First Textile Network News on May 3 (Reported by Reporter Martin): Affected by the spread of the epidemic globally, China’s textile manufacturing industry has suffered heavy losses, especially in the Since the beginning of this quarter, due to epidemic control factors, China’s textile industry has encountered obstacles in resuming work and production. Although some companies resumed work one after another in late February, the ensuing intensification of overseas epidemics has led to the loss of orders. From February to May, textile and apparel companies Once the traditional production peak season is lost, it is difficult to make up for it, especially for large textile and garment enterprises.
According to the monitoring statistics of First Textile Network, as of the first quarter of March 31, 2020, 48 listed companies in textile, printing and dyeing auxiliaries and textile and garment machinery in Shanghai and Shenzhen stock exchanges achieved a total operating income of 27.624 billion yuan. , compared with 37.299 billion yuan in the same period of 2019, a decrease of 9.675 billion yuan, and the net profit attributable to shareholders of listed companies was 2.119 billion yuan, a decrease of 1.772 billion yuan compared with 3.891 billion yuan in the same period of 2019.
From the perspective of the textile manufacturing sector, the main production and operations of upstream textile companies in the first quarter Affected by the delayed resumption of work and restricted logistics, in the first three months of this year, China’s total textile and apparel exports totaled US$45.264 billion, a year-on-year decrease of 17.7%. Among them, the cumulative exports of textiles were US$22.694 billion, a year-on-year decrease of 14.6%, and the cumulative exports of clothing were US$22.570 billion. , a year-on-year decrease of 20.6%.
In terms of product categories, the year-on-year decline in exports of textiles, including yarns, fabrics, home textiles, industrial and other manufactured products, rebounded by 5.3 percentage points from the previous two months, while the exports of downstream clothing products fell by 5.3 percentage points. It continued to deepen by 0.6 percentage points compared with the previous two months.
In the same period, the global PMI new orders index was 39.2%, a month-on-month decrease of 7.1pct. Against the backdrop of the spread of overseas epidemics, the global economic boom is under pressure. Chinese textile companies are facing pressure from reduced orders, and industry boom is weakening.
However, amid the sudden epidemic situation that has led to a shortage of medical supplies such as masks and protective clothing, some textile manufacturing companies have added production lines for related products to convert production. However, most of the materials are used for donations and government procurement and storage, and are subject to the uncertainty of the supply and price of raw materials required for production, as well as the uncertainty of the actual production capacity reaching time and output. Their contribution to performance is small and difficult to predict accurately. Mask and protective clothing concept stocks performed outstandingly during the epidemic, with most companies achieving gains of 20%-50% in more than a month.
Industry insiders said that from the perspective of listed companies, some textile manufacturing companies have already deployed overseas production capacity, which can alleviate the negative impact of the epidemic on order production to a certain extent. Although the resumption time previously announced by various places will It will affect the delivery of short-term orders, but it is expected to be compensated by working overtime after the resumption of work. In terms of orders, amid short-term panic, some overseas customers may shift their orders, but demand is expected to return to normal competition after the epidemic. Therefore, the impact of the epidemic on the exports of the textile industry is a one-time impact, and the medium and long-term impact is small.
Wang Xueheng, an analyst at Guosen Securities, previously said that there are still large differences in production resumption rates among textile manufacturing companies. Leading companies have relatively good employment conditions, companies with controllable upstream raw materials and stable downstream order demand It is expected that production capacity will be restored to saturation as soon as possible; downstream brand retail companies will resume work relatively earlier than the manufacturing industry, but it is expected that it will take some time for offline passenger flow to recover. Companies with a good membership base and online sales layout can benefit from this trough in passenger flow. Companies with sufficient cash reserves to make up for more sales can withstand shocks for longer.
Wang Xueheng believes that as the epidemic eases, the resumption of production of manufacturing companies is generally delayed by one to two weeks, and the actual resumption rate will still take some time to reach a high level after resumption of work. The resumption rate of large enterprises is relatively low. higher. Since my country accounts for a high proportion of global textile and apparel exports and is the upstream of Southeast Asian apparel manufacturing companies, the delay in resumption of work has also affected the supply of other global apparel production industry chains. It is expected that the resumption of work will be managed in an orderly manner, with global decentralization and independent raw materials. Controlled suppliers are least affected.
From an observation point of view, export-oriented companies may face pressure from weakening external demand. It is expected that the pressure will mainly be transmitted to small and medium-sized enterprises with poor order stability. The stable delivery of core suppliers and global order production deployment capabilities will help For brand owners to respond to sudden changes in demand in different markets around the world.
Wang Xueheng pointed out that currently, among the major clothing consumer markets, Japan, South Korea, Europe and the United States are all facing the spread of the epidemic. Local consumers’ demand for clothing may be affected by the epidemic in the short term and will decline to a certain extent. However, it is expected that due to differences in quarantine measures, overseas passenger traffic may not necessarily see the same sharp decline as domestic. It has not yet been observed that brands have closed stores overseas due to the epidemic. At the same time, our country is also trying its best to control the risk of secondary infection caused by overseas imports. (First Textile Network martin)
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