the financial crisis, and the industry’s demand for copper poles will remain strong. On the contrary, the demand for winding wires and electrical equipment wires has dropped significantly, because China is currently a manufacturing center with very large exports of air conditioners, motors, home appliances and other products. However, the occurrence of the financial crisis has hindered exports, which are used for these products. Demand for copper poles fell in both sectors. Overall, driven by the demand for wires and cables, domestic demand for copper poles remains strong, but demand growth has declined.
Chemical Industry and Electronic Information
Profitability is expected to improve
This time, the export tax rebate rate for chemical products is generally increased by 4 to 8 percentage points. There are many products involved. The industries involved are mainly soda ash, fluorine chemicals (F22 and polytetrafluoroethylene, etc.), methanol, phenol acetone, Many companies such as silicone, PVC paste resin, PVC, polyformaldehyde, PBT resin, etc. have benefited, and companies in relatively poor conditions in the industry have benefited more obviously. Among them, Sanaifu (600636) has a relatively large profit elasticity. The company currently suffers serious losses in polytetrafluoroethylene and other polymers, and will benefit significantly. The increase in methanol tax rebates will also be beneficial to the reorganized company. Blue Star New Materials (600299)’s main products, such as silicone, phenol acetone and PBT, have had their tax rebate rates increased, and they are also the varieties that have benefited very significantly. Domestic soda ash companies are still on the verge of losing money, and the increase in export tax rebates will obviously help improve profitability.
The rebate rate for copper-clad laminates (thickness ≤ 0.15mm) has been increased from 11% to 17%; the rebate rate for 3-6 inch monocrystalline silicon wafers has been increased from 5% to 13%, and the rebate rate for monocrystalline silicon rods with a diameter ≥30cm The tax rebate rate was raised from 0% to 13%; the tax rebate rate for CRT color TVs and some TV parts was raised from 14% to 17%. Electronic information export dependence exceeds 60%. In 2008, export revenue accounted for 36.5% of the country’s total exports. It is a pillar industry of the national economy and one of the top ten industries supported by the state for revitalization. In this round of economic crisis, the performance damage of some enterprises has been relatively concentrated. Therefore, the increase in tax rebate rate highlights the state’s support for the related electronics industry and the policy intention of maintaining growth and promoting employment.
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