The performance answer sheet is not all, are there any extra points for the cotton textile industry?
In 2022, the cotton textile industry will experience ups and downs and many difficulties. Data from key enterprises tracked by the China Cotton Textile Industry Association (referred to as “China Cotton Textile Association”) show that from January to December 2022, the yarn output of key enterprises fell by 4.8% year-on-year, the yarn sales volume fell by 5.18% year-on-year, and the operating income dropped by 5.18% year-on-year. A year-on-year decrease of 0.2%, and total profits decreased by 35.1% year-on-year.
The good news is that companies have turned the multi-faceted pressure they have endured on operations in the past year into motivation in 2023. They have focused on production and guaranteed orders, and have started the first battle of “a good start”.
So, can the cotton textile industry get rid of the gloom in 2023 and cheer up? Dong Kuiyong, president of the China Cotton Textile Industry Association, said that with the support of the country’s optimized epidemic prevention and control measures, stock policies and incremental policies, the vitality of my country’s cotton textile industry is expected to accelerate, and the operating situation is expected to rebound overall.
Move forward under pressure
Leading performance prediction loss
In 2022, under the influence of the complex and changeable environment, cotton textile companies have experienced many difficulties, such as significant fluctuations in raw material prices, sluggish consumption, insufficient orders, increased inventory, and labor shortages. For most cotton textile companies, , although it has survived the crisis, it is inevitable that its performance will suffer setbacks. Data from key enterprises tracked by the China Cotton Industry Association show that the number of loss-making enterprises in key enterprises increased by 133.3% year-on-year. Among them, even the leading companies in the industry are not immune.
As one of the world’s largest manufacturers and suppliers of colored yarn, Huafu Fashion Co., Ltd. (hereinafter referred to as “Huafu Fashion”) released a performance forecast on January 30, predicting a full-year loss of 280 million yuan in 2022. -360 million yuan, compared with 2021, from profit to loss, net profit decreased by 149.15%-163.19%
Also turning from profit to loss is Anhui Huamao Co., Ltd. (hereinafter referred to as “Huamao Co., Ltd.”). It is expected to lose 160 million yuan to 230 million yuan in 2022. Compared with 2021, the net profit will drop by 53.27%. %-68.41%.
Xinye Textile Co., Ltd. (hereinafter referred to as “Xinye Textile”), which is on the list of the top 100 textile and apparel brands to be cultivated in 2022, its performance is also unsatisfactory, and it is expected to lose 430 million yuan for the whole year in 2022 – 480 million yuan, a decrease of 978.49%-1080.64% compared with 2021.
As the world’s leading elastic core-spun yarn company, Rainbow International Group Co., Ltd. predicts that the group’s net profit will decrease significantly by more than 90% compared with the previous year.
The general decline in performance of leading companies has aroused widespread concern in the industry. The reasons for the decline in performance reflect the reality and helplessness of companies moving forward under pressure in the past year.
Regarding the performance loss, Huafu Fashion explained that during the reporting period, the impact of factors such as the epidemic, geopolitical conflicts, and global interest rate hikes caused the market to intensify concerns about economic recession, and consumer purchasing power continued to decline. Affected by the epidemic, the company’s main production areas will have limited production capacity in the fourth quarter of 2022, and losses from production suspension will increase. Since the second half of the year, the combination of multiple negative factors has led to a sharp decline in cotton prices. The company has incurred floating losses in its hedging business, and has made sufficient provisions for inventory price declines.
Other companies’ explanations for performance losses are basically similar. Huamao Co., Ltd. stated that in 2022, the international situation will undergo drastic changes, bulk commodity prices will fluctuate violently, domestic epidemics will occur frequently, and factors such as rising factor costs will lead to the company’s production and operations. Under tremendous pressure, the gross profit of the textile business dropped significantly.
Xinye Textile said that due to factors such as the domestic epidemic and weak industry demand, the company’s start-up and domestic logistics and transportation have been restricted to a certain extent, which has a certain impact on the company’s performance. In addition, the company is based on the principle of caution. Based on factors such as the company’s inventory situation and estimates of the future market situation of raw cotton, further provision of special impairment provisions for related assets will have a greater impact on the current period’s net profit indicators.
“2022 is a year of twists and turns and hopes, and it is also a year of building on the past and forging ahead into the future. Under the influence of multiple factors, our country’s economy is facing continued pressure from demand contraction, supply shocks, and expected weakening.” For cotton textiles Dong Kuiyong summarized the overall operation of the industry. In 2022, China’s cotton textile prosperity index will be below the boom-and-bust line throughout the year. The industry continues to be in a sluggish state, with overall industry production slowing down, product output declining, and raw material and product prices showing an overall downward trend. . Faced with “weak demand and high inventory”, corporate operating pressure is significant, the growth rate of major economic indicators has slowed, product profits have declined, and losses have expanded. These characteristics are expected.
Highlights still exist
The industry is making steady progress
Although the industry’s “cold winter” in 2022 has left most cotton spinning companies with unsatisfactory performance results, it is undoubtedly one-sided to judge the development of the industry based on simple corporate profit and loss data.
In 2022, twists and turns are closely intertwined with hope. In the face of difficulties, the cotton textile industry has developed under pressure, faced difficulties, calmly responded to the impact of unexpected factors, and overall maintained relatively stable development. Under pressure, the performance of cotton textile companies has many bright spots, insisting on technological innovation and accelerating<font color�. The four key tasks of reform and development will open up a new track for high-quality development; the third is to strengthen the guarantee of seven key elements such as party building, talent, and research and development, and fully complete all goals. Task. Dai Jun believes that Yueda Textile is currently in a critical period of overcoming obstacles, reducing losses, turning losses around, and transforming and developing. Only by facing up to difficulties, working together, and working hard can we open up a new situation for the company’s transformation and development.
Lu Thai Textile Co., Ltd. has planned its development this year from three aspects. Liu Zibin, chairman of the company, said that it is necessary to focus on customers, give full play to the driving role of marketing, vigorously explore the market, and strive to achieve order growth; it is necessary to focus on product lines and further promote two major strategies, strengthen advantages, and improve delivery capabilities and operational efficiency. , strengthen the respective advantages of the two major bases at home and abroad, and complement each other; with operations as the core, all functional departments will comprehensively improve their overall work capabilities, strengthen business support, provide management support and service guarantees, and have bottom-line thinking and safety awareness , to ensure the company’s stable and long-term development.
“In the future, with the changes in the cotton textile terminal foreign trade market, cotton textile enterprises must actively respond and avoid risks in the European and American markets by adjusting the product raw material structure, making full use of imported cotton and mainland cotton, and increasing development.”One Belt, One Road‘ Countries along the route and emerging markets such as ASEAN, Africa, and Latin America are making every effort to ensure foreign trade. In terms of domestic demand, we actively cooperate with domestic terminal brands to jointly support Xinjiang cotton online and offline. Xinjiang cotton.” Dong Kuiyong made suggestions for enterprise development. At the same time, he also emphasized that in 2023, enterprises should enhance development confidence, continue to promote transformation and upgrading, continue to be prepared for pressure, and maintain a healthy and stable capital chain.
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