“Orders have decreased a lot now. All orders in July and August have been shipped, but customers have not placed additional orders. The peak period is in March and April, when the orders are the largest.” On August 13, working in Shantou, Guangdong Mr. Lu, a garment manufacturer, told Times Finance that the booming garment exports in the first half of the year seemed to have stalled.
According to data from the China Chamber of Commerce for Import and Export of Textiles, from January to June 2021, the cumulative exports of textiles and clothing were US$140.086 billion, and the cumulative exports of textiles and clothing increased by 11.9% year-on-year. According to incomplete statistics from Times Finance, about 43 listed companies in the textile and apparel industry have recently released first-half performance or performance forecasts, and 38 companies have predicted increased performance, increased in the same direction, or turned losses into profits.
Among them, Shenzhen Textile A (000045) expects the net profit attributable to shareholders of listed companies to be 63 million to 90 million yuan in the first half of the year, a year-on-year increase of 8650% to 12400%; Xinfeng Ming (603225) expects to achieve a net profit attributable to its parent company of 1.30-1.35 billion yuan in the first half of 2021, a year-on-year increase of 549%-574%; Blum Oriental (601339) will achieve a net profit attributable to its parent company of 550 million yuan, a year-on-year increase of 304%…
“The return of global orders to China that began last year due to the epidemic has continued this year.” On August 13, the knitted sportswear export company Jiansheng Group (603558) released its semi-annual results According to the report, the company’s net profit in the first half of the year was 108 million yuan, a year-on-year increase of 96.4%. As for the reason for the surge in performance, the semi-annual report mentioned that it benefited from the “return of orders.”
Now, the situation is changing
Data recently released by the General Administration of Customs shows that in July Clothing exports and textile exports both declined. Settled in RMB, textile and apparel exports were 181.39 billion yuan, a year-on-year decrease of 18.24%, a month-on-month increase of 1.82%, and a month-on-month decrease of 4.21%. Among them, textile exports were 75.06 billion yuan, a year-on-year decrease of 33.73%, a month-on-month decrease of 6.90%, and a month-on-month decrease of 4.21%. An increase of 1.30%; clothing exports were 106.33 billion yuan, a decrease of 2.08%, a month-on-month increase of 9.03%, and a decrease of 7.76% compared with the same period in 2019.
In fact, since the second quarter, the monthly export growth of textile and clothing has gradually declined. Exports in May fell by 16.8%. Exports in June continued to decline, but the decline was significantly narrower than in May. Only 3.7%.
“The larger decline in textiles and clothing is also largely due to the export orders of the textile industry in some Southeast Asian and South Asian countries. It has recovered, especially in India and Bangladesh. Some of the orders that originally ‘returned’ to China have returned.” On August 13, Bai Ming, deputy director of the Market Research Institute of the Ministry of Commerce Research Institute, pointed out in an interview with Times Finance.
Mr. Lu, who is engaged in clothing production, also agreed, “In the first half of this year, if the epidemic situation in other Southeast Asian countries eases, domestic orders will decrease, and then the price of raw materials will drop. .”
The slowdown trend of “return” orders is obvious
Although textile Listed apparel companies have frequently reported good results in the first half of the year, but when settled in RMB, the total textile export volume in the first half of the year was not as good as in 2020. According to data from the General Administration of Customs, from January to July, the cumulative exports of textiles and clothing were 1.09021 billion yuan, a year-on-year decrease of -0.93%; of which textile exports were 519.89 billion yuan, a decrease of 17.94%, and clothing exports were 570.32 billion yuan, an increase of 22.17%.
If calculated in US dollars, the situation of clothing exports is slightly better, but textile exports also experienced double-digit declines. From January to July, the cumulative exports of textiles and clothing were US$168.351 billion, an increase of 7.73%; of which textile exports were US$80.252 billion, a decrease of 10.80%; clothing exports were US$88.098 billion, an increase of 32.89%.
“China’s textile and clothing export market is concentrated in the European, American and Japanese markets. With the vaccination in these countries With the rate increasing and herd immunity normalized, its imports of textile anti-epidemic products have dropped significantly, and some developing countries have also begun to gradually resume production, resulting in the return and transfer of orders. In addition, due to the rapid resumption of work and production in China, the export base of related textiles was relatively large last year , so the year-on-year decline in exports of such products is inevitable.” Lan Qingxin, researcher and doctoral supervisor at the National Institute for Opening-up at the University of International Business and Economics, analyzed Times Finance.
