Boom Season, Home Textile Giant Negative Growth

The continued decline in domestic sales and the weakening of external demand have made textile enterprises less profitable this year. The textile industry in 2012 of 1~4 released by the China Federation of textile industry in May 31st showed that nearly 1/5 of the textile enterprises above designated size were losing money, and the growth of the loss amount reached 120%.

We know that in the case of shortage of raw materials, labor costs and insufficient orders, the traditional peak season of textile industry has encountered a "cold current". Most enterprises do not dare to start work at full capacity.

　　 Cost burden

　　 Textile enterprises The main raw material of cotton is a big obstacle to promote its export.

Since 2011, China's cotton prices have staged a breathtaking "roller coaster" market. In the first quarter of last year, cotton Prices soared to a maximum of 34 thousand yuan / ton. But by this year, cotton prices have come down. As of May 25th, China's cotton price index (CC Index328) closed at 18853 yuan / ton, the lowest since March 2011. But at the same time, international cotton prices are continuing to decline. Due to the lack of integration with the international cotton prices, the gap between domestic and foreign cotton prices is still expanding, and the export volume of cotton textiles, which occupy an important proportion in textile exports, has dropped sharply.

If the export market is mainly affected by the European debt crisis, the situation may be even worse. Yao Wenpu, President of Jiangsu Xinchang Group Co., told reporters that the proportion of exports to the EU accounted for 1/3 of the total export volume of the company. The export volume of the company alone declined by 5% to 7%, and the order volume was also greatly reduced.

An export garment company in Nantong told reporters. European debt crisis The continuous impact on the company is very large, and the cost of raw materials does not have the advantages of some Southeast Asian countries. The organic cotton produced by the company has to be imported from India, with a maximum savings of more than 2000 yuan per ton.

Labor cost is also a problem that textile enterprises have to face. Xu Jianping, chairman of Changshou City Jingwei Jingwei Knitting Co., Ltd. said that the cost of labor alone increased by about 15%. Yao Wenpu said that the company used to recruit more workers in Jiangsu Province, but considering the increasing labor costs, it is now recruiting from Anhui, Jiangxi and other places.

　 The peak season is not prosperous.

In principle, every May is the peak season for the textile industry, but this year is the peak season. An industry source told reporters that many enterprises were short of orders, half of the factory machines and half of them stopped. Even the most advanced warp knitting industry in the textile industry is facing a grim situation. Taking a warp knitting industrial park in Zhejiang as an example, the deficit has reached 50% this year.

Xu Jianping told reporters that the company's orders had dropped by about 20%, and this time it was full load, but the company has only eight or nine of the current operating rate. In the 1~4 months of this year, the company still made a profit, but it dropped a lot in May.

The gross profit margin of textile industry will not exceed 5% in general. Compared with the previous years, this year's situation is even more sluggish, the price will lose market share, and no price increases will face losses.

However, in the case of weak external demand, enterprises still have to work hard to adjust prices. Lu Longsheng, chairman of Shanghai Pegasus import and Export Co., told reporters that since the second half of last year, the product had to cut prices by about 10% to protect exports. However, Lu Longsheng predicts that "this downturn will remain for two years."

　　 Home textile giant negative growth

In the past, home textile enterprises were "safe haven" in the textile industry. But judging from several listed home textile enterprises, this year's situation is not much better.

Three giants of home textiles Roley home textiles ( 002293.SZ), Fuanna (002327.SZ Meng Jie home textiles (002397.SZ) a quarterly report shows that sales growth in the first quarter of this year was 5.25%, 21.46% and -9.93% respectively, while three companies in 2011 increased by more than 30%. Among them, Meng Jie home textile this year even reported a negative growth.

The growth rate of several other listed textile enterprises has slowed down or even declined. The total operating income of Huafu color spinning (002042.SZ) decreased by 13.34% in 2011, attributable to a net profit margin of 64.20% of listed companies. At the same time, it is estimated that the net profit attributable to shareholders of Listed Companies in 2012 will be 30% to 50% year-on-year in 2012. The net profit of last year's attributable to shareholders of Listed Companies in China Textile investment (600061.SH) fell by 209.38% compared to the same period last year. Although the company's business situation has improved in the two quarter, it is expected that the company's half yearly reporting period may still be a loss due to industry demand and market downturn.

Constantly breaking through and looking for new profit growth points may still be able to find a way out. Xu Jianping told reporters that the company's export market has slowly shifted from the European Union to emerging markets, such as the India and South American markets, and the product mix has also been adjusted, such as developing more upscale new products to cater for the needs of the market.