Regarding the slowdown in reshoring orders in July and August, Bai Ming said that the epidemic in India was relatively serious in the first half of the year, and many orders were transferred to China in April and May. In the second half of the year, some industries in India and Bangladesh also recovered. Therefore, there was a “return” loss of orders in July and August.
Lan Qingxin further said that in addition to the return of orders being an important factor affecting export growth, rising costs and slow economic recovery are also major reasons for suppressing demand.
As for the decline in textile exports reflected in the data from the General Administration of Customs, Mr. Lu is engaged in production on the front line and his feelings are more intuitive. Mr. Lu said, “In the first half of this year, we have felt that whenever the foreign epidemic situation eases slightly, foreign trade orders will decline.”
When the reporter asked Mr. Lu and his Are the small and medium-sized business owners around him worried about not having orders? Mr. Lu said frankly, “The price of raw materials in recent times has been the highest in two years. It doesn’t matter if you can’t receive orders, otherwise you will also lose money. After all, the clothing industry is a low-profit industry.”�”
As for listed companies, there are also reports of reduced orders. A Times Financial reporter called as an investor on August 13 to gather polyester, polyester spinning, texturing, import and export A staff member of the investor relations department of Xinfengming (603225), a modern large-scale joint-stock enterprise that integrates trade, said that the export situation in July has indeed declined recently. “The epidemic relationship will definitely have some impact. ”
When a reporter asked whether it was due to the increase in shipping prices, a Xinfengming staff member said, “There is also a factor of rising shipping prices, and commodity exports may be hindered. But our main focus will be on domestic sales, and exports will account for a smaller proportion. ”
As of the close of trading on August 13, Xinfengming rose slightly by 1.45% to 20.30 yuan.
Still facing many uncertain risks
As the epidemic hits, we are looking for alternative orders, which are destined to not last long.
Bai Ming pointed out, “In recent years, China has transferred orders overseas, but the situation last year was quite special. Many Chinese factories were the first to resume work and production. In many countries, the epidemic was still relatively serious. It affected their textile exports. Customers couldn’t wait and went to China to buy textiles. Now that the production capacity of those countries has been restored, customers are running back. “
Large-scale domestic textile and apparel companies are also “well aware” of the temporary nature of the return of orders. Jiansheng Group pointed out in the third section of the semi-annual report “Management Discussion and Analysis” , “The transfer of mid- and low-end production capacity to Southeast Asian countries with lower factor costs and less disruption from tariff disputes is still the general trend. ”
As global epidemic prevention and control gradually becomes normalized, trade demand for epidemic-related items weakens, and many manufacturing countries have restarted production. Li Xingqian, Director of the Department of Foreign Trade of the Ministry of Commerce 7 On the 22nd, it was stated that this is both a challenge and an opportunity for China’s foreign trade.
“On the one hand, my country’s exports will face intensified market competition; on the other hand, countries Resuming production also requires a large amount of raw materials and production equipment, and the demand for my country’s capital goods and intermediate goods has increased significantly. “
As for the possible impact of restarting production in many manufacturing countries, Li Xingqian said, “Currently, we are closely tracking changes in the foreign trade situation, and in the second half of the year we will focus on the outstanding issues faced by enterprises. Difficulties and problems, we will work with relevant departments and localities to study and introduce more targeted policy measures to effectively reduce the comprehensive costs of foreign trade enterprises. ”
The textile industry is closely related to the macroeconomic environment and relevant national policies. At present, the global epidemic alarm caused by the Delta mutant strain has not yet been lifted, and a man named “Ram “Da (λ)” mutant strains have begun to emerge again, causing the development of the domestic textile industry to face many uncertain risks.
Lan Qingxin suggested that export companies should further explore in the second half of the year Potential, reduce costs from the perspective of increasing efficiency, diversify export markets, and make more use of cross-border e-commerce to actively develop overseas demand. At the same time, moderately adjust production capacity and do not blindly expand production and increase inventory.
It is worth mentioning that, according to data from the China Chamber of Commerce for Import and Export of Textiles, as of the end of July, rising freight rates and port congestion have not been fully alleviated, becoming the biggest uncertain factors affecting exports in the second half of the year. Global inflation has led to The increase in the price of upstream raw materials has not been transmitted to the simultaneous increase in the sales price of downstream finished products. In the first half of the year, the total export price of knitted garments dropped slightly by 0.8% year-on-year.
In addition, The scissor gap between domestic CPI and PPI has been running at a high level for nearly half a year. Under the dual impact of rising raw material prices and weak consumption, downstream garment companies, especially small and medium-sized enterprises, may be in a situation where profits are continuously compressed.</p